SB 608 – Rent Control
SB 608 fundamentally alters the landlord/tenant relationship for residential property in Oregon. It is a poorly thought out bill that will have negative impacts on both Oregon landlords, and ultimately Oregon tenants.
Property ownership has been defined as a “bundle of sticks”. When private property is purchased, the owner acquires various rights, which together comprise the bundle of sticks that belong to the property owner. One of the most important and fundamental “sticks” in the bundle is the right of the property owner to control possession to the property. Essentially, the owner maintains the authority to determine 1) who can enter onto the property, 2) for what purpose they can enter, and 3) how long they can remain.
Unfortunately, SB 608 fundamentally weakens the ability of the property owner to control possession of his property. Under the bill, if a landlord rents his property to a tenant and the tenant occupies the property (lawfully) for at least one year, the landlord loses the right to evict the tenant, unless the tenant fails to pay rent or commits one or more serious offenses, from threatening to harm another person to inflicting serious damage to the premises to selling drugs to prostitution. Absent one of these harmful acts, once a tenant remains in the premises for at least a year, the landlord loses the ability to evict the tenant, meaning the landlord loses the ability to control possession of their property, a fundamental right of property ownership.
The landlord may still terminate the tenancy without cause, but only in certain circumstances, such as the intent of the owner to occupy the unit, the need to make significant repairs to the unit, or the landlord’s desire to sell the unit to a new owner. If any of those circumstances arise, the landlord may terminate the lease, but only upon giving the tenant a lengthy notice period prior to terminating the tenancy, and paying the tenant one month ransom to get the tenant to vacate the premises.
If the landlord attempts to terminate a tenant and does not do so correctly, the landlord is liable for any damages incurred by the tenant and an amount equal to three months rent, even if no damage has occurred.
The second major change resulting from SB 608 is the limitation on rent increases that a landlord may impose. The bill limits rent increases to no more than 7 percent plus inflation in any 12 month period. The rent increase limitations do not apply, however, to dwelling units constructed less than 15 years ago. In other words, for the first 15 years after a dwelling unit is built, the limitations on rent increases do not apply. After that time, they do.
Forcing a property owner to continue to allow a tenant to remain on the property interferes with the property owners ability to control his property, and interferes with the ability of the property owner and the tenant to negotiate an arms-length contract for the use of the property. The end result is that the legislature is making it less enticing for a property owner to become a landlord at precisely the time that the state, facing a severe housing shortage, needs property owners to become landlords. That doesn’t make sense, but it is what happened.