Lawmakers examine impacts of rent control, just cause eviction
SALEM — As the Legislature considers lifting a statewide ban on rent control and outlawing no-cause evictions this year, lawmakers are trying to sift through how differing policies are working.
"Oregon is facing a housing crisis, and the Speaker is hopeful that the Legislature will pass meaningful solutions this session," said Lindsey O'Brien, a spokeswoman for House Speaker Tina Kotek, whose constituents have experienced mass evictions in North Portland.
The bill dominating discussion, and which will receive a public hearing Thursday, March 2, would outlaw no-cause evictions and lift the statewide ban on rent control. Local governments then would have authority to pass ordinances to limit how much rents may increase.
The legislation is more stringent than an ordinance passed last month in Portland. For instance, under the state proposal, homeowners who move back into their house after renting it out, would be required to pay three months' relocation assistance to their tenant. The relocation fees would be required regardless of whether the landlord ended a month-to-month rental agreement or terminated a tenancy at the end of a fixed-term lease. The idea is to prevent landlords from circumventing the law by converting month-to-month tenancies to leases and then, forcing tenants out at the end of a lease, housing advocates say.
The bill also omits exemptions such as those in San Francisco that are meant to prevent discouragement of new construction of residential buildings.
Legislators are deliberating these measures under increasing political pressure from tenants who have experienced skyrocketing rents and mass evictions. Meanwhile, landlords are pushing back on the proposed legislation, arguing it is overbearing, will have unforeseen consequences and will fail to solve the state's affordable housing shortage.
Economists overwhelmingly agree with the landlords' perspective. A 2012 survey of economists by the University of Chicago Booth School of Business found that 81 percent disagreed that local ordinances that limit rent increases have had a positive impact in the last 30 years on the amount and quality of affordable housing.
The science is settled: Rent control "stifles turnover and shrinks supply," said Portland economist Eric Fruits during a meeting of the House Human Services and Housing Committee Tuesday, Feb. 28.
Fruits, who also is an adjunct professor at Portland State University, said property owners are more likely to sell homes than to rent them out when there are draconian rental regulations. And developers are less motivated to build residential units, he said.
The proposed rent stability measures in Oregon would equate to a "self-inflicted housing shortage," he said.
Stephen Barton, former director of the Berkley Housing Department and member of the Berkley Rent Stabilization Board, said rent stabilization polices haven't brought rents down, but they are the "absolute best program to reduce forced displacement."
The average rent in the nine-county Bay Area in California was $2,502 in 2016, according to Real Answers, a research firm in Novato, Calif.
California law allows municipalities to set a limit on rent increases, but once a tenant vacates a unit, the landlord is free to set the unit's rent at market rate, Barton said.
In San Francisco, rent increases limits are tied to inflation. Exemptions to the rules are given to newly constructed residential units, anything built after June 13, 1979, in order to encourage new construction. All single-family dwellings also are exempt. Oregon's proposed law includes none of those exemptions.
It's unclear whether the Oregon bill will be revised to include some of those exceptions, or whether there will be enough votes in the two chambers to pass it. The initial public hearing on the bill is scheduled for Thursday, March 2.
Kotek has been meeting with developers, landlords, housing advocates and tenants to learn their concerns, O'Brien said.