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Portland Relocation Payment Ordinance: A Solid Move For The City?

Erlin Taylor - Tuesday, December 21, 2021
Portland Relocation Payment Ordinance: A Solid Move For The City?

During the coronavirus outbreak, many renters are struggling to pay their rent, and that's before they have to worry about the cost rising. However, considering the millions of Americans who are unemployed or whose income has been cut, rent rises during this period might cause major financial troubles. During these trying times, one city is attempting to safeguard tenants from rent increases. 

The Oregon Supreme Court upheld the Portland Relocation Payment ordinance that requires landlords to provide payments to tenants and renters to offset the negative effects of gentrification. Attorneys representing landlords in the case said they would review the ruling before making any plans. According to attorney John DiLorenzo Jr. with Davis Wright Tremaine LLP, Oregon landlords lost a good fight.

A recent ruling in Portland, Oregon, mandates that landlords cover their tenants' relocation fees. It applies if they cannot afford the rent hikes they demand. In this case, landlords will be responsible for between $2,900 and $4,500 in relocation costs. The majority opinion states that ORS 91.225 does not preclude communities from passing measures that may impact the landlord's choice to raise rent unless the amount is controlled. It concludes that the ordinance did not create an unconstitutional private cause of action. "It goes on to explain that the Act does not define rent control or control."

The dissent acknowledges that the ordinance does not regulate rents or leases. It argues, however, that the relocation payment ordinance controls the rent because it requires landlords to accept a city-selected tenant in lieu of all other tenants for whom they might have received higher rents. The city aimed to dissuade landlords from establishing prices at fair market levels as a method of stabilizing rising rents and used a coercive instrument to achieve that goal."

This new ordinance may be intended to safeguard renters, but it hasn't gone down well with landlords. If a landlord in Portland wants to raise a tenant's rent, they must give them at least 90 days' notice. Tenants can also offer written notice that they need help. In this case, the landlords may be held accountable for the costs of their relocation. 

Of all, the purpose isn't to harm landlords but to help renters avoid becoming homeless in the absence of a statewide eviction moratorium. The new legislation, however, obviously disadvantages landlords, particularly mom-and-pop landlords who lack the capabilities of larger property management organizations. If landlords in Portland may be held accountable for tenants' relocation fees, it could theoretically happen everywhere. However, this law only applies to landlords who raise rents; it does not apply to landlords whose tenants choose not to renew their leases owing to financial difficulties.

DiLorenzo said that the City of Portland created an intense regulatory environment for housing providers over the past many years. He also added that it still discredits the scarcity of rental homes. On the one hand, it is illogical to implement laws that discourage rental homeownership while yet complaining about a lack of supply and skyrocketing rates. As a result, even if similar orders are enacted in other areas, landlords may avoid the cost of relocating renters by merely maintaining steady rent costs as the country grapples with its protracted slump.

What do you think? Is Portland Relocation Payment Ordinance a solid move for the city?  

For more information and updates on rental properties and rental property management, you may visit Illume Property Partners.


Sources: 

https://www.multifamilynw.org/portlands-relocation-ordinance##

https://rentalhousingjournal.com/divided-oregon-supreme-court-upholds-portland-relocation-payment-ordinance/