Oregon has positioned itself to be the first State to have State controlled rent. What does that mean for both the homeowner and the tenant. When this first was published many Realtors® I know were concerned for both the owner and the tenant. The final bill (Senate Bill 608) caps rent increases at 7% per year. Below we will chat about some of the results of this bill. Please chime in with questions you have and I will do my best to help find the answers.
7% Max Rent Increase
This new bill caps out rent increases for the tenant to 7% per year. Let’s talk about what that means for the tenant first. Each year your landlord can increase your rent by 7%. Sounds like the State of Oregon is protecting you the tenant correct? Well not really, they have set a maximum rent increase and many landlords may choose to take advantage of that number, where previously they had not increased rents by that much.
The Statesman Journal out of Salem, Oregon published an article that really breaks this down. Had this bill been in place 10 years ago rents today could have been 35% higher than they currently are.
Had a rent control bill under consideration by Oregon legislators been in effect 10 years ago, Salem-area rents could have grown 35 percent higher than they are today.
Average rents for a 2-bed, 1-bath apartment in the Salem area rose from $594 in 2009 to $914 in 2018, according to the latest available data. But if the increases allowed in Senate Bill 608 were applied, those same apartments could have risen to $1,238 by 2018.
Is 7% Really the Maximum
Although the bill reads 7% maximum it also states that the maximum is 7% PLUS the Annual Consumer Price Index. So during years of higher inflation your increases could be even higher.
People in favor of this bill felt this bill would stop price gouging while people opposed felt it would scare away investors causing a bigger shortage of rentals. I am sure there are stories where rents went up by more than the current cap. Stories of huge rent increases and rents that seem completely out of line. I fear that this new rule can actually cause landlords who previously increased rents at a slower pace will now use this cap as a standard.
Rent vs Buy
You can still purchase a home and pay less down and monthly than most people are paying for rent. There are several loan products for buyers that require low or no down payments. The State of Oregon is even finding ways to help people buy. You can create a Home Buyers Savings Account making your down payment and closing costs basically tax free.
I am here to help guide you through the process – below are some samples of homes currently available in Central Oregon – let’s have a conversation and see where you stand in the process of getting into your own home. Where your payment is in your control not someone else.