Rent Control in Portland, OR — Everything You Need To Know As a Property Owner

You’ve likely noticed that Oregon is growing quickly. Take a look at any “top cities to move to” lists and you’ll see Portland and the beautiful locales of Oregon as a whole in the top 10. The City of Vancouver Washington is one of the fastest growing cities in the state!  As cities grow, different cause and effects include congested traffic, businesses starting or relocating, and great new people to share in our community’s awesome benefits. This migration brings large numbers of new residents very quickly, and unfortunately we don’t always have places for them to live.

It remains clear that Oregon needs more housing, and we’re in a ripe position for investors who want to assist their growing state and cities. According to More Housing Now!, an independent media outlet covering the situation on the ground,  “The solution is more affordable rental housing, but vocal activists – and some elected politicians – are demanding rent control and a ban on no-cause [terminations]. Rent control has proven to be an unfair advantage to those who don’t have it. It hasn’t worked in New York or San Francisco; it creates few winners and drives up the cost of rent overall. No-cause notices are used to remove drug dealers and violent people – those who threaten the quiet enjoyment of other tenants. Why would we make that harder? Short-term, politically driven, single solutions don’t create more housing.”

This puts landlords, property managers, and property investors in a difficult and often misrepresented position. We all want to help ease the growing pains of the city, but we know we need to protect our investments and our property owners as well. That’s why we’ve put together this guide outlining the current status of rent control in Portland, OR.

Everything You Need to Know About Rent Control (Rent Stabilization) in Portland, OR


What is Rent Control?

At a high level, rent control is when the government controls and regulates the amounts charged for rented housing.

Rent control is an attempt by the elected officials to protect their most vulnerable constituents without, necessarily, considering the laws of supply and demand. We’ve seen in other cities that rent control can cause many unintended consequences that are do not seem to be being considered by Portland elected officials.

“People don’t often think about it in this way, but property management is about managing human behavior. It’s making educated decisions on how humans will behave in the future, based on how they’ve behaved in the past,” says President of InterWest Properties, Inc., Robert L. Johnson.

Rent control is a forced effort by government to control natural cycles of growth that are typically better left for the marketplace to acclimate to and solve.


How does rent control negatively impact a property owner?


While there have been horror stories told of rent control in cities like New York, Chicago, and San Francisco, in Portland, “rent control” is referred to as “rent stabilization.”

When the government takes over a marketplace, as they are doing with the property management industry in Portland, landlords are often the scapegoat for factors beyond the control of politicians, landlords, and tenants themselves.

The flavor of control In Portland currently means the following:

  • No more than 10% rent increase regardless of changes in the marketplace
  • Elimination of no-cause notices to vacate (without a huge penalty)
  • An environment that is no longer pro-business
  • Property owners have less control over what they do with their own property


How do the expert property managers at InterWest Properties navigate the new rent stabilization city policies?

While it is important to note long term tenants have lower rent values than tenants who are newer, 10% rent increases are certainly not average, and have not been common in the last several months city wide.  Yet as property managers, it’s important that we stay on top of all of the important rules and regulations as they change, or as new policies are introduced. Knowledge is power, and understanding the evolving landscape in this industry allows us to make strategic decisions that protect and benefit our clients and properties.

The political environment in Portland is a maze that requires experience to navigate. We are able to hold investors’ hands and educate them as we continually stay actively involved in the political scene. Communication is key and that’s why we take the painstaking efforts to properly understand each shift in the marketplace, then communicate the changes back to our clients and property owners. This is about giving you the information you need to make smart decision and stay calm in a tumultuous political climate. This may include coaching a property owner to hold their investment longer and delay plans for remodeling. It may also include coaching a property owner to pay the stiff penalty in order to meet their needs as a cost of doing business. Each investor is different, and we believe navigating these new rent stabilization policies is critical, and we are the team you want on your side.  


What are the protections that can be put in place against rent stabilization / control?

It’s important to know what actions are appropriate to take with your property and which actions are penalized by the government. Our property management team can advise on the pitfalls and and exemptions that are different between property owners. Working with us puts you in a more advantageous position than navigating these uncharted waters alone.


What is Tenant Relocation Assistance?

As a landlord in Portland, under rent stabilization, should you make a rent increase over 10-percent or above in a calendar year (which may include new utility expenses passed along to tenants), a tenant can notify you that they are leaving. You as the landlord must pay money to them for the purposes of relocating. Failure to do so can result in huge fines and penalties.


The same thing goes with a tenant who has a lease coming to an end in Portland. Traditionally, a landlord might issue a no-cause notice to terminate tenancy for any number of reasons. Now, however, the property owner is required to pay relocation assistance to take back control of their own rental property—even though the lease terms have come to a contractual end.


The Tenant Relocation Assistance fees are as follows:

  • Studio or Room — $2,900 in relocation assistance owed to tenant
  • 1-bedroom — $3,300 in relocation assistance owed to tenant
  • 2-bedroom — $4,300 in relocation assistance owed to tenant
  • 3-bedroom and above — $4,500 in relocation assistance owed to tenant

See also: No-Cause Notice vs. Eviction — What’s the difference?

If you have further questions about rent control or rent stabilization in Portland, OR, we’d love to jump on a call with you.

Get a FREE assessment of your rental property. Start here!

Posted by: InterWest Properties on July 5, 2017
Posted in: Property Management