WA bills seek to cap rent hikes and register rentals, landlords object
As high housing costs chip away at Washington renters’ paychecks, state lawmakers are considering a sweeping array of policy fixes.
Along with proposals to allow denser development, lawmakers are considering a slew of landlord-tenant bills that would cap rent hikes, require more advanced notice of big rent increases and make other changes that they say offer an immediate response to a top concern among constituents struggling to stay housed.
But the bills face sharp opposition from landlords, who decry them as unworkable and a distraction from addressing the underlying housing shortage.
The scope of this year’s proposals and the swift backlash reflect the growing urgency of the housing crisis in Washington, where the statewide median rent for a one-bedroom apartment is nearly $1,300, and there are twice as many people with low incomes as affordable and available rental homes.
Many state lawmakers were up for reelection last fall, knocking on voters’ doors.
“They were out on the doors,” said Rep. Strom Peterson, D-Edmonds, who chairs the state House’s Housing Committee, “and they came back with a pretty resounding, cohesive voice that the cost of housing is the number one issue that we need to deal with this session.”
Limiting rent hikes
Brianna Vazquez, who rents a duplex near Maple Valley, left behind more than just an apartment when a 14% rent increase forced her to find a cheaper rental last spring.
“I miss the other part of Renton I was in because there was a Latinx community, and it was more walkable,” she said of the Renton Highlands neighborhood where she and her teenage daughter lived.
But the increased cost was too much, and Vazquez had to move. If she had accepted a month-to-month lease at the Greystar-managed building instead, the cost would have been even higher: The $2,051 rent for her two-bedroom apartment would have more than doubled to $4,347.
HB 1388 takes aim at that type of increase. The bill would prohibit many landlords from raising rents by more than 7% per year and prevent them from charging more for a month-to-month lease compared to a long-term lease or vice versa. Another bill, HB 1389, would impose a similar cap but offer more exemptions for landlords.
While Washington also desperately needs more housing, limiting rent hikes would “provide immediate help to the people who are most at risk of losing their housing now,” said Rep. Nicole Macri, D-Seattle, who is sponsoring HB 1388.
Macri’s bill would allow rent increases of 3% or the rate of inflation, whichever is greater, but cap any annual increase at 7%. The cap would apply only to buildings older than 10 years old.
Under HB 1389, sponsored by Rep. Alex Ramel, D-Bellingham, a similar cap would apply but landlords could raise rents higher if they had recently paid for significant improvements or faced “significant hardship” because of high operating costs. The bill would allow landlords to skip rent increases one year and then charge more later, called “banked capacity.”
Landlords could reset rents to any amount after a tenant moved out under either proposal, lawmakers said.
The proposals mark the first real attempt at limiting increases in Washington in recent memory. State law bars local governments from regulating the amount of rent that can be charged for private market rentals.
Morgan Atwood, a Vancouver renter, said knowing the maximum rent increase she might face in any given year would have “helped with my stress levels a lot.” Atwood experienced three rent increases, ranging from 10% to 17%, in the past three years. To afford the latest increase, she put off serious car repairs and cut her grocery costs.
Despite a college degree and stable job, “even I am a few months away or even a bad few situations away from being homeless myself,” Atwood said.
But the proposals face steep opposition. Dozens of landlords flooded a hearing in Olympia last week, many wearing T-shirts warning, “Rent control kills housing.”
Property owners told lawmakers more regulation could drive “mom and pop” landlords out of the state, and limiting rent hikes could cause tenants to stay long-term, effectively capping rents. Rising costs — from repairs to utilities and property taxes — can be unpredictable, they said.
Even with an exemption for newer buildings, the proposals would limit rent increases at many properties. About two-thirds of all multifamily buildings in Seattle were built more than 10 years ago, according to a city-commissioned report. Single-family homes are mostly older, with just 5% built in the last decade. Roughly 9% of King County rental properties were built in the last 10 years, according to data from the county assessor.
Capping rent increases would be “the worst possible thing that could happen to the housing industry in Washington state,” said Chris Dobler, who runs a Pierce County property management company that manages about 5,500 apartments.
Instead, lawmakers should boost funding for housing vouchers to help people with low incomes pay private-market rents, said landlord Sean Flynn, executive director of the Rental Housing Association of Washington. “If the most vulnerable in our community are having a difficult time paying their housing costs because housing costs have gone up like everything else, then we need to support those people through vouchers.”
Tenants struggling with rent increases don’t always qualify for today’s voucher programs.
“Even with a good job and steady paycheck, I can’t figure this out,” Vazquez said about her housing costs. “I don’t qualify for low-income housing because I make too much, but I don’t have enough to buy something.”
Longer notice of rent increases
Lawmakers are considering ways to give tenants more advance notice of rent hikes — even if there’s no limit on how high those rents can go.
HB 1124 would require landlords across the state to provide at least six months’ notice (but not more than 220 days’ notice) for rent increases over 5% and would allow tenants to break their lease to avoid a rent hike of more than 5%. Today, state law requires 60 days’ notice of any rent hike. The bill would also cap fees for late rent at $75.
Finding a new rental can take months, making advance notice helpful for tenants. But at the same time, available apartments usually need to be snapped up right away.
More notice of a rent hike without the ability to actually move out “leaves you very limited in what you’re able to do,” said Peterson, who is sponsoring the bill.
Notices of rent increases higher than 5% would inform tenants about their right to end their lease before the increase took effect without a penalty, according the bill. Tenants would only owe rent until their move-out date.
Allowing tenants to break leases early upends a landlord’s planning process and could discourage long-term leases, Flynn said. “I want to plan my life the same way the tenant wants to plan their life.”
The idea of more notice has already gained traction around Seattle, though tenants are not allowed to break their leases early.
Seattle requires six months’ notice of all rent increases, and several suburban cities passed new rules last year requiring four- to six-month notice of certain increases.
For Stacey Valenzuela, extra notice means time to try to find financial assistance to stay in her home. Valenzuela lives in a mobile home in Kenmore, where the city now requires a four-month notice for rent hikes over 3% and six months for increases over 10%.
The new owner of the mobile home community where she lives recently told her the rent for her lot would increase by 28%, Valenzuela said. That’s a squeeze on her fixed income from Social Security and a small pension.
Valenzuela said she’s grateful for the extra time, but still wonders where she might end up. “I don’t think in six months I can find extremely affordable housing.”
What is normal wear and tear?
Tenants can face high costs when they move out of a rental if the landlord alleges that they caused damages beyond ordinary wear and tear.
HB 1074 would attempt to help tenants avoid losing their damage deposits to vague or dubious claims of damage.
The bill would require a landlord to provide invoices, repair estimates or other proof to substantiate claims of damage when they planned to keep some or all of a tenant’s deposit. In exchange, landlords would get 30 days instead of the current 21 to inform a tenant of their plans to keep a portion of the deposit and show documentation.
“This is not a new concept: If you want to charge people something, there’s got to be a value attached to it,” said Rep. My-Linh Thai, D-Bellevue, who is sponsoring the bill and is a landlord.
Still, landlord groups are arguing against the bill. Instead of requiring written documentation, the state should allow renters to ask for it, “instead of having this huge burden on everybody,” Dobler said. “They’re trying to fix something that’s not broken.”
Requiring landlords to register
As concern about housing costs dominates in Olympia, some lawmakers say the state needs better data for policymaking.
SB 5060 would create a state database of rental properties, requiring landlords to register and publish rents for their units. The state would charge $70 for each initial unit and $15 for each additional unit. Landlords who do not register their properties would not be allowed to evict a tenant except in cases such as nuisance, illegal activity and substantial interference with use of the property.
Registration fees would go toward rental housing inspection programs and providing lawyers for tenants facing eviction. The proposal would exempt certain rentals, such as a room rented out in a house where the owner lives, temporary rentals of less than a year and emergency shelters.
“We lack real-time data on what housing inventory we actually have in the rental market,” said Sen. Patty Kuderer, D-Bellevue, who is sponsoring the bill.
Property owners would also be required to register all vacant units, laying the groundwork for a possible eventual tax on vacant properties, Kuderer said.
While private firms publish information about the cost of new leases, finding reliable information about current rents is more of a challenge.
Landlords say the registration requirement is burdensome and unnecessary. “You want to know how much a two-bedroom currently costs?” said Flynn, from the Rental Housing Association. “There’s this website. It’s super secret. It’s called Zillow. ”
The bill contains a notable exemption: It would not apply in Seattle because the city already has a rental registry program. It would also not apply to other cities that require a business license for rental properties. Instead, the city would have to report “program data” to the state.
But while Seattle’s inspection program collects information about rental properties, it does not collect rent amounts. Mayor Bruce Harrell vetoed a City Council attempt to gather private market rents last year. Harrell raised concerns about the cost of collecting the data and its accuracy.
Kuderer says she believes her bill would require cities such as Seattle to begin collecting data on rents.
Lawmakers are set to be in session in Olympia until late April, but they only have a few weeks before they start encountering deadlines to hear bills in key committees. Most bills must pass out of the chamber where they originated by March 8.