Rent Control is Coming

Oregon Senate Bill 608 (SB 608)

A group of Oregon legislators has filed a pre-session bill that, if passed, would bring rent control to Oregon statewide. Senate Bill 608 (SB 608) proposes to limit rent increases for nearly all residential landlords to 7% during any 12-month period, plus inflation as measured by the Consumer Price Index.

SB 608 would keep in place current Oregon law that prohibits landlords from raising rent during the first year of the tenancy, and the requirement that rent can only be increased with a 90-day notice after the first year of the tenancy. The proposed bill would also prohibit landlords from resetting rent greater than 7% plus inflation for a new tenant if the previous tenant was evicted without cause during the first year of tenancy (i.e., to prevent landlords from “flipping” tenants to avoid the 7% limitation).

The proposed rent control laws would apply to most residential landlords in the state, including manufactured home parks and RV parks. However, the rent control limitations would NOT apply in the following situations: (1) week-to-week tenancies, (2) rental units when the first certificate of occupancy was issued less than 15 years prior to the date of the rent increase notice, or (3) when the landlord is providing reduced rent as part of a federal, state or local program or subsidy.

Of equal or greater concern in SB 608 are provisions that would only allow landlords to evict tenants after the first year of tenancy “for cause” (i.e., rent nonpayment, rental agreement violations, etc.), or when certain conditions exist when a landlord intends to put the rental unit to a different use (i.e., to undertake substantial repairs, demolish the unit, move in family members, or sell the unit). Even then, the tenant can only be evicted with a 90-day notice and the landlord must pay the tenant one month’s rent to move out. This essentially means that tenants can live in a rental unit for life unless they violate the rental agreement or the landlord’s plans for the rental unit change substantially. The only significant exception is that this portion of SB 608 would not apply to landlords who have an ownership interest in four or fewer rental units.

If passed, SB 608 as written would go into effect immediately upon passage by the legislature and signature by the governor. It would apply to (1) rent increase notices issued on or after the bill’s effective date, (2) fixed-term tenancies entered into or renewed on or after the effective date, and (3) termination of month-to-month tenancies occurring on or after the 30th day after the effective date. While it is possible that SB 608 will not pass or will be substantially amended, landlords should nonetheless begin consulting with their own attorneys to formulate a personalized strategy to deal with this potential shift in the landlord-tenant landscape.

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