Is Rent Control In Eugene’s Future? Stay Tuned.
We’re in tune with everything affecting multifamily. We know what’s driving current movements to pass renters’ rights legislation in Oregon. You need to know too. It could have a huge impact on the value of your investment.
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Today we’re talking with Rene Nelson, CCIM, a well known multi-family expert and commercial real estate broker about commercial real estate in Eugene. This special series focuses on issues related to multi-family properties that many investors aren’t as familiar with as they should be.
René what’s being proposed in new Oregon landlord-tenant laws?
René: Well Patrick, let me give you a little back history on how we are at this point. So in February of this year, Portland passed a new tenant-favored law under an emergency housing guideline and basically the new law requires that if you give your tenant a 90-day no cause notice, or if you raise rent by more than 10 percent, and the your tenant gives you notice because they can’t afford the rent, then you have to pay them relocation fees. This is in the city of Portland and it ranges anywhere from $2,500 to $4,300, depending on the number of bedrooms.
That is a substantial hit for a smaller investor who, could you imagine cutting a check for $4,300 out of your pocket? So what’s happened is after that built momentum in Portland, then the House speaker Tina Kotek decided that she was going to push that through the House of Representatives, and she created a similar bill and tried to push that through for the entire state of Oregon.
Luckily for multi-family owners it was defeated in the Senate in July of 2017 as they were just ending for their summer session; however, we know that the tenant advocacy groups are going to try to bring this back to the table when the legislation reconvenes again, so we know round two is just around the corner and it’s going to be a lot tougher to fight it and defeat it this time.
René, will Oregon roll out rent control any time soon?
René: When they rolled that out to the House of Representatives, trying to do it on a statewide level, that was one of the things that they were debating was rent control. That would be for the first time since 1985 that the legislation was trying to look at lifting rent control. We’ve always had our rule that we want to keep things steady, and now they’re looking at letting each city make that decision on whether the city wants to control the rent control and who’s to say that if they say, well you can raise your rents by no more than five percent this year, that they wouldn’t say well next year you can only raise your rent the three percent.
And nationally we’ve seen that rent control is just a disaster in cities like Chicago and San Francisco because once rent control goes into place, the property owner is demotivated to fix things up and improve the property and really the sad thing is the biggest impact is on the tenant and I just don’t think many tenants realize what they’re trying to advocate for rent control, that it’s really going to probably have a big impact on them because multi-family owners are not going to be motivated to improve their property, because the government is going to try to tell them what they can charge for rent.
Thank you, René now our listeners know what’s new with commercial real estate in Eugene right now. If you need more information, go to Eugene-Commercial.com or call Rene at 541-912-6583.