[OPPOSE]

House Bill 1217 (Macri) and Senate Bill 5222 (Trudeau): Rent Stabilization

This bill would limit rent increases to 7% annually, but there’s much more in the bill than just the % cap: ○ Requires 180 days’ notice to tenants for rent increases of 3% or more
○ Imposes a 1.5% cap on late fees
○ Limits move-in fees and security deposits to one month’s rent

○ Consumer protection act

We oppose this legislation because:

●  In other jurisdictions that have adopted rent caps, financial lenders have refused to underwrite loans for construction that are tied to rent caps

●  If financing is not available for construction, development does not happen – housing does not get built 

●  Our state needs more housing at all levels to meet demand. No financing for construction and development means housing will not be built and our situation will continue as is, or likely, get worse.

●  The state will also experience a reduction in housing quality and builder investment in projects due to rent not keeping up with inflation and the cost to maintain properties 

●  Rent caps do not work anywhere they have been tried. We need real solutions like building more housing at affordable prices, not limiting the amount of quality housing on the market. 

○ New York City and St. Paul, MN both enacted rent cap policies and neither have ever been able to get sky-rocketing housing costs under control, nor have rent caps alleviated the number of evictions filed for housing for the many who need it most

● Rent cap legislation is a reactive measure that – on the surface – appears to provide temporary relief but in reality, doesn’t address the systemic issue of housing scarcity

○ By increasing the supply of housing, we’re addressing the root cause of the affordability crisis, ensuring that renters have more options and helping to keep rents naturally in check

Partnership for Affordable Housing (PAH) commissioned report, "Modeling the Impacts of Rent Growth Caps on Washington State’s Apartment Market” released last year and analyzes how a 7% rent control/rent stabilization policy would affect Washington State’s economy, several important statistical conclusions were drawn: 

• The estimated probability that an apartment in Washington would be affected by a seven percent growth cap is quite substantial at 46 percent, while the estimated probability in Seattle is 31 percent.
• A seven percent rent increase would lead to an estimated reduction in maintenance spending of $16 million per year in Washington. Seattle would have an estimated annual reduction of $6 million.
• Total annual rental income loss for apartment owners in Washington is estimated to be over $57 million, while owners in Seattle would experience a total income loss of $23 million. These estimated losses result from the combination of restricting rents and reduced income from foregone construction.
• This income reductions translate into declines in apartment property value. We estimate aggregate property value losses to be $1.12 billion in Washington and $449 million in Seattle.
• The reduction in property values would also cause a reduction in revenue of $11 million per annum for Washington State, and $4 million for Seattle

WMFHA supports legislation that:

• Creates and incentivizes housing supply

• Increases housing availability without imposing undue burdens on housing providers and developers

  • Multi-Family Tax Exemption

  • Tax incentives for development of affordable housing

  • Addressing zoning regulation

  • Reforms and improves the eviction process

[SUPPORT] 

Senate Bill 5661 (Gildon) - Statewide Preemption

This bill proposes to preempt local jurisdictions (cities and counties) from enacting or enforcing ordinances that regulate rent or landlord tenant agreements, except in cases involving public or low-income housing. 

WMFHA supports this legislation because:

- Currently, some cities and counties have already made modifications to their statutes and have created inconsistencies in landlord-tenant laws across the state

- This has led to confusion and challenges for housing providers and residents.

-  We need a consistent and predictable statewide regulatory framework to streamline landlord-tenant relations and create uniformity across all jurisdictions

-  We believe that the state, not local governments, should control and regulate these areas to ensure consistency and protect the rental market

-  The differing regulations across the state can also be a drain on resources for municipalities

-  Many housing providers operate in multiple jurisdictions. It’s important to operators of rental housing that the State operates under one set of rules that are equally applicable to residents and housing providers.

-  The current patchwork of local regulations discourages investment in rental properties, particularly in cities like Seattle, where restrictive laws have caused some providers to abandon the market altogether

-  By creating uniform regulations, SB 5661 will help attract more investment in rental housing, which is essential to meet the growing demand for affordable housing

-  With less ambiguity in the law, both housing providers and renters can more easily understand their rights and obligations, leading to fewer conflicts and smoother interactions

[SUPPORT]

House Bill 1621 (Macri) - Court Commissioners

This bill proposes that superior courts, with consent from the county legislative authority, may appoint housing court commissioners to assist in managing unlawful detainer cases more efficiently.

-  This measure aims to alleviate delays in the eviction process by increasing the capacity of courts to handle the growing number of eviction filings

-  These housing court commissioners would receive specialized training in landlord-tenant laws, including the Residential Landlord-Tenant Act, show cause hearing processes, and unlawful detainer procedures

Why this is important:

-  Housing providers, their employees, and neighboring residents face significant challenges under the current eviction system, which often results in prolonged delays and uncertainty

-  The unlawful detainer process must operate transparently and effectively, ensuring the safety and well-being of all residents and employees while providing equitable and timely resolutions for property owners

-  Delays in addressing non-payment or behavioral offenses by one renter negatively affect the entire community, creating financial and safety burdens for all

- Drawn out eviction proceedings have lasting impacts on residents, causing months of back rent to accrue

Potential Questions to be Ready For:
Question: This is rent stabilization, tell me how you think this is like rent control?
Answer: Advocates for the policy believe that rent stabilization differs from rent control policies because it has 2 differences:

1) It is a simple cap on increases, not a board of commissioners who decide your unit price
2) The cap follows the tenancy, not the unit

The Webster Dictionary defines Rent Control as “government regulation of the amount charged as rent for housing and often also of eviction”. According to The Law Dictionary, “Rent control refers to laws or ordinances that set price controls on the renting of residential housing. It functions as a price ceiling."

Question: Why would you need to raise rents higher than 7% per year?

Answer: Inflation in 2022 went above 7%; SOURCE 

• Insurance costs comprise about 8% of expenses, and increased 26.2% in 2023 alone 

• Repairs and maintenance costs increased 11.8%

• Administrative costs increased 11.7%

• Payroll expenses increased 5.6%

• Property taxes comprise 26.3% of operating expenses, and increased 9.7% in 2023

Question: Are you saying 7% is not high enough? What percentage would you support?

Answer: WMFHA believes that any rent cap will have negative impacts on supply. WMFHA is willing to sit at a stakeholder table, but there has not been one as of yet.

Question: How does this proposal differ from NYC, San Francisco, Oregon, Portland?

Answer: Use Chart Here

Question: Your mortgage is “fixed” so you have stability in knowing how much it’s going to be, so why can’t renters have the same?
Answer: Commercial mortgages aren't fixed long-term. They usually have an initial fixed rate of 5-15 years, after which they adjust based on interest rates. After this period, the interest rate and payment become adjustable, or require a balloon payment, leading to fluctuating monthly payments or the need for refinancing at potentially higher rates. This highlights the risk in property investment, as long-term economic uncertainty can affect future mortgage terms.

Question: If we don’t implement rent stabilization, how do we protect vulnerable renters from being priced out of their homes?
Answer: The best way to protect vulnerable renters is to ensure an adequate supply of affordable housing. If we increase housing availability, there will be more affordable units for residents, which helps keep rents lower across the market and provides more options for renters in need.

Questions: What happens to residents who are already struggling with rising rents in the short term while we wait for the supply of affordable housing to catch up?
Answer: We can address short-term renter struggles through targeted rental assistance, housing vouchers, and eviction protection programs, which provide immediate relief without creating the economic market distortions caused by a rent cap policy. The solution is balancing short-term support with long-term solutions that increase housing availability.

Question: Don’t the rising number of evictions show that immediate action is necessary, and rent stabilization is a proven way to protect renters from displacement?
Answer: While eviction rates are a serious issue, the underlying problem is the lack of affordable housing. Rent stabilization may seem like a quick fix, but it ultimately reduces the housing stock and worsens the problem. We need to focus on policies and solutions that increase the housing supply and provide renters with more affordable housing options, rather than relying on a rent cap policy and additional regulations, which will only exacerbate scarcity.