Oregon Rent Increase Cap: 7% + CPI Rule — Self-Managing Landlord Compliance Guide (2026)

What Oregon’s Rent Increase Cap Actually Means for Your Portfolio

On January 1, 2024, Oregon implemented one of the strictest rent increase limits in the nation through Senate Bill 608 (SB 608), codified as ORS 90.323. This law fundamentally changed how you can raise rent on existing tenants. Unlike a simple percentage cap, Oregon’s formula combines a hard ceiling (7%) with a floating variable (the Consumer Price Index), creating a moving target that shifts every calendar year.

For landlords managing 2–75 units in Oregon, this is not a guideline—it is a statutory requirement with teeth. Violations expose you to tenant lawsuits, statutory damages, actual damages, and attorney fees. Even unintentional non-compliance can trigger liability. The law applies to all residential tenancies in Oregon except for a narrow set of exemptions, and those exemptions come with specific filing and certification requirements.

This guide walks you through the exact compliance mechanics, shows you how to calculate your allowable increase for 2026, explains the notice requirements, identifies the exemptions that might apply to your units, and outlines the penalties you face if you get it wrong.

The 7% + CPI Formula: How It Works in Practice

The Statutory Framework (ORS 90.323(1))

Oregon law states that a landlord shall not increase rent on a month-to-month or fixed-term tenancy by more than 7 percent plus the percentage change in the Consumer Price Index (CPI) for all urban consumers, U.S. city average series, for the 12-month period ending in December of the prior year.

This language is critical. The formula is:

Maximum Allowable Increase = 7% + CPI (for 12 months ending December of prior year)

For rent increases effective January 1, 2026, you use the CPI figure released in December 2025 (which measures inflation from December 2024 through December 2025). The CPI is published by the U.S. Bureau of Labor Statistics and is reported statewide by the Oregon Bureau of Labor and Statistics.

2026 Rent Increase Example

Let’s say the CPI for the 12-month period ending December 2025 is 2.8%. A landlord in Portland can increase rent by no more than:

7% + 2.8% = 9.8%

If your tenant currently pays $1,200 per month, the maximum new rent is:

$1,200 × 1.098 = $1,317.60

You cannot round up to $1,318. The calculation method matters for disputes. Use the precise decimal and round to the nearest cent at the final step.

Many landlords make the mistake of applying only the 7% portion and ignoring the CPI. That is not legal. The CPI component is mandatory and must be included every single year.

When Does the CPI Figure Get Announced?

The U.S. Bureau of Labor Statistics releases the monthly CPI report around the 13th of each month. The December CPI (which covers the prior 12 months) is typically released in mid-January of the following year. Oregon’s Bureau of Labor and Statistics confirms and distributes the state-level figure, which you can access at the agency’s website or through your property management software. For 2026, the relevant CPI number was released in January 2026 and applies to all rent increases effective January 1, 2026.

Notice Requirements: The 90-Day Rule and How to Get It Right

The 90-Day Notice Deadline (ORS 90.323(2))

You must provide written notice of any rent increase at least 90 days before the increase takes effect. This is not 90 days from the tenant’s move-in date or lease renewal date—it is 90 calendar days before the effective date of the increase.

Example timeline:

• You want the increase to take effect January 1, 2026
• You must deliver notice no later than October 3, 2025 (90 days prior)
• If you deliver notice on October 4, 2025, the earliest the increase can take effect is January 4, 2026

Count backward from your desired effective date. Do not count forward from the date you send the notice. This is a source of frequent landlord error.

How to Deliver the Notice (ORS 90.155)

The notice must be in writing and delivered using one of three compliant methods:

Delivery Method	Requirements	Proof of Delivery
Personal Service	Hand-delivered to tenant in person at the rental unit or known workplace	Affidavit of service or dated receipt signed by tenant
Certified Mail, Return Receipt	Mailed via USPS Certified Mail with Return Receipt Requested; addressed to tenant’s last known address	Green card returned by USPS showing date of delivery or signature
Posting (if tenant cannot be located)	If tenant cannot be personally served or certified mail is returned, post notice on the rental unit door and send via regular mail to last known address	Affidavit of posting and mailing with date

Sending an email, text, or leaving the notice under the door without certified mail backup is not compliant. If the notice is challenged in court, you will need proof of proper delivery. Certified mail with return receipt is the safest method for documentation purposes.

Content Requirements for the Notice

Your notice must include:

• The tenant’s name and the property address
• The current monthly rent amount
• The new monthly rent amount after the increase
• The effective date of the increase
• The dollar amount of the increase (optional but recommended for clarity)
• A statement that the increase complies with ORS 90.323 (recommended to include for transparency)

While Oregon law does not explicitly mandate a specific form, providing a detailed, dated, and signed notice protects you from tenant claims that they were confused about the terms. LeaseBase’s rent payment management system can generate compliant notice templates that include all required elements and date-stamps them automatically.

Exemptions: Who Does NOT Have to Follow the 7% + CPI Cap

Oregon’s rent increase cap is broad but has three narrow exemptions. Understanding whether your units qualify is critical because if they do, you have more flexibility—but only if you meet the exemption conditions.

Exemption 1: New Construction (First 15 Years)

Under ORS 90.323(3)(a), a landlord is not subject to the cap if the rental unit is in a residential building or complex for which construction was completed less than 15 years before the date of the notice of rent increase.

Key details:

• The exemption applies only to the first 15 years after construction completion
• Once 15 years have passed, the cap applies to all future increases on that unit
• The exemption applies per unit, not per building (an older unit in a newer building does not qualify)
• You must have reliable documentation of the construction completion date (building permits, CO, property records)
• This exemption applies statewide and does not require pre-filing or certification

If your unit was built in 2012 or later, it qualifies for the exemption through 2027. If built in 2011 or earlier, the exemption expired and the 7% + CPI cap applies.

Exemption 2: Natural Gas Heating (Conditional)

Under ORS 90.323(3)(b), the cap does not apply if:

• The rental unit is heated by natural gas supplied to the unit by a utility (not a bulk supply to the building), AND
• The rental unit is not a permanent manufactured dwelling (a mobile home on a permanent lot does not qualify)
• The landlord did not receive a rent increase in that unit in the 24 months preceding the proposed increase

This exemption is narrow in practice. Many Oregon buildings have central heating or electric heat, so this exemption applies to a small subset of detached homes or duplexes with individual gas meters. The 24-month look-back is also restrictive: if you raised rent on that unit two years ago, you cannot use this exemption now.

Exemption 3: State Tax Credit Properties (Income-Restricted)

Rental units for which the landlord receives a tax credit under the Oregon Business Energy Tax Credit (ORS 315.135) for the property are exempt, but only if the credit was received before the rent increase notice was issued. This exemption applies to a tiny pool of properties and requires documentation from the Oregon Department of Revenue.

Documentation and Burden of Proof

If you claim an exemption, you bear the burden of proving it. Keep clear records:

• Building permits, Certificate of Occupancy, or property acquisition documents for new construction dates
• Utility account records or property inspection reports confirming natural gas heating
• Rent increase history for the specific unit (to verify the 24-month no-increase requirement)
• Oregon tax credit documentation if applicable

If a tenant disputes your exemption claim in small claims or civil court, you will need to present this evidence. Absent documentation, the court will apply the 7% + CPI cap.

The Calculation Process: Step-by-Step Compliance Checklist

Step 1: Confirm the Applicable CPI (January–October)

• Wait for the U.S. Bureau of Labor Statistics to release the December CPI (typically mid-January)
• Oregon’s Bureau of Labor and Statistics will confirm the state-level figure
• Access the figure directly or through your property management software
• Document the source and date in your records

Step 2: Calculate the Maximum Allowable Increase

• Add 7% to the confirmed CPI percentage
• Example: 7% + 2.8% CPI = 9.8% maximum
• Round the final percentage to two decimal places
• Do NOT apply only the 7%; the CPI is mandatory

Step 3: Determine Your Desired Effective Date

• January 1 is the most common effective date for consistency
• You can choose any date, but count backward 90 days for notice deadline
• Example: January 1 effective date requires notice by October 3

Step 4: Calculate the New Rent Amount

• Multiply current monthly rent by (1 + allowable increase percentage)
• Example: $1,200 current rent × 1.098 = $1,317.60 new rent
• Use the exact calculation; do not round during intermediate steps
• Round the final rent amount to the nearest cent

Step 5: Draft and Deliver the Notice

• Use certified mail with return receipt or personal service
• Include all required content (tenant name, property, current rent, new rent, effective date)
• Deliver at least 90 days before the effective date
• Keep proof of delivery in your tenant file

Step 6: Document and Record

• Record the notice date, delivery method, and tenant signature/receipt in your records
• Keep a copy of the CPI calculation and source documentation
• Update your lease or rent agreement if required
• Use property management software to log the increase and maintain audit trail

Common Compliance Mistakes and How to Avoid Them

Mistake 1: Applying Only 7% and Ignoring CPI

This is the most common error. Landlords see “7 percent” in news headlines and assume that is the cap. It is not. The CPI is added to 7%, making the true maximum higher every year. If you raise rent by 7% only, you are actually giving the tenant a hidden reduction (in real terms, not nominal).

Fix: Always add the current CPI to the 7% base. Set a calendar reminder to pull the December CPI each January and recalculate before issuing notices.

Mistake 2: Counting the 90-Day Notice Period Forward Instead of Backward

If you serve notice on October 1 and assume the increase can take effect on January 1, you have violated the law. The 90-day period runs before the effective date, not after the notice date.

Fix: Work backward from your desired effective date. January 1 requires notice by October 3 (90 days prior). Use a calendar app or spreadsheet with a formula to calculate the deadline automatically.

Mistake 3: Improper Notice Delivery

Slipping the notice under the door, emailing it, or texting it to the tenant is not compliant. If the tenant challenges the increase, you have no proof of proper service.

Fix: Use certified mail with return receipt, personal service with a signed receipt, or posting plus regular mail (only if the tenant cannot be found). Keep the green card or affidavit of service in your file.

Mistake 4: Claiming an Exemption Without Documentation

If your unit claims the new construction exemption but you have no building permit or CO, you are taking a risk. A tenant can sue and force you to prove the exemption.

Fix: Gather exemption documentation before issuing the notice. For new construction, pull the CO from county records. For gas heating, keep utility account records or an inspection report. If you cannot prove the exemption, apply the cap.

Mistake 5: Increasing Rent Mid-Year Without Proper Notice

Oregon law does not prohibit rent increases effective on dates other than January 1. However, if you want to increase rent on July 1, you must serve notice by April 2 (90 days prior). Many landlords miss this and issue a short notice, which is invalid.

Fix: If you want mid-year increases, mark the 90-day notice deadlines on your calendar in advance. Coordinate with your lease renewal schedule to minimize compliance gaps.

Penalties for Non-Compliance: What Happens If You Get It Wrong

Statutory Damages (ORS 90.332)

If a landlord violates ORS 90.323 by increasing rent beyond the allowable amount or failing to provide proper notice, the tenant can sue. The law provides for:

• Actual damages — the difference between the illegal increase and the lawful increase (e.g., if you raised rent 12% and the cap was 9.8%, damages are 2.2% × monthly rent × number of months the illegal rent was charged)
• Statutory damages of up to $250 per violation — per Oregon law, this can add up quickly if multiple violations occur (e.g., multiple months of illegal rent)
• Attorney fees and costs — if the tenant wins, you pay their legal fees, which can total $3,000–$10,000+ depending on the case complexity

Example Liability Calculation

Scenario: You raised rent from $1,200 to $1,300 (8.3% increase) on January 1, 2026, claiming an exemption. The tenant discovers the exemption was invalid. The lawful cap was 9.8% + CPI (let’s say 9.8%), making maximum lawful rent $1,317.60.

Illegal increase: $1,300 (your amount) vs. $1,317.60 (lawful max) = you were actually within the cap, no violation.

But if you had raised it to $1,320 instead:

• Overage: $1,320 – $1,317.60 = $2.40 per month
• If the tenant was charged the illegal rent for 12 months: $2.40 × 12 = $28.80 in actual damages
• Plus statutory damages: up to $250
• Plus attorney fees: potentially $5,000+
• Total liability: $5,278.80+

A single, seemingly small overage can trigger thousands in liability once attorney fees are included.

Enforcement and Tenant Rights

Tenants can enforce this law through:

• Small claims court (up to $10,000 in damages in Oregon) — no attorney required; lower filing fees
• Civil court — for damages exceeding small claims limits
• Class actions — if multiple tenants were subjected to the same illegal increase, they can sue as a group
• Abatement of rent — a court may order the illegal portion of rent abated (not paid), reducing your cash flow retroactively

There is no statute of limitations issue here; claims can be brought while the tenant is in possession or shortly after they vacate (typically within 1–3 years under Oregon’s general contract law).

Special Situations and Edge Cases

What About Lease Renewals vs. Month-to-Month Tenancies?

ORS 90.323 applies to both fixed-term leases and month-to-month tenancies. If a tenant is on a one-year lease expiring December 31, 2025, and you want to renew at a higher rate effective January 1, 2026, you must provide the new terms at least 90 days before expiration (by October 2, 2025). The increase is subject to the 7% + CPI cap.

If the tenant is month-to-month, the same rule applies: 90-day notice before the increase takes effect.

What If a Tenant’s Lease Specifies an Increase Higher Than the Cap?

The lease provision is void and unenforceable. Oregon law preempts any contractual term that violates ORS 90.323. If your lease says “rent will increase by 10% annually,” that clause is superseded by the statutory cap. A tenant can challenge the higher amount, and the court will enforce only the statutory maximum.

Move-In Increases (No Cap for New Tenants)

The 7% + CPI cap applies only to existing tenants. If a tenant vacates and you rent the unit to a new tenant, you can set rent at any market rate for the new lease. However, if you keep the existing tenant and raise their rent, the cap applies. This creates an incentive to turn over tenancies, which some argue the law does not adequately address.

What If CPI is Negative (Deflation)?

If the CPI for the prior year declines (negative inflation), the formula becomes 7% plus a negative number. In theory, if CPI were -2%, the cap would be 5%. However, CPI has not been negative in recent U.S. history. As of 2026, this remains a theoretical edge case not yet tested in Oregon courts.

Tools and Systems for Staying Compliant

Manual tracking of CPI figures, notice deadlines, and exemptions is error-prone. Self-managing landlords should implement systems to automate compliance:

• Rent payment and lease management software: Use LeaseBase Lease Operations to log lease terms, exemption claims, and increase history in one system. The platform tracks notice deadlines and flags when an increase violates the 7% + CPI formula.
• Compliance alerts: Enable automated reminders for the 90-day notice deadline before your planned effective date. Many landlords miss compliance dates because they do not calendar them in advance.
• CPI tracking: Subscribe to the Oregon Bureau of Labor and Statistics email alerts or set a manual reminder to download the December CPI each January. Store it in your records.
• Notice template library: Create a compliant rent increase notice template that includes all required elements. LeaseBase Compliance Engine can generate and track notices automatically.
• Documentation system: Keep a folder per tenant showing notice dates, delivery methods, proof of service, and rent increase justifications. Digital storage with timestamps is preferable.

Frequently Asked Questions

Q: Can I increase rent twice in one calendar year?

A: Yes, if you provide proper notice. ORS 90.323 does not limit the number of increases per year, only the maximum amount per increase. If you want to increase rent on January 1 and again on July 1, you must serve notice by October 3 and April 2, respectively. Each increase is subject to the 7% + CPI cap (the same cap applies to both, since they occur in the same calendar year and use the same CPI figure). This is rare in practice and is not recommended, as it may strain your tenant relationship and increase legal exposure.

Q: My lease says rent is $1,200 plus a “market adjustment” clause. Can I increase beyond 7% + CPI?

A: No. Any lease clause that permits increases beyond the statutory cap is void and unenforceable under Oregon law. The market adjustment clause is superseded by ORS 90.323. The maximum increase is 7% + CPI, regardless of what the lease says.

Q: I provided notice on October 1 for a January 1 increase. Is that compliant?

A: No. October 1 to January 1 is 92 days, which meets the 90-day minimum. However, courts count the full calendar days, so confirm the exact date. If you served on October 2, the earliest effective date is January 2 (exactly 92 days). To be safe, serve notice by October 1 for a January 1 increase. Use an online day calculator to verify.

Q: Does the cap apply to deposits, fees, or utilities the tenant pays separately?

A: The cap applies specifically to “rent”—the regular recurring payment for occupancy of the unit. Deposits are not rent and are not subject to the cap; however, you cannot convert rent into a “deposit” or fee to circumvent the law. Separately metered utilities paid directly to the utility company are not rent. Utilities bundled into a single payment to you may be considered rent, depending on the lease structure and Oregon courts’ interpretation. If uncertain, consult an attorney about how the cap applies to your specific lease terms.

Q: If a tenant breaks their lease and vacates early, can I charge them a higher amount for a new tenant?

A: Yes. The 7% + CPI cap applies only to rent increases on existing tenants. Once a tenant vacates, you can lease the unit to a new tenant at any rate. However, if the departing tenant held over on a month-to-month basis after their lease ended, any increase during their holdover period is subject to the cap.

Q: What if I made a calculation error and charged the wrong amount for three months before catching it?

A: Mistakes are not a defense to liability under ORS 90.323. If you overcharged, the tenant can sue for actual damages (the overage plus interest) and statutory damages (up to $250 per violation, potentially per month). The tenant can also demand abatement of the illegal portion of rent. You should immediately correct the error and refund any overcharge, but do so proactively (do not wait for a lawsuit). Documenting your good faith correction may support a settlement negotiation but is not a legal defense.

Compliance Checklist for Oregon Rent Increases (2026)

Use this checklist before issuing any rent increase notice:

• ☐ Confirm the unit does not have an exemption (new construction under 15 years, natural gas heat with 24-month no-increase look-back, or tax credit status)
• ☐ Pull the December CPI figure from Oregon Bureau of Labor and Statistics; document the source and date
• ☐ Calculate maximum allowable increase: 7% + CPI percentage
• ☐ Calculate new rent amount using the exact formula; round to nearest cent only at the end
• ☐ Determine desired effective date (e.g., January 1, 2026)
• ☐ Count backward 90 calendar days to determine notice deadline (e.g., October 3 for January 1 effective date)
• ☐ Draft notice with all required content: tenant name, property address, current rent, new rent, effective date, dollar increase
• ☐ Deliver notice via certified mail with return receipt, personal service with signed receipt, or posting plus regular mail
• ☐ Retain proof of delivery in tenant file (green card, affidavit, or signed receipt)
• ☐ Update your internal rent tracking system or property management software
• ☐ Document the CPI figure used, calculation method, and exemption determination in your files
• ☐ Keep a copy of the notice and delivery proof for at least three years

The Bottom Line: Why Compliance Matters for Your Portfolio

Oregon’s rent increase cap is a hard floor, not a suggestion. The 7% + CPI formula is straightforward once you understand it, but execution errors—missed notice deadlines, improper delivery, incorrect CPI calculations, or invalid exemption claims—can trigger liability that exceeds the rent increase benefit by multiples.

A single non-compliant increase across multiple units can expose you to class action liability. Even small overages compound across many units and months. Attorney fees and court costs, once triggered, dwarf the rent increase savings.

Self-managing landlords who maintain clear documentation, use compliant notice processes, and track CPI figures centrally eliminate most litigation risk. Use tools that automate the compliance steps: maintain a rent increase calendar, pull CPI data systematically, generate notices with all required elements, and store proof of delivery in a searchable database. LeaseBase’s compliance engine integrates these steps, flagging when an increase violates the cap and automating notice deadlines so you never miss a 90-day window.

The cost of getting compliance right is minimal—a few hours annually to pull the CPI and issue notices. The cost of getting it wrong is thousands in damages, attorney fees, and management disruption. For portfolio-level compliance across multiple units and tenants, automation is the difference between manageable and chaotic.

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, particularly regarding exemption claims, notice disputes, or litigation. LeaseBase does not provide legal advice. Laws change; verify current statutes at Oregon Revised Statutes (ORS) website or through the Oregon State Legislature.