A state court has ruled that Eugene has the authority to cap screening fees for rental applications.
Eugene's City Council passed a $10 limit on those fees in 2022, as part of its first phase of renter's protections.
Two housing providers, Jennings Group and Thorin Properties, sued the city in response. In 2023, a Lane County Circuit Court judge ruled in their favor, finding that state law preempted the city's ordinance.
On Wednesday, the Oregon Court of Appeals overturned that previous decision, restoring Eugene's ability to enforce the cap.
Kevin Cronin, an organizer with the Eugene Tenant Alliance, said the ruling came as a welcome surprise. He said this could reduce barriers to housing for low-income and homeless people.
Cronin said it may take an applicant several tries before an apartment accepts them, and Section 8 housing assistance doesn't cover screening fees.
“Now they can apply for their four top choices, and it will only cost them $40, instead of $300," said Cronin.
Darren Stone, a Principal Broker with Jennings Group, said the plaintiffs may appeal the ruling to the Oregon Supreme Court.
Stone said $10 isn't enough to thoroughly screen an applicant, as he claims Jennings Group spends $59 on average per person. If the cap is enforced, he said landlords may stop paying for that process.
According to Stone, this could lead to more people landing in eviction court due to unforeseen issues. The screening process checks for rental, credit, and criminal histories.
"The state legislature has done a number of things to control the way applications are processed, to provide some relief to applicants in this housing crisis," said Stone. "The City of Eugene just came in on their own, and torpedoed the structure that the legislature carefully crafted."
It's yet unclear how Eugene will apply its ordinance moving forward. In an email to KLCC, city spokesperson Lindsay Selser said its legal team is still assessing the recent decision.
Another city spokesperson, Marion Barnes, said City Council will receive an update on the ruling after Labor Day Weekend.
