SALEM, Ore. — Oregon Gov. Tina Kotek signed Senate Bill 611 last week, a law that sets a new state-mandated upper limit of 10% for all residential rent increases, down from the previous limit of 14.6% for 2023.
A few days after Kotek signed the bill, KGW got a question from a viewer: Does the new limit take effect right away? And what if a landlord notified tenants of a pending rent increase greater than 10% before Kotek signed the bill — are those notices still valid?
Here's what we can VERIFY:
THE QUESTION
Does the new 10% rent hike cap go into effect immediately, and does it invalidate larger increases if they were announced before Gov. Kotek signed SB 611 on July 6?
THE SOURCES
- Senate Bill 611
- City of Portland
- Stable Homes for Oregon Families
- Sybil Hebb, Director of Legislative and Policy Advocacy, Oregon Law Center
THE ANSWER
Senate Bill 611 took effect immediately when Gov. Kotek signed it, and it applies to the rest of 2023, which means any rent increases announced on or after July 6 cannot exceed 10%.
However, it's not retroactive. If a landlord notified a tenant of a larger increase prior to that date, that increase is still valid, even if it doesn't take effect until after July 6.
WHAT WE FOUND
Senate Bill 611 is an update to Oregon's rent control law, which was originally enacted in 2019. The old version of the law limits rent hikes to once per year and caps the size of those hikes to 7% plus the annual change in the consumer price index — in other words, 7% plus inflation.
But just like the rest of the U.S., Oregon saw extremely high inflation in 2022, resulting in a rent hike cap of 14.6% for 2023 — high enough to give Oregon lawmakers sticker shock. Senate Bill 611 adjusts the 2019 formula by adding a new hard cap of 10% to the rent hike limit.
Bills passed in Oregon typically don't take effect until Jan. 1 of the following year, but SB 611 includes an emergency clause, which means it takes effect as soon as the governor signs it.
The previous 14.6% cap was supposed to be in place for all of 2023, but SB 611 supersedes it, according to the City of Portland and the advocacy organization Stable Homes for Oregon Families, meaning the cap has been lowered to 10% for the remainder of the year, starting from July 6 when Gov. Kotek signed the bill.
However, SB 611 is not retroactive. Rent increases that were put in place before July 6 are still valid, even if they were greater than 10%.
The same goes for rent increases that the tenant was notified about prior to July 6, even if they won't take effect until a later date, according to Sybil Hebb, director of legislative and policy advocacy at the Oregon Law Center.
Oregon law requires that landlords provide tenants with a minimum of 90 days' written notice ahead of all rent increases, but there's no maximum amount of time for the notice period, Hebb said.
"In other words, a notice for a 14.6% increase issued before July 6th to take effect in January 2024 is enforceable, if otherwise valid," she wrote in an email.
A fixed-term lease renewal offer also counts as a rent increase notice if it lists a new rental rate, she said. So if a lease renewal offer with a greater-than-10% rate hike was issued before July 6, it would still be valid after July 6.
It's worth noting that tenants do not have to accept lease renewals, she added. Landlords can demand that tenants sign long-term leases when they first move in, but under Oregon law, once a tenant has lived in a unit for at least a year, they can choose to switch to a month-to-month model when their long-term lease expires, and they'll still be protected from no-cause eviction.
However, landlords can still increase rents for month-to-month tenancies, as long as they're complying with the restrictions under SB 611.
Got a question or a story about Portland or Oregon that you'd like us to VERIFY? Drop us a line at verify@kgw.com.
