Oregon renters will see a 10% max rent increase in 2025

PORTLAND, Ore. (KOIN) – The Oregon Department of Administrative Services released the annual maximum rent increase for 2025 – revealing a 10% increase for Oregon renters for units 15 years and older.

An Oregon law, established in 2019, requires DAS to calculate and publish the maximum annual rent increase percentage for the following calendar year by Sept. 30.

Based on the law, the Office of Economic Analysis calculates the increase as 7% plus the annual 12-month average change in the Consumer Price Index or 10%, whichever is lower. The law only allows one rent increase to be issued within a year.

Since the law was implemented, the rate has held around 9% or 10%, except prior to July 6, 2023, which saw a 14.6% max rent increase, according to DAS.

That mid-year change was due to a new law signed by Gov. Tina Kotek, which capped rent increases at 10%, or inflation plus 7%.

'I have no other options'

AJ Davis, who pays $1200 for a downtown studio apartment, can't even afford the current rates.

"I was able to pay it but I wasn't able to feed myself and I have two animals -- I have a cat and a dog -- and I was not able to take care of them comfortably," Davis told KOIN 6 News.

As she is falling behind her rent, she's made a difficult decision. Next month she's moving to Seattle to live with her grandmother.

"I don't want to do that," she said, "but it's what has to be done because I have no other options."

The real estate website Zillow said the median rent in Oregon is more than $1800. Housing advocate Kat Clark said many are still struggling to get approved for housing, and higher rents won't help -- especially when most people don't get 10% pay hikes.

"Even just thinking about us workers, we don't even get paid enough," Clark said. "I don't even make enough to live where I'm at. I'm probably one or two paychecks away from having housing insecurity myself."

Still, there are some protections under the law. Landlords can only bump up rent once a year, rent can't be raised during the first year and landlords have to give 90 days notice before any increase.

Additionally, if a landlord does surpass the limit or evicts a tenant just to raise rent, they have to pay the tenant three months rent plus compensation for any hardships.

Property managers in buildings newer than 15 years old can increase rent as much as they see fit and there is no limit on how high a landlord can set rent for new tenants.

Clark said many Oregonians will need to adjust their budgets to cope with these changes.

"I don't even know where you come up with the sum to come up with, like, a security deposit down," she said.

Oregon's housing supply

Kotek's rent cap bill comes as the state grapples with the affordable housing crisis.

In May, the governor signed the Emergency Housing Stability and Production Package into law, which will help lawmakers officially secure major investments to increase the housing supply across the state.

At the beginning of Gov. Tina Kotek’s term in office, Oregon’s housing supply was short about 140,000 homes. While the state has made some progress, Kotek previously said there's still a lot of work to do.

“Our undersupply of housing worsens our homelessness crisis, drives up home prices, and makes it harder for Oregonians to live near where they work, play and go to school,” Kotek said at the signing ceremony.

The housing production bills Kotek signed into law secured $376 million to fund homeless shelters, help renters and boost housing production.