Washington state lawmakers look to cap rent increases

By: - January 11, 2024 3:15 pm
housing, apartment for rent

Landlords and developers say the rent and fee cap would hurt property owners struggling to keep up with rising operating costs for apartment buildings and other housing. (Getty Images)

Washington Democrats in the state Legislature are restarting conversations around rent stabilization with a proposal that would cap rent increases at 5% a year for residential tenants and also place limits on fees charged by landlords.

Their bill would also require a six-month notice for large jumps in rent and offer more protections for tenants who’ve signed month-to-month leases.

Similar proposals failed in the Legislature last year, even though lawmakers passed dozens of other housing policy changes and made record investments in affordable housing construction.

But rent stabilization has taken on new salience after voters in Tacoma and Bellingham in November passed protections against large rent hikes and evictions.

“It’s a real urgent issue, and the time to act is now,” said Rep. Emily Alvarado, D-Seattle, sponsor of the House bill. “The momentum is building because people are hurting.”

Supporters say new laws capping rent increases and fees are essential to keeping people in their homes. Alvarado said her plan can help provide predictability for renters.

But as in previous years, the proposals are likely to face opposition from Republicans, developers and landlords who say capping rents will disincentivize construction and worsen the state’s housing shortage.

“We continue to think we can undercut the market of housing and succeed at this problem, and we can’t,” Senate Minority Leader John Braun, R-Centralia, told reporters this week.

The proposal

House Bill 2114 would cap rent and fee increases at 5% for a 12-month period. It also would prohibit rent and fee increases during the first year of tenancy. If a landlord wanted to raise rent by 3% or more, they would have to provide at least six months of notice to the tenant. If a tenant wants to move after being notified of a 3% or more increase, they could do so without a penalty.

A landlord could reset the rent as they wish if a tenant voluntarily moves out at the end of their lease.

The bill would also cap late fees for rent payments at $10 per month and all move-in fees at no more than one month’s rent. It also prohibits landlords from having different rent prices and fees for month-to-month leases compared to fixed-term leases.

New construction would be exempt from the rules for the first 10 years of occupancy.

Additionally, the proposal would require the Department of Commerce to create an online landlord resource center and it calls for the Attorney General’s Office to publish model lease provisions for rent and fee increases.

Alvarado said the legislation is a balanced approach aimed at helping tenants while offering flexibility to landlords to deal with rising costs and to developers investing in new construction.

“It allows landlords to raise the rent, but it prevents excessive rent increases,” she told the House Housing Committee on Thursday.

Landlords disagree.

The Washington Business Properties Association, in a news release, called the proposal an “unrealistic rent control scheme.”

William Shadbolt, the association’s managing director, said in a statement that the proposal is “arguably unconstitutional and a step in the wrong direction.”

“If this law is enacted, we’ll see even more housing providers get out and exacerbate our state’s already bad affordability crisis,” he said.

Democrats and other supporters of the bill argue the proposal is not a rent control plan because it does not set a specific cap on the price of rent, only a limit on increases during a tenancy. Landlords can raise the rent however much they want after a tenant voluntarily moves out, Alvarado added.

Tacoma Democrat Sen. Yasmin Trudeau, sponsor of the Senate version of the bill, told reporters that it would not stifle housing supply because it provides an exemption for new construction.

“We can build supply, and we can stabilize the renter market,” Trudeau said.

Strong reactions

A public hearing on the bill in the House Housing Committee drew more than 100 people to testify. Another 2,500 people signed in to support or oppose the bill but did not make comments.

Throughout the testimony, renters urged lawmakers to pass the proposal. Some shared how they had to live in their cars after a large rent increase. Others told stories about having to find a new home, and enough money to move, in less than a month because their rent went up abruptly.

“Renters are not being squeezed,” Shannon Corrick, a tenant in Cheney, told reporters on Wednesday. “They’re being crushed.”

Meanwhile, landlords and developers argued the rent and fee cap would hurt property owners struggling to keep up with rising operating costs for apartment buildings and other housing.

Audrey Riddle, of Goodman Real Estate, said the cost for taxes, insurance and utilities for their Washington properties has gone up 65% over the last five years.

“This bill does not account for the increases of required expenses to maintain housing and will discourage further investment in additional housing,” she told the Housing Committee.

Some small landlords, on the other hand, said a 5% increase cap would not affect their business.

Kelley Rinehart, a small landlord in Silverdale, said the most important piece of a steady income as a landlord is long-term tenants who are happy in their homes. A 5% increase is more than enough to cover expenses, he added, and any more than that could hurt their tenants and local businesses.

“This is a good bill for responsible and reasonable landlords,” he said.

Democratic leadership has identified rent stabilization as a priority this session, though it still faces hurdles and the bills now in play will likely still see changes.

Senate Majority Leader Andy Billig, D-Spokane, said the degree of his caucus’s support will depend on the details of the bill.

Both the House and Senate versions received hearings in the first week of session. The House version is scheduled for a committee vote on Tuesday.

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Laurel Demkovich
Laurel Demkovich

Demkovich joined the Washington State Standard in 2023 after almost three years as a statehouse reporter for the Spokesman-Review. She covers state government, the Legislature and all other Olympia news.