Posted by: Josh Lehner | September 25, 2019

Oregon’s Maximum Annual Rent Increase 2020

What you need to know: The allowable rent increase percentage for the 2020 calendar year is 9.9%.

See our office’s Rent Stabilization page for more, including a downloadable spreadsheet with all the data.

More Information:

Per SB 608 (2019) our office has the reporting requirements for the annual allowable rent increase that is defined as the “annual 12-month average change in the Consumer Price Index for All Urban Consumers, West Region (All Items), as published by the Bureau of Labor Statistics of the United States Department of Labor in September of the prior calendar year” plus 7 percent.

That’s a mouthful but it does have a few implications in terms of calculating the figures. First, data through August is available by the September 30th reporting deadline. Second, the “annual 12-month average change” is interpreted to be the CPI average of July through August, and then you calculate the percent change relative to the previous July through August. It is not simply August relative to August of the previous year. This means that just going to the BLS site and finding the August West Region All Items CPI percent change will not necessarily give you the same figure as using the 12 month average of the index. The reason is BLS reports the August to August percent change. See the Excel file on our website for the calculations and underlying data.

Policy Considerations

In broad terms, SB 608 has two components: restrictions on no-cause evictions, and rent stabilization. Nearly all of the public discussion centers on the latter given the longstanding rent control issues like low levels of new supply and deferred maintenance given there is less economic incentive to build or maintain properties.

Back in February, our office discussed the legislation with our advisors and the consensus was that the new law is likely to avoid these bad outcomes. SB 608 is not expected to restrict new housing supply given the 15 year exemption for new construction and the relatively high cap for the maximum annual rent increase. These conditions will not bind for the vast majority of developers, landlords or units. As such, the likely impact of the legislation will be preventing the worst displacement scenarios, ensuring somewhat more stability for tenants, and increased administrative costs for landlords.

Now, our office’s advisors did raise two concerns. First, they are worried that the annual increase or new construction exemption would be tightened over time, leading to worse housing market outcomes. Second, they wondered who would oversee tenant complaints, ensure landlord compliance and whether there would there be funding for increased landlord/tenant court cases.


Responses

  1. […] Source: Oregon’s Maximum Annual Rent Increase 2020 | Oregon Office of Economic Analysis […]


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