Portland landlords are continuing their legal fight against the city's tenant-friendly renter relocation law, arguing that it's "disguised rent control" that violates the state constitution.
Oregon Judge Henry Breithaupt ruled in July that Portland's renter relocation law was legal. The ordinance—introduced by Commissioner Chloe Eudaly and passed by City Council in February—requires landlords to pay between $2,900 to $4,500 in relocation fees to tenants if they've either raised rents by at least 10 percent or issued a no-cause eviction. The landlord lobby, obviously, hates this. Here's what the Mercury wrote last month:
Days after it passed, two landlords, Michael Feves and Phillip Owen—represented by high-profile lawyer John DiLorenzo—challenged the ordinance in court. Their suit argued that the ordinance amounts to rent control (which is preempted by state laws), illegally curbs no-cause evictions (which are allowed), hampers existing contracts, and unlawfully allows tenants to sue when landlords don't pay up...
Of all the arguments landlords were making, the claim that relocation payments violated the state preemption on rent control seemed to hold the most promise for landlords. But Breithaupt concluded that the law didn't explicitly prevent landlords from raising rents.
"It is difficult to imagine that the legislature intended something other than proscribing restrictions that would affect all sellers in the market—landlords," the judge wrote. Later he writes: "The Ordinance—while it applies throughout the city—will apply to any individual landlord only if conditions or contingencies are also satisfied as to that individual landlord. The landlord must raise rents by more than a specified amount in a specified period."
City officials cheered the ruling. Jamey Duhamel, the policy director for Commissioner Chloe Eudaly who was instrumental in bringing the law forward, issued a statement saying: "At a time when the legislature has so blatantly turned its backs on tenants in Oregon, it is deeply gratifying to know that the only tool available to us has been upheld in the courts. Relocation assistance helps stabilize families and we intend to make sure as many tenants as possible know about it."
Here's what the landlord plaintiffs had to say today:
Two Portland landlords who last February claimed Portland City Councilwoman Chloe Eudaly’s Ord. 188219, the “Tenant Relocation Ordinance” violated Oregon statutes and the Oregon Constitution, today announced they are seeking appeal from the judgment entered in this case on July 14, 2017, signed by Judge Henry Breithaupt, in the Multnomah County Circuit Court.
The appeal was filed today with the Appellate Court Administrator in Salem.
In July, Judge Breithaupt stated the Tenant Relocation Ordinance was legal, ruling against landlords Phillip E. Owen and Michael L. Feves’ suit, concluding “the ordinance was a legislative response to a socio-economic problem in the city… such change is not prohibited."
“Though we appreciate the time and effort the court expended on this case, we still strongly believe the ordinance will only aggravate Portland’s housing crisis,” Owen and Feves’ attorney John DiLorenzo said. “The court failed to see it for what it is – disguised rent control, which violates state statutes and the Oregon Constitution.”
Eudaly’s ordinance requires residential property lessors to provide relocation assistance amounting to what may often total three months’ rent to tenants (a) who have left a tenancy after a rent increase of 10% or higher (b) who have received a 90-day no-cause termination notice; or (c) reach the end of their lease for a set term and are not offered a renewal.
Owen and Feves’ complaint claimed the ordinance as amended violates state law in at least three ways. First, it effectively “controls the rent that may be charged for the rental of any dwelling unit,” in violation of ORS 91.225. Second, it conflicts with ORS 90.427, which authorizes no-cause terminations of tenancies, by imposing significant financial burdens on lessors who utilize the no-cause termination procedure. Third, the ordinance expressly applies to existing leases and therefore impairs contracts in violation of the state Contract Clause, Article I, section 21, of the Oregon Constitution.