Portland Rental Law: What Landlords should Know in 2021

portland rental law landlords

The Portland real estate rental market was pretty eventful for rental owners in Portland in 2020. For long-term rental/investment property owners, the contentious FAIR ordinance went into effect city-wide in March, but was soon overshadowed by COVID and the subsequent ban on evictions. Short-term property owners saw a dip in bookings as well, but the situation resolved itself more quickly.

Let’s review what the changes were for rental owners in the Portland real estate market this year, and what you need to do to be a successful rental owner in Portland in 2021 and beyond. Before we get started, we should say that we are not lawyers and that this blog post is not intended to be a complete guide to Portland rental laws. In addition, ordinances and rules change all the time, so follow the links to the official websites before you act on any of the information we provide here. 

Short-Term Rentals in Portland: Regulations and income potential

Renting out property can be done in two ways: Short-term and long-term. Most people know short-term rentals as Airbnbs or vacation rentals. Portland homeowners with an extra room, or even an Accessory Dwelling Unit (ADU) or entire home, may rent it out this way, and the good news is that it’s perfectly legal to do so in Portland and surrounding communities. In fact, Airbnb’s headquarters are located right in downtown Portland!

The biggest restriction on Portland short-term rentals is that the owner must live in the home 9 months out of the year. If you’re renting out an ADU, you must live in the main house 9 months out of the year. 

If you can meet that requirement, the next step is to apply through the city’s Bureau of Development Services. All rentals must be permitted, with fees ranging from around one hundred to thousands of dollars, depending on the size of the rental. There are a few other steps as well; check the website for a full description.

So, what’s the income potential for a short-term rental in Portland. According to the rental data cruncher Airdna, the median income for a Portland short-term rental provider is $1,748/month (12-month average July 2019-2020). 

Portland short-term rental statistics from Airdna.

Many properties in Portland have the potential to provide short-term rental income, even if it’s not immediately apparent. Research from Portland State University shows that only about 2.5% of properties in the city identified as “prime” locations for ADUs currently have ADUs on them. An ADU can be in a basement or backyard cottage.

Long-Term Rentals in Portland: Investing in the community

Becoming a landlord is a bigger commitment than simply renting out a room or house short-term, but those who do it successfully enjoy stable income, and spend less time dealing with short-term renters coming and going, cleaning, etc. And, you get the satisfaction of knowing that you’re providing a good place to live for individuals or families.

Some Portland homeowners simply rent out a room or an ADU long-term, while others may invest in separate rental properties, managing entire homes or apartment complexes. At some point, you may find it necessary to hire an outside property management company, but most small-scale Portland rental owners find it financially advantageous to handle the management themselves. 

Understanding the law should be the first task of any potential landlord; most laws governing the rental of homes and apartments are the same across Oregon. There are many resources available to those who want to self-educate, but we recommend talking to a lawyer before you set out on this new business venture, especially if you’re renting to someone you don’t know. 

Resources for New Landlords in Portland

  • For a good overview of disclosure responsibilities, the types of fees allowed, and how to comply with Fair Housing rules to rent out properties in Oregon, check out this Nolo Legal Encyclopedia article. Multnomah County also has a Resource Guide for Renters and Tenants PDF, but it hasn’t been updated since 2018. 
  • On the other hand, Portland Housing Bureau’s website is updated frequently, with the latest rule changes up top. In the past, they also provided Landlord Tenant Law training sessions, and you can sign up to find out when those will be happening again. 
  • Both the Portland Area Rental Owners’ Association and the Rental Housing Alliance of Oregon have regular meetings where new landlords can learn the latest rules and updates for their area. They also have forms, such as application forms, available on their websites. 
  • If you’re worried about the paperwork of managing multiple rentals, consider using rental management software. In addition to tracking tenant information, maintenance and accounting, some products can generate repots to help you ensure that you’re making money off your investment. 

2020 Rule Changes for Portland Landlords

We hinted above that 2020 was a challenging year for rental property owners and managers in Portland, and we’re hoping that things smooth out in 2021. However, investing in real estate in Portland for rental purposes is still a great investment — see the last section.

Fair Access in Renting Ordinance

This rule, which went into effect in Portland in March 2020, made some changes to the ways that landlords can select tenants (check out this OPB article for a good overview). It was intended to make it easier for historically marginalized groups to find housing. Though many landlords opposed the rule changes, it has yet to meet any legal challenges in the courts. For the average small-scale Portland rental owner, the FAIR ordinance shouldn’t be a concern: It doesn’t apply if you’re renting out part of your own home, an ADU on your property, or a duplex when you live in one half. 

No Evictions for Non-Payment of Rent

In April 2020, the Governor of Oregon issued an Executive Order that banned evictions and terminations of rental agreements for any tenant impacted by COVID-19 who can’t pay rent. Then, in June, Oregon lawmakers passed House Bill 4213, which clarified the process and created a six-month repayment period for tenants starting October 1.

The Oregon eviction ban is set to expire before long, but the CDC recently issued a new eviction moratorium that applies across the country. Like the Oregon Executive Order, it prevents renters from being evicted if they are impacted by COVID-19 and can’t pay rent. However, the rules to qualify are a bit stricter; read more about it here

Rental or Investment Property in the Portland Real Estate Market

According to Multifamily NW, only 11% of Oregon renters struggled or failed to pay their rent in August 2020. The Oregon economy is getting back on its feet and our unemployment rate is at 7.7% and falling. It’s still difficult for many families, but all the more important that responsible property owners step up to provide rental opportunities. There is little risk in purchasing a home this fall to rent out in 2021. Ask our top 1% buyers agents to provide you a list of great investment properties in the Portland real estate market. Our goal is to make it fast, simple and affordable for you to become a rental owner. Then after you own, we can help connect you with a reputable property management company.

September 18, 2020
AUTHOR

Stephen FitzMaurice

Stephen FitzMaurice, Realtor is a top 5% real estate agent in the U.S. and a top 1% agent in the Portland Metro. Principal Broker in Oregon, Managing Broker in Washington he has been licensed since 2003 for residential real estate sales in the Portland Metro area. Call him direct: 503-714-1111.

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