HB 2004: Moderation is Winning

There is something worse than growing housing rents: a permanent housing shortage. That’s what rent control gives a city.

Rental prices go up as demand growth begins to outpace supply growth, but markets adjust when those higher prices signal profits to would-be landlords. If prices are allowed to grow, supply will ultimately keep up with demand.

Destroy this market with command-and-control regulation, and a city will have slightly lower-priced housing that’s in a permanent state of severe shortage. That’s a recipe for far worse forms of exploitation, the kind that has inspired Law and Order screenplays in New York.

The newly amended version of the Oregon House’s flirtation with rent control by the Senate Committee on Human Services on Wednesday seems to have allowed Portland to dodge a self-inflicted regulatory bullet. There is no longer a cap on how high prices can rise, only a provision that rents can be adjusted but once a year.  

Portland’s new city ordinance that forces landlords to pay all of a tenant’s broadly defined relocation costs will remain banned by state law. HB 2004 will only allow Oregon municipalities to require payment of the first month’s rent. When the no-cause eviction is the result of the non-renewal of a lease, landlords will not even have to pay that if they give 90 days notice of an intent not to renew.

That’s not to say there’s anything in this bill that will make Oregon’s housing markets better. For that reason, Senator Tim Knopp, who sits on this committee, was the one vote against it, because he said HB 2004 fails to address land use laws that impair developers’ ability to build more affordable units and ease the housing shortage.

Remarkably there is a bill making its way through the House that does actually address the problem, if only a little. HB 2007 offers a slight deregulation of the permitting process for multi-family homes in the red tape latticework of designated “historic” neighborhoods.

Co-sponsored by Tina Kotek and supported by 1000 Friends of Oregon, this bill could seemingly pass with full Republican support if allowed a floor vote. Of course, it’s quite rich to see the defenders of the urban growth boundary, one of the most significant causes of higher rents, stick their necks out for lower housing prices.

But stick their necks out they are. Both Kotek and her white-shoed environmentalist ally are basically on the opposite side of their donors, a point Peggy Moretti, executive director of Restore Oregon and leader of the NIMBY preservation lobby probably meant to make when she said: “1000 Friends have forgotten who their friends are.”

Break out the popcorn folks. This will be fun to watch. And if neither of these bills pass, the good news is that markets are already adjusting.

Eric Shierman lives in Salem and is the author of A Brief History of Political Cultural Change.

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Posted by at 05:00 | Posted in Housing, Portland | Tagged | 4 Comments |Email This Post Email This Post |Print This Post Print This Post
  • ImaTaxpayer2

    Shockingly I agree with the basic premise of this article, that rent control is ultimately detrimental to housing supply. Even a blind squirrel finds an acorn. Unfortunately you just couldn’t resist taking the obligatory and erroneous swipe at Oregon’s urban growth boundary while touting a spurious comment from a guy that’s never worked an honest day in his life Tim Knopp. If Oregon’s UGB were responsible for higher housing costs Seattle would be a cheap place to live and Burns would be expensive, it’s more complicated than that. Tim Knopp criticized HB 2004 saying it “fails to address land use laws that impair developers ability to build more affordable units and ease the housing shortage”. How so Tim? A completely partisan swipe and blatantly incorrect. Oregon land use laws require a mix of housing within the UGB and that mix, within a range, is determined by the local jurisdiction developing the land use plan, if there is insufficient lower priced housing in the mix that is the fault of the local jurisdiction not Oregon land use law. Oregon doesn’t have an affordable housing problem it has a poverty wages problem.

    • Oregon Engineer

      you do raise a couple of reasonable points oregons UGB vs Seattle/Washington,s lack of. So what is driving the housing and rent prices in both? and typical of both states the further away you are from major metropolitan/urban centers the cheaper the housing and lower rents. Salem,s rents are rapidly rising and house prices are reaching levels beyond the median income affordability. so whatever your findings for portland vs seattle then it should apply to salem and other metro areas as well.

  • Bob Clark

    I oppose HB 2007 because as it is it would over ride the ability of communities and cities to be in charge of their own zoning codes, and will speed the regional Metro governments push to cram more population into urban areas within the urban growth boundary; which as practiced by Metro is actually the Urban Fixed Boundary largely as it is not expanded any where commensurate with the area’s population growth.
    Per Metro’s own surveys, folks want to live in single family detached homes with yards rather than being forced by Metro into the cramped quarters of mixed use condominiums or multi-family units via urban neighborhood infill.
    The reason many homeowners in the city of Portland are rebelling and seeking out historic neighborhood designation is to counter Metro’s absolute control over where people live.
    Unless HB 2007 is changed so as to not attack local control of zoning codes, please encourage your legislatures not to pass it.
    The watering down of rent control by comparison is a very good thing as it is command and control; and an affront to the American Dream of working hard and offering a business service that of shelter. To have government step in and say sorry we are taking over a significant part of operating you business is very discouraging.

  • 每一滴晶莹的露珠,都是一颗透明的心情

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