BY D. ADAM ANDERSONThis article originally appeared in the May 1, 2017 edition of the Portland Busines Tribune.
The Oregon legislative assembly is currently at work on big changes to Oregon’s residential landlord-tenant law. On April 4, 2017, House lawmakers passed HB 2004A (the “Bill”) along mostly partisan lines, sending to the state Senate a bill that would both drastically change the permissibility of and procedures for no-cause residential evictions, and lift the current statewide ban on rent control measures by local jurisdictions. The Bill comes in the wake of Portland’s recent city ordinance, passed in February, generally requiring the payment by landlords of relocation costs to involuntarily displaced residential tenants. As of this writing, the Bill is scheduled for hearings and debate before state Senate committees, but a final vote is not yet scheduled. The Bill is currently written to take effect immediately upon being signed into law.
The Bill establishes a statewide, for-cause eviction standard that would restrict no-cause evictions after six months of occupancy. Under current Oregon law, residential landlords renting on a month-to-month tenancy may generally terminate without cause with 30 days’ notice (a local Portland ordinance extends this to 90 days). This would remain the same under the Bill for month-to-month tenants who have occupied a unit for less than six months. After that, and for all tenants renting under a fixed lease term regardless of occupancy length, tenants may only be evicted for specified tenant fault-based causes under the law, or for certain specified business or personal reasons of the landlord. Permissible landlord-based reasons include the sale of a dwelling unit to a buyer intending to use it as a primary residence, and the conversion of a dwelling unit into a non-residential use. The Bill would apply generally to any landlord renting more than four dwelling units.
If the eviction is for one of the permissible landlord-based reasons, the tenant must be given a 90-day notice and the equivalent of one month’s rent to cover moving expenses (the Bill as originally introduced would have required three). These statewide standards are less stringent than those of the Portland ordinance, which would continue to control within the city at least until it sunsets on October 6, 2017, or is otherwise extended. The Portland ordinance currently requires relocation assistance ranging from $2,900.00 to $4,500.00 for any no-cause eviction (including “constructive” evictions resulting from 10% rent increases), depending on the number of bedrooms in the dwelling unit.
The Bill would also repeal the current statewide prohibition at ORS 91.225, in place since 1985, on local (city and county) rent control ordinances setting limits on permissibly charged rent amounts. This is in lieu of a single statewide rent control program, which was removed from the Bill as originally introduced. The Bill would allow local jurisdictions to adopt rent stabilization programs so long as they provide landlords “with a fair rate of return” to be determined by the local jurisdiction. Such local ordinances must provide a petition process for landlords to seek a higher rental rate than the one set and provide a five-year exemption for any “new residential development” running from the date of issuance of the first certificate of occupancy.
Critics of local rent control worry about a rash of rent spikes prior to the law taking effect, a checkerboard of different local legal standards for landlords operating in various jurisdictions, and the effect of pushing needed urban development to suburban jurisdictions that may have a less stringent rent control regime (or none at all). Whether rent control will adequately address Oregon’s shortage of affordable housing remains to be seen. One can reasonably assume, however, that the enactment of HB 2004A will likely result in the City of Portland at least considering a local rent control program.