By Marshall Hammond
On Thursday, July 6, Governor Tina Kotek signed a bill capping rent increases on Oregon residences at 10 percent or seven percent plus inflation, whichever is lower.
SB 611 amends a 2019 bill (SB 608) that set a limit of seven percent plus inflation on rent increases, with no maximum limit on the total allowable amount.
Inflation rates hadn’t risen above three percent for decades prior to 2019, limiting the maximum rent allowable increase to 10 percent or less. But in 2022, runaway inflation drove up that limit with some Oregonians seeing increases of as much as 14.6 percent and facing an equally large increase in 2023. In response, legislators passed SB 611 to cap the maximum allowable rent increase at 10 percent.
“You might ask, ‘What’s the difference between 14.6 percent increases and 10?’ Obviously the answer is 4.6 percent, but we’re talking about tenants who are already some of the most cost burdened renters in the nation,” says Sybil Hebb of the Oregon Law Center, which worked with tenant advocacy group Stable Homes for Oregon Families to help pass SB 611 and its predecessor SB 608.
“We have rents that are the ninth highest in the nation and vacancy rates that are extremely low. So every cent counts and the impact of the governor’s signing of the bill and that bill going into effect is that every tenant in Oregon has greater protections and greater stability, and also a greater understanding of what the maximum could be.”
The bill was introduced by Sen. Wlnsvey Campos (D-Aloha). The first version proposed a rent increase cap of eight percent or three percent plus inflation, whichever was lower. Sen. Kayse Jama (D-Portland) amended the bill to increase the cap after pushback from both Democratic and Republican legislators.
The amended bill passed the Democrat majority Senate with a vote of 17 for and eight against, and the House with 32 for and 18 against, with voting falling mostly on party lines.
SB 611 does not apply to properties that have been built or became rentals within the last 15 years, and it does not apply to increases that occurred before passage of the bill (retroactively) or in cases where the tenant was given an otherwise valid notification of an upcoming rent increase before July 6.
The bill was supported by tenants rights advocate groups such as Stable Homes for Oregon, the Coalition of Communities of Color, the Community Alliance of Tenants and the Oregon Housing Alliance.
One group opposing SB 611 was Multifamily NW, a business association of housing providers, investors and other industry partners. “Multifamily NW did not support SB 611 because further regulating how and when housing providers can increase rents ignores the real expenses incurred by housing providers,’’ says Jonathan Clay, who works on Multifamily NW’s public affairs team. “The additional restrictions that are part of SB 611 exacerbate the housing crisis by forcing housing providers and developers to invest outside of where these regulations are placed.”
Hebb and other supporters of the bill disagree that it will significantly discourage investment in housing development. “I don’t think there’s any evidence to show that passage of [2019 bill] SB 608 led to reduced construction, or reduced investment; in fact I think there’s evidence that indicates that 2021, for example, was a banner year for investment in multifamily housing development,” says Hebb. “ We think that rent stabilizers are fair to tenants and landlords. 10 percent is certainly within a bandwidth to allow for reasonable rent increases year over year.”
One area where Stable Homes for Oregon and Multifamily NW agree is that more measures are needed to solve Oregon’s housing crisis. Both groups supported legislation to provide emergency rental assistance to Oregonians in danger of being unable to pay their rent.
During the pandemic, the federal government provided Oregon with over $400 million in emergency rental assistance, which was paid out to more than 67,500 households. During that time monthly evictions averaged around 1,000 per month, only to jump back up to over 2,000 a month after the emergency funds ran dry.
In June, the legislature sought to make up for some of those lost funds by passing a measure which combined with an earlier measure provides $81 million in emergency rental assistance for the next two years. “That is less than we hoped for,” says Hebb. “We were collectively working for a $100 million investment, but that is very significant.”
Overall Hebb thinks the Oregon legislature is making significant progress in addressing the housing crisis. “They’ve taken steps to stabilize rents, they’ve taken steps to provide rent assistance, they’ve taken steps to fund new affordable housing, to streamline development and to reform and improve the eviction process. I think they’re on the right track.”
The full text of SB 611 can be found at bit.ly/3KquhFd.