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The Portland City Council moved closer Wednesday to ending an exemption to the city’s relocation ordinance for small-scale landlords.

The council’s measure would also make permanent the relocation ordinance, which took effect in February 2017. Without council action, the ordinance is set to expire April 6.

Commissioners also would require the Housing Bureau to collect data on relocation payments. That would be the first step in creating a rental registration database that could eventually include citywide data on rents, evictions and lease agreements.

Commissioners are poised to allocate $394,700 to develop the system and pay for two new Housing Bureau staff positions to administer it.

鈥淲e’re trying to make sure that we’re collecting good data and are tracking our policies going forward,鈥� said Shannon Callahan, interim director of the Housing Bureau.

The current relocation policy exempts landlords who rent only one housing unit from paying relocation costs. Ending that exemption has prompted backlash from some small-time landlords who said regulatory requirements would be a burden.

Landlords are required to pay their tenants $2,900 to $4,500, depending on the unit’s size, when evicting tenants without cause or prompting them to move with a rent increase of 10 percent or more in any 12-month period. Removing the single-unit exemption would affect an estimated 20,000 dwellings.

Mayor Ted Wheeler defended commissioners’ drive to end the exemption.

鈥淥n the margin, I believe it is possible that some landlords could remove their units from the market,鈥� he said. 鈥淗owever, the broader stability provided to the overall market, in my opinion, outweighs the concerns of the loss of some units in the near term.鈥�

Commissioner Chloe Eudaly said the policy is the result of compromise among the five commissioners.

鈥淚 want to acknowledge this policy would look very different if it was left up to any single commissioner,鈥� she said. 鈥淏ut this is a group effort requiring compromise from all of us, and while I have some concerns 鈥� I’ll call them yellow flags 鈥� that I’ve raised, and which I’ll be watching closely, I want to acknowledge that we are taking a huge step forward today in the right direction, and that is something to celebrate even if it’s not perfect.鈥�

Commissioners heard more than three hours of testimony by renters, landlords and city staffers. A second and final reading is likely to be held next week.

Tenant advocates turned out in force to support removing the exemption.

鈥淚nvoluntary displacement affects us all as a community, especially when it leads to homelessness,鈥� said Katrina Holland, executive director of the Community Alliance of Tenants and a member of the city’s Rental Services Commission advisory board. 鈥淲e’ve all experienced the externalities created by a business decision between one person and another, and we don’t believe it has to continue to fall on the rest of the population to make up that burden.鈥�

Commissioner Amanda Fritz offered an amendment that would exempt landlords who establish a fixed term of tenancy and notify the tenant prior to occupancy of the landlord’s intent to sell or permanently convert the unit to another use.