March 6, 2019 Comments Off on NMHC & NAA to Oregon: Rent Control Legislation is Ineffective Views: 843 Connect Apartments

NMHC & NAA to Oregon: Rent Control Legislation is Ineffective

On Feb. 28, 2019, Oregon Governor Kate Brown signed legislation to enact state-wide rent control and eviction protections. Oregon is the first state to have such legislation, which caps rent hikes at 7% plus inflation, during a given 12-month period. The legislation, which went into effect immediately, also prohibits non-cause evictions.

The National Multifamily Housing Council isn’t having any part of it. Doug Bibby, president of the NMHC, issued a statement acknowledging that housing affordability is a problem in Oregon, but the signed legislation, SB 608, will create more imbalances between housing supply and demand. “While the intent of rent control laws is to assist lower-income populations, history has shown that rent control exacerbates shortages, making it harder for apartment owners to make upgrades.” Furthermore, rent controls “disproportionally benefits higher-income households,” Bibby said.

Robert Pinnegar, president and CEO of the National Apartment Association, added that “rather than focusing on the onerous regulatory environment that constricts the diversity of housing needed to meet the surging demand for rental housing, Oregon’s public officials chose to slide backward by enacting a failed policy that has historically proven to hurt residents and housing supply alike.”

An NMHC follow-up article used the example of San Francisco, which also passed legislation allowing for annual increases capped at 7%. “Over time, lawmakers amended the law by dramatically lowering the cap,” the article noted. Rent increases are capped at 60% of CPI, or 1.6%.  The result is that “San Francisco is now the most difficult and priciest market in the country to create housing,” according to the article.

The solution to the affordable housing crisis in Oregon and other states relies on more than capping rents. Bibby suggested that lawmakers focus on solutions “that encourage more housing supply, facilitate public-private partnerships to tackle many of the existing barriers, and increase direct assistance to renters.”

Pictured: Oregon State Capital, Salem, OR

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