A Multnomah County judge heard arguments Thursday in a challenge to Portland’s renter relocation ordinance.

The new policy allows tenants to collect between $2,900 and $4,500 when landlords use no-cause evictions or raise rents more than 10 percent in a year.

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Related: Portland Decides Landlords Must Pay For No-Cause Evictions, Effective Immediately

Two landlords filed the lawsuit, backed by the apartment lobbying group Multifamily Northwest.

Their attorney, John DiLorenzo, argued the payments amount to an indirect form of rent control and an indirect prohibition on no-cause evictions. State law prohibits rent control and permits evictions without a stated cause.

Quoting statements made by Portland Commissioner Chloe Eudaly, DiLorzenzo described the ordinance as a deliberate effort to circumvent state law.

“They are attempting to prohibit indirectly what they know they cannot prohibit directly," he said.

Judge Henry Breithaupt pressed DiLorenzo on the assertion that the law is a de facto ban on rent increases and no-cause evictions. He cited a brief filed in the case that notes landlords have issued no-cause evictions and rent increases of more than 10 percent since the ordinance passed.

"Amicus provides declarations that there are in fact landlords who have bitten the bullet, complied and moved on," Breithaupt said.

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City attorneys argued that because Multnomah County and Portland are home rule jurisdictions — in effect sharing lawmaking power with the state — any issue that isn't explicitly prohibited by state law is left up to the city to decide.

Related: Oregon Is 1 Step Closer To Rent Control, Restricting No-Cause Evictions

"There is a constitutional, almost dual sovereignty, between a home rule city and a state," argued Portland Deputy Attorney Denis Vannier.

"There’s nothing in the rent control statutes that suggests an attempt to bar local governments, certainly cities, from adopting a relocation ordinance," Vannier said.

The dueling attorneys also argued about whether Portland’s ordinance violates state contract laws by changing the obligations of landlords and tenants who have signed leases.

DiLorenzo summarized those arguments for reporters after the court proceedings ended.

"If they pass a law that’s applicable to future contracts, that’s OK," he explained. "You can’t apply a law after the fact to a currently existing contract that adds a term to it."

Breithaupt, for his part, said the city doesn't see any conflict between the ordinance and the contract clause in the Oregon Constitution.

“On the impairment of contracts, the background assumption of the law is that contracts are entered into subject to the general power of the government,” he said.

Both sides have asked the judge to reach a summary judgement in the case based on the briefs and the the oral arguments he heard Thursday.

Breithaupt didn’t say when he expects to reach a decision.

The Portland relocation ordinance is set to expire in October, along with the city's declaration of a housing state of emergency.

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