Gov. Kate Brown signed into law Thursday a bill that caps rent increases and bans no-cause evictions for many across Oregon, reshaping the state's housing market for years to come.

The law, which took effect immediately after Senate Bill 608 was signed by the governor shortly after noon, throws up several barriers for landlords while still giving them leeway to raise rents. Meanwhile, tenants can expect more regularly scheduled rent increases, which the law limits to once a year.

The bill is one in a set of actions taken by Oregonians to address the state's housing woes. Last November, voters approved Measure 102 to let local bond measures pay for private, affordable housing.

Brown called SB 608 "a critical tool for stabilizing the rental market throughout the state of Oregon. It will provide immediate relief to Oregonians struggling to keep up with rising rents and a tight rental market."

Still, the new law does little to add more homes to that tight market — and opponents have voiced concerns it will scare away investors. Developers have cited land-use policies that restrict land supply and government charges tagged to development as some of the reasons housing costs rise.

To the supply issue, Brown highlighted a $400 million assistance package outlined in her proposed budget. "Most of that is dedicated toward building affordable units throughout the state, but it also provides assistance for renters and of course for homelessness prevention," she said.

The $400 million ask is up from the more than $300 million lawmakers allocated during her first term as governor.

"It was literally like spreading peanut butter across a piece of toast: It was very, very thin," she said. "So we have to redouble our efforts, and that's exactly what we're going to do."

There's a lot to unpack in the new legislation. Here's what tenants and landlords need to know about Oregon's statewide rent control law.

Eviction rules overhauled

Landlords will be limited to when they can issue eviction notices after the first year of tenancy.

The legislation largely does away with no-cause evictions, except during the first year of tenancy. In that first year, landlords have to give 30 days' written notice for eviction.

After the first year, landlords can end month-to-month rental agreements with 90 days' notice for a "qualifying landlord reason," which includes:

Planning to demolish the unit or convert it to non-residential use in "a reasonable time." (SB 608 doesn't define how long is "reasonable.")

Planning to repair or renovate the unit, again in "a reasonable time." In this case, the property has to be unfit or unsafe for someone to live there.

The landlord or their immediate family — such as children, grandchildren or spouse — planning to live in the unit, when the landlord doesn't own a similar unit in the same building they could move into.

The landlord has agreed to sell the unit to someone who plans "in good faith" to live there. They also have to provide evidence of the planned sale, along with notice, no more than 120 days from the day they strike a deal with a buyer.

If a landlord ends the rental agreement, they have to outline the "qualifying reason" in the termination notice and give "supporting facts." The landlord also has to pay the renter an amount equaling one month's rent when they deliver the termination notice — again, should they have a qualifying reason.

Landlords who manage four or fewer units are exempt from the requirement to pay a month's rent.

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There are still instances where landlords can evict month-to-month renters without cause after a year — namely if the landlord's main residence is located on the same property as the tenant's and the property has two units or fewer.

In that case, they can serve a no-cause eviction with 60 days' notice. They can give 30 days' notice if a sale similar to the earlier described is in the works.

Tenants can still be evicted for cause; if, for example, they fail to pay rent or deliberately damage the unit.

Penalties for rule-breakers

Landlords who break eviction rules outlined in the law are liable to pay an amount equaling three months' rent, as well as "actual damages sustained by the tenant as a result of the tenancy termination."

Tenants are entitled to get that money if they commence an action against the landlord within a year after they "knew or should have known" their landlord broke the rules.

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Rent increases limited

Landlords can only raise rents once a year for tenants, and when they do, rent increases are capped at 7 percent plus the yearly change in the consumer price index.

In 2019, landlords are allowed to increase rents by up to 10.3 percent, according to a maximum rate released by the Oregon Department of Administrative Services. The rate was calculated by the department's Office of Economic Analysis.

The 7-percent plus CPI cap gives property managers wide latitude in raising rents each year, according to a Statesman Journal analysis.

For instance, only once in the past decade have average rents for a 2-bedroom, 1-bath apartment built before 1990 in the Salem-Keizer area surpassed the cap adopted under SB 608, housing data shows.

Properties built in the past 15 years are exempt from the 7 percent plus CPI limit, as landlords get 15 years from the day their unit's first occupancy certificate is issued before they are subject to the cap.

Also exempt are properties where landlords give reduced rents because of government subsidies or programs.

The rules say landlords also have to adhere to the 7 percent plus CPI cap if they evict a resident without cause with 30 days' notice or serve an eviction notice within the first year of occupancy.

Basically, landlords aren't allowed to evict tenants without cause with 30 days' notice just so they can raise rents past the limit.

What if a tenant moves out of their own volition? Landlords "can move the rent up to market value for the next tenant," said Danny Moran, a spokesman for House Speaker Tina Kotek, D-Portland. "But once the tenant moves in, the cap applies."

And if a landlord issued a notice to raise rent past the limit before the bill was signed? "Notices of rent increases given before the effective date of the bill are valid," Moran said. "Notices given after the effective date of the bill can't exceed 7 plus CPI on a tenant in a 12-month period."

Landlords with four or fewer units still have to abide by the rent caps, according to Moran.

The bill isn't just geared toward apartments; single-family rental homes are also affected.

"If someone owned and was renting out a single-family home that they did not live in or live on the property of, they would have to abide by the rent regulation and the for-cause eviction pieces," Moran said.

However, if a landlord lived on the same property with no more than two units, such as a single-family home or accessory dwelling unit, "the owner could still use a no-cause eviction, but they are still subject to the cap on rent," he said.

Contact reporter Jonathan Bach at jbach@statesmanjournal.com or 503-399-6714, or follow him on Twitter at @jonathanmbach.