12/14/2015 3:31:32 PM

15CV31078

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IN THE CIRCUIT COURT FOR THE STATE OF OREGON

FOR THE COLTNTY OF MULTNOMAH

MELCLIFF ASSOCIATES, LLC,

Plaintift

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Case

No. l5CV3

1078

PLAINTIFF'S MOTION FOR

SUMMARY JUDGMENT

CITY OF PORTLAND, an Oregon Municipal

Corporation,

ORAL ARGUMENT REQUESTED

Defendant.
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UTCR 5.050

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Pursuant to UTCR 5.050, plaintiffs request oral argument on this

motion. Plaintiffs

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estimate that 60 minutes are required for oral argument. Official coufi reporting services are

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requested.

MOTION

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Pursuant to ORCP 47, plaintiffs respectfully move for summary judgment:

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(1)

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Declaring that Portland City Code Section 30.01.085 ("Ordinance") is invalid and

unenforceable because it is preempted by ORS 91 '225; and

(2)

Permanently enjoining Defendant City of Portland ("City") from taking any

action to enforce the Ordinance.

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This motion is supported by the following Memorandum of Points and Authorities, the

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Declaration of Timothy Gray in Support of Plaintiffls Motion for Summary Judgment and the

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records and files of this case

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Page 1 - PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
DAVIS WRIGHT TREMAINE LI,P
DWT 28472413v3

0105706-000001

Fifth Avenre, Suite 2400

Portland, Oregon 97201-510
(s03) 24 I -2300 rnain ' (503) 778-5299 lax
1300 S

POINTS AND AUTHORITIES

I.

INTRODUCTION

This action challenges Portland City Code Section 30.01.085 ("Ordinance"), which flouts

an unambiguous and express preemption provision duly enacted by the Oregon legislature. The

Ordinance is irreconcilable with the preemption statute and does not fall within any of the

limited exceptions contained in that statute. Accordingly, this Courl should declare the

Ordinance preempted and enjoin its enforcement.

In 1985, the Legislative Assembly enacted ORS

91

.225,whichpreempted all local rent

control enactments and reserved to the state the exclusive right to regulate residential rental
.225 notonly ensures uniform statewide rent regulations, it prevents "the

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prices. ORS

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imposition of general restrictions on housing rents" ORS

91

91

.225(1)'

Despite thirty years of exclusive state control of rent regulation, the City of Portland has

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adopted an Ordinance attempting to do just what ORS 9l .225 proscribes-impose restrictions on

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rent price adjustments. The Ordinance prohibits residential property lessors from adjusting rent

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prices more than five percent over a 12-month period without providing a full 90 days' notice'

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By tripling the notice period specified by ORS 90.220, the Ordinance conflicts with Oregon state

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law and constricts property owners' ability to respond efficiently to changes in the rental market.

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For the duration of this extended notice period, the Ordinance "controls the rent that may be

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charged for the rental of any dwelling," in violation of ORS 91.225. Therefore, the Ordinance is

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invalid and unenforceable.

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BACKGROUND

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A.

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Responding to decades of research showing the devastating consequences of rent control

State law prohibits local regulation of residential property rental prices.

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policies, Oregon's Legislative Assembly passed emergency legislation in 1985 that preempted

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local rent regulation. In its entirety, the resulting statute now provides:

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Page2 - PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

DAVIS WRIGHT TREMAINE LLP
Dv,/T

2847 24 13v3 0 1 05706-00000 I

1300 S.W. Fifth Avenue, Suite 2400

Portland, Oregon 97201-5610

(503) 241-2300 rnain ' (503) 778-5299 fax

(1) The Legislative Assembly finds that there is a social and

economic need to insure an adequate supply of affordable housing
for Oregonians. The Legislative Assembly also finds that the
imposition of general restrictions on housing rents will disrupt an
orderly housing market, increase deferred maintenance of existing
housing stock, lead to abandonment of existing rental units and
create a property tax shift from rental-owned to owner-occupied
housing. Therefore, the Legislative Assembly declares that the
imposition of rent control on housing in the State of Oregon is a

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matter of statewide concern.

(2) Except as provided in subsections (3) to (5) of this section, a

city or county shall not enact any ordinance or resolution which
controls the rent that may be chargedr the rent(tl of any dwelling
unit.

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(3) This section does not impair the right of any state agency, cit!,
county or urban renewal agency as defined by ORS 457 '035 to
reserve to itselfthe right to approve rent increases, establish base
rents or establish limitations on rents on any residential property
for which it has entered into a contract under which certain
benefits are applied to the property for the expressed putpose of
providing reduced rents for low income tenants. Such benefits
include, but are not limited to, properly tax exemptions, long-tetm
financing, rent subsidies, code enforcement procedures and zoning
density bonuses.

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(4) Cities and counties are not prohibited from including in

condominium conversion ordinances a requirement that, during the
notification period specified in ORS 100.305, the owner or
developer may not raise the rents of any affected tenant except by
an amount established by ordinance that does not exceed the limit
imposed by ORS 90.493.

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(5) Cities, counties and state agencies may impose temporary rent
controls when a natural or man-made disaster that materially
eliminates a significant portion of the rental housing supply occurs,
but must remove the controls when the rental housing supply is
restored to substantially normal levels.

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(6) As used in this section, "dwelling unit" and "rent" have the
meaning given those terms in ORS 90.100.

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Page 3 - PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
DAVIS WRIGHT TREMAINE LLP
DWT 284724 l3v3

01 05706-00000 I

1300 S.W. Fifth Avenue, Suite 2400

Portland, Oregon 9720 -5610

(503) 241-2300 main' (503) 178-5299 fax

(7) This section is applicable throughout this state and in all cities
and counties therein. The electors ot the governing body of a city
or county shall not enact, and the governing body shall not
enforce, any ordinance, resolulion or other regulation that is
inconsistent with this section.

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ORS 91 .225 (emphasis added). By its plain text, ORS 9l .225 unambiguously preempts any local

enactment that "controls the rent that may be charged for the rental of any dwelling unit," subject

to several nalrow exceptions not implicated in this case.

Together with the Residential Landlord and Tenant Act, ORS chapter 90, the purpose of

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ORS 91 .225 was to avoid a patchwork of harmful and conflicting local laws, As part of this

system, the legislature adopted a statewide rent increase notice period. ORS 90.220 provides:

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* * * Rent may not be increased without

"(7) except as otherwise provided by this chapter: (a)

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*
30-day written notice thereof in the case of a month-to-month tenancy

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period reflects the legislature's careful balancing of the interests of tenants, the rights of

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landlords, and the risks of interfering with the efficient functioning of the residential rental

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market.

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*'" This 3O-day notice

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B.

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Despite the state legislature's deliberate choice of a 3O-day notice period, the Portland

The Ordinance regulates residential property rental price increases.

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City Council decided that "Portland renters need more advance notice of rental increases than the

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state law minimum notice of 30 days," due to "[r]ecord high rents." Ordinance

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Accordingly, on October 14,2015,the Portland City Council added the Ordinance to the

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Portland City Code.

Id.

No. 187380'

The Ordinance states, in relevant part:

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A. In addition to the protections

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set forth in the Residential Landlord

and Tenant Act, the following additional protections apply to

Tenants that have a Rental Agreement for Premises covered by the

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Act.
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*****

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Page

4 - PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

DAVIS WRIGHT TREMAINE LLP

DWT 28472413v3

0105706-000001

W Fifth Avenue, Suite 2400

Portland, Oregon 97201-5610
(503) 241 -2300 main ' (503) 778'5299 fax
1300 S

C. A Landlord may not increase

or Associated
Housing Costs by 5 percent or more over a 12 month period unless
the Landlord gives notice in writing to each affected Tenant: (a) at
least 90 days prior to the effective date of the rent increase; or (b)
the time period designated in the Rental Agreement, whichever is
longer. Such notice must specify the amount of the increase' the
amount of the new Rent or Associated Housing Costs and the date,
as calculated under the Act, when the increase becomes effective.

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a Tenant's Rent

Portland City Code Section 30.01.085. Subsection D. of the Ordinance imposes stringent

penalties for violation of the notice requirement, including fines of "up to three months Rent as

well as actual damages, reasonable attorney fees and costs" for each affected tenant.
On November 13, 2015, only 30 days after its enactment, the 90-day notice period took

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effect.

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C.

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Plaintift Melcliff Associates, LLC, is an Oregon Limited Liability Company.

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Declaration of Timothy Gray in Support of Plaintifls Motion for Summary Judgment ("Gray

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Decl."), fl3. Plaintiff owns multi-family residential property within the City of Portland, which it

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leases out under Rental Agreements governed by the Residential Landlord and Tenant

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chapter 90. Gray Decl., tj4. Plaintiff has entered Rental Agreements that allow rent increases

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with 30 days'notice in accordance with ORS 90.220. Gray Decl., fl5. Plaintiff is adversely

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affected by the enactment and enforcement of the Ordinance, which prevents plaintiff from

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adjusting rent prices in accordance with its Rental Agreements and ORS chapter 90. Gray Decl',

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T6.

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Plaintiff challenges the Ordinance's regulation of rental price increases

Act, ORS

Plaintiff filed this lawsuit on Novemb er 17 ,2015, seeking a declaration that the

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Ordinance is invalid and unenforceable and seeking a mandatory injunction petmanently

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enjoining the City from enforcing the Ordinance.

rfl.

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STANDARI)

Summary judgment is appropriate where "the pleadings, depositions, affidavits,

declarations and admissions on file show that there is no genuine issue as to any material fact
Page 5 - PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

t)w'r 2s4iz4t3v3

0r05706-00000r

J'3 #ill;i,?y*ll:ii"'

Potland, Oregon 97201-561 0

(503) 241'2300 main ' (503) '778-5299 fax

law." ORCP 47 C. No

genuine

and that the moving party is entitled to prevail as a matter of

issue as to a material fact exists

most favorable to the adverse party, no objectively reasonable juror could retum a verdict for the

adverse party. ORCP 47 C;Jones v. General Motors Corp.,325 Or 404,407 (1997). If the

party moving for summary judgment has produced enough evidence to establish the absence of a

genuine issue as to any material fact, the adverse parly must demonstrate that it has sufficient

evidence to entitle it to a jury determination. Estes v. Lewis and Clark College,l52 Ot App 372,

383 (1ee8).

if, based upon the record before the court viewed in a manner

IV.

ARGUMENT

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A.

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As an initial matter, plaintiff has standing to challenge the validity of the Ordinance'

Plaintiff has standing to

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seek declaratory and

injunctive relief

Plaintiff has standing to pursue declaratory relief pursuant to the

uniform Declaratory Judgments Act ("DJA"), ORS 28.010 to 28.160.

Plaintiff has standing because its legal rights are currently affected by the Ordinance.

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Standing is a concept that "identifies whether a party to a legal proceeding possesses a status or

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qualification necessary for the assertion, enforcement, or adjudication of legal rights or duties'"

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Kellas v. Dept. of Corrections,34I Or 471,476-77 (2006). Whether a particular plaintiff has

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standing "depends on the particular requirements of the statute under which he or she is seeking

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relief." Morganv.

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plaintiff

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whether plaintiff has standing. The DJA provides:

Sisters School Dist. No.

6,353 Or 189, 194 (2013). Accordingly, because

seeks declaratory relief under the DJA, the statutory provisions of the DJA govern

Any person interested under a deed, will, written contract or other

wriiig constituting a contract, or whose rights, status or other
legal rlations are ffected by a constitution, statute, municipal

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ch-arter, ordinance, contract or franchise may have determined any

question of construction or validity alislng under any such

instrument, constitution, statute, municipal charter, ordinance,
contract or franchise and obtain a declaration ofrights, status or
other legal relations thereunder.

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Page6 - PLAINTIFF'S MOTION FOR SUMMARY ruDGMENT

DWT 28472413v3

0105706-000001

DAVIS WRIGHT TREMAINE LLP

1300 S.W Fifth Avenue, Suite 2400
Potland, Oregon 97201-5610
(503) 241 -2300 rrain ' (503) 7'8-5299 fax

ORS 28.020. Thus, to establish standing under the DJA, a plaintiff must show that his or her

"rights, status or other legal relations" are "affected by" the statute or ordinance at issue'
Whether a plaintiff s "rights, status or other legal relations" are "affected" within the

of

meaning of ORS 28.020 "implicates three related but separate considerations." Doyle v' City

Medford,356 Or 336,372 (2014) (en banc). First, there must be "some injury or other impact

upon a legally recognized interest beyond an abstract interest in the correct application of the

validity of

parly

must involve a dispute based on present facts rather than on contingent or hypothetical events."

law." Morgan,353 Or at 195. This means "the challenged law must affect that

s rights, status, or legal

relations." Id. (emphasis in original). Second, the "controversy

practical effect on the rights that the

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Id. at 196. Finally, the "coufi's decision must have

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plaintiff is seeking to vindicat e." kl. at

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granted, "must redress the injury that is the subject of the declaratory judgment action." Id'

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197

. In other words, the relief thaf a party seeks, if

Additional ly , a pafty has standing to challenge the validity or enforceability of a statute

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or ordinance where that party has demonstrated that its "rights, status or other legal relations are

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affected by the law or enactment at issue." See League of Oregon Cities v. State of Oregon,334

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Or 645,658 (2002).

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Plaintiff satisfies all of the requirements for standing under ORS 28.020' First, because
as a result

of its inability to increase rent in accordance with its

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plaintiff financially impacted

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Rental Agreements and ORS 90.220, plaintiff has suffered an "injury or other impact upon a

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legally recognized interest." Morgn,353 Or at 795; accord Marks v. City of Roseburg, 65 Or

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App 102, 105,06 (1983) (holding that intent to use property for

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challenged ordinance gives rise to standing); Thunderbird Mobile Club,234 Or App 457 , 467 -68

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(holding that declaration would have immediate effect on plaintiff s legal interests where "the

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ordinance presently affects the marketabitity and value of plaintiff s property.")' Second,

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plaintiff

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enactment of the Ordinance, constituting a "dispute based on present facts rather than on

seeks declaratory relief based on a real

for

injury to plaintiffls property due to the City's

PageT - PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

DAVIS WRIGHT TREMAINE LLP
DWT 28472413v3 0l 05706-000001

use that is permissible but

1300 S.W. Fifth Avenue, Suite 2400

Portland, Oregon 97201-561 0
(503) 24 1 -2300 nain ' (503) 't'18-5299 fax

."

Morgan, 353 Or at 196. Third, declaring the Ordinance

contingent or hypothetical events

invalid will "redress the injury that is the subject of the declaratory judgment action," as plaintiff

will

state

status or other legal relations," a declaration in

on plaintiff s legal interests, and plaintiff has standing to seek declaratory relief pursuant to ORS

28.020.

be able to avoid further financial impediments by modifying rent prices in accordance with

law. Morgan,353 Or at 191. Because the Ordinance directly affects plaintiffls "rights,

2.

plaintiff

Plaintiff also has standing to

s favor would have an immediate effect

seek

injunctive relief.

Because plaintiff has standing to pursue a claim for declaratory relief, it follows that
seek injunctive

relief. Although "no

statute govelrrs the issue

of

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plaintiff also has standing to

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standing to seek injunctive relief," the Oregon Supreme Court has "long applied essentially the

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same standing requirements that ordinarily apply in declaratory judgment actions." Nordbye

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BRCP/GM Ellington,2Tl Or App 168, 177 (2015). In fact, as the Oregon Supreme Court has

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noted, in a number of cases addressing the standing requirements under the DJA where plaintif

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sought both declaratory and injunctive relief, the court "did not distinguish between the forms of

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relief in assessing the issue of standing

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455 , 467 -6g (2012); League of

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Kubiaczyk,32l Or

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apply to fplaintiff s] request for declaratory relief and injunctive relief," plaintiff has standing to

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seek injunctive relief for the same reasons that plaintiff has standing to seek declaratory relief'

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Morgan, 353 Or at 201-02.

ll4,l7g

." Morgou

353 Or at20l (citing Hazell v. Brown,352 Or

oregon cities v. state, 334 Or

645 , 657 -62 (2002);

Barcik

B.

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Plaintiff is entitled to a declaration that the Ordinance is invalid and unenforceable

The Ordinance is a "rent control on housing" preempted by ORS 91.225.

because ORS 91 .225 pteempts the Ordinance as a matter of law.

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Page 8 - PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

,t)wr 2s4j24t3v3

v.

(1995)). Thus, "in light of the fact that the same standing standards

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v.

0r05706-00000r

J'3 Hil,Ii.|.y*il3i'|o'

Portland, Oregon 97201-510

(503) 241-2300 nrain'(503) 778-5299 fax

l.

Substantive state statutes preempt incompatible local enactments.

"When a local enactment is found incompatible with a state law in an aea of substantive

policy, the state law will displace the local rule." City of La Grande v. Public Employees

Retirement Bd.,28I Or 137,I49 (1978). Although courts should "interpret local enactments,

possible, to be intended to function consistently with state laws," local enactments must yield to

"legislative policy" where "both cannot operate concurrently" or where "the legislature meant its

law to be exclusive." Id. at 148. Thus, a statute expressly preempts a "local rule where the text,

context, and legislative history of the statute unambiguously expresses an intention to preclude

local govemments from regulating in the same area as that govemed by the statute." Rogue

if

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Valley Sewer Servs. v. City of Phoenix,357 Or 437 , 450-51 (2015). The legislature may express

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its unambiguous intent without "using the word 'preempt'

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such as "no local authority shall enact any ordinances, rules or regulations in conflict with the

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provisions hereof." 1d (quoting ORS 461.030(l)).

itself if it uses "equally

clear terms,"

Where statutes unambiguously preempt local enactments, "a naffowing construction

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."

of

Homebuilders Ass'n of Metropolitan

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state law to avoid preemptive effect is not permissible

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Portland v. Metro,250 Or App 437, 443 (2012). Instead, the application of the statute to a

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particular local enactment "is a question of statutory construction resolved by resort to the

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familiar methodology set forth in State v. Gaines,346 Ot 160, 771 (2009)." 1d When

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interpreting a statute under this methodology, courts begin by examining the text and context of

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the statute and then consider any legislative history proffered by the parties. State v. Gaines,346

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Or 160, 171-72 (2009). "If the legislature's intent remains unclear after examining text, context,

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and legislative history, the court may resort to general maxims of statutory construction to aid in

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resolving the remaining uncertainty." Id.

2.

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ORS 91 .225 unambiguously preempts local enactments like Portland's ordinance. The

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The plain text of ORS 91.225 shows that it preempts the Ordinance.

statute begins by listing the dangers posed by "the imposition of general restrictions on housing
Page 9 - PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

Dwr

2s4724t3v3

0r05706-00000r

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rents," and then "declares that the imposition of rent control on housing in the State of Oregon is

a matter

statute expressly prohibits local rent regulation:

or resolutionwhich controls the rent that may be chargedfor the rental of any dwelling Ltnit'"

ORS 91 .225(2) (emphasis added). The statute's final subsection provides, "This section is

applicable throughout this state and in all cities and counties therein. The electors or the

governing body of a city or county shall not enact, and the governing body shall not enforce any

ordinance x x * is inconsistent with this section." ORS 91.225(7). Together, these

provisions constitute a clearer expression of preemptive intent than even the paradigmatic

of statewide concern," rather than subject to local control. ORS

91

.225(1). Next, the

"[A] city or county shall not enact any ordinance

("fN]o local

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language ofered by the supreme court. See Rogue Valley,357 Or at 450-51

ll

authority shall enact any ordinances, rules or regulations in conflict with the provisions hereof.")

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Accordingly, ORS 9L225 expressly preempts all local rent regulations that do not fall into its

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naffow exceptions.

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The only remaining question is whether ORS 91 .225 preempts the Ordinance at issue

here. The plain text of the statute demonstrates that it does.

"Rent control" is an expansive term, defined simply as "government regulation of the

Int'l

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amount charged as rent for housing and often also of eviction." Ll/ebster's Third New

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Dictionary 1923 (unabridged ed2002). Economists apply the term to a variety of policies

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ranging from setting price ceilings to regulating the timing of price increases. See, e.g., Bengt

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Turner and StephenMalpezzi, A Review of Empirical Evidence on the Costs and Benefits of Rent

22

**
Control,l0 Swedish Econ Pol'y Rev I 1,17 (2003). ("Another approach to rent control is to
* put limits on the extent to which rents can be increased. {< {< * [T]his format does not attempt to

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say what the rent should be, but only to

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Yet, rather than narrowly prohibiting particular policies, the legislature targeted any "imposition

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of general restrictions on housing rents," any "imposition of rent control," or "any ordinance or

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resolution which controls the rent that may be eharged for the rental of any dwelling unit." ORS

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limit how much it can increase in a given time period.").

Page 10 - PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

DAVIS WRIGHT TREMAINE LLP
DWT 2&472413v3 0l 05706-000001

1300 S.W. Fifth Avenue, Suite 2400

Portland, Oregon 97201-561 0
(503) 24 -2300 rnain ' (503) 778-5299 fax

9I.225. By its plain text, ORS

91

.225 preempts all forms of rent regulation.

Bolstering this conclusion, the exceptions to ORS 91.225 refer to a broad range of

otherwise preempted policies.l For instance, ORS 9L225(3) expressly permits local governments

to "approve rent increases, establish base rents or establish limitations on rents" for properties

governed by government affordable housing contracts. Under ORS 91 .225(4),local

governments are permitted to limit rent increases during the 120-day notice period preceding the

conversion of apartments to condominiums. Outside of these narrow exceptions, therefore, local

govemments are preempted from approving rent increases, establishing base rents or limitations

on rents, or limiting rent increases during state-mandated notice periods

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much less locally-

concocted ones..

By controlling permitted rent charges and imposing conditions on the ability to increase

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rents, the Ordinance falls within the broad scope of ORS 9l.225. Under the Ordinance, "[a]

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Landlord may not increase a Tenant's Rent or Associated Housing Costs by 5 percent or more

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over a 12 month period unless the Landlord gives notice in writing to each affected Tenant: (a) at

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least 90 days prior to the effective dates of the rent increase

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3Q-day notice period required by statute, effectively imposing a 60-day moratorium on rent

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increases above a five percent cap. During this 60-day period, the Ordinance "controls the rent

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that may be charged for the rental of any dwelling unit," in violation of ORS 91 .225. Like all

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rent control laws, the effect of the Ordinance is to burden landlords' ability to increase rents in

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accordance with market rates. Indeed,

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phrase "a Landlord may not increase a Tenant's Rent," could be anything other than a "general

22

restriction[] on housing rents."

* * *." The Ordinance triples the

it is difficult to see how an ordinance containing the

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is not limited to property

' None of these exceptions apply to the Ordinance. The Ordinance
conversion
"condominium
not
a
subject to local government contracts. ORS 91 .225(3). It is
ordinance[]." ORS 91.225(4). And, whatever one's view of the City's housing policies, the
Ordinance.was not imposed in response to "a natural or man-made disaster that materially
eliminates a significant portion of the rental housing supply . . ' ." ORS 9l ,225(5) (emphasis
added).
Page I

I - PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

DAVIS WRICHT I.REMAINE LLP

DwT

284724 I 3v3 0 I 05706-000001

1300 S.W. Fifth Avenue, Suite 2400

Portland, Oregon 9?201-510

(503) 24 I -2300 main ' (503) 't78-5299 fax

In fact, the City Council was well aware of the risk of preemption, but hoped that the

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Ordinance would withstand legal challenge because it was "reasonable." Declaration of Chris

Swift in Support of Plaintifls Motion for Summary Judgment, Exhibit 2. During the October 7,

2015 public meeting, a proposed amendment extending the notice period to 120 days triggered a

discussion of the Ordinance's dubious legality. The Ordinance's own sponsor, Commissioner

*
Saltzman, worried that"a90 day notice -- is defensible and potentially legal, whereas 120 day*

* veers toward preemption." Id. The testifying Deputy City Attorney agreed, cautioning against

stretching the notice period fuither because it is:

controlled, you know, by a different parl of the statute, which is the

rent control statute. And having a period of time where you know,
you cannot-a landlord is not able to increase the rent -- extended
Io 120 days starts to feel more like we're running afoul of the
prohibition on rent control. And again, 90 days, seems like a more
reasonable period of time, where we are running less risk of
running afoul of that.

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1d. V/hen pressed on the distinction between a9}-day period and a 120-day period, the Deputy

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City Attomey responded, "It's just

a question

of reasonableness in terms of time." Id.

Throughout the discussion, Commissioner Saltzman emphasized the Ordinance's

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"I think we're going to be risking

challenges who say even 90 days

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precarious legal foundation:

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is not legal*

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He later added:

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* I try to find the art of the possible,

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defensible

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gray here and there is a lot of risk. x 'r * The question is how much risk are we willing to take of

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a court overtuming

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seemed reasonable, Mayor Hales explained his vote by stating, "Very interesting discussion

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because my assumption before this discussion

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greater, but I am pleased to hear that. To me, now, that I have heard that, it makes sense, why

>F

t x threading

the needle, I guess, is how I'd like to refer to these amendmenTs." Id.

"I would just, you know,

*
say that the risks are not, you know, not imaginary 'o

I said, threading the needle,

as

* *.'r Id. Commissioner Fish

this * *

also acknowledged,

*." Id. Apparently comforted

l3v3

0 I 05706-00000 I

* * * was that our legal risk would

300 S.Vr'. Fifth Avenue, Suite 2400

Portland, Oregon 97201-561 0
(503) 241 -2300 main ' (503) 't'18-5299 fax
I

say that there is a lot

by assurances that the Ordinance

DAVIS WRIGHT TREMAINE LLP

2847 24

to what I think is legally

"I would

Page 12 - PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

D$/T

as

perhaps be

of

are we here? We are here because of a financial emergency. And therefore, we ought to focus
2

on the financial question. And we're trying to avoid harm to our citizens by extraordinary rent

increases, at a time where they have few other choices, so

that's both a sound policy basis and focusing on the heart of problem." Id.

I am pleased to hear that we think that

However, the purporled "reasonableness" of a local enactment that controls rent

it from preemption. ORS 91 .225 is not limited by

increases, even for 90 days, cannot save

subjective "reasonableness" of an ordinance (e.g. only a little rent control); it expressly preempts

"any ordinance or resolution which controls the rent that may be charged * * *.'r ORS 91.225

(emphasis added). Reading a reasonableness safe harbor into the statute would impermissibly

l0

adopt "a narrowing construction of state law to avoid preemptive effect" and would subvert the

1l

intent of the legislature. Homebuilders Ass'n,250 Or App at

12

legislature is not "defensible and potentially legal." The plain text of ORS 91.225 establishes

13

that local govemments have no power to regulate rent increases-there is simply no needle for

t4

the Council to thread here.

3.

l5

443

Defying the will of the

The legislative history of ORS 91.225 further shows that the

legislaiure intended to preempt local enactments like the Ordinance.

16

t7

If the statue's text left any conceivable doubt

it. ORS 91.225 was adopted

as to the

legislature's intent, the legislative

by the 1985 legislative assembly as Chapter 335,

18

history dispels

19

Oregon Laws 1985 (Enrolled H.B. 2505). See Exhibit 1. ORS 91.225(2) is identical to that

20

which was contained in the enrolled House Bill and the Bill as originally introduced, which is

2t

attached as Exhibit

22

2.

The amendment, ultimately adopted by the House is attached as Exhibit

On April 30, 1985, the House Committee on the Judiciary held a hearing on the bill as

23

introduced. Among those testiffing as proponents was Charlie Hales, who, at the time

24

represented the Home Builders Association Metropolitan Portland. During that hearing, Mr.

25

Hales spoke of the need for total statewide permanent preemption with respect to rent regulation

26

il
Page 13 - PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
DWT 28472413v3

0105706-000001

DAVIS WRIGHT TREMAINE LLP

1300 S W Fifth Avenue, Suite 2400
Portland, Oregon 97201-5610
(503) 241-2300 nrain ' (503) '778-5299 fax

rt<{<**t
2

I also had the chance to look down the gun barrel

measures in Jackson County and on the ballot in Lane County and

the City of Springfield and I think we sometimes forget after a
couple of years how close we came in November of 1982 to having
rent control underway in Oregon which is what the need was for
this legislation in the first place and why it's now being brought to

4
5

you in making permanent. House Bill 2505 is just that, it's an

opportunity. It's an opportunity to preserve Oregon from that kind
of a threat and it's an opporlunity to benefit from other states' bad
experiences with rent control. We provided you with this
enormous book not simply to wow you with our ability to make
photocopies but to show you the depth of data that is now available
from other states. The major issues that are addressed in this book,
what rent control does to maintenance and abandonment are now
well documented. Maintenance stops and abandonment begins.
What it does to new construction is well documented. The
comparison of Oregon to Washington DC over the last few years
in here is an excellent demonstrator of what happens to
construction of rental housing under rent control - it stops. There
is no longer any question about it. V/hat happens to tax shifts, the
movement of the tax burden from rental housing to single family
housing as that rental housing deteriorates under rent control?
**
That is now well documented as well. *

6
7
8

l0
11

l2
13

14

l5
16

x*

I think what is also documented well for you is the loss of

local control in other jurisdictions that the failure to pass House
Bill 2505 would engender. How could Tualatin resist rent control
if Tigard had it? And I think equally important is the facf thatT
other states have now done what is asked of you in House Bill
2505 and that is to have enacted permanent prohibitions against
* *
local rent control in the interest of state wide concem. 't<

t7

l8
t9
20

2l

{<

Allowing rent control to get started in Oregon is only going to

exacerbate the problems that2915 addresses. Those problems
need to be addressed in this session and in the future. But what we
need to do is remove the threat of rent control in order to have a
better and more creative approach to those problems.

22
23

24
25

at rent control

See

Exhibit 4.

26
Page 14 - PLAINTIFF'S MOTION FOR SUMMARY ruDGMENT
DAVIS WRIGHT TREMAINE LLP
DWT 28472413v3

0 I

05706-000001

1300 S.W. Fifth Avenue, Suite 2400

Portland, Oregon 97201-5l 0
(503) 24 l -2300 rnain ' (503) 7'18-5299 fax

Because the Ordinance is invalid and unenforceable, plaintiff is entitled to a

permanent injunction.

4
5

6
7
8

l0
1l
12

l3
t4

A party is entitled to injunctive relief where there is "an appreciable threat of continuing
harm," Eagles Five, LLC v. Lawton,250 Or App 413, 422 (2012), and the harm is "irreparable,

i.e.,thercmust be no adequate remedy at law," Levasseur v. Armon,240 Or pp250,259

(2010). Further, aparty has standing to enjoin a goverrmental action where,

plaintiff would expect as a member of the general public." Eckles v. State,306 Or 380, 386
(1988). Finally, pursuant to ORS 28.080, a court may grant "othet forms of coercive relief,
including injunctive relief' when "based on a declaratory judgment" and when "necessary and

proper." Ken Leahy Constr., Inc. v. Cascade Gen., Lnc.,329 Or 566,575 (1999).
Here, plaintifls entitlement to injunctive relief is beyond dispute. Plaintiff has a right to
the possession, use, and enjoyment of its property. Hall v. State ex rel Oregon Dep't of Transp',

355 Or 503, 51

11

l8

"the

challenged action injures the plaintiff in some special sense that goes beyond the injury the

l5
t6

as here,

(2014) (property owner has "right of possession, enjoyment, and use"); Nearing

v, l4/eaver,295 Or 702,707 (19S3) (property owner has legally protected "interest in the use and
enjoyment of their land). Plaintiff seeks the ability to manage its own property in response to
market forces and subject to state law. That is unquestionably a lawful pursuit, but for the

19

Ordinance
20
21

22
J
24
25

Even though the Ordinance is invalid, the threat of its enforcement interferes with

plaintiff

s use

of its property, constitutingper se irreparable harm. Indeed, the principle that an

injunction is a property remedy against enforcement of an invalid law goes back at least a
century and remains well-established. Northwestern Title Loans, LLC v, Division of Finance and

Corporate Securities,lS0 Or App I ,8 (2002) (citing Alum. IJtensil Co. v. City of North Bend,
210 Or 472,419 (1957) "and the cases collected therein dating back to 1905 (if the threatened

26
Page 15 - PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
DAVIS WRIGHT TREMAINE LLP
DWT 284724 13v3

0I

05706-00000 I

1300 S.W. Fifth Avenue, Suite 2400

Portland, Oregon 97201-5610

(503) 241-2300 rnain'(503) 7'78-5299 fax

enforcement of an allegedly invalid ordinance or statute may harm the property rights of a party,

the court has authority to issue an injunction to prevent the threatened harm from occurring.)")'
Moreover, under ORS 23.080, "further relief may be granted whenever necessary or

proper," and such "further relief' may include injunctive relief. See Ken Leahy Constr., Inc.,

329 Or

necessary to effectuate the declaration that Ordinance is invalid and to give plaintiff complete

relief.

***
of an injunction is a prerequisite in every case seeking injunctive relief under ORS 28.080

provide the kind of complete relief to

fbecause the injunction] here was designed to

at 575. Here, injunctive relief is "necessary and propet" because an injunction is

see

id. at 572, 57

5-7

6 ("We need not decide whether proof of all the equitable elements

10

*
the manner contemplated by ORS 28.080

11

so that

it can enjoy the rightful, peaceful

V.

t2
l3

{<

plaintiff in

*.") Plaintiff is entitled to a permanent injunction

use of its property'

CONCLUSION

For the foregoing reasons, the courl should grant plaintiff s motion, issue a declaratory

l4

judgment declaring that the Ordinance is invalid and unenforceable, and enter an injunction

15

permanently enjoining the City from enforcing the Ordinance'

16
11

DATED this 14th day of December, 2015.

DAVIS WRIGHT TREMAINE

l8

I-I-P

t9
B

z0

s/J ohn Dilorenzo" Jr

John Dilorenzo, Jr., OSB #802040
Email j ohndiloren zo@dv'rt.com

2l

Chris Swift, OSB #154291

Email: chrisswift@dwt.com
Telephone: (503) 241-2300
Facsimile: (503) 77 8-5299
Of Attorneys for Plaintiff

22
23
24
25
26

Page l6 - PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

DAVIS WRIGHT TREMAINE LLP
DWT 28472413v3

0 105706-000001

1300 S.W. Fifth Avenue, Suite 2400

Portland, Oregon 9720 -56 I0

(503) 24 I -2300 rrain

' (503) '7't8'5299 fax

EXHIBIT 1

63rd OREGON LECISLATIVE ASSEMBLY-- 1985 Regular Session

Enrolled

[Iouse Bitl 2505

Sponsored by COMMITTEE ON HOUSING AND URBAN DEVELOPMENT (at the request of Oregon MultiFamily Housing Council, Oregon Stale Home Builders Association, Oregon Bankers Association, Oregon
Associalion of Realtors, Oregon Mobilehome Park Association, Affrliated Rental Housing Association,
Orcgon League ofFinancial Institutions)

'

CHAPTER

AN ACT

(
Relating to rent control on housing; and declaring an emergency.
Be

It

Enacted by the People of the State of Oregon:

SECTION l. Section 2 of this Act is added to and made

part of ORS chapter 91.

SECTION 2. (l) The Legislative Assembly frnds that there is a social and economic need to insure

an

adequate supply of affordable housing for Oregonians. The Legislative Assembly also finds thaf the imposition of
general restrictions on housing rents will disrupt an orderly housing market, increase deferred maintenance of
existing housing stok, lead to abandonment ofexisting rental units and create a property tax shift from rentalowned to owner-occupied housing. Therefore, the Legislative Assembly declares that the imposition of rent
control on housing in the State of Oregon is a matter of state-wide concern.
(2) Except as provided in subsections (3) to (5) ofthis section, a city or county shall not enact any ordinance
or resolution which controls the rent that may be charged for the rental of any dwelling unit.
(3) This section does not impair the right ofany state agency, city, county or urban renewal agency as defined
by ORS a57.035 to reserve to itselfthe right to approve rent increases, establish base rents or establish limitations
on rents en any residential property for which it has entered intg a contract under which certain benefits are
ipplie to the'property for the expressed purpose of providingieduced rents for low income tenants. Such
benefits include, but arc not limited to, property tax exemptions, long-term nancing, rent subsidies, code
enforcement procedures and zoning density bonuses.
(4) Cities and counties are not prohibited from including in condominium conversion ordinances a
requirement that, during the notification period specihed in ORS 94.116, the owner or developer may not raise
the rents ofany affected tenant excpt in a proportional amount equal to the percentage increase in the All Items
Ponland Consumer Price Index since the date of the last rent increase for the dwelling unit then occupied by the
affected tenant.
(5) Cities, counties and state agencies may impose temporary rent controls when a natural or man-made
disaster that materially eliminates a significant portion of the rental housing supply occurs, but must remove the
controls when the rental housing supply is restored to substantially normal levels.
(6) As used in this section, "dwelling unit" and "rent" have the meaning given those terms in ORS 91.705.
(7) This section is applicable throughout this state and in all cities and counties therein. The electors or the
governing body ofa city or county shall not cnact, and the governing body shall not enforce, any ordinance,
resolution or othr regulation that is inconsistent with this section.

^
"*-***
Pp.r-** r2*
I

xHtll

SECTION 3. This Act being necessary for the immediate preservation of the public peace, health and safety,
an emergency is declared to exist, and this Act takes effect July I, 1985.

Passed by House

May 15, 1985

Received by Governor:

M.,
Chief Clerk of Hoqse

1985

Approved:

M.,

985

Spcaker of Housc

Covernor

Filed in Office of Secretary of Sate

Passcd by Senate June 10, 1985

.... M,,.. ......

1985

Presdent ofSenale
Secrtary ofState

Enrolled House Bill 2505

PaEe 2

LXill't]
FA,

*2*-* ili

EXHIBIT 2

63rd OREGON LEGISLATIVE ASSEMBLY--1985 Regular Session

House

Bill 2505

(at the request of oregon Multi-Family

sponsored by GoMMITTEE ON HOUSING AND URBAN DEVELOPMENT
of Realtors,
Housin! Council, Oregon State Home Builders Association, Oregon Bankers Association, Oregon Association
Institutions)
Oregon-Mobilehome ark Association, Affrliated Rental Housing Association, Oregon League of Financial

'

SUMMARY
subject to
The following summary is not prepared by the sponsors of the measurc and is not a part of the body thereof
features ofthe measure as introduced.
essential
ofthe
briefstatement
ri
is
eito's
an
assmuty.
Legislative
the
consideratioriby

housing
Retains existing law, scheduled for repeal on July 1, I 985, that prohibits adoption ofrent controls on
by cities and counties.
Declares emergency, effective July I' 1985.

BILL FORAN ACT

I
2

Relating to rent control on housing; and declaring an emergency

Be

4
5

6
7

Enacted by the People of the State of Oregon:

SECTION l. Section 2 of this Act is added to and made a part of oRS chapter 91'
SECTION 2. (l ) The lgislative Assembly finds and declares that the imposition of rent controls on housing
in this statc is

matter of state-wide concern.

(2) Except as provided in subsectons (3) to (5) ofthis section, a city or couny shall not enact any ordinance

or resolution which controls the rent that may be charged for the rental of any dwelling unit'
(3) This section does not impair the right ofany state agency, city, cou.nty or urban renewal agency as defined

l0

by ORS 457.035 to reserve to itselfthe right to approve rent increases, establish base rents or establish limitations

t2

on rents on any residcntial property for which it has entered into a contract under which certain benefils are
applied to the property for the expressed purpose of providing reduced rents for low income tenants' Such

r3

benefits include, but are not limited to, property tax exemptions, long-term fltnancing, rent subsidies, code

l4

enforcement procedures and zoning density bonuses.

il

It

It

t7

(4) Cities and counties are not prohibited from including in condominium conversion ordinances a
g4.ll6,the owner or developer may not raise
requirement that, during the notification period specified in ORS
All Items
the rents ofany affected tenant except in a proportional amount equal to the percentage increase in the

l8

portland Consumer price Index since the date of the last rent increase for the dwelling unit then occupied by the

l9

affected tenant.

r5

t6

2l

(5) Cities, counties and state agencies may impose temporary rent controls when a natural or man-made
disaster that materially eliminates a significant portion of the rental housing supply occurs, but must remove the

22

controls when the rental housing supply is restored to substantially normal levels.

20

23
24

(6) As used in this section, "dwclling unit" and "rent" have the meaning given thos terms in ORS 91.705'
(?) This section is applicable throughout this state and in all cities and counties therein. The electors or the

ofa city or coun shall not enact, and the governing body shall not enforce, any ordinance,

25

governing body

26

resolution or other regulation that is inconsistent with this section.

NOTE: Matter in bold

face in an amended section is new; matter litalic and bracketedl is existing law to be omitted'

r#.ili[li
Ff{t:

*-.-t:'

k*

HB
I
2

2505

SECTION 3. This Act being necessary for the immediate preservation of the public peace, health and safety,
an emergncy is declared to exist, and this Act takes effect July

l,

1985.

(
21
L"ri'll!il

PArr -.-.

*ff z*

EXHIBIT 3

63rd OREGON LEGISLATIVE ASSEMBLY-1985 Regular Session

HOUSE AMENDMENTS TO
HOUSE BILL 2505
By COMMITTEE ON

May

JUDICIARY

10

(No change in Measure Summary)

On page I of the printed bill, dclete lines 5 and 6 and insert:

a

"SECTION.2.

(l)

The Igislative Assembly finds that there is a social and economic need to insure an

adequate supply of affordable housing for Oregonians. The Legislative Assembly also hnds that the imposition

of

general restrictions on housing rents will disrupt an orderly housing market, increase defened maintenance

of

existing housing stock, lead to abandonment ofexisting rental units and create a property tax shifl from rental-

owned to owner-occupied housing. Therefore, the Legislative Assembly declares that the imposition of rent

control on housing in the State of Oregon is a matter of state-wide concern.".

LAllii;ll
p\{j,

----l-- ili

"*

EXHIBIT 4

TESTIMONY OF CHARLIE HALES BEFORE THE HOUSE COMMITTEE ON JUDICIARY

IN SUPPORT OF HB 2505

April 30, 1985

TAPE 547

Charlie Hales: Thank you Mr. Chairman and members of the subcommittee. For the record, I
am Charlie Hales with the Home Builders Association of Metropolitan Portland. Mr. Irvine has
stated our organization's position so my testimony will be brief. Prior to working for the Home
Builders, I worked for the Mobile Home Park Association for 5 years and saw some of these
issues over and over during that time. I also had the chance to look down the gun barrel at rent
control measures in Jackson County and on the ballet in Lane County and the City of Springfield
and I think we sometimes forget after a couple of years how close we came in November of 1982
to having rent control underway in Oregon which is what the need was for this legislation in the
first place and why it's now being brought to you in making permanent. House Bill 2505 is just
that, lt's an opportunity. It's an opportunity to preserye Oregon from that kind of a threat and it's
an opportunity to benefit from other states' bad experiences with rent control. We provided you
with this enornous book not simply to wow you with our ability to make photocopies but to
show you the depth of data that is now available from other states. The major issues that are
addressed in this book, what rent control does to maintenance and abandonment are now well
documented. Maintenance stops and abandonment begins. What it does to new construction is
well documented. The comparison of Oregon to Washington DC over the last few years in here

is an excellent demonstrator of what happens to construction of rental housing under rent control
- it stops. There is no longer any question about it. What happens to tax shifts, the movement of
the tar burden from rental housing to single family housing as that rental housing deteriorates
under rent control? That is now well documented as well. And the cost of administration f,rnally
is also very, very clear from other cities' examples. One of the worst of course is Santa Monica
where they enacted rent control in 1979 and where the cost of administration went from an
assessment of $12.50 a unit in 1980 to $72.00 a unit last year. I'm soruy, in 1982. And in 1983,
the Court of Appeals in California ruled that those costs of administration may be passed on
directly to tenants. So tenants in Santa Monica, in addition to the other costs of rent control, are
paying $72.00 a year per unit to have it enforced. That works out to a budget of 2.3 million and
60 employees in enforcement control in a city the size of Eugene. That is an inefficient way to
regulaie tire housing market. Now, I think what is also documented well for you is the loss of
loal control in other jurisdictions that the failure to pass House Bill 2505 would engender. How
could Tualatin resist rent control if Tigard had it? And I think equally important is the fact thatT
other states have now done what is asked of you in House Bill 2505 and that is to ha'e enacted
permanent prohibitions against local rent control in the interest of state wide concern' Finally, I
ii* tfr" problems of mobile home park tenants remain and the kind of exercise vou have had to
go through this afternoon is only going to be repeated unless we do something about the time
bomb of mobile home parks sitting on conditional uses in industrial zones throughout the State'
We sort of blundered into this situation through a series of historical accidents wherein local
govemments in the post-war decades took land that was one day going to be industrial and said,
Ok, l"t', put a trailer park there for a few years. That looks like a pretty good temporaly use,"
And trailers were in those days a pretty good form of temporary housing that still had their
wheels and axels and trailer tons on them. Trouble is, those units evolved into permanent
Page
DwT 28s37087v1 0105706-000001

i:.\ri

::.t

I of2
t-

fI*'li:,E
Pfr

rli'

-,

.... ,';'

*L.**

TESTIMONY OF CHARLIE HALES BEFORE THE HOUSE COMMITTEE ON JUDICIARY

IN SUPPORT OF HB 2505

April 30,

1985.

TAPE 547

housing and became an attractive lifestyle for many of the people who have testified before you
today and they are less mobile then they once were. But the time bomb is there. There are a lot
of Terrace Heights out there waiting for us unless we find a way to produce replacement stock in
mobile home spaces for those displaced residents and there is very little that we can do to stop
that displacement I believe. But stopping House Bill 2505 is not the solution. Allowing rent
control to get started in Oregon is only going to exacerbate the problems that 2915 addresses.
Those problems need to be addressed in this session and in the future. But what we need to do is
remove the threat of rent control in order to have a better and more, creative approach to those
problems. I would be happy to answer any questions.

2
DWT 28537087v1 0105706-000001

fiii,l;iii t-.-. -P*u "*2. . i;, k*

CERTIFICATE OF SERVICE

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

I hereby certify that I served a copy of the foregoing: PLAINTIFFS MOTION FOR
SUMMARY JUDGMENT; DECLARATION OF CHRIS SWIFT IN SUPPORT OF
PLAINTIFFS MOTION FOR SUMMARY JUDGMENT; AND DECLARATION OF
TIMOTHY GRAY IN SUPPORT OF PLAINTIFFS MOTION FOR SUMMARY
JUDGMENT on:
Dennis M. Vannier, Esq.
Portland City Attorneys Office
1221 SW 4th Avenue, Room 430
Portland, OR 97204
Telephone 503-823-9967
Email Dennis.Vannier@portlandoregon.gov
Of Attorneys for Defendant City of Portland
by mailing a copy thereof in a sealed, first-class postage prepaid envelope,
addressed to said attorneys last-known address and deposited in the U.S. mail at Portland,
Oregon on the date set forth below;
by causing a copy thereof to be hand-delivered to said attorneys address as
shown above on the date set forth below;
by sending a copy thereof via overnight courier in a sealed, prepaid envelope,
addressed to said attorneys last-known address on the date set forth below;
by faxing a copy thereof to said attorney at his/her last-known facsimile number
on the date set forth below; or
by emailing a copy thereof to said attorney at his/her last-known email address as
set forth above.
Dated this 14th day of December, 2015.
DAVIS WRIGHT TREMAINE LLP

20
21

By: s/ John DiLorenzo, Jr.

John DiLorenzo, Jr., OSB #802040
Email: johndilorenzo@dwt.com
Chris Swift, OSB #154291
Email: christopherswift@dwt.com
Telephone: (503) 241-2300
Facsimile: (503) 778-5299

22
23
24
25

Of Attorneys for Plaintiff

26
Page 1 - CERTIFICATE OF SERVICE
DWT 28472413v3 0105706-000001

DAVIS WRIGHT TREMAINE LLP

1300 S.W. Fifth Avenue, Suite 2400
Portland, Oregon 97201-5610
(503) 241-2300 main (503) 778-5299 fax