Portland’s new rent control ordinance survives legal challenge by landlords

A Superior Court justice has upheld Portland’s new rent control ordinance despite a lawsuit brought by local landlords.

The ordinance limits most rent increases to the rate of inflation, increases the amount of notice a landlord must provide when not renewing an at-will tenancy, and creates a Rent Board to enforce the ordinance and award additional rent increases when appropriate.

The Southern Maine Landlords Association sued the city of Portland in Cumberland County Superior Court in January, two months after voters approved the change on the November ballot. The landlords argued that the ordinance is vague, conflicts with state and federal statutes, and is an improper use of the citizen initiative process.

The city argued the ordinance is not vague and provided adequate safeguards to ensure fair treatment of landlords and tenants. People First Portland, which backed the ordinance during the election, and the newly formed Foreside Tenants Union, intervened to defend the ordinance. And Pine Tree Legal Assistance, which provides free civil legal aid to low-income people, filed its own brief to support rent control, saying the COVID-19 pandemic has only exacerbated housing instability in Maine’s largest city.

In April, the landlords association filed a motion for summary judgment and asked the court to resolve the lawsuit in its favor. Superior Court Justice MaryGay Kennedy denied that motion last week. Among her findings, she wrote that the ordinance limits the board’s discretion to approve or deny rent increases to objective and qualifiable metrics, and it is not on its face biased toward either tenants or landlords.

Brit Vitalius, president of the Southern Maine Landlords Association, said he was disappointed by the decision and still confused by the ordinance. The association’s attorneys were reviewing Kennedy’s order and he could not say whether the landlords would appeal.

“We’re still left with this ordinance that has left the city of Portland landlords and tenants with a lot of questions and problems ahead,” he said.

Ben Gaines, who represents People First Portland and the tenants union, said it was “a good day for the tenants of the city and a great day for democracy.”

“This rent control ordinance starts the work of stabilizing out-of-control rents and providing a framework to protect vulnerable tenants struggling with our state’s affordable housing crisis,” Gaines wrote in an email. “It’s time for the landlords to stand down and recognize that this law passed because we have a real problem on our hands.”

A city spokeswoman did not respond to an email or a voicemail late Wednesday afternoon asking about the order. Portland’s website includes guidance for landlords and tenants on the new ordinance, and the members of the Rent Board were appointed in March.

In April, a Portland landlord filed a separate lawsuit over the ordinance. Bayview Court LLC and Eastern Promenade Limited Liability Co., which own 102 units in Portland, sued the city in an effort to prevent public disclosure of detailed information about rents. The status of that lawsuit was not clear Wednesday evening.

Portland voters approved five citizen referendums in November, including rent control, and this is not the only one to face a legal challenge. Earlier this week, the Maine Supreme Judicial Court ruled that a hazard wage mandate is constitutional, but the provision that boosts pay during emergencies such as the pandemic does not take effect until next year.