The First Year of Rent Control in Oregon
Rent control in Oregon has now been the law since 2019. Here is what Oregon’s rent control laws mean for renters:
- Rent increases have been capped at 7% plus inflation for 12 months.
- No-cause evictions have been banned. Landlords must cite a cause if they choose to evict a tenant after the first year of their lease.
Rental rates have been rising at a lower percentage than they did in previous years but they are still rising. Why? Rent control doesn’t apply to buildings that are younger than 15 years old or government-subsidized buildings so it’s anyone’s guess what the real impact of rent control will be in Oregon.
One thing is for certain, with the changing rental laws across Oregon it makes sense for an owner to hire PEGGY HOAG REAL ESTATE Property Management. Our property managers will save an owner the time, money, and hassle of managing rental properties themselves while ensuring compliance with the latest laws.
How do rent control laws affect the supply of rental units?
When considering how rent control laws may affect the rental economy in Portland (and Oregon in general), let’s look at San Francisco. Rent control was introduced to San Francisco in 1979. A study by Stanford University revealed that the available supply of rental units dropped 15% as apartments were converted to condominium units and sold.
As a result of rent control (and other factors), San Francisco’s rent has skyrocketed. Today, the average 1-bedroom apartment in San Francisco rents for well over $3,000 per month. Rent control laws provided short-term benefits to those already renting an apartment, but those who moved to the area later on (or those who moved to a different apartment) found rentals in short supply — and at very high prices.
Could the same thing happen in Oregon?
It’s entirely possible. However, rent control is not the only cause of high rents in San Francisco. The area’s economy is increasingly driven by young tech workers who can afford to pay high prices. In addition, geography plays a role. The city of San Francisco itself is less than 33% of the size of Portland. There just isn’t as much room and local opposition to high-density housing has further reduced supply.
What will change for Oregon’s property owners?
Perhaps the most controversial part of the rent control law in Oregon is this:
Rental rates can be raised to “fair market value” (becoming exempt from rent control regulations) when a unit is “improved.” However, they are not exempt if the improvements are structural. Seismic retrofitting and new roofs (both costly investments) are considered structural improvements and would not allow a landlord to increase rental rates beyond what rent control laws allow.
The expert team at PEGGY HOAG REAL ESTATE Property Management anticipates that this will reduce the quality of rental properties as property owners become hesitant to invest in high-cost projects with value that will take years (or decades) to recoup.
Do you own a rental property?
Over 400,000 people have moved to Oregon since 2010, many of them young adults who are more likely to rent properties rather than buy. As demand for rentals increases and supply dwindles (likely due to rent control laws, among other factors), property owners may be in prime position to profit.
You need PEGGY HOAG REAL ESTATE Property Management on your side
The PEGGY HOAG REAL ESTATE Property Management team has decades of experience helping our clients:
- Build equity in their properties
- Find and manage the needs of long-term tenants
- Reduce the costs associated with owning a rental property
PEGGY HOAG REAL ESTATE Property Management’s services
We’ve developed a system that benefits both property owners and high-quality long-term tenants, providing services like:
- Preparing your property for the market
- Researching and setting rental prices
- Screening applicants and finding qualified renters
- Managing payments and evictions (if needed)
- 24/7/365 support for tenants in need of emergency assistance
- Working with you to track deductible business expenses
- Staying up to date on all applicable legislation, including rent control laws
Our team is uniquely positioned to help property owners navigate the murky waters of rent control laws in Oregon. If you own a rental home, apartment, or condo in Oregon, let’s talk.