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Economist offers details as state sets maximum 2022 rent hike at 9.9% under SB 608

(Update: Adding video, economist comments)

SALEM, Ore. (KTVZ) -- The Oregon Department of Administrative Services said Monday it has published the annual maximum rent increase allowed by statute for calendar year 2022. The DAS Office of Economic Analysis has calculated the maximum percentage as 9.9%.

Following the passage of SB 608 in the 2019 legislative session, Oregon law requires DAS to calculate and post to its website, by Sept. 30 of each year, the maximum annual rent increase percentage allowed by statute for the following calendar year.

As dictated by the statute, OEA calculates this amount as 7% plus the Consumer Price Index for All Urban Consumers, West Region (All Items), as most recently published by the Bureau of Labor Statistics.

The allowable rent increase percentage for the 2022 calendar year is 9.9%, slightly higher than the 2021 limit of 9.2% and equal to the 2020 figure.

DAS said it will calculate and post the percentage for the 2023 calendar year by Sept. 30, 2022.

NewsChannel 21 spoke Monday with economist Josh Lehner from the Oregon Office of Economic Analysis to learn more about the formula behind the increase.

"The inflation over the last 12 months has been 2.9%, so 7% plus 2.9 gets you 9.9%," Lehner said.

Lehner says the law only applies to units 15 years and older, and follows the passage of Senate Bill 608 in 2019.

According to state legislators, it was designed to protect against no-cause evictions and extreme rent hikes.

"If a new person comes and a new owner buys an apartment complex, then they can double the rent overnight," Lehner said. "Effectively, kick the tenants out, so they can get new tenants in who can pay a higher rate or something like that seems to be what this policy is designed to (prevent)."

But Lehner says aggressively limiting rent hikes can lead to other issues.

"That can actually really restrict new development, and we know we're a housing-constrained economy here in the Northwest," Lehner said.

Because newer units are exempt from state law, landlords can adjust rent however they want, which Lehner says is classically called "whatever the market will bear."

And according to the state's tenant rights:

- In a month-to-month situation, your landlord may not increase rent during the first year of your tenancy.

- After that, your landlord may increase the rent by giving you at least 90 days written notice.

- Unless you can show the rent increase is retaliatory, discriminatory or imposed in bad faith. 

Information about the maximum annual rent increase percentage, as well as the provisions of ORS 90.323 and 90.600 (statutes governing rent increases), can be found on the OEA website.  

Here's Lehner's blog entry about the newly set figure.

For information on the new law, please see the full text of SB 608 at the link below. DAS does not provide legal advice regarding other provisions of SB 608.


Article Topic Follows: Oregon-Northwest

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Alec Nolan

Alec Nolan is a multimedia journalist for NewsChannel 21. Learn more about Alec here.


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