How does rent control effect a tenant?
There is a ton of buzz going around about implementing rent control in Jackson County. Portland has previously blazed the trails when it comes to rental laws regarding landlords and tenants in Oregon, but what does “rent control” really mean for a tenant?
Rent control is a price control that limits the amount a property owner/management company can charge for renting out a home, apartment or other real estate. Rent control acts as a price cap by preventing rents either from being charged above a certain level or from increasing at a rate higher than a predetermined percentage. Sounds great for a tenant right? To help our tenants better understand the negative facts about rent control we feel it’s important to share with tenants our Owners thoughts and concerns about rent control. For more information about Portland’s rent control ordinance click here http://www.oregonrentalhousing.com/news/3778593.
Owners and investors will no longer be willing to take risks in purchasing new investment properties because of the rental cap. When purchasing a home many different factors go into the interest rate of the loan. If the owners do not get a good rate, this will ultimately cause the mortgage payment to be higher, resulting in a need for a higher rental amount to make the home an actual source of income. Many current Owners have stated they are debating on selling the home because of constant utility increases and tax increases. Simply stated by one of Asurent Property Managements Owners: “It doesn’t make since to have a rental if I am in debt every month because my bills are going up and my rents are not.” With a cap on how much rental owners can charge this will cause less homes purchased as rentals. This all boils down to a simple supply and demand situation. Less homes being purchased as rentals and less rentals available will cause the rentals that are available to have high rental amounts.
This economic change will cause a loss in growth and expansion for Jackson County. Investors will no longer be willing to purchase land and construct new housing. Investors will not be willing to invest in rental homes in Ashland, Medford and other surrounding cities. Tenants that may be offered a higher paying job or positions in other cities will not want to leave because they will not want to lose their rent controlled housing. When a homeowner or Property Management Company has a vacancy available they will likely change their screening policies not taking “risks” on tenants who have not so good credit or no rental history. “Based on decades of evidence, the result of this misguided policy will be a decline in the number of rental properties, especially for low income tenants, as landlords sell existing units, underinvest in building new units, and tear down older units to replace them with higher priced ones.
The quality of housing will eventually decline. Neighborhoods could have multiple vacant homes because Investors are not willing to purchase something that is not profitable. Owners who have rentals are less likely to add improvements to the current rentals because the ROI is not there.
Since we will soon see rent control discussions in legislative area we are asking you to contact our local representatives. We are fighting to protect against rent control statues, tenant relocation expenses, and eliminate lease regulation. If you live in the Ashland area you will want to contact Oregon Legislator Alan DeBoer at sen.AlanDeBoer@oregonlegislature.gov. Those of you living in Medford and surrounding areas should contact Herman Baerstschinger at Sen.HermanBaertschiger@oregonlegislature.gov. If you are not sure who your Legislator is use this link for finding their information: https://www.oregonlegislature.gov/FindYourLegislator/leg-districts.html