Gov. Kate Brown of Oregon signed the nation's first statewide mandatory rent control measure on Thursday, giving a victory to housing advocates who say spiraling rent costs in the economically booming state have fueled widespread homelessness and housing insecurity.
Ms. Brown, a Democrat, said the legislation will provide "some immediate relief to Oregonians struggling to keep up with rising rents and a tight rental market."
Landlords are now limited to increases once per year that cannot exceed 7 percent plus the change in the consumer price index, which is used to calculate inflation.
The law prohibits them serving no-cause evictions after a tenant's first year of occupancy, a provision designed to protect those who are living paycheck to paycheck and who affordable housing advocates say are often most vulnerable to sudden rent hikes and abrupt lease terminations.
New York has a statewide rent control law, but cities can choose whether to participate. California restricts the ability of cities to impose rent control. Last November, voters defeated a ballot initiative that would have overturned that law.
The Oregon law takes effect immediately. Democrats who control the Legislature say the state's housing crisis justified passing the bill as an emergency measure.
In hearings for the bill passed, tenants testified that they have struggled to keep up with skyrocketing rents, with many said they've been forced from their homes. Kori Sparks, a resident of the fast-growing city of Bend, said she relies on disability and has "to deal with the stress of losing an accessible home on short notice."
She said rent control will protect vulnerable people from "a predatory system where profit comes before people and denies them of a basic human right."
Builders in Oregon have not been able to construct enough houses and apartments to meet the demands of the thousands of people moving to the state for jobs and in some cases, for a lower cost of living. Many people move to the state from California.
A state report estimated that a renter would need to work 77 hours a week at minimum wage to afford a two-bedroom apartment. One in three renters in Oregon pay more than 50 percent of their income on rent, far higher than the Congressional-set definition of housing affordability, which suggests setting aside 30 percent toward rent.
In the Portland metropolitan area, rent began to plateau in 2017 after four consecutive years of rent hikes averaging 5 percent or more. The average rental unit costs about $1,400 a month, according to data released by the city.
Oregon is also suffering from a lack of affordable housing and has one of the highest rates of homelessness in the country.
Landlords and developers argued that rent control would make the housing crisis worse, saying investors will now be less willing to build or maintain properties.
"History has shown that rent control exacerbates shortages, makes it harder for apartment owners to make upgrades and disproportionately benefits higher-income households," said Doug Bibby, president of the National Multifamily Housing Council, a national association representing apartment building owners.
The governor acknowledged that rent control alone isn't enough, and that the state needs an "all hands on deck" solution. Brown has proposed a $400 million investment in affordable housing solutions in her two-year budget proposal.
"It will take much more to ensure that every Oregonian, in communities large and small, has access to housing choices that allow them and their families to thrive," she said.
This story was reported by The Associated Press.