Rental Eviction Rules – Portland Appraisal Blog

House depicted sitting on a stack of $1 bills. Used to illustrate inheritance of a home.

When I appraise 2–4 unit residential income properties in the Portland metro area for estate, trust, or probate purposes, the single largest value depressant is almost always a long-term tenant paying far below-market rent. Oregon’s statewide rent-stabilization law and Portland’s additional relocation-assistance requirements combine to make it expensive and slow for heirs to reset those rents after the original landlord passes away.

How Below-Market Rents Survive Inheritance

Oregon law limits rent increases to once every 12 months and caps the allowable increase at 7% plus the Consumer Price Index (CPI), with an overall hard cap of 10%. For calendar year 2026, this limit is 9.5%. Certain units—such as regulated affordable housing and buildings less than 15 years old—are exempt. No-cause evictions are prohibited after the tenant’s first year of occupancy.

Many inheritors lack the cash or desire to front relocation fees and perform renovations, so the low-rent tenancy often remains in place for years. (I go into more detail in my discussion of Oregon rent control laws and the overlays the City of Portland adds.)

Appraisal Impact: Contract Rent vs. Market Rent

In the income approach for 2–4 unit residential properties, appraisers derive a gross rent multiplier (GRM) by dividing comparable sales prices by their monthly (or annual) scheduled rents, typically resulting in a three-digit figure (e.g., 165–195 in most Portland metro submarkets at present). Appraisers may also cross-check conclusions with a direct capitalization approach when income and expense data are reliable.

That GRM is then applied to the subject property’s actual contract rent. When contract rent lags 20–40% behind market—a common range in inherited portfolios— the indicated value is often proportionally lower than the same property delivered vacant or at market rent.

Example: A duplex with market rent of $2,700 per side ($5,400/month total, $64,800/year) but current contract rent of $2,000 per side ($4,000/month total, $48,000/year) and a reconciled GRM of 180 yields:

Market-rent value: $5,400 × 180 = $972,000
Contract-rent value: $4,000 × 180 = $720,000
Result: $972,000 – $720,000 = $252,000 → Difference of approximately 26% solely due to the locked-in tenancy.

Graphic depicting a duplex. On one side a green up arrow depicts market rent and an estimated value of $972,000. On the other side a red arrow pointing down depicts below market rent and an estimate of $720,000.

For a real-world illustration, consider a recent North Portland fourplex sale from 2024. This 1966-built property sold for $768,000 with actual gross scheduled income of $58,026 annually ($4,835 monthly average across four 2-bedroom units on month-to-month leases). The listing projected $66,120 in gross income—a 14% increase—highlighting below-market rents with “opportunity for growth.” Using the market-derived monthly GRM of approximately 159 (consistent with the listing’s implied metrics), the contract-rent value aligns with the sale price, while the projected rents suggest a potential value around $875,000, representing a 12–14% discount due to the existing tenancies and regulatory hurdles to realizing that upside.

RMLS multifamily listings display scheduled rents in the public fields, and confidential remarks may note “long-term tenants – below-market rents” as an upfront acknowledgement to a potential purchaser. Savvy buyers and appraisers run the numbers immediately and adjust offers (and appraised values) accordingly.

The Challenge Scales with Unit Count

Duplexes remain the most manageable. Under Oregon law, a new owner or an immediate family member moving in is a “Qualifying Landlord Reason” for termination. This creates a realistic path to market rent within 12–18 months. Crucially, Portland’s mandatory relocation assistance is generally NOT required if the new owner occupies one unit of a duplex as their primary residence and terminates the tenancy of the second unit. This key exception significantly lowers the cost and risk of resetting the rent on a duplex in the city.
Triplexes and fourplexes are far harder. While an owner or immediate family member can still reclaim a unit (or units) in a triplex or fourplex for occupancy, this move-in termination does trigger the full Portland relocation assistance payment for each unit vacated. The cost of reclaiming multiple units often becomes the practical—and high-cost statutory—constraint. As a result, at least one protected tenant and their below-market rent often remains in place, sometimes indefinitely.

Regulatory Scenario	Duplex (Owner-Occupied)	Triplex / Fourplex
State Law Termination (Owner Move-In)	Allowed (with 90-day notice)	Allowed (with 90-day notice)
Portland Relocation Fee Required?	NO (Exempt under PCC 30.01.085.G.3)	YES (Full fees apply)
Cost to Recoup 1 Unit	Minimal (Time/Legal fees)	$4,200 – $4,500+ (plus legal fees)

Practical Guidance for Heirs and Estate Professionals

Inherited small income properties with long-term, below-market tenants routinely trade at meaningful discounts to physically identical buildings that are vacant or leased at market rates. The regulatory environment creates a durable “locked-in tenancy discount” that survives the death of the original landlord.

Appraisers must document both contract and market rent, then apply the market-derived GRM to the realistic income stream the property actually produces under current law. Understanding this dynamic early avoids surprise when the date-of-death value comes in lower than expected.

In many cases, keeping the stable tenant and modest cash flow is the path of least resistance—and still the highest and best use. Rents can be gradually raised each year until all units are in alignment with the rest of the market, provided increases comply with the annual cap and notice requirements; in Portland, certain increases trigger relocation assistance.

If you are an estate planning attorney, personal representative, or heir handling a 2–4 unit rental in Multnomah, Washington, Clackamas, Yamhill, Columbia, or Hood River counties, reach out. These scenarios are a routine part of my practice.

Sources & Further Reading

PortlandAppraisalBlog discussion on Oregon 2026 Rent Cap: Post
PortlandAppraisalBlog discussion on Oregon Rent Laws vs. Portland’s Tenant Protections: Post
Oregon Residential Landlord and Tenant Act (full chapter): ORS Chapter 90
Rent Increase Limits & Notice Requirements: ORS 90.323
Annual Rent Cap Calculation: ORS 90.324
Termination of Tenancy without Tenant Cause: ORS 90.427
Portland Renter Additional Protections (City Code 30.01.085): Official City Page
Portland Mandatory Relocation Assistance Brochure (PDF): Download
Portland Housing Bureau Relocation Rules & Exemption Form: HOU-3.05
Oregon Law Help – Eviction & Termination Notices: Guide

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Question: How have the current rent control laws affected your portfolio?

CODA

Are you an agent in Portland and wonder why appraisers always do “x”?

A homeowner with questions about multifamily income properties, GRMs, or income calculations?

If so, feel free to reach out—I enjoy connecting with market participants across Portland and the surrounding counties, and am always happy to help where I can.

And if you’re in need of appraisal services in Portland or anywhere in the Portland Region, we’d be glad to assist.

Oregon’s statewide rent stabilization framework under the Residential Landlord and Tenant Act provides a uniform baseline for rental increases and evictions across the state, including the Portland metro area. Oregon was the first U.S. state to enact comprehensive statewide rent control in 2019 (via Senate Bill 608), followed by California later that year (via AB 1482) and Washington in May 2025 (via HB 1217). These statutes establish annual limits on rent increases for most residential properties, with exemptions for new construction and certain subsidized housing. However, within the city limits of Portland, local ordinances add layers of tenant protections that require relocation assistance for certain terminations and rent hikes. As a certified residential appraiser serving homeowners, lenders, realtors, estate planners, and attorneys in the region, understanding these distinctions is crucial for accurate property valuations, especially for income-producing rentals where regulatory constraints directly influence projected cash flows and market discounts.

Key provisions include rent increase limits under ORS 90.323 and their annual calculation under ORS 90.324.

Statewide Rent Stabilization and Eviction Basics

Under ORS 90.323, landlords cannot raise rent during the first year of tenancy or more than once every 12 months thereafter. The maximum allowable increase for calendar year 2026 is capped at 9.5%. Violations expose landlords to liability for three months’ rent plus actual damages.

Just-cause eviction requirements under ORS 90.427 prohibit no-cause terminations after the first year. Qualifying landlord reasons (major remodel, owner/family move-in, etc.) still require proper notice and, in some cases, one month’s rent as assistance. Exemptions from these protections include units less than 15 years old from the date of the certificate of occupancy, federally subsidized or regulated affordable housing (where the tenant’s portion does not rise or the increase is program-mandated), owner-occupied duplexes or triplexes (where the landlord resides in one unit), and certain short-term rentals.

Portland’s Local Overlay: Enhanced Relocation Assistance

Portland builds on these state protections through City Code 30.01.085 – the Renter Additional Protections ordinance. The city applies Oregon’s statewide cap but adds relocation assistance obligations when rent increases reach 10% or more (for units otherwise exempt from the statewide cap, such as newer construction or subsidized housing). Relocation assistance is also required for:

Non-renewal of fixed-term leases
Qualifying landlord reasons under state law
Substantial changes to lease terms beyond rent or utilities

Payments (due 45 days before termination or within 31 days of tenant request) are scaled by unit size:

$2,900 (studio/SRO)
$3,300 (1-bedroom)
$4,200 (2-bedroom)
$4,500+ (3+ bedrooms)

Landlords must file exemption forms with the Portland Housing Bureau when applicable and notify the Bureau of payments within 30 days.

Valuation Implications for the Portland Metro Area

For estate planners and attorneys handling inherited rentals, these combined rules often lock in below-market tenancies. Homeowners converting properties to rentals must project income conservatively. Realtors listing income properties typically disclose scheduled rents via RMLS. A listed property with units significantly below market rent levels may receive low offers and usually sells at a substantial discount.

Lenders benefit from reduced turnover risk but must recognize higher operating costs inside Portland city limits. For appraisers, the dual framework means statewide rent caps set the ceiling, while Portland’s relocation obligations add another layer of financial consideration.

Geographic Scope

Oregon’s statewide rules apply in the Portland Region (Columbia, Clackamas, Hood River, Multnomah, Washington, and Yamhill Counties). Portland’s relocation overlay is city-specific. Properties in the Vancouver Region (Clark, Cowlitz, Klickitat, and Skamania Counties) fall under Washington’s separate statewide stabilization law (enacted May 2025), which exempts new construction for 10 years and caps annual increases at 7% + inflation, not to exceed 10%.

Tag: Rental Eviction Rules

Portland Real Estate Appraisal Brief – Monday, December 1, 2025: How Oregon Rent Caps and Eviction Rules Impact Inherited Rental Properties