Rents could rise as much as 14.6% for Oregonians renting a property that’s over 15 years old in 2023.
The average rent in Bend is $1,836, according to RentCafe, a data company with access to pricing on all Bend apartments 50 units or larger — so raising the average by the maximum allowable extent would bring the cost to over $2,100.
“The second I heard about the new increase I knew that as soon as they can in July, they will be raising it as much as they can because they have every single year,” said a Bend-based tenant who asked to remain anonymous for fear of retaliation from their landlord.
The tenant is currently paying $950 a month for their apartment, and comes with its own set of problems. Their carpet is 20 years old and so threadbare tack strips are poking through it. They have no washer, dryer, dishwasher or garbage disposal and their baseboard heater is malfunctioning.
“My next-door neighbor has the same apartment as me, and they moved in at $1495,” they said.
They said they budget conservatively and that they’re already exploring how they can tighten up their budget. They’re expecting to cut off the internet, leaving only cell phones, electric bills and car insurance as their only monthly expenses.
“I’m a full-time college student and my son is a high school student so we’ll be going to coffee shops to do our homework,” they said.
Oregon’s rent control laws passed in 2019’s legislative session and are intended to stop landlords from effectively evicting tenants through large rent increases, as well as stabilizing rental markets. The law allows 15+ year-old rentals to raise rents by 7% plus the Consumer Price Index for the West region — which measures average change of prices over time for consumer goods and services. Oregon’s the first state to enact rent control laws, but some cities have capped rent at much lower rates. In San Francisco, landlords’ allowable rent increases typically hover between 1-2%.
“Decades of economic and academic research show that really stringent rent controls, which this is not, but really stringent rent controls harm new construction. If a builder or developer cannot get a return on their investment, if the rents can only go up by 1% or 2% a year, they don’t get that financial return, and then they don’t build at all,” said Josh Lehner, an economist for the Oregon Office of Economic Analysis.
The 14.4% hike is the steepest since the program’s inception three years ago, thanks to the fastest inflation observed in 40 years. Over the past several decades inflation was generally around 2-3%. Lehner said signs are pointing to less-rapid inflation in the coming year. Inflation stemmed largely from the increases in energy prices that are now decreasing, and supply chain issues that’re also starting to ease up.
The maximum allowable rent increases aren’t taken advantage of by every landlord and property management company. Bend’s year-over-year increase in rental costs was about 6% with a max increase of 9.9%.
“Broadly speaking, housing costs go up along with incomes, if not a little bit faster than that. So if we see income growth 5-6% a year, broadly speaking, housing costs go up 5- 6% a year. Of course, every year can be a little bit different than that, but that tends to be the big-picture trend,” Lehner said.
Get more info on The Source.
Related Links
If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.
