Oregon became the first state to implement a statewide mandatory rent control policy this week, limiting landlords to once-per-year rent increases that cannot go over seven percent, plus inflation.
Gov. Kate Brown (D) signed the measure on Thursday and it went into effect immediately, providing much-needed relief to residents dealing with increasing rent costs and rampant homelessness.
The move comes at a critical time in the United States, as states across the country struggle with a widespread housing affordability crisis. Salaries have not kept up with rising rent costs, and few states have enough affordable housing to meet the necessary demands.
These realities led Oregon to move rather quickly, thanks in large part to the groundswell of activism by tenant advocacy groups that elevated the voices of vulnerable and displaced tenants who have been affected by the state’s rising rent costs, evictions, and housing shortages firsthand.
“Oregon has a strong history of kind of wrestling with these hard issues and trying to take action on them, compared to other states that seem less willing to confront these issues head on,” Corianne Scally, principal research associate at the Urban Institute, told ThinkProgress. The advocacy on the part of activists cannot be discounted, she added, as grassroots leaders “gave a voice to renters that have been displaced from their homes over and over again.”
Many of these tenants ended up testifying at hearings prior to the passage of the bill, shedding light on how the housing crisis has affected them.
“This has been a huge hit for my family,” one tenant said, according to the Oregonian. “Without the connections that I have made in my community, I would not have housing right now … I cannot afford housing otherwise.”
A state report released in 2017 found that one in three Oregon residents spend more than half of their income on rent, a significant difference from the national average of 17 percent, according to a recent Pew Charitable Trusts study.
The percentage of people in the United States who are rent burdened — or, people who spend more than 30 percent of their pretax income on rent — increased about 19 percentage points from 2001 to 2015, Pew reported. Those who were “severely rent burdened,” or spend more than 50 percent of their income on rent, almost doubled between 2001 and 2015. The problem is especially significant for black households, which are far more likely to be rent burdened than white households.
Despite this, few states have come close to Oregon’s achievement. While New York has a statewide rent control law, cities can opt out of participating. In the last election, California voters rejected a controversial ballot initiative that would have done away with restrictions on rent control.
Other states and cities have taken a piecemeal approach. Boston, for instance, is mulling over a proposal that would tax high-end developers to tackle the problem of limited affordable housing in the city. In Denver, local officials in 2016 started a wildly successful affordable housing loan fund that subsidized the building of rental units for individuals and families earning up to 60 percent of the area’s median income. Pittsburgh has contemplated implementing a similar program.
But no state has been able to match Oregon’s sweeping law, as rent control remains a controversial issue, Scally said.
“The existing evidence on rent control is somewhat scattered. The reality is that it’s never been tried at a statewide level in the U.S. and it’s unclear what all of the outcomes will be for all affected parties,” she said. “Most evidence point to rent control being helpful particularly for low-income tenants in terms of helping to keep their rent lower. The rest of it, though, is a bit murky in terms of, how does it affect landlord behavior and action? And also in terms of looking at the housing market … How does it affect production?”
“Ultimately, there’s concerns about developers voting with their feet and choosing to go places with lower restrictions,” Scally added.
A more realistic solution, one that may appeal to more cities and states, Scally said, may lie in community ownership of land, not rent control.
“The fundamental problem … is tied up in land costs,” she said. “That is what drives a lot of development costs … Finding some way to gain more community ownership over land and try and take that land out of the speculative market so the cost of that land doesn’t keep going up and up.”
Scally added that community land trusts — or non-profit, community-based organizations that buy land for the purpose of creating affordable housing — are a model many cities can and already do follow.
As ThinkProgress reported last spring, community land trusts in Puerto Rico have allowed families to co-own land to help residents evade eviction and displacement. In 2017, New York City’s Department of Housing Preservation and Development announced a $1.65 million grant for community land trusts to meet affordable housing and neighborhood revitalization goals. And a predominantly black neighborhood in Washington, D.C., Anacostia, plans to have its first community land trust in 2019 to help tackle the problem of skyrocketing rent costs and gentrification, which has threatened to price many longtime residents out of their homes.
“That’s a critical component of building more affordably,” Scally said. “Putting land in control of communities.”