Oregon's Multifamily Housing Laws for 2026: What Property Owners Must Know

Olive Tree Property Management - February 4, 2026

Oregon's Multifamily Housing Laws for 2026: What Property Owners Must Know

The 2025 Oregon Legislative Session concluded with several significant bills that will reshape how multifamily property owners operate in 2026. From tenant protections to affordable housing preservation requirements, landlords and investors need to understand these changes now to ensure compliance when they take effect. This comprehensive guide breaks down the key laws coming in 2026, with citations to help you dive deeper into the specifics.

Rent Increase Limits for 2026

Before diving into new legislation, it's critical to understand Oregon's statewide rent control framework. For 2026, the maximum allowable annual rent increase is 9.5% for most properties. This represents the formula of 7% plus the Consumer Price Index (CPI), which Oregon law caps at 10% total.[^1]

However, properties built within the last 15 years and certain subsidized housing units may have different restrictions. Manufactured home parks face even stricter limits under new legislation, capped at just 6% annually beginning in 2026 for parks with more than 30 spaces (HB 3054).[^2]

[^1]: Multifamily NW. "Oregon Rent Increase Limits for 2026: 9.5%." https://www.multifamilynw.org/news/oregon-rent-increase-limits-for-2026-95

[^2]: HFO Real Estate. "Oregon's 2025 Housing Legislation: What Multifamily Owners, Investors & Developers Need to Know." May 26, 2025. https://www.hfore.com/oregons-2025-housing-legislation-what-multifamily-owners-investors-developers-need-to-know-this-week-may-26-2025/

HB 2134: Early Lease Termination Rights (Effective January 1, 2026)

What It Does: House Bill 2134 fundamentally changes lease termination dynamics when landlords issue no-cause termination notices. If a landlord provides a tenant with a 90-day notice to vacate (typically for a "qualified landlord reason" such as owner move-in or substantial renovation), the tenant now has the right to terminate their lease early with just 30 days' notice.[^3]

Critical Details:

• Landlords cannot charge early termination fees or "lease break fees" in these circumstances
• Landlords cannot collect rent beyond the tenant's move-out date once they provide 30-day notice
• This applies only when the landlord has initiated the termination process, not when tenants choose to leave voluntarily

Industry Opposition:  The multifamily industry opposed this legislation, arguing it creates operational complexity and potential revenue loss. Property owners who issue termination notices may now face unpredictable vacancy dates, making it difficult to coordinate renovations, showings, or new tenant move-ins.[^4]

Compliance Action:  Update your lease agreements and termination notice templates to reflect these new tenant rights. Train property management staff to explain these provisions clearly when issuing any termination notice. Consider the financial impact of shortened notice periods when planning renovations or other actions requiring unit turnover.

[^3]: Portland Housing Bureau. "Landlord-Tenant Policy Changes." https://www.portland.gov/phb/rental-services/helpdesk/landlord-tenant-policy-changes

[^4]: HFO Real Estate. "Oregon's 2025 Housing Legislation."

HB 3378: Physical Access Requirements (Effective January 1, 2026)

What It Does:  House Bill 3378 requires landlords to provide tenants with a physical method of accessing their dwelling unit that doesn't rely solely on software or electronic devices. This means properties using app-based smart locks must also provide traditional keys, access codes, fobs, or key cards.[^5]

The Problem It Solves:  The rise of smart home technology in multifamily properties has created situations where tenants lose access to their homes due to dead phone batteries, software glitches, or lack of technological proficiency. This legislation ensures all tenants have reliable, technology-independent access to their rental units.

Industry Concerns:  Multifamily NW opposed this legislation as "redundant, unnecessary legislation," arguing that most professional property managers already provide backup access methods. The industry worries about additional costs for properties that invested heavily in smart access systems and now must retrofit or supplement them with physical access options.[^6]

Implementation Challenges:

• Properties with existing smart-lock-only systems must add physical access methods
• Additional key management and replacement costs
• Potential security concerns with managing both digital and physical access systems
• Need for additional technical support and tenant education

Compliance Action:  Audit your properties to identify units with app-only access systems. Procure physical keys, key cards, or establish access codes for all affected units before January 1, 2026. Update lease agreements to specify both digital and physical access methods. Train staff on managing dual access systems.

[^5]: PAROA. "Understanding Oregon's House Bill 3378: Implications for Landlords and Property Owners." April 11, 2025. https://www.paroa.org/post/understanding-oregon-s-house-bill-3378-implications-for-landlords-and-property-owners

[^6]: HFO Real Estate. "Oregon's 2025 Housing Legislation."

SB 973: Affordable Housing Preservation Requirements (Effective September 29, 2025, Applies to Properties July 1, 2028+)

What It Does:  Senate Bill 973 dramatically extends notice requirements for landlords of publicly supported housing who intend to withdraw from affordability programs. The law extends the minimum notice period to existing tenants from 20 months to 30 months before affordability restrictions expire.[^7]

Who This Affects:  This applies to properties with affordability covenants, typically those developed using:

• Low Income Housing Tax Credits (LIHTC)
• Oregon Housing and Community Services (OHCS) funding
• Federal or state affordable housing programs
• Properties with deed-restricted affordable units

Key Requirements:

For Prospective Tenants and Applicants: Before charging application fees or signing leases, landlords must provide written notice including:

• That the property has affordability restrictions
• The earliest date those restrictions could end
• Information must use forms prescribed by OHCS (to be published by December 1, 2025)
• Notices must include information in Oregon's five most commonly spoken languages (besides English) on how to access translations[^8]

For Current Tenants:

• Must provide 30-36 months' notice before ending affordability restrictions
• Failure to provide proper notice requires extending the affordability restriction for at least 30 months after notice is finally delivered
• Property owners cannot withdraw from affordability programs until 30 months after delivering notice to all tenants

Penalties for Non-Compliance:  For each tenant who doesn't receive proper notice, the owner must extend the affordability restriction. This creates significant financial consequences for landlords who fail to comply with notification requirements.

Industry Position: Multifamily NW offered medium support for this bill, recognizing the importance of protecting affordable housing residents while acknowledging the administrative burden on property owners.[^9]

Compliance Action: If you own properties with expiring affordability restrictions:

1. Immediately review all affordability covenant end dates
2. Calculate when you must provide notices (30-36 months before expiration)
3. Monitor OHCS website for required notice forms (due December 1, 2025)
4. Implement systems to track notice delivery to every tenant
5. Consider whether to extend affordability, convert to market rate, or sell before restrictions expire

[^7]: Oregon Legislative Information System. "SB 973 Staff Measure Summary."

https://olis.oregonlegislature.gov/liz/2025R1/Downloads/MeasureAnalysisDocument/88412

[^8]: PAROA. "New Oregon 2025 Landlord Laws Review: Impact on Landlords and Real Estate Investors." August 29, 2025. https://www.paroa.org/post/oregon-2025-landlord-laws-review-impact-on-landlords-and-real-estate-investors

[^9]: Multifamily NW. "2025 Oregon Legislative Session Review." https://www.multifamilynw.org/news/2025-oregon-legislative-session-review

SB 814: Expanded Rental Assistance Eligibility (Effective January 1, 2026)

What It Does:  Senate Bill 814 expands eligibility for Oregon's long-term rental assistance programs to include individuals under 25 years old, with particular benefits for college students and young adults.[^10]

Why It Matters for Landlords: This legislation may reduce payment delinquencies among younger tenants by expanding their access to rental assistance. Properties near universities or in areas with significant populations of young professionals may see improved payment reliability as more tenants become eligible for assistance programs.

Industry Position:  Multifamily NW strongly supported this legislation, recognizing that rental assistance programs help both tenants and landlords by reducing nonpayment evictions and stabilizing rental income.[^11]

Opportunity:  Property owners should familiarize themselves with how tenants access these programs and potentially provide information about rental assistance eligibility during the leasing process. This can help prevent payment issues before they start.

[^10]: HFO Real Estate. "Oregon's 2025 Housing Legislation."

[^11]: HFO Real Estate. "Oregon's 2025 Housing Legislation."

HB 3522A: Expedited Squatter Evictions (Effective January 1, 2026)

What It Does:  House Bill 3522A creates an expedited process for evicting squatters from properties not being used as dwelling units. Landlords can now evict squatters with just 24 hours' notice from properties that aren't actively rented.[^12]

Important Limitation:  This law does not apply to occupied rental units with tenant rights. It only covers vacant properties, properties under renovation, or non-residential properties where unauthorized occupants have entered.

Practical Application:

• Vacant units between tenants
• Properties under renovation
• Foreclosed or abandoned properties
• Commercial spaces not zoned for residential use

Compliance Consideration:  Document that the property is not being used as a dwelling unit. This distinction is critical—applying this expedited process to occupied rental units with tenant protections could result in significant legal liability.

[^12]: D&A Property Management. "2026 Legislative Session Recap: Oregon Landlord-Tenant Law." December 16, 2025. https://www.duerksenrentals.com/2026-oregon-landlord-tenant-law-updates

HB 3525B: Well Water Testing Requirements (Effective January 1, 2027)

What It Does: While not effective until 2027, landlords should begin planning now. House Bill 3525B requires landlords with properties served by wells to test drinking water for contaminants including arsenic, coliform bacteria, lead, and nitrates.[^13]

Financial Impact:  Testing costs vary but typically range from $150-$400 per property depending on the comprehensiveness of testing. For landlords with multiple well-served properties, particularly in rural areas, this represents a significant compliance cost.

Strategic Planning:

• Budget for testing costs in 2026-2027
• Consider whether well upgrades or treatment systems may be necessary based on test results
• Update lease agreements to address water quality documentation
• Plan for potential remediation if testing reveals contamination

[^13]: D&A Property Management. "2026 Legislative Session Recap."

SB 586A: Sale Termination Notice Reduction (Effective October 1, 2025)

What It Does:  This law, already effective, allows landlords to reduce the required termination notice from 90 days to 60 days when selling a rental property—but only if the buyer intends to occupy the home as their primary residence and the landlord provides the tenant with two months' rent as compensation.[^14]

Cost-Benefit Analysis:  Landlords must weigh the benefit of 30 additional days of vacant possession against the cost of two months' rent compensation. For properties selling at premium prices to owner-occupants, this may be worthwhile. For typical investment sales, the standard 90-day notice remains more economical.

Application:  This is particularly useful for single-family rentals or condominiums where buyer owner-occupancy is common. It's less relevant for multifamily properties typically sold to other investors.

[^14]: D&A Property Management. "2026 Legislative Session Recap."

Middle Housing Expansion: HB 2138 and the Continuing Evolution

While many of the headline 2026 changes focus on tenant protections, Oregon's housing policy continues pushing toward increased density through middle housing reforms.

Background:  Oregon's 2019 House Bill 2001 legalized middle housing (duplexes, triplexes, fourplexes, cottage clusters, and ADUs) on single-family lots in cities with 25,000+ residents. The 2025 legislative session's HB 2138 extends and strengthens these reforms.[^15]

Key Changes:

• Geographic Expansion: Middle housing requirements now extend into urban unincorporated lands beyond city limits
• Retroactive Covenant Invalidation: Private deed restrictions and HOA rules that forbid duplexes, triplexes, ADUs, or higher density are now invalid, even if established before the 2019 reforms
• Density Protection: Local governments cannot reduce density allowances within urban growth boundaries, preventing cities from rolling back previously granted density rights
• Streamlined Approvals: 120-day mandatory review periods and appeals exemptions reduce municipal delays for middle housing developments[^16]

Implications for Multifamily Investors:  These reforms create opportunities for property owners to:

• Convert single-family properties into duplexes, triplexes, or fourplexes
• Add ADUs to existing rental properties for additional income
• Develop higher-density projects in previously restricted areas
• Purchase properties with invalidated restrictive covenants at potential discounts

Long-Term Market Impact:  While these changes won't flood the market with new units immediately, they fundamentally reshape what's permissible in Oregon's residential zones. Over the next 5-10 years, expect to see:

• Gradual increase in small multifamily properties in formerly single-family neighborhoods
• More diverse housing stock and rental options
• Potential downward pressure on rents as supply increases, though this will vary significantly by market
• Increased small-scale development opportunities for local investors

[^15]: BC Group. "Oregon's New Housing Laws: A Shift for Middle Housing." August 20, 2025. https://bcgroup-inc.com/oregons-new-housing-laws-a-turning-point-for-middle-housing/

[^16]: BC Group. "Oregon's New Housing Laws."

Portland-Specific Considerations

Portland property owners face additional regulations beyond statewide laws. The city has historically led Oregon in tenant protection measures, and many state laws don't apply within Portland because the city already has stricter rules.

Key Portland Distinctions:

• Some statewide 2026 changes don't apply in Portland because Portland City Code 30.01.085 and 30.01.086 already provide equivalent or stronger protections
• Portland has additional screening criteria restrictions
• Algorithmic rent-setting tools face regulation under Portland Ordinance 30.01.088[^17]
• Portland continues considering a vacancy tax on properties sitting empty, which could significantly impact property owners

Action Item: Portland property owners should consult both state law changes and city-specific requirements to ensure full compliance. When state and local laws conflict, the more restrictive requirement typically applies.

[^17]: Multifamily NW. "January 2026 Law Changes." https://www.multifamilynw.org/news/january-2026-law-changes

What Property Owners Should Do Now

With multiple significant changes taking effect January 1, 2026, property owners should take these immediate actions:

Immediate (Before December 31, 2025):

1. Update All Legal Forms and Templates:

• Lease agreements reflecting HB 2134 early termination rights
• Termination notices with new language about tenant options
• Rental applications for affordable housing properties (SB 973)
• Move-in documentation for physical key provision (HB 3378)

2. Conduct Property Audits:

• Identify units with smart-lock-only access systems
• Locate well-served properties requiring future testing
• Review affordable housing properties for expiring restrictions
• Document vacant properties for potential squatter eviction procedures

3. Budget for Compliance Costs:

• Physical key systems and management
• Potential revenue loss from early terminations
• Affordable housing notice preparation and distribution
• Well water testing (2027 but plan now)
• Attorney or consultant fees for complex situations

First Quarter 2026:

4. Staff Training:

• Educate all property management staff on new laws
• Update screening and leasing procedures
• Train maintenance staff on dual access systems
• Create response protocols for new tenant rights

5. Tenant Communication:

• Inform current tenants of new rights (especially early termination)
• Update resident handbooks and move-in materials
• Post required notices for affordable housing properties
• Communicate physical key availability

6. Technology Updates:

• Implement or update property management software for compliance tracking
• Create systems to monitor affordable housing notice deadlines
• Establish digital record-keeping for all required notices
• Set up automatic reminders for key compliance dates

Ongoing Compliance:

7. Legal Review:

• Consult with a landlord-tenant attorney familiar with Oregon law
• Join industry associations like Multifamily NW or PAROA for updates
• Monitor OHCS website for required forms (due December 1, 2025)
• Subscribe to legislative updates for future changes

8. Industry Engagement:

• Participate in industry association advocacy efforts
• Provide feedback to legislators about implementation challenges
• Share best practices with other property owners
• Stay informed about pending legislation for future sessions

The Bigger Picture: Oregon's Housing Policy Direction

These 2026 changes aren't isolated—they represent Oregon's continued evolution toward stronger tenant protections and increased housing production. Understanding the policy trajectory helps property owners prepare for future changes.

Clear Policy Trends:

1. Expanding Tenant Protections: Each legislative session brings new tenant rights, making it increasingly difficult to operate using outdated practices
2. Preserving Affordable Housing: The state is actively working to prevent loss of subsidized housing units, creating compliance obligations for affordable housing property owners
3. Increasing Housing Density: Middle housing reforms continue expanding, reshaping what's developable in Oregon communities
4. Technology Regulation: As property management technology advances, legislators are ensuring technology doesn't exclude or disadvantage tenants

What This Means for Investors: Oregon remains an attractive multifamily market despite increasing regulation.

The key to success is:

• Professionalize Operations: Casual landlording becomes increasingly risky as compliance requirements grow
• Stay Informed: Ignorance of new laws isn't a defense and can result in significant penalties
• Build Compliance Costs Into Pro Formas: Regulatory compliance has real costs that must be factored into investment analysis
• Focus on Quality: As regulations increase, properties with strong fundamentals, good management, and happy tenants will outperform

Looking Ahead:  The 2026 short session and subsequent legislative sessions will likely bring additional changes. Property owners should monitor:

• Potential changes to screening criteria restrictions
• Further eviction process modifications
• Additional energy efficiency or sustainability requirements
• Continued refinement of middle housing implementation

Resources for Compliance

Industry Associations:

• Multifamily NW (www.multifamilynw.org): Oregon's largest multifamily housing association, providing education, advocacy, and resources
• PAROA (www.paroa.org): Property and Rental Owner Association offering legal guidance and updates
• Oregon Rental Housing Association (www.oregonrha.org): Statewide association focusing on small property owners

Government Resources:

• Oregon Housing and Community Services (www.oregon.gov/ohcs): Administers affordable housing programs and will publish SB 973 required forms
• Oregon State Bar (www.osbar.org): Provides landlord-tenant law information and attorney referrals
• Oregon Legislative Information System (www.oregonlegislature.gov): Access full text of all bills and legislative history

Legal Forms:

• Multifamily NW and ORHA both offer updated Oregon-specific forms for members
• Consider attorney review of all lease agreements and notices for 2026 compliance
• Many property management software platforms update forms automatically based on law changes

Conclusion

Oregon's 2026 multifamily housing laws represent significant changes that require proactive preparation from property owners and investors. From early lease termination rights to affordable housing preservation requirements to physical key mandates, these changes affect nearly every aspect of property operations.

The most successful multifamily operators will be those who:

1. Understand the specific requirements of each new law
2. Implement compliant systems and procedures before January 1, 2026
3. Train staff thoroughly on new requirements
4. Budget appropriately for compliance costs
5. Stay engaged with industry associations and legal counsel for ongoing guidance

While these regulations add complexity and cost to multifamily operations, Oregon's strong rental market fundamentals, population growth, and housing shortage create ongoing opportunities for well-informed, compliant property owners.

The era of informal property management in Oregon is over. The future belongs to professional, compliant operators who view regulatory adherence not as a burden but as a competitive advantage in a maturing market. Those who invest in understanding and implementing these 2026 changes position themselves for long-term success in Oregon's evolving multifamily landscape.

Key Dates Summary

• September 29, 2025: SB 973 (Affordable Housing Preservation) effective
• October 1, 2025: SB 586A (Sale Notice Reduction) effective
• December 1, 2025: OHCS must publish SB 973 required notice forms
• January 1, 2026: HB 2134 (Early Termination), HB 3378 (Physical Keys), SB 814 (Rental Assistance), HB 3522A (Squatter Evictions) all effective
• July 1, 2028: SB 973 applies to all properties with affordability restrictions ending on or after this date
• January 1, 2027: HB 3525B (Well Water Testing) effective

This article is for informational purposes only and does not constitute legal advice. Property owners should consult with qualified legal counsel regarding specific compliance questions and requirements.