The 2019 Legislative Session is now in progress and the results of the November elections are proceeding as predicted. Speaker of the House Tina Kotek along with Senate Majority Leader Ginny Burdick instantly submitted SB 608, which is an “emergency” statewide rent control bill. This means when it passes (as it is universally expected to), and when Governor Brown signs it into law, it will take effect immediately.

Housing advocates on all sides of the issue agree that with rising rents, greater density and a demand that outpaces inventory, our state like so many others has finally reached a housing crisis. Elected officials seek to find government solutions for social problems. Consequently, for the state to pass an emergency housing bill should come as no surprise to anyone.

While landlords are understandably concerned and confused, it’s worth noting that most tenant advocate groups have lined up against SB 608, claiming it does not go far enough.

Here is a summary of the bill ( Click here to review the full version: SB0608):

Briefly, SB 608:

  • Caps rent increases at 7% per year + CPI (which currently adjusts to just over 10%)
  • Restricts no-cause terminations to the first year of the tenant’s occupancy
  • Requires fixed term leases be converted to month to month tenancies upon termination unless a new fixed term lease is re-negotiated
  • Adopts an annual “3 strikes” system to terminate fixed term leases for repeated violations/warnings, with 90-day notice
  • Defines “Landlord Exceptions” to terminate tenancies for sale / renovation / demolition / family move-ins of unit, and
    • Establishes a relocation fee equal to 1 month’s rent for Tenants being displaced
    • Relieves small Owners (with 1-4 units) from paying relocation fees
  • Exempts Owner-occupied tenancies (renting to roommates) and Owner-occupied duplexes
  • Provides Tenant defense against “action for possession” with 3 months’ rent plus actual damages for violations when Tenant brings action within 1 year

Like many sudden challenges in life, our first reaction is denial and anger.  When we first learn of a threatening medical diagnosis, for example, these types of outbursts are normal.  Bargaining is the next stage; trying to figure out what we could have done or ought to do differently to avoid or eliminate the obstacle. Next, a falling into a state of depression is common.  Ultimately, there comes “acceptance”. At that point we begin to cope  and regroup. With renewed determination, we can then even learn to thrive in our new reality.

Anyone who has read my posts in the last 2 years can easily trace all of these symptoms in my words.

Today I am calmly reassuring my clients and peers that – as ominous as “rent control” sounds – Oregon’s new law will ultimately take shape without a seismic impact to our industry. In fact, for the vast majority of tenants and owners, the provisions written into the new law will not be noticed at all.

My testimony before the House Committee on Human Services and Housing reflected my appreciation for the equities crafted into SB 608 along with my concerns that these new regulations not be altered (or eroded) by the influences of Tenant Rights groups in the future.

Statistically, renters remain for 23 months on average (Oregonian Article Feb 11, 2019). The overall trend for rent vs ownership is proving that the demographics are dramatically shifting to increased rental demands. Oregon is rated in the top 3 “in-migration” states in the country. Portland’s growth rate keeps pace with destination cities around the world.  Our appeal is summed up by the 3-word sentence universally spoken by Oregon newcomers and natives alike: “Quality of life.”

Real estate in general and rental properties in particular, especially in our market, have long been and will continue to be excellent investments.

Being a landlord has always proved to be a challenging occupation. As a professional property manager, my days are filled with drama from tenants, owners, and maintenance concerns. I am often working through a maze of regulation reviews or budget and accounting issues. And (of course) the unexpected emergencies seem to arise at the least opportune times.

The fact is, these problems represent the core business product I offer my clients – to navigate the complexities and maintain their compliance and provide them with peace of mind.

And with the passage of SB 608 I will continue to do just that. As various nuances surface that affect individual units, tenants and owners, our company will be on top it, making sure we continue to provide the best advice, service and execution possible.