If you’ve been following the local news, you know that there are a number of proposed changes to Oregon law that may affect commercial real estate in Eugene. In this episode, René Nelson shares her expert opinion on what effect those proposals may have.
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Patrick: Today we’re talking with René Nelson, CCIM, a well-known multifamily expert and commercial real estate broker about proposed changes to Oregon law.
René, how do you think commercial real estate in Eugene will be affected by proposed changes to Oregon landlord and tenant laws?
René Nelson: You know, ultimately, I think the excitement to own multifamily will diminish with the government now being involved in regulating rent control. I think we’re going to see landlords be concerned that they’re not going to be able to increase their rents as aggressively as they have in the past. However, one thing that we are going to see is now every year almost all landlords will raise their rent. I have a property that I have a residential tenant in that’s been with me for 12 years, and I’ve only raised their rent twice and that was because my property taxes increased. Not all landlords are greedy or bad people. If all property owners act independently but in unison and start to raise rents on an annual basis, they’re going to increase rents overall for tenants. The new rent control that the legislation is trying to put in effect to protect tenants is actually going to have a significant impact on them.
What impact will this have on new construction, do you think?
René Nelson: Well, you know, developers normally want to go to good locations that have a good tenant pool, strong demand, and tenant income is high. The idea of rent control just flies in the face of opportunity. I think many investors are going to look at that and say, “You know, I’d rather go to another state,” because if they’re going to develop in an area where there’s free market and no rent control, that’s where they’re going to gravitate as opposed to dealing with government regulation, having to worry about how much they could potentially raise rents. If you go over the guidelines, now there’s some proposed penalties. I think what’s going to happen is the lack of new construction, that’s going to create even more of a housing crises because we have lots of tenants moving into the state of Oregon and especially Eugene because of opportunities for jobs. I just think there’s going to be a housing shortage and rents are just going to continue to bump up against the top threshold that we’re going to talk about in our next blog cast.
Patrick: Thank you, René. If you need more information, go to eugene-commercial.com or call Rene at 541-687-5871.
Part of doing a good job of managing your investments is keeping up to date on how changes to the law can impact them. With so many proposals afoot, be sure to check back regularly as we analyze what they mean to you. And, if you ever have a question, René and her staff of commercial real estate professionals are only a phone call away!