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Advocates and opponents of tenant protection rules and rent stabilization measures are heading for a showdown before the Oregon Legislature.

Proposed rules, if they were to pass, could have widespread effects in the Portland area’s multifamily housing market.

Proponents say tenants must be protected from no-cause evictions and dramatic rent increases that can send renters onto the streets.

But the multifamily lobby is pushing back hard, suggesting that rent control and tenant protections won’t work and could hurt housing production 鈥� thereby deepening the rental housing crisis.

A package of bills has been filed ahead of the Legislature convening Feb. 1:

• H.B. 2001 would impose a 5 percent cap on rent increases, with some exceptions 鈥� for example, if repairs must be done to the building for health and safety reasons.
• H.B. 2003 would lift a state prohibition on local rent control policies. Similar to last year’s bill that eliminated a statewide ban on inclusionary zoning policies, H.B. 2003 would require local governments to offer multifamily developers the choice to pay a fee in lieu, and limit rent controls to buildings of 20 units or more.
• H.B. 2004 would require 90 days’ notice before a no-cause eviction could be carried out. The bill also would mandate that leases become month-to-month after a fixed term. The bill would also end the statewide pre-emption on rent control.
• H.B. 2240 would prohibit landlords from terminating a month-to-month lease without cause.

The debate has echoes of last year’s push for inclusionary zoning, when the city of Portland and housing activists pushed lawmakers to end a statewide ban on such policies.

Multifamily housing developers lost that fight. Now they’re gearing up for another round. Business interests are arguing that a larger supply, not new rules, is needed to ease the housing crisis.

鈥淚f you don’t address the supply side, it doesn’t encourage new development, which puts a constraint on supply, which puts pressure on rents,鈥� said Greg Frick, a partner at HFO Investment Real Estate in Portland.

An apartment owners group, Multifamily NW, is spearheading lobbying, along with the Equitable Housing PAC, to fight the proposed rules. The group has instead proposed a voluntary rent-assistance program that landlords could contribute to in exchange for tax credits.

鈥淩ent control only helps a select few 鈥� it doesn’t help all renters,鈥� said John McIsaac, spokesman for Multifamily NW.

McIsaac said no-cause evictions are a valuable tool for ousting problem renters.

鈥淢y concern is for the safety of the good tenants,鈥� he said. 鈥淣o-cause evictions were not created to raise rents. No-cause evictions were created to evict bad tenants who are posing a risk to their neighbors.鈥�

The Equitable Housing PAC donated $2,500 to the Senate Democratic Leadership Fund on Jan. 3.

Multifamily brokers and owners say investors will look to support construction in other markets if Portland makes projects less economically attractive.

Rent control could have a particularly negative impact on the market coming on the heels of inclusionary zoning, said broker Gary Winkler, principal at ABR Winkler Investment Real Estate.

As it is, landlords’ costs are rising for items such as maintenance and remodels, where strong competition for labor has pushed prices up, Winkler said.

鈥淚 understand rent is expensive,鈥� he said. 鈥淚 just don’t think rent control is the way to offset it.鈥�

Groups pushing for the housing bills have formed the Stable Homes for Oregon Families Coalition. The groups include the AFL-CIO and SEIU labor unions, the Community Alliance of Tenants, Oregon Housing Alliance, OPAL Environmental Justice Oregon, Oregon Opportunity Network, Welcome Home Coalition and Asian Pacific American Network of Oregon.

The city of Portland and Multnomah County have prioritized the housing legislation, and Housing Director Kurt Creager said he expects to be in Salem during the session to lobby for the bills.

There are some signs that the rental crisis is easing as new supply comes online.

鈥淚’m talking to people that are seeing an uptick in vacancies,鈥� Winkler said. 鈥淲e’re kind of plateauing.鈥�

A surplus of luxury apartments coming online has led some high-end Portland properties to offer concessions such as two months’ free rent.

Yet overall, the rental market is undeniably tight. The Portland-Vancouver, Washington-Hillsboro area had a 5.6 percent vacancy rate during the third quarter of 2016, according to the U.S. Census Bureau. That was up from 4.9 percent during the second quarter.

And it’s not just the Portland area. Southern and Central Oregon have their own rental crises, with vacancies nearing 1 percent in some communities, said Alison McIntosh, deputy director at the Oregon Housing Alliance.

鈥淚n most communities in Oregon, the supply crisis is not getting any better,鈥� she said.
Renters are stressed and anxious and need greater stability, Multnomah County Commission Chairwoman Deborah Kafoury said.

鈥淚n order for families to be successful, they need to have a safe and affordable place to live,鈥� she said. 鈥淭hat’s been harder and hard to come by.鈥�

Local governments also need to fix the housing crisis for the sake of their own budgets, Kafoury said.

鈥淲e want to craft something that works for everyone, but at the governmental level, we鈥榬e spending millions of dollars to get people into housing and help them stay in housing, and we want the business community to step up as well,鈥� she said.

Multnomah County supports lifting statewide pre-emptions, believing decisions are better made at the local level, Kafoury said.

The tenant protection and rental caps are presented in separate bills, but supporters and opponents are gearing up for a fight over both issues.

鈥淲e really need to talk about both issues together,鈥� said Vivian Satterfield, deputy director of OPAL.