2023 Oregon Legislative Round-Up

Oregon's annual legislative session ended June 25, 2023. There were 2,976 bills, memorials, and resolutions introduced during the 2023 session. Of those, the Legislature passed 653. We have attached bills below that might be of interest to those who invest in real estate in Oregon.

Senate Bill 599

Requires landlord to allow dwelling to be used as family childcare home, subject to conditions.

Senate Bill 611

Modifies maximum allowable residential rent increase for affected units, from seven percent plus the September annual 12-month average change in Consumer Price Index (CPI), to the lesser of either 10 percent, or seven percent plus the CPI. Clarifies language limiting rent increases on tenancies, other than week-to-week tenancies, to not more than once in any 12-month period. Clarifies language applying rent increase limit to units from which tenant was evicted.

Senate Bill 718

Provides that year in which Governor declares that drought exists, or is likely to exist, within county does not count toward period of time for forfeiture of water right for nonuse for owner holder of water right within county. Removes reference to repealed federal law.

Senate Bill 1069

Allows electronic delivery of written notice to landlord or tenant, if allowed under written addendum to rental agreement which specifies electronic mail addresses each party agrees to send and receive electronic mail to and from. Provides language to which addendum must substantially adhere, including that addendum is voluntary. Allows electronic return of security deposit or prepaid rent upon termination of tenancy if tenant so requested after tenancy began.

House Bill 2001

Establishes the Oregon Housing Needs Analysis to calculate needed housing allocations and production targets for each city in Oregon with a population of 10,000 or more. It also allows for the use of housing acceleration agreements or enforcement orders for underperforming cities. Further, it requires cities to calculate and plan for development-ready lands and requires the Oregon Facilities Authority to finance infrastructure and predevelopment costs for moderate-income housing.

HB 2001 defines ‘nonpayment’ as nonpayment of a payment that is due to a landlord, including a payment of rent, late charges, utility or service charges or any other charges or fee as described in the rental agreement. As defined under HB 2001, ‘nonpayment’ does not include payments owed by a tenant for damages to the premises.

Important requirements and changes made by HB 2001 include, in part:

• When serving a notice of termination for nonpayment of rent per ORS 90.394, HB 2001 increases notice period from 72-hours to 10-days or from 144-hours to 13-days.

• Requires the landlord to deliver a copy of a newly created notice when serving the tenant with any termination notice related to non-payment, whether under ORS 90.392 or ORS 90.394. This notice will be posted on the website of the Oregon Judicial Department. (Download form) This notice is in addition to any other notices required by ORS 90 and Portland City Code.

• Extends the time a tenant can cure the nonpayment cited in a termination issued under ORS 90.392 or ORS 90.394 up to the first appearance in court.

• Requires the landlord to reasonably participate with rental assistance programs.

Housing providers may need to update business forms in relation to terminations issued under ORS 90.394 and the newly required notice.

House Bill 2680

Requires landlords of residential rentals to refund screening charge within 30 days if the unit is filled prior to screening the applicant, or the landlord has not conducted or ordered any screening of the applicant before the applicant withdraws the application in writing.

House Bill 2889

Makes refinements to the Oregon Housing Needs Analysis (OHNA). It defines the term “development-ready lands" for the purposes of OHNA and allows new methods for cities to use when designating urban reserves.

House Bill 2984

Requires local governments to allow the conversion of a building from commercial to residential use without requiring a zone change or conditional use permit. The measure clarifies housing developed under the measure may occur only within an urban growth boundary for cities with populations of 10,000 or greater, and not on lands zoned for heavy industrial use.

House Bill 3042

Prohibits landlord or owners of formerly publicly supported housing from terminating a tenancy in the 3 years following withdrawal and prohibits them from providing rent increase notices more than once per calendar year. Allows Oregon Housing and Community Services the ability to assess up to a $5,000 penalty for noncompliance and subsequently file a lien against the property for failure to pay.

House Bill 3151

Limits improvements that a landlord of a manufactured dwelling park may require of tenants.

House Bill 3395

House Bill 3395 is the housing omnibus bill. Allows affordable housing on lands zoned for commercial uses within urban growth boundaries. HB 3395 also requires Oregon Housing and Community Services (OHCS) to provide grants for developing community housing to support agricultural employees, create a grant providing low-interest loans to purchasers of homes with limited equity, and to provide grants to nonprofits to develop a fund to guarantee affordable housing construction loans.

Residential Rent Increase Limits for 2024

The Oregon Department of Administrative Services (DAS) this week published the annual maximum rent increase allowed by statute for calendar year 2024. The DAS Office of Economic Analysis (OEA) has calculated the maximum percentage as 10.0%.

Following the passage of SB 608 in the 2019 legislative session and SB 611 in the 2023 legislative session, Oregon law requires DAS to calculate and post to its website, by September 30 of each year, the maximum annual rent increase percentage allowed by statute for the following calendar year. Per statute, OEA calculates this amount as 7% plus the Consumer Price Index for All Urban Consumers, West Region (All Items), as most recently published by the Bureau of Labor Statistics, or 10%, whichever is lower.

The allowable rent increase percentage for the 2024 calendar year is 10.0%.

There are limited exemptions to the rent cap for affordable housing providers and for new construction.

For access to more Oregon bills that have been signed into law for 2023/2024 click here.

This information was assembled using source information from the Oregon Real Estate Agency, the Oregon Department of Administrative services, the Oregon Governor’s office and the internet.

Clifford A. Hockley, CPM, CCIM, MBA

Cliff is a Certified Property Manager® (CPM) and a Certified Commercial Investment Member (CCIM). Cliff joined Bluestone and Hockley Real Estate Services 1986 and successfully merged that company with Criteria Properties in 2021.

He has extensive experience representing property owners in the sale and purchase of warehouse, office, and retail properties, as well as mobile home parks and residential properties. Cliff’s clients include financial institutions, government agencies, private investors and nonprofit organizations. He is a Senior Advisor for SVN | Bluestone.

Cliff holds an MBA from Willamette University and a BS in Political Science from Claremont McKenna College. He is a frequent contributor to industry newsletters and served as adjunct professor at Portland State University, where he taught real estate-related topics. Cliff is the author of two books, 21 Fables and Successful Real Estate Investing; Invest Wisely Avoid Costly Mistakes and Make Money, books that helps investors navigate the rough shoals of real estate ownership. He is the managing member of a real estate consulting practice, Cliff Hockley Consulting, LLC., designed to help investors and commercial brokerage owners successfully navigate their businesses.  He can be reached at 503-267-1909 , Cliffhockley@gmail.com or Cliff.Hockley@SVN.com.