Oregon Supreme Court upholds Portland’s renter relocation policy

The Oregon Supreme Court has upheld Portland’s renter relocation policy, allowing the city to continue requiring landlords to pay renters’ moving fees if they enact a major rent hike or evict them without cause.

The 5-to-1 ruling delivered a fatal blow to a four-year-long legal push by Portland-area landlords to kill the city ordinance. The council unanimously passed the rule in 2017, framing the policy as a tool to protect tenants from being priced out of their homes in the middle of an affordable housing crisis. One week after its passage, two landlords sued the city, arguing that the rule violated a state ban on local rent control.

The case has been snaking through the courts ever since. Multnomah County Circuit Court judges dismissed the suit and the Oregon Court of Appeals upheld that ruling last July.

Related: Portland’s renter relocation rule goes before the Oregon Supreme Court

In their Thursday ruling, the Oregon Supreme Court sided with the lower courts. The majority of justices found that the state law barring local jurisdictions from enacting rent control does not prevent policies that may discourage — but not outright ban — rent hikes.

“The city’s ordinance neither mandates nor forbids landlords to set their rents at, above, or below a certain amount,” the majority opinion read. “Portland landlords retain their legal ability to set rents as they see fit.”

The relocation ordinance was pushed by then-Commissioner Chloe Eudaly months after she won her seat on a platform of protecting renters who are at risk of being priced out of Portland. The ordinance requires landlords to pay renters when those landlords raise rents by 10% or more over a one-year period or issue a no-cause eviction. Payments range between $2,900 and $4,500, depending on the size of the home. Tenants can sue if their landlords don’t follow the rules.

A landlord trade group called More Housing Now contended that the renter relocation policy was an obvious violation of the state’s ban on rent control, and that it indirectly controlled prices by penalizing landlords who want to raise rents.

The majority of Oregon Supreme Court justices were unswayed by that argument. They said the ordinance made clear that the city’s intent was to curb the displacement of low-income renters and not to impose rent control through other means.

Justice Christopher Garrett was the exception. In a dissenting opinion, Garrett said he believes landlords have seen their freedom to set rents “restrained just as if the city had enacted an outright prohibition” on rising rents. He believed that was the city’s goal, referencing public comments made by both Eudaly and Portland Mayor Ted Wheeler, in which the Portland leaders had framed the ordinance as a “tool we have to keep rent levels stable.”

Related: Portland decides landlords must pay for no-cause evictions, effective immediately

Attorney John DiLorenzo, who brought the case on behalf of the landlord lobby, said the City Council was fueling an “extreme regulatory environment” for housing providers that would hamper the city’s attempts to create more rental housing.

“It is unrealistic to, on the one hand, adopt policies that discourage ownership of rental housing and, on the other hand, complain that there is too little supply and that rents are too high,” he wrote.

State Supreme Court Justice Rebecca Duncan did not participate in the case.