From the AP-- Oregon set to become 1st state with mandatory rent controls

It starts off--

" Faced with a housing shortage and skyrocketing rents, Oregon is poised to become the first state to impose mandatory rent controls, with a measure establishing tenant protections moving swiftly through the Legislature.

"Many residents have testified in favor of the legislation, describing anxiety and hardship as they face higher rents. Some have gone up by as much as almost 100 percent — forcing people to move, stay with friends or even live in their vehicles.

"The town of Medford recently authorized churches to offer car camping for the homeless on their parking lots. Cities across the West Coast are struggling with soaring housing prices and a growing homelessness problem.

"A House committee on Wednesday backed the measure, sending it to the full chamber for a vote as soon as next week. The Senate passed it last week."

And other highlights include--

"Oregon’s measure prohibits landlords from terminating month-to-month leases without cause after 12 months of occupancy and limits rent hikes to once per year. Those increases are limited to 7 percent above the annual change in the consumer price index.

Government and charities will have to provide the housing units. Landlords raised rents as much a 100% year over year because the costs went up by that and more. Nearly impossible to evict a house-beater, from one former landlord I know. Reportedly, many properties for sale, just sitting empty, as no one wants the hassle.

Unfortunately, in consideration of exorbitant rent increases, rent control is on its way in many places. Look for it soon in a jurisdiction near you.

Rent control is an unavoidable consequence of unlimited rent increases where incomes have not kept pace. While the marketplace is the most efficient method of keeping rents where they should be, politicians find it too hard to manage the marketplace, and rent control is their fallback policy.

You may expect that the limit of (7% + CPI) will not remain in place, but will be replaced by a figure more in touch with OR's housing / tenant balance.

P.S.,

" CPI is 2-3% so 7 points above that is 9-10%. Who here is getting 9-10% year on year rent increases? "

We are. We have had 6-12% increases no for several years, which are, of course, a result of limited housing and immigration overload (legal and otherwise).

As to be expected, rent control is raising its ugly head. The City of Los Angeles has added 40,000 new units in the last year, but calculations show that the annual increase to stay even is much greater than that.

NE, that’s it exactly! Fewer and fewer landlords .

And, then the politicians will just pass more laws, so they can say they have a plan. Well, I’m a landlord, and I have a plan. My plan is to rent well-maintained housing, to trainable tenants who want to work hard, in whatever form that is, to improve their lot in life. I’ll keep rents reasonable, treat my tenants respectfully, expect the rents to be paid in a timely fashion, and the property to be treated well.

I had to recheck it too...

It says 7% above the change in the CPI which was about 2%... so 2 x 1.07 = 2.14

So a maximum increase in rent of 2.14% ???

Wow.

This will cause a squeeze for landlords... fixing the rent meanwhile property taxes go up, cost of repairs go up...

WL, Berkeley, CA has had rent control for decades, and developers love to build huge new apartment megacomplexes there. Several ones already went up in Downtown Berkeley, and Mill Creek Residential is currently developing a gigantic one. The same goes for San Francisco.

" Berkeley, CA has had rent control for decades, and developers love to build huge new apartment megacomplexes there. Several ones already went up in Downtown Berkeley, and Mill Creek Residential is currently developing a gigantic one. The same goes for San Francisco. "

Thats because CA law doesn't allow local rent control to be applied to new construction. The purpose of the law is, of course, to encourage new construction so as to increase housing supply.

Thus, its is very worthwhile to purchase old property, tear it down, and construct new housing, as many units as possible, because units in the old property were rent-controlled, and units in the new development are not.

Yes, I just posted about this the other day. The politicians here on the left coast just can't help themselves. They know that all they need to do is to control every aspect of our lives and then all will be right with the world.

Delusional and shortsighted are the posters here that think "lazy" lawmakers and bureaucrats would draft language that says "7 percent above CPI" rather than just say "CPI", because they care about that extra 0.14%

"The bill would cap annual rent increases to 7 percent plus inflation throughout the state. Annual increases in the Consumer Price Index, a measure of inflation, for Western states has ranged from just under 1 percent to 3.6 percent over the past five years."

Rent control is the #1 reason why the poor gets poorer.

How's that?

- Rent control discourages tenants from making the move to ownership, thus making sure they remain poor tenants for life.

- As Robert Ontario mentioned, rent control is designed to bankrupt small landlords, then let municipalities take over with the end result of the poor gets poorer.

"Rent control discourages tenants from making the move to ownership,"

Oregon has imposed statewide laws, as has Washington state that are having a very negative affect on landlords. At least that is the anecdotal evidence I have gleaned from residents of those states. Landlords quitting the business, leaving houses sit empty rather than rent.

It's not as if OR LLs don't already have enough hurdles to get over.

We can't hardly touch a sfh for less than $300k near Portland. That same home might rent for just $1500. Subtract from that about $400/mo just for taxes and insurance. Less the cost of repairs, maintenance, management, vacancy allowance and turnover costs, etc, etc. There is no profit to be made.

And multi-units aren't much better. You can easily pay over $200k per unit for very small, simple places.

Add to that all the burdensome regulations and horrendous fees associated with trying to do a "No Cause" eviction and having to pay to current residents to pay their moving costs, 90 Day Notices... and small LLs are closing up shop and selling out. And for everyone who leaves the business that just means that much fewer rentals available.

That's why I say the politicians are short-sighted and delusional. They only want to do what feels good and what they think will help today. They don't have any common sense or vision of what will happen tomorrow. Something is missing in that part of their brain I suppose.

I did some Zillow surfing, and Yikes! There are no low end properties out there. Most lower priced homes were in mobile home parks. But, one thing I noticed, after my brief five-ten minute search, there are no ‘dumps’ either.

Here, in the Midwest, AKA, rust-belt, cities are loaded with street after street of $30-$40k handyman specials. Violent crime is higher in those areas too. I’m using hyperbole here, dear readers, we don’t have THAT many. But, vast difference in the housing stock.

I admit, I don’t what causes the difference. Whether it is a weather issue, or, timeframe of when areas were developed ( lots of post-WWII small prefabs on very small lots in Middle US.) , or ?? Mobile homes not as desirable in mid-west, Great Plains where tornadoes are more frequent? Maybe. House on wheels desirable if the mountain is getting ready to explode? Maybe.

But, there sure wasn’t much under $100k out there. But, also nothing I spotted that was a ‘fixer’. So, no where for a new landlord to get in, start a business, and offer more rentals.

Moshe, you are correct, and I totally forgot about the CA Costa–Hawkins Rental Housing Act of 1995 that allowed new construction not to be under rent control. The measure to repeal it was right on the CA ballot in 2018 too.

the limitation on the rent hikes is the LEAST of the burdens on owners. the laws passed ALWAYS have lots of additional terms included in their wording. there will be mandated fees for terminating tenants, limitations on permissible evictions, "disabled" impositions, fees to register units, obligations to arbitrate disputes. the recent rent control ballot issue in national city calif (which did not pass) proposed a FIVE member "Rent Board" which required that THREE of those members be TENANTS. that's the same as two wolves and a sheep voting on who to eat for lunch.

Right you are Busy. There are really no fixers any more. Most of those homes have had 50 flippers a month offering to purchase those places for the past several years. Anything priced at a somewhat reasonable price is an (often) disguised manufactured home or an attached home (photo not even showing that it is attached). I guess the agents are just hoping that people will come out to see them and in desperation just purchase and overlook the obvious problems in owning those properties.

JB, What will you do? Will you continue doing business in Oregon, or will you move your investments to another state?

It’s a really hard situation to be in. I’m sorry for your problems, and hope it works out for you.

Thanks Sandy. It's a shame because I was born and raised here. All of my family is still here. I love the state, but the people are getting stranger and stranger and they keep coming from CA and Seattle and other places that attract the same element.

I may stick it out a bit and see if they reverse course. We do have a few REIA's in the state but our voices never seem to be heard. But I don't hold out much hope. The only thing keeping me renting at this point has been that I purchased while prices were more reasonable.

JB, that's awful. I remember Oregon being a beautiful state. Well, hopefully they'll see the error of their ways and change course. I hope it works out for you.