Recently the city of Portland passed a new ordinance that requires landlords to pay relocation expenses if they serve their tenant a No-cause notice or they raise the rent more than 10%. There are a number of things wrong with this ordinance, but as of right now landlords have no choice but to follow the ordinance as it is currently written.
Unfortunately for tenants, this ordinance will increase the number of for-cause evictions and will decrease the supply of available rental units. Hopefully our legislature will recognize this and will start to focus on ways to increase the number of available units for tenants. The main cause for the problems the city cited comes from the low vacancy rates. Even if the city simply speeds up the permitting and rezoning process for projects that will add rental units to the market they would make a large positive impact for tenants.
I have included a copy of the City Counsel's reasoning as well as the exact wording of this ordinance below.
Many rental property owners will be looking to sell their rental properties, or at least hire professional management because of these law changes. If you know of any feel free to give them my contact information as we specialize in management and sales of residential and commercial rental properties.
Copy of city council reasoning and the Ordinance:
* Amend Affordable Housing Preservation and Portland Renter Protections to add relocation
assistance for involuntary displacements of tenants (Ordinance; amend Code Section 30.01.085)
The City of Portland ordains:
Section 1. The Council finds:
1. As noted in the City's 2016 Report on the State of Housing in Portland (the "Housing
Report"), the average monthly rent in Portland rose 7 percent between 2015 and 2016,
with increases between 12-18 percent in 1, 2, and 3-bedroom units. Studio apartments
experienced a comparatively smaller increase of 3 percent.
2. This is now the fourth consecutive year that Portland has seen an annual rent increase in
excess of 5 percent, with the average rent increasing nearly 30 percent since 2012.
3. Significant increases in rents raise serious concerns over potential involuntary economic
displacement. East Portland neighborhoods saw some of the city's largest rent increases.
4. Large rent increases in neighborhoods in Southwest and North Portland in both 2015 and
2016 also raise concerns over potential involuntary economic displacement.
5. Due to the severe shortage of rental housing and shelter space arising from human-made
events and circumstances, the Portland City Council ("Council") declared a housing
emergency on October 7, 2015 (the "Housing Emergency"). Council extended the
Housing Emergency for one additional year until October 6[[Al], 2017.
6. Also in October 2015, finding that Portland tenants need more advance notice of both no cause
terminations and rental increases, Council approved amendments to City Code Chapter
30.01 .085 (the "Portland Renter Protections"), requiring a 90-day notice before a no-cause
termination of tenancy, and a 90-day notice for a rent increase greater than 5
percent over a 12-month period.
7. At least 45% of the population of Portland are tenants.
8. Over 52% of tenants in Portland are considered "cost-burdened" (paying over 30% of
their gross monthly income on rent).
9. The average Portland tenant is paying between 45% to 49% of their income in rent which
puts them at significant risk of becoming "severely cost-burdened" (paying over 50% of
their gross monthly income on rent).
10. Rent increases of 10% and higher have the effect of constructively evicting tenants
("Economic Evictions") resulting in involuntary economic displacement.
11. Involuntary displacement occurs not only as a result of Economic Evictions, but also
when a tenant is forced to leave their home through no fault of their own due to a no-cause
12. Involuntary displacements have contributed to a significant increase in homelessness.
Point-in-Time Counts for 2015 indicate a 26.8% increase in newly homeless individuals
including a 48% increase in persons of color and a 24% increase in families with
13. Relocation expenses associated involuntary displacement, such as application fees,
security deposits, double rent, moving supplies, storage, and lost wages present a
significant financial burden to an average Portland tenant.
14. Relocation assistance is essential to allow tenants to manage the unexpected relocation
expenses that result from involuntary displacements.
15. Current law allows for just-cause eviction of tenants who are engaging in unlawful
behavior, or who are otherwise breaking the conditions of their lease agreement.
Remedies for property owners in these circumstances are well established in the court
system and are easy and inexpensive to obtain. Tenants evicted for just-cause reasons
would not qualify for relocation benefits.
16. Accordingly, the Portland Renter Protections set forth in City Code Chapter 30.01.085
are amended to include for the provision of relocation assistance for tenants receiving a
90-day notice for a no-cause termination of tenancy or an Economic Eviction
1 7. Relocation Assistance amounts were determined by averaging the range of rental rates of
similarly sized units across the city according to the Housing Report. Averaging the
range of rents also creates an equitable flat fee that does not vary based on the current
rent paid, thus giving property owners a fixed amount to plan for.
NOW, THEREFORE, the Council directs:
a. City Code Chapter 30.01 Affordable Housing Preservation is hereby amended to add
Relocation Assistance to the Portland Renter Protections, as provided in Exhibit A,
b. If any portion of this Ordinance or the Relocation Assistance is ruled invalid, void or illegal
by an order of the court, the remainder of this Ordinance and the Relocation Assistance
shall remain in full force and effect.
Section 2. The Council declares that an emergency exists to prevent delays in implementing the
Relocation Assistance therefore, this ordinance shall be in full force and effect on and after its
date of passage.
Passed by the Council:
Comm Eudaly and Mayor Wheeler