Oregon becomes first state to pass statewide rent control

They need to incentivize the building of new apartment buildings over condo buildings, disincentivize buildings being left completely or partially unoccupied, and severely clamp down on NIMBYism that interferes with densification.

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Nope. It totally sucks here…we have…um…hipsters and they’re so annoying you’ll regret moving here. And we have…bicycles…with measles and…um…

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So much easier in SimCity. The only thing they protest is the toxic waste dump.

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Totally understand that, but definitely it should have been lower, capped at inflation plus a tiny bit. Even a moderate 7% compared to what you experienced and what you were expecting is far too high. When salaries are going up very slowly, this becomes untenable quickly. Best of luck to you both in your saving and house search, here’s hoping it all goes well for you.

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Still, if you’re going to get priced out of your apartment it’s better if it happens over a longer period of time so you don’t have to scramble to find a new place.

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NYC and SF could hardly have better public transit, certainly they are unmatched in the US.

I’m sorry, but as someone who has to commute on MUNI every day, I actually LOL’d. The only reason MUNI gets any credit is because it exists, whereas public transit is basically non-existent in large parts of the country. It is literally the worst public transit system I have ever had to use in a city of any size.

Rent control didn’t dampen rents, instead, it ensure it went up for all other renters, because landlords “build in” extra rent increases every time the apartment has to turn over. new renters end up effectively subsidizing old renters, which given how SF’s rent control laws are structured, this basically means younger generations subsidizing boomers. Renters subsidizing renters is not how I’d structure a renter subsidy, personally. It also created really perverse incentives where tenants end up aligning themselves with landlords to essentially protect the landlord’s property values. The only ones that win are the landlords.


I agree with the goals of SF’s rent control, but I think there has got to be a better way to do it. Between it and Prop 13, it’s put us in a very tight trap.

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Fellow San Franciscan here, gotta disagree. MUNI is not notably worse than any other transit system I’ve used. We just like to complain about it.

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7% is a good and very mild rent control. Really, the massive increase is typically the result of new ownership. That being said, this doesn’t put any kind of damper on housing costs being too damn high. Doing some rough calculations, you’ll find that even after factoring in inflation and population increases, we’re spending about seven times as much on housing as we were in the 50’s and we are in about seven times as much housing debt. Maybe there’s some kind of sensible equilibrium, but current diversified investments in business has been consistently under-performing the real estate market. Basically, being rich and collecting rent is more profitable than running a business, and this has been true for the entire life of everyone who’s not already of retirement age in the US. So either there’s a long chain correction or homes are going to be unaffordable for large swathes of society. Which one do you think it is, random market apologist reading this comment? Also, do you think that’s actually a good thing?

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I wonder if this is means tested. My wife worked on the Berkeley Rent Control Board in the 1980’s and she often saw this scenario play out: A UC Berkeley student would rent an apartment from a retired person who’s sole income was from the apartment. Because Berkeley had rent control even between tenants, the income earned from the apartment didn’t increase that much over time. The student would graduate, start earning more money than the landlord and continue living in the apartment. Not a great outcome, but if we are going to make landlords subsidize housing rather than taxpayers, then means testing would help.

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I wonder whether we’ll see all rent going up by seven percent annually now that a number is set in law. I know my rent in Ontario has increased by the maximum allowable rate every year (granted, it’s usually less than two percent).

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Exactly so. So long as there’s any kind of housing shortage, which IIRC is defined as occupancy rates over 90%, it’s a seller’s market both for purchases and rentals. Nobody ever asks for a law limiting how much you can sell a property for, so as much as I dislike most landlords, it’s a bit inconsistent to limit rent increases. Especially when real estate taxes, maintenance costs, etc. are rising.

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It still has some flaws.

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Worse, it’ll be 7% plus inflation. So close to 9% compounding annually. At that rate, a $1400 apartment would be $3040 in 10 years, a 117.19% increase – an order of magnitude higher than the 18.22% inflation1 during the 10 years from 2007-2017, which in turn is an order of magnitude higher than the increase in median household income2 of only 3.09%.

So it’s a win for the landlords - it lets them look like they’re doing good, and suffering by limiting their own profits to graciously and charitably help ‘the poor people’ out, while still raising rent rates way faster than normal middle class people can afford those increases. It will probably also make it harder to pass something that actually does help with housing since now they can say they’ve already done something about it.

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This seems to me to be targeted at the extreme abuses. It won’t do anything for ‘normal’ rent increases, so it shouldn’t have a negative effect on the vast majority of landlords. It will limit the extreme rent increases, forcing them to play out over years instead of overnight.

There are also provisions to make it harder for landlords to evict current tenants to bump up the rent, and various other things. Here’s a link to a more local story about it:
https://www.oregonlive.com/politics/2019/02/oregon-gov-kate-brown-signs-nations-first-statewide-rent-control-law.html

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First, rent control would not have been needed had they not passed HB2369 in 2013, effective 2015. That was the law that in essence FORCED all landlords to accept HUD section 8 vouchers, with a penalty of $11,000 per instance of “discrimination,” if they refused. Within months of the law going into effect a lot of landlords simply withdrew housing units from the rental market rather than risk getting a huge fine or accepting welfare recipients into their properties. Oh Ms. Kotek had high progressive ideals when she rammed this garbage down the throats of the legislators, to make more low income housing available.

But guess what it did NOT do? Make more (or any) low income housing available. What it did do was raise rents by 90% here in Jackson County (Medford area) between 2013/14 and today. And the real reason for that is that HUD will only pay 135% of the median rent for any statistical metro area which in Jackson County was about $830 per month, so to get around the law and possible fines landlords simply raised rents to beyond what HUD was able to pay by law. The result is a place I looked at summer of 2013 for $700 in Central Point is now $1,350 and landlord pays no water, sewer, or refuse removal, so it really is closer to $1,400 or a 100% increase for that rental.

Well rather than simply admit their idiotic plan damaged the rental market in a disastrous way for Oregonians, and repealing that law they decided to double down and now institute rent controls. I assure you that outside of Portland we may never see another rental unit built in the state.

Another tricky little way landlords figured out to keep welfare people out of their units without getting fined, simply remove all appliances. People who qualify for HUD housing have no savings, if they had money in the bank they are required to spend down prior to getting help. Also, since they are by definition poor most have bad or no credit, so buying appliances is beyond their ability. Tenants who still want to rent will then find that landlords suddenly have a refrigerator and stove, dishwasher, washer dryer units in storage they can use if they like. But when people come to look at the rentals the places need thousands worth of appliances. Almost no renters want to buy appliances since the next place they live in probably already has them.

I am a lifelong democrat, I believe the laws, rules, regulations, all have gotten far too slanted to the wealthy and mostly via idiotic regressive tax policy. But, I also have been a landlord and I would not rent to HUD recipients either. HUD has a lot of rules, when I say a lot you could get a four year degree in them and still not be an expert. Landlords have to comply, and landlords lose the right to get rid of undesirable tenants. Housing gets destroyed and good luck collecting reimbursements. Another way landlords have discovered to keep HUD out, gigantic deposits. There is no limit on deposits (yet) in Oregon. I am not a socialist, and I am especially not in favor of mandating who a landlord can rent to. The private market will not build rental housing with these two restrictions in place that in effect require them to rent to people who just can’t afford rent at all. This crap forces landlords to jump through endless government bureaucracy without due process of law.

I know many of you never met a poor person that was not a victim of some mean old capitalist, because poor people do not make bad decision or abuse substances and such. You want to buy them a cake and throw them all a party. Give away everyone else’s money to them. But in this matter those in favor of rent control better start looking now outside the state for your next place, because in five years time you will see rents have double, then doubled again. And it will be because of the PROVEN failure of rent control. If nothing else this will lock in a guaranteed 7% increase every year from now on with lower quality of rentals.

And last, it might just all be moot since the GOP tax theft ;law passed late 2017. Some of the provisions had not yet hit the public then but now are. One of those is a cap on deductions for mortgage interest, another the end of deductions for SALT (state and local taxes) and those were the landlords bread and butter when it came to running a negative cash flow business like renting to you and me. The other was that capital gains from real estate appreciation paid for the rest of the negative cash flow.

Now, landlords are going to have to raise rents vastly to cover lost tax advantages of renting out units to YOU! Only to find the state has now capped them. They will have no choice but to withdraw units from the market.

This law is a FUCKING disaster for Oregon. And as rents skyrocket there will be bidding wars on already grossly overpriced housing to purchase. Or, you will see what California has seen, people of middle class will just leave. The state economy will be hollowed out and any who remain will live in rental poverty as every cent goes to keeping a crap roof over your head!

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Good luck with that, with the deletion of the SALT deductions and caps on mortgage interest deductions of $10k per year per filer the negative cash flow business model of the rental real estate market is good and dead. Now in Oregon you will also have rent controls so not one new unit will get built. And this comes at a time when many home owners were renting out their properties rather than lose them in foreclosure when they could not make their underwater mortgage payments anymore, they waited and now their houses are worth more than the mortgages, but they hung on and kept renting them out anyway because of tax advantages and capital gains. Say good bye to that, this will mean it will be a better deal to sell the houses than continue to rent them out.

When they passed HB 2369 forcing landlords to accept HUD vouchers as payment for rent under threat of an $11,000 fine for violations the vacancy rate in Jackson county was 5.6%, THAT is what kept a cap on rents. That is the ONLY thing that ever will keep rents down, a decent vacancy rate so that landlords have to compete for tenants. Now, the vacancy rate thanks to HB 2369 is 1% officially but in reality a lot lower because as rents doubled in the wake of the non discrimination law we say backyard sheds being rented out for 600 bucks and called charming cottages. In the real middle market residential real estate rental market here the vacancy rate is actually effectively statistically zero. Yes there are a few places under $1,000 per month, but I would not live in them, and there actually are quite a few places over about $1,700 per month, but to rent those requires mostly two incomes. And there is a lot of rental availability for the people who can afford $2,000 or more, why? Because NOBODY makes that much here. But landlords will not come down in price, they all want “good tenants” and by good they mean affluent.

Rent in this county has already doubled since 2013-14 and it is going to double again. And these STUPID laws are the reason.

fainting couch

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If a property is burdened by the occupants on it, it would conceptually be reasonable to demand the value of the property be adjusted to account for the true value which is pretty normal. Still it’s the land and not the stuff on it that drives the biggest increase in value. Somewhere in there is the question of if the land is actually being put to use, and a lot of that blame may be on creditors and landowners.

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You must not live on the wrong side of West portal like I do. My transit options are a) a bus to Bart that shows up twice an hour, but you never know when or b) the lovely L train, which when it works takes 35 minutes to get downtown but these days is almost always closer to an hour.

Let’s not even touch the catastrophe that was last summer.

Not including new development seems to be the deal with the devil that most rent controls accept. It is really a gift to developers; it devalues older buildings and raises the values of what is being constructed. Oh, and rent control raises rents. When I lived in San Francisco rent controlled units went for 20% more than equivalent non-rent controlled.

So it becomes a gamble about how long you are going to stay; if you want to stay for a long time you get a crappy old rent controlled apartment and the stress of a landlord who wants you out. If you are just passing through, you get a new apartment for less, and your landlord wants you as a tenant. Not exactly helping long term residents.