Oregon Rent Control Updates: HB 2004 Dies, Portland City Ordinance Stands

By Nick Krautter | Articles

Oregon Rent Control Updates: HB 2004 Dies, Portland City Ordinance Stands

July 11, 2017

In our 2017 Portland Real Estate Market Report and our blog, we’ve been reporting on the city of Portland and state of Oregon’s recent attempts to impose laws that will significantly impact the local real estate scene. Here are updates on two key laws that met opposite fates:

HB 2004

After a series of public hearings and amendments, HB 2004 died without making it past the Oregon Senate President’s desk. KPTV explains:

As it was introduced, HB 2004 would have effectively banned no-cause evictions statewide and would have allowed individual cities and counties to enact their own rent controls.

The rent control part of the bill was eventually taken out through an amendment, and several exceptions to the no-cause eviction ban were included in another amendment… Multifamily Northwest, an organization that represents Oregon landlords, released the following statement on the failure of HB 2004.

This is a statewide victory for landlords, of course, primarily because the bill didn’t address the real solution for Oregon’s housing crisis, which is the construction of more affordable and market-rate housing.

Dirk VanderHart of the Portland Mercury gave some context as to the atmosphere among lawmakers and activists as the bill started to fail:

“I can confirm that there is not a path forward for House Bill 2004,” says Rick Osborn, a spokesman for Senate Democratic leadership.

The development isn’t altogether surprising. We reported last month that the Senate was working to reshape the bill in order to win the support of Portland Senator Rod Monroe and others.

As passed by the House in a narrow vote, the bill would have allowed cities and counties in Oregon to establish rent control policies for the first time in more than three decades, limited landlords’ ability to issue no-cause evictions, and more. The rent control provision was stripped out as part of a set of amendments in a Senate committee, as Democrats tried to win over skeptical members of their party (Republicans had vowed to oppose the bill).

Those tweaks angered the group Portland Tenants United, which decided not to support HB 2004 as a result. But they also weren’t enough to appease skeptical lawmakers. Senate Majority Leader Ginny Burdick told the Mercury last month senators were working on amendments that could satisfy the concerns of Monroe—who owns a large East Portland apartment building—Senator Betsy Johnson, and others. And in fact lawmakers did adopt some changes during a work session in the Senate’s Rules Committee a week ago.

They apparently had little effect. And with Senate President Peter Courtney loath to call a bill up for a vote that has little chance at passage, it appears renter protections will join serious tax reform and a whole host of other goals for this year’s legislative session on the cutting room floor.

Portland City Ordinance 188219

Within days of the passage of the Affordable Housing Preservation and Portland Renter Protections Ordinance, local landlords Michael Feves and Phillip Owen (represented by attorney John DiLorenzo) challenged the City Council’s ordinance in court. The suit argued that the ordinance violated state law by both illegally curbing no-cause evictions and functionally serving as a rent control ordinance, both of which are forbidden by state law; it also asserted that the ordinance prevented the execution of existing contracts and created an unlawful situation in which tenants could sue landlords.

In a lengthy decision issued on July 7, Oregon Judge Henry Breithaupt found that the new policy did not violate Oregon law or the state constitution, agreeing with the city on all four arguments that the landlords raised.

In particular, the Judge noted in his findings that the ordinance did not explicitly prevent landlords from raising the rent on their properties, and as such did not constitute rent control. “It is difficult to imagine that the legislature intended something other than proscribing restrictions that would affect all sellers in the market—landlords,” the judge wrote. “The Ordinance—while it applies throughout the city—will apply to any individual landlord only if conditions or contingencies are also satisfied as to that individual landlord. The landlord must raise rents by more than a specified amount in a specified period.”

As a result, the Ordinance will stay in effect at least through October, when the “state of emergency” declared by the City Council expires. Later this week, the City Council will consider tweaks to the ordinance proposed by an advisory body that would substantially alter the rules it sets down, as the Mercury reports:

[The] tweaks would give qualifying tenants 45 days to indicate they want to receive relocation payment (and move) following notice of a rent increase, as opposed to two weeks. And they would give tenants six months from the time their rent is hiked to either decide to stay in place—in which case they’d be subject to higher rents and have to pay the relocation money back—or move.

We will continue to closely monitor these issues and update via our blog; to read clear arguments as to why these ordinances and laws simply won’t address the real problems in Portland’s housing crisis, read our 2017 Portland Real Estate Market Report.

About the Author

Nick Krautter is the author of The Golden Handoff: How to Buy and Sell a Real Estate Agent’s Business which debuted number one on Amazon for mergers and acquisitions. His goal is to teach real estate agents how to grow their business and to help them later retire and benefit from their years of hard work. For the last decade Nick has been a Realtor in Portland, Oregon, where he leads a team and frequently serves as a real estate expert for the media.