In my 2017 Portland Real Estate Market Report, I dive deep into the issues and controversies around rent control and inclusionary zoning in Portland and the state of Oregon. To help readers more fully understand the issue, here are summaries of the laws along with full texts, documentation of their refinements, and supplemental materials.
Oregon Senate Bill 1533 functionally allows for inclusionary zoning to become a legal practice in certain cities and counties throughout the state. It permits those cities and counties to adopt land use regulations or functional plan provisions, or impose conditions for approval of permits, that effectively establish sales or rental price, or require designation for sale or rent as affordable housing, for up to 20 percent of multifamily structure or limit sales or rental purchase to class or group of purchasers or renters in exchange for one or more developer incentives. It creates new authority for local governmental agencies to impose construction taxes on improvements to residential properties at rate determined at the city or county level. The bill requires local governments to use net construction tax revenue to fund certain developer incentives and programs related to affordable housing; additionally, these funds are also distributed to the local Housing and Community Services Department to fund home ownership programs that provide down payment assistance.
Oregon SB 1533 passed into law on June 2, 2016 and quickly became the precedent for inclusionary zoning laws to pass in Portland.
Text as Introduced
Oregon House Bill 2004 declares a state of “renter’s emergency” effective upon passage of the bill. It prohibits landlords from terminating month-to-month tenancy without cause after the first six months of occupancy except under certain circumstances; to pursue termination of tenancy, the landlord must offer 90 days’ written notice and payment of amount equal to one month’s periodic rent. The bill provides exception for certain tenancies for occupancy of dwelling unit in building or on property occupied by a landlord as a primary residence. It makes violation defense against action for possession by landlord. The bill requires fixed term tenancy to become month-to-month tenancy upon reaching specific ending date, unless tenant elects to renew or terminate tenancy; it also requires landlord to make tenant offer to renew fixed term tenancy. HB 2004 repeals statewide prohibition on city and county ordinances controlling rents, and permits city or county to implement rent stabilization program for rental of dwelling units.
HB2004 is in committee with the state Senate with many pundits giving it a 50/50 chance of becoming an Oregon law.
Ordinance 188219, championed by City Councilwoman Chloe Eudaly, is popularly known as the “Relocation Assistance Ordinance.” Within 45 days of giving a no-cause termination notice, a landlord must pay relocation costs to the tenant. Additionally, if a tenant gets notice of a rent increase of 10% or more in a 12-month period, the tenant has the right to decide within 14 days that the increase will force them to move for economic reasons at the end of the notice period; in this situation, the landlord then has 14 days to pay relocation costs for the tenant. The ordinance also set compensation amounts based on the size of the living space rented by a tenant.
The ordinance took effect in February 2017; while this law was passed as a temporary bill to sunset October 2017, many housing providers feel this will be renewed indefinitely.
Full Text of Ordinance:
Presentation: [download file from http://efiles.portlandoregon.gov/Record/10681981]
Oregon State Board’s excellent video walking through the ordinance: https://vimeo.com/203339601
Ordinance 188219 builds upon City of Portland City Code, Title 30, Chapter 30.01; of particular note is the updates of section 30.01.030, which contains the definitions of concepts such as “affordable housing:” https://www.portlandoregon.gov/citycode/?c=28481
To understand these laws in context – and to see why I, along with most others in the real estate industry, argue that these aren’t the interventions our housing crisis demands – check out my full 2017 Portland Real Estate Market Report.
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.