The Oregon House on Tuesday approved new eviction protections and a first-in-the-nation statewide rent control policy.

After the 35-25 vote, Senate Bill 608 now heads to a supportive Gov. Kate Brown after speeding through the Legislature with the backing of Democratic leaders in both houses. It will take effect as soon as she signs the bill.

With Brown’s signature, Oregon would become the first state to enact a statewide rent control program. In other states with rent control policies, cities enact and administer local programs.

The bill would cap annual rent increases to 7 percent plus inflation throughout the state. It exempts new construction for 15 years, and landlords would be free to raise rent without any cap if renters leave of their own accord. Subsidized rent would also be exempt.

Backers characterized the bill as unlike the rent control policies common in some of the nation’s most expensive housing markets and dimly viewed by many economists

Studies have found those policies can be effective in reducing displacement of current tenants but result in a reduction in rental housing units and higher rents for new renters.

Democratic leaders have described their bill as an anti-price gouging measure that offers landlords and developers much more flexibility than policies elsewhere.

“This is not the rent control of yesteryear,” said Rep. Mark Meek, D-Clackamas County. “It’s a smart, innovative hybrid.”

But opponents said it would slow investment in housing, adding to the rental shortage that’s contributed to rising rents in the first place.

“With the growing cost of our property taxes, insurance and maintenance, the incentive to add rentals will decrease,” said Rep. Jack Zika, R-Redmond. He suggested it’s likely the restrictions would increased once in place, and that prospect could further drive disinvestment. “Why would anyone invest in a state if the Legislature is prone to tighten restrictions?”

The vote split mostly along party lines, with three Democrats breaking ranks to vote “no.”

The bill would keep in place the state’s ban on cities implementing their own more restrictive rent control policies, which was passed by the Legislature in 1982 in response to several local rent control pushes.

Senate Bill 608 also would require most landlords to cite a cause, such as failure to pay rent or other lease violation, when evicting renters after the first year of tenancy.

Some “landlord-based” for-cause evictions would be allowed, including the landlord moving in or a major renovation. In those cases, landlords would have to provide 90 days’ notice and pay one month’s rent to the tenant, though landlords with four or fewer units would be exempt from the payment.

In a hearing earlier this month, renters from across the state told lawmakers about how evictions and big rent hikes had affected them.

Tigard resident Gloria Pinzon told lawmakers that she was on track to buy a house when a rent increase followed months later by a no-cause eviction wiped out her savings.

“This happened to me about two months after I’d recently gotten employment after graduating from college,” Pinzon said. “If this had happened to me months before, I don’t know what would have happened to me and my family.”

Landlord groups had mixed views on the legislation, with some taking a neutral stance and others staunchly opposed.

But many landlords told lawmakers they felt unfairly targeted by the bill. They said the bill could drive Oregon landlords out of the business, worsening the housing shortage.

“We really do have a supply issue, and that can’t be ignored,” said Terry Luelling, a Bend rental owner. “Most of those laws are born right here in this building, in the overly restrictive land use.”

Other bills attempt to add to the supply of housing. They include policies that would allow more density in residential neighborhoods, as well as new funding for subsidized affordable housing and initiatives to speed such projects through their development approvals.

-- Elliot Njus

enjus@oregonian.com; 503-294-5034; @enjus

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