Feb. 28 (UPI) -- Oregon became the first state to impose statewide rent control on landlords Thursday, as Gov. Kate Brown signed a proposal passed by lawmakers earlier this week.
The House of Representatives passed Senate Bill 608 by a vote of 35-25 on Tuesday, about two weeks after the Senate passed the same measure by six votes. Brown signed the bill into law Thursday putting it into effect immediately.
"This legislation will provide some immediate relief to Oregonians struggling to keep up with rising rents and a tight rental market," Brown said in a statement emailed to UPI. "But it does not work alone. It will take much more to ensure that every Oregonian, in communities large and small, has access to housing choices that allow them and their families to thrive."
Both Democratically controlled branches of the legislature passed the bill along party lines, with one Democrat voting against it in the Senate and three in the House.
Supporters say the measure is different than older rent control policies that have been denounced by some economists, and opponents worry it could stymie housing investments.
The law caps annual rent increases to 7 percent plus inflation statewide, exempting subsidized rent and new construction for 15 years. It also requires landlords to give a reason for evicting renters and disclose renovation plans. In such cases, tenants are entitled to at least 90 days and one month of paid rent. It also says landlords can increase rent without a cap if tenants abandon a residence.
Real gross rent in Oregon climbed 14 percent in three years to $1,079 in 2017, data show. Over the same period, the rental vacancy rate -- the percentage of homes unoccupied -- increased by 0.23 percent, or nearly twice the national average.
The aim of the new measures is to make Oregon housing more affordable by preventing substantial rent increases.
This week, Democratic Rep. Alissa Keny-Guyer said both Portland and Eugene declared states of housing emergency in 2015 as the rest of the state saw unusually high rental vacancy. Portland's city council voted last week to issue the longest extension of the housing emergency so far, stretching it to April 2021.
"Many landlords do right by their tenants, but unreasonable rent increases and no-cause rent increases are destabilizing some of our most vulnerable residents," Democratic Rep. Mark Meek said.
Pros and cons
The issue of rent control is a controversial one. While some see it as an effective way to keep costs down, critics view it as an ineffective mandate that does more harm than good.
Oregon House Speaker Tina Kotek is in the former camp. She's praised the legislation as a "big step forward" to addressing the crisis.
"This groundbreaking tenant protection bill will make a real difference for Oregon renters," she said in a statement.
Other Democratic supporters like Meek argue controls are necessary to guard against both rent gouging and no-cause evictions. He warned, for example, that base safeguards against no-cause evacuations still allow landlords to hike rent and force tenants out. The bill, he said, creates tougher protections.
"These issues are two sides of the same coin and we must do both," he said.
Supporters also say landlords under existing law can raise rent more than 100 percent at a time, putting tenants in often untenable positions.
"Too many people are living on the edge, one rent spike away from being homeless," said Democratic Rep. Tiffiny Mitchell.
Republican Rep. Jack Zika said said the bill is "well-intentioned" but cautioned that unintended consequences could harm the very renters it tries to protect.
"This is an unprecedented piece of legislation rammed through the legislative process without careful vetting or notice to industries affected by this bill," he said. "Furthermore, this bill decreases the opportunities of home ownership and is a direct attack on property owners."
Some legislators, including Republican Rep. Gary Leif, worried the law is unevenly slanted toward Portland and other metropolitan areas. He suggested those larger areas implement rent controls at the local or county level, rather than statewide.
Rep. David Gomberg, a dissenting Democrat, told UPI in an email he's concerned how the law might affect his district along the coast where mobile home parks are prominent.
"Along the coast, most landlords are families that invested in property to generate some modest income in their retirement. I worry that the more requirements or restrictions we place on them, the more we will encourage them to shift rentals into the lucrative nightly vacation rental market," he said. "Oregon doesn't have a housing problem. We have a number of housing problems that change in different parts of the state. I'll continue to support increasing the supply of affordable housing."
Rent controls nationwide
With the signing of the law, Oregon became the first and only state with statewide rent controls. That decision worries national groups like the National Multifamily Housing Council, a Washington, D.C.-based association representing the apartment industry.
"There is no doubt housing affordability is a crisis in Oregon. However, [this bill] will worsen the imbalance between housing supply and demand," NMHC President Doug Bibby said. "While the intent of rent control laws is to assist lower-income populations, history has shown rent control exacerbates shortages, makes it harder for apartment owners to make upgrades and disproportionally benefits higher-income households."
Though Oregon is the first to control rent on a statewide basis, many areas of the United States have control measures at the local level. Washington D.C., and cities in California, New York, New Jersey, and Maryland have policies in place, but there are 37 states that prevent governments from regulating rent, according to the National Apartment Association.
Florida Rep. Anna V. Eskamani and Sen. Victor Torres have introduced bills to repeal that state's pre-emptive restrictions, which allow rent controls only in the event of a housing crisis considered a serious "menace to the general public."
Democratic Illinois Rep. Will Guzzardi has also introduced a bill to repeal the state's Rent Control Preemption Act.