A Eugene-based property manager is attempting to get ahead of the nation's first mandatory rent control law, notifying hundreds of its tenants of an upcoming and significant rent hike as the legislation sails through the state capitol.

The proposed law, Senate Bill 608, would prohibit no-cause evictions after 12 months of occupancy and limit the amount on rent hikes.

The bill has passed the Senate, and a House committee gave it a do-pass recommendation following a hearing Wednesday. A House vote is expected next week, and Gov. Kate Brown is expected to sign it into law. The law would take effect immediately upon signing.

The day of the hearing, Empire Property Management sent out a bulk email to tenants noting that due to the legislation, landlords "are under pressure to make serious changes to the way we do business."

"Part of this bill is the way we give notices and raise the rent," said the email, which a tenant provided to The Register-Guard. "We do not like it and are fighting it as best we can but we are likely to have little influence on the outcome. Call (your legislator) if you wish to help.



"With this, Empire has been forced to send out rent increases early and at a much higher rate than we would ever wish on so many of our tenants who are struggling to make ends meet."

The tenant, who requested anonymity due to concerns about retaliation, said he didn't appreciate Empire attempting to get ahead of a new law and characterized the notice as "fearmongering to get tenants to reach out to their representatives against the bill." The tenant said Empire already had increased his rent in August, and he'll take a financial hit if the rent goes up again when money in his household is tight.

Empire manages properties that house about 400 tenants. Not all tenants will receive rent increase notices, which could raise the monthly payments by up to $150 a month, said Ed Waggoner, Empire's owner.

"That's a sizable increase and we had no plans to do that right away, but with this law being passed we really kind of have to," he said.

Waggoner, who also is a landlord, explained the company specializes in rundown dwellings that landlords can offer for below-market rents as they work to spruce them up.

Annual rent increases for some properties can range from $50 to $100 a month, so the landlord can pay higher mortgage costs and for improvements that benefit property owners and tenants alike, Waggoner said. The typical annual rent increase is $20 to $30 a month, he said.

Senate Bill 608 prohibits rent increases in any 12-month period to no more than 7 percent above the average change in the consumer price index, with exemptions for subsidized housing and newer properties.

"They (the owners) are afraid they're going to be caught without being able to raise the rent for an entire year now and then because of limits on how much they can raise the rent, properties that we do rehab and make nice, we won't be able to raise the rents on those and that's really going to hurt them. It's going to hold them back from wanting to make those improvements to the property," Waggoner said.

Waggoner maintained the bill will hurt the local rental market by forcing mom-and-pop landlords to turn to property managers, which increase the owners' expenses, or sell their properties. He said a small number of owners that use his company have put their properties up for sale due to the legislation.

Waggoner said many tenants have called him and he's working with them to address their concerns.

Jim Straub, owner of Springfield-based Acorn Property Management and legislative director of the Oregon Rental Housing Association, said he hasn't heard of another property manager taking a similar step.

The association, which has 14 member chapters, including one in Lane County, has taken a neutral stance on the legislation.

"As a general rule, I would hope that all landlords would not make their decisions on when or how to raise rents purely from a political motivation, or in response to a potential political action," he said. "Rent increases should be based upon business factors, not political factors."

Stable Homes for Oregon Families, a coalition lobbying for the legislation's passage, condemned Empire's move.

"This notice is a threat in order to get tenants to oppose SB 608 and we hope it is an isolated incident," said Patty Wentz, the coalition's spokeswoman. "It is a perfect example of why we need ​the basic protections for people who rent their homes that are contained in SB 608. Too many landlords use the threat of no-cause evictions and rent increases when people speak out against them or assert their rights as tenants."

The legislation comes as the state and Oregon cities grapple with housing affordability and homelessness.

The housing shortage is getting worse as people keep moving to Oregon, drawn by its forests, mountains, coastline, relaxed lifestyle and job opportunities. Oregon ranked second to Vermont as the top moving destination in 2018, according to a study by United Van Lines, the nation's largest mover of households.

"We've waited too long as it is, and there are too many people living in tents. It is an emergency," said Rep. Tawna Sanchez, a Portland Democrat, during Wednesday's hearing.

Many residents have testified in favor of the legislation, describing anxiety and hardship as they face higher rents. Some have gone up by as much as almost 100 percent, forcing people to move, stay with friends or even live in their vehicles.

Anna Peña, a senior at the University of Oregon in Eugene who works full time, described living in a house smaller than 1,200 square feet with five roommates and spending over half her income on rent that then increased by 15 percent.

"Ultimately, housing insecurity has been one of the biggest setbacks for my education and personal health," she said.

Lawmakers noted Oregon will be a pioneer in statewide rent control if the measure becomes law. New York has a statewide rent control law but cities choose whether to participate. California actually restricts the ability of cities to impose rent control. Last November, voters defeated a ballot initiative that would have overturned that law.

"Homelessness and affordability have no boundaries," said Rep. Mark Meek, a Democrat from a Portland suburb. "We're going to be leading the nation now with this legislation."

Under the legislation, landlords can terminate tenancies only with 90 days written notice and payment of one month's rent, with exemptions in some cases. A landlord can refuse to renew a fixed-term lease if the tenant receives three lease violation warnings within 12 months and the landlord gives 90 days notice.

The Associated Press contributed to this report. Follow Christian Hill on Twitter @RGchill. Email christian.hill@registerguard.com.

Note: An earlier version of this story incorrectly identified the property management company. The correct name of the company is Empire Property Manaegment.