Key Takeaways
- 7% + CPI cap applies statewide — Oregon law (ORS 90.323) limits annual rent increases to 7% plus the consumer price index (CPI-U), whichever is greater, with narrow exemptions
- 90-day notice requirement is mandatory — You must provide written notice at least 90 days before the increase takes effect; failure to comply voids the increase and exposes you to tenant claims
- Exemptions are narrow and heavily scrutinized — Only new construction (first 15 years), substantial repairs/capital improvements, and buildings with 4 or fewer units in some cases qualify; exemptions require documented proof
- Violations carry civil liability — Tenants can sue for actual damages, attorney fees, and court costs; the Oregon Attorney General has enforcement authority and can impose civil penalties
- CPI is recalculated annually — The allowable increase changes each year based on the Consumer Price Index for the U.S. city average; you must calculate the correct cap before issuing notice
- No "pass-through" exceptions for operating costs — Unlike some states, Oregon does not allow landlords to increase rent above the cap to recover property tax increases, insurance premiums, or maintenance costs
What Oregon's Rent Increase Cap Actually Means
On January 1, 2017, Oregon became one of the first states to impose a statewide rent control measure when SB 608 took effect. The law created ORS 90.323, which caps annual rent increases at 7% plus the percentage increase in the Consumer Price Index (CPI-U). This is not a hard 7% cap—it's a floor combined with inflation.
For example, if the CPI-U increases 3.2% in a given year, the allowable rent increase is 7% + 3.2% = 10.2%. If CPI rises 5%, the cap is 12%. If CPI declines (deflation), the cap remains at the statutory 7% minimum. This annual recalculation means you cannot simply apply last year's cap to this year's increase.
The law applies to all rental housing in Oregon except a narrow set of exemptions. Most self-managing landlords with 2-75 units fall squarely under this requirement, regardless of property age, property type, or neighborhood. The burden is on you to know the law, calculate correctly, and document compliance.
Understanding the 7% + CPI Formula
How the Calculation Works
The formula is straightforward on its face but requires precision in execution:
Allowable Rent Increase = 7% + (Current Year CPI-U% – Prior Year CPI-U%)
The CPI-U referenced in the statute is the Consumer Price Index for All Urban Consumers published by the U.S. Bureau of Labor Statistics. Oregon uses the annual average CPI for the U.S. city average, not regional or Portland-specific indices.
Here's a practical example:
- Prior year (2025) CPI-U average: 3.8%
- Current year (2026) CPI-U average: 4.2%
- CPI increase: 4.2% − 3.8% = 0.4%
- Allowable rent increase: 7% + 0.4% = 7.4%
- Current rent: $1,500/month
- Maximum new rent: $1,500 × 1.074 = $1,611
The Oregon Department of Consumer and Business Services publishes the CPI index used for rent increase calculations each year, typically by mid-January. Many landlord organizations and compliance platforms (such as LeaseBase's compliance tools) track this data and update their systems automatically.
The 7% Floor Matters
Even if CPI is zero or negative, you can still increase rent by 7%. This was deliberate policy. The legislature recognized that landlords face real costs that may not track perfectly with inflation, but refused to allow unlimited increases. The 7% floor is a compromise between rent stability and landlord economics.
Conversely, you cannot increase rent above the cap simply because your costs increased more than the formula allows. No "pass-through" exception exists for property taxes, insurance, or maintenance—a recurring compliance mistake.
Exemptions: Narrow and Documented
ORS 90.323(2) lists exemptions from the rent increase cap. Understanding which properties qualify is critical because claiming an exemption without legal grounds exposes you to liability.
Exemption 1: New Construction (15-Year Window)
A building is exempt from the cap for the first 15 years following completion of new construction. "New construction" means a building that was not previously occupied as a residential rental.
Compliance requirement: You must be able to document the date the building was first occupied. If a property was built in 2010, the exemption expired at the end of 2024. You cannot claim this exemption simply because the building is "newer."
What "first occupied" means: The statute does not require the building to be occupied as a rental from day one—it means first occupied as a residence. If you constructed a building in 2012 and held it vacant until 2015, the 15-year clock started in 2015, not 2012.
Exemption 2: Substantial Repairs or Capital Improvements
A landlord may increase rent above the cap if the increase is tied to costs of substantial repairs or capital improvements. This exemption is frequently misused by landlords and heavily disputed by tenants and enforcement agencies.
Statutory requirement (ORS 90.323(2)(b)): The increase must be "necessary to recover the costs of substantial repairs or capital improvements made or to be made to the premises." The statute does not define "substantial," creating ambiguity and litigation risk.
Key limitations:
- The increase must be tied to actual, documented costs
- Routine maintenance and repairs do not qualify (e.g., repainting, floor waxing, HVAC service)
- The improvement must add value to the property or prevent deterioration
- You must provide detailed notice explaining the repairs and the cost basis for the increase
- Tenants have a right to request documentation and verification
Examples that might qualify: roof replacement, foundation repair, major electrical system upgrade, seismic retrofit, new HVAC system, kitchen or bathroom renovation, siding replacement.
Examples that do not qualify: painting, carpet cleaning, gutter cleaning, standard maintenance repairs, minor plumbing fixes, replacing light fixtures.
Compliance best practice: Obtain written estimates from licensed contractors documenting the scope and cost of work. Retain invoices, receipts, and work permits. Before increasing rent under this exemption, provide the tenant with detailed written documentation of the work and cost breakdown.
Exemption 3: Buildings with Four or Fewer Units (Limited)
ORS 90.323(3)(a) provides a limited exemption for buildings with four or fewer units if the landlord owns fewer than 10 such buildings statewide and does not own any other residential rental property in Oregon.
This exemption is narrow: it applies only if you meet all of these conditions:
- The building has 4 or fewer rental units
- You own no more than 9 other buildings of 4 or fewer units
- You own no other residential rental property in Oregon (this means no apartments, condos, or other rentals)
- You occupy at least one unit in the building as your primary residence
If you own a duplex, a fourplex, and a single-family rental house, you exceed the exemption threshold and are covered by the cap. If you own two fourplexes and occupy one unit as your primary home, you may be covered. The calculation is strict and the burden is on you to verify eligibility.
No exemption for rental market rates, demand, or landlord discretion. You cannot increase rent above the cap because the market will bear it, because a tenant can afford more, or because you simply choose to. Doing so violates ORS 90.323 and creates liability.
The 90-Day Notice Requirement
When Notice Must Be Provided
ORS 90.323(1) requires that you provide written notice of a rent increase at least 90 days before the effective date of the increase. This is a hard deadline, not a guideline.
Practical timeline:
- To increase rent effective January 1, notice must be provided by October 3 of the prior year
- To increase rent effective April 1, notice must be provided by January 1
- To increase rent effective your standard lease renewal date, count back 90 calendar days
Notice provided fewer than 90 days in advance is ineffective. The rent increase does not take effect, and the tenant is entitled to challenge the increase as improper. Some courts have held that a landlord who attempted to impose a rent increase with insufficient notice cannot cure the defect by re-issuing notice later.
What the Notice Must Include
Oregon law does not specify exact language required in the rent increase notice, but courts and the Attorney General have held that notice must include:
- The current rent amount
- The new rent amount
- The effective date of the increase
- A clear statement that the increase complies with ORS 90.323 (if it does)
- If claiming an exemption, documentation or explanation of the exemption basis
Best practice: Provide notice in writing, signed by you or your authorized agent, and delivered or mailed in compliance with service requirements in ORS 90.155. Keep a dated copy for your records. Many landlords and compliance platforms use certified mail or email with read receipt to document delivery and timing.
If the rent increase exceeds the statutory cap or is not preceded by 90 days' notice, tenants can refuse to pay the increase. Attempting to evict a tenant for non-payment of an illegal rent increase is itself unlawful and can result in a wrongful eviction claim.
Calculating Your 2026 Rent Increase Cap
For rent increases effective January 1, 2026, the calculation uses CPI data released in late 2025. The Oregon Department of Consumer and Business Services publishes the official calculation guidance.
2025 CPI-U (January–December average): Approximately 3.4% to 3.8% (final figure released in January 2026)
2024 CPI-U (January–December average): Approximately 3.2%
Estimated 2026 cap: 7% + (3.5% − 3.2%) = approximately 7.3%
Note: This is an estimate. The precise cap depends on official CPI data released by the Bureau of Labor Statistics. Do not rely on projections. Once the official 2025 CPI is published in January 2026, recalculate using actual figures.
Many landlords automate this calculation using compliance software that tracks CPI updates and alerts when new caps are published. This reduces manual calculation errors and ensures compliance.
Penalties for Non-Compliance
Civil Liability to Tenants
A tenant who is subjected to an illegal rent increase—one that exceeds the cap or lacks proper notice—can sue the landlord for damages. ORS 90.332 provides the remedies framework:
- Actual damages: Any rent paid in excess of the lawful cap, plus interest at 6% per annum
- Attorney fees and costs: If a tenant prevails in court, the landlord must pay the tenant's legal fees and court costs
- Potential treble damages: In egregious cases, courts may award damages up to three times the amount wrongfully collected
Example: You increase rent from $1,500 to $1,650 (10% increase) when the lawful cap is 7.4% ($1,611). A tenant pays the $1,650 for 12 months ($19,800). Upon challenge, the tenant is owed the overage ($39 × 12 = $468), plus interest, plus attorney fees if the tenant retains counsel. If the tenant's attorney costs $2,500, your liability is $2,968 plus potential treble damages.
Enforcement by the Oregon Attorney General
The Oregon Department of Justice has enforcement authority over rent control violations. The Attorney General can investigate complaints, issue cease-and-desist orders, and file civil actions against landlords who systematically violate ORS 90.323.
Penalties under ORS 90.745:
- Civil penalty of up to $500 per violation
- Each illegal rent increase notice constitutes a separate violation
- If a landlord collects illegal rent, the Attorney General can seek restitution to affected tenants
While individual violations may seem minor, a pattern of non-compliance across multiple units or tenants can result in substantial aggregate penalties. A landlord with 20 units who systematically over-increases rent faces potential liability of $10,000+ in civil penalties alone, before attorney fees and tenant damages.
Eviction Risk
Attempting to evict a tenant for refusing to pay an illegal rent increase is an unlawful eviction under Oregon law. A tenant can defend against an eviction based on non-payment if the increase violated ORS 90.323. Additionally, the tenant may file a counterclaim for damages, and the court may sanction the landlord for bad faith litigation.
Common Compliance Mistakes to Avoid
Mistake 1: Using Last Year's Cap
The CPI changes annually. Applying last year's allowable increase to this year's rent is noncompliance. For example, if 2025 allows a 7.3% increase, you cannot assume 2026 allows 7.3%. You must recalculate each year.
Mistake 2: Claiming a Repairs Exemption Without Documentation
Increasing rent above the cap and simply stating "capital improvements" does not qualify. You must have invoices, contracts, or evidence of actual expenditures. Tenants and enforcement agencies will request documentation. Lack of proof undermines your claim and exposes you to a damages award.
Mistake 3: Not Accounting for CPI Declining (Negative Inflation)
If CPI decreases in a given year, the increase cap floor remains 7%, but you may feel pressure to justify an increase to tenants. If you explain the increase as tied to inflation and CPI was negative, you create a factual inconsistency that undermines credibility. Provide clear, accurate notice citing the statutory formula, not casual explanations.
Mistake 4: Insufficient Notice Timing
Providing 89 days' notice instead of 90 is non-compliance. Courts have been strict on this requirement. If you miss the 90-day window, issue corrected notice at least 90 days before the new intended effective date, or accept that the increase will be delayed.
Mistake 5: Increasing Rent Between Lease Terms Without Proper Procedure
If a tenant's lease renews on July 1 and you want to increase rent effective July 1, notice must be issued by April 2. If notice is late, the increase is invalid. The tenant's rent remains the prior amount until proper notice and a new lease term.
Mistake 6: Failing to Distinguish Between Units
If you own a four-unit building with multiple leases at different renewal dates, each unit must receive separate, timely notice for that unit's increase. You cannot issue one blanket notice for all units and apply different effective dates.
Step-by-Step Compliance Checklist
| Step | Action | Deadline |
|---|---|---|
| 1 | Obtain current year CPI-U data from Bureau of Labor Statistics | By January 15 |
| 2 | Calculate allowable increase: 7% + (Current CPI – Prior CPI) | Before issuing notice |
| 3 | Verify exemption eligibility (if claiming exemption) | Before issuing notice |
| 4 | Gather documentation (invoices, permits, cost estimates if claiming repairs exemption) | Before issuing notice |
| 5 | Draft written rent increase notice with all required information | Before issuing notice |
| 6 | Count backward 90 days from intended effective date | To determine notice deadline |
| 7 | Deliver or mail notice to tenant (certified mail, email with read receipt, or hand delivery) | At least 90 days before effective date |
| 8 | Retain dated copy of notice and proof of delivery in records | Ongoing (min. 3 years) |
How Technology Reduces Compliance Risk
Manual rent increase tracking across multiple units and lease renewal dates is error-prone. Property management platforms like LeaseBase can reduce mistakes by:
- Auto-calculating CPI updates: When new CPI data is released, the system recalculates the allowable cap and alerts you
- Tracking lease renewal dates: The system identifies each tenant's renewal date and counts backward to alert you when 90-day notice is due
- Generating compliant notices: Templates ensure all required information is included and formatted correctly
- Maintaining documentation: Invoices, notices, and delivery proofs are centralized and timestamped for audit defense
- Audit reporting: You can generate reports showing all rent increases issued, dates, caps applied, and exemptions claimed
Rent payment systems that integrate with compliance tools also prevent tenant disputes about rent amounts by clarifying the new amount and effective date upfront.
Frequently Asked Questions
Q1: Can I Increase Rent Mid-Lease?
A: No. ORS 90.323 applies to rent increases after the lease term ends. You cannot increase rent during an active lease term unless the lease itself contains a clause permitting adjustment (which is rare and legally risky in Oregon). Rent increases take effect only upon lease renewal or at the start of a new tenancy.
Q2: What If I Provide 90 Days' Notice but the Tenant Refuses to Pay the Increase?
A: If your notice and increase comply with ORS 90.323, the tenant is legally obligated to pay the new rent amount. If the tenant refuses, you can pursue a non-payment eviction under ORS 105.105. However, the tenant can defend by arguing the increase violates the statute. If the tenant proves the increase exceeds the cap or lacked proper notice, the eviction fails and you may face sanctions for wrongful eviction.
Q3: Does the 90-Day Notice Requirement Apply If I'm Using an Exemption?
A: Yes. The notice requirement in ORS 90.323(1) applies to all rent increases, regardless of exemption. However, if you are claiming an exemption (e.g., substantial repairs), you must clearly state the exemption basis and provide supporting documentation. Failure to do so weakens your claim and may result in a court finding that no valid exemption applied.
Q4: Can I Increase Rent If My Property Taxes Increased?
A: No. Property tax increases do not create an exemption or exception to the 7% + CPI cap. Many landlords believe operating costs justify higher increases, but Oregon law does not permit this. You are limited to the statutory cap regardless of your costs.
Q5: What If a Tenant Disputes the Increase? Do I Have to Prove Compliance?
A: If a tenant challenges a rent increase in court or disputes it with the Attorney General, you bear the burden of proving compliance. Keep documentation showing: (1) the CPI figures you used, (2) the calculation, (3) the notice issued with date of delivery, and (4) any exemption documentation. Without clear records, a court may find the increase unlawful even if you believed you were compliant.
Additional Resources and Reporting Requirements
Oregon does not require landlords to report rent increases to a state agency. However, the Attorney General's office accepts complaints about alleged violations. The Consumer and Business Services Department maintains guidance on the calculation methodology.
If you manage properties in Portland, note that the City of Portland does not impose additional rent control restrictions beyond the statewide ORS 90.323 cap (as of 2026). Some discussion exists about local rules, but statewide preemption currently prevents cities from setting tighter caps.
Tenants can file complaints with the Oregon Bureau of Labor and Industries (BOLI) or the Attorney General. While BOLI's primary enforcement role covers employment law, the Attorney General actively investigates housing complaints.
Staying Current on Oregon Rent Control Law
Rent control law in Oregon continues to evolve. The legislature has considered amendments to the cap, exemptions, and enforcement mechanisms. Subscribe to updates from the Oregon Residential Landlord and Tenant Association, the Department of Consumer and Business Services, and your local real estate association to stay informed of changes.
Platforms like LeaseBase's compliance engine monitor legislative changes and update guidance automatically, so you don't have to track statutory amendments manually.
Bottom Line: Compliance is Non-Negotiable
The 7% + CPI rent increase cap is not optional or subject to landlord discretion. Violations carry real penalties: tenant lawsuits for damages and attorney fees, enforcement actions by the Oregon Attorney General, and eviction defense. The cost of compliance—proper calculation, timely notice, and documentation—is far lower than the cost of a single tenant dispute or enforcement action.
Self-managing landlords must treat rent increase compliance with the same rigor as property maintenance and lease execution. Errors are not forgivable, and courts will not excuse non-compliance based on landlord good intentions.
Disclaimer
This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney licensed in Oregon for guidance specific to your situation. Rent increase laws are complex and subject to court interpretation. LeaseBase is not a law firm and cannot provide legal counsel. Always verify current statutory requirements and CPI data before issuing rent increase notices.