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Oregon Passes Statewide Rent Control

by | Mar 12, 2019 | Articles, Uncategorized

Oregon just passed a statewide rent control law, the first of it’s kind in the nation. Unfortunately there is no evidence or support from economists that rent control lowers rents or provides more units. On the contrary it reduces mobility among tenants and makes other investments more attractive to investors. See a great summary and FAQ with link to the bill.

The market will adapt and those costs and risks will get passed onto the tenants. Already Portland has seen a 10+ percent drop in available rental homes as owners are selling when they go vacant. I personally had to leave two rental homes vacant for collectively a year as I knew that I wanted to sell and I would be forced to pay relocation fees when the leases were over. The crazy thing is that an owner and tenant can no longer have a valid lease in my opinion if the tenant can break the lease when they want and the landlord is committing to a lifetime lease for the tenant who has no investment or risk.

This also comes at a time when luxury apartments are in hyper supply and affordable rentals are hard to find. The market is already seeing lowering rents. Landlords who have kept rents below market will be forced now to raise rents as new owners will not be able to raise rents to fair market value. The only solution is more units and the state of Oregon just made that far less attractive to developers and investors who create those units. If we really want to solve the problem let’s actually solve it by creating incentives for builders to build more affordable units.

Unfortunately our representatives chose a quick politically popular band-aid and not a real solution. These new laws will push many investors out of state which is already happening at a scale beyond what I expected. It will also hurt mom and pop investors with a couple units who cannot afford the legal bills that will now come with having a rental business. The future will be corporately owned and managed super complexes whose profits will likely be headed out of state.


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