Tag: rent increases

City Council, housing, legislature

Eight-Month-Old Program to Mitigate Rent Hikes Shows Promise, Areas for Improvement

By Katie Wilson

In September 2021, the Seattle City Council passed two laws, both sponsored by Councilmember Kshama Sawant, to help renters cope with rent hikes. One required landlords to give 180 days’ notice of rent increases. The other tackled “economic evictions,” requiring landlords to pay relocation assistance equal to three months’ rent to lower-income tenants who move after an increase of ten percent or more. In a state that bans local rent regulation, these laws were designed to mitigate the harm caused by rapidly rising rents.

Since then, other cities around King County have passed new landlord-tenant laws, including longer notice requirements for rent increases, and even some protections—like caps on late fees—that Seattle doesn’t have. But so far, no other city has required landlords to pay relocation assistance when they impose large rent hikes.

The organization I work for, the Transit Riders Union (TRU), along with allies in the Stay Housed Stay Healthy coalition, hopes to support passage of renter protections in several more King County cities this year—including Tukwila, where last year we ran a successful ballot initiative to raise the minimum wage. Renter Arc Di wants the Tukwila City Council to pass a relocation assistance law.

“With two months’ notice of price hikes, it’s incredibly difficult to pull together the money to move and pay moving and storage fees,” Di said. “With my current apartment, if I don’t have a place to go when the lease is up, my rent jumps up 75 percent month to month, from $2,050 to $3,500.” Moving expenses would quickly wipe out Di’s savings.

“These large landlords don’t care if you have somewhere to go and will happily take advantage of our precarious situation as renters,” Di said.

Seattle’s Economic Displacement Relocation Assistance (EDRA) program went into effect last July, so it’s been in effect for over eight months now. So how’s it going?

According to a high-level summary from the Seattle Department of Construction and Inspections, which oversees the program, 83 tenants applied for relocation assistance between July 2022 and the end of last year, an average of about 14 a month. But the pace appears to be picking up. By February 21, there had already been 61 applicants in 2023, an average of 36 a month so far.

Of these 144 applications, SDCI has determined that 33 are eligible for relocation assistance; 28 were disqualified, generally because the increase was less than ten percent or the landlord gave notice before the ordinance was in effect. SDCI only disqualified one application because the household earned more than 80 percent of Seattle’s median income, the threshold for eligibility. The remaining applications are still in the pipeline—a time-consuming process that sometimes means tenants must move before they get relocation assistance.

“These large landlords don’t care if you have somewhere to go and will happily take advantage of our precarious situation as renters.”—Tukwila renter Arc Di

When Seattle landlords give notice of a rent hike of 10 percent or more, they’re supposed to include a notice about the EDRA program, which explains that the tenant may qualify for financial assistance. To find out if landlords are actually doing this, TRU ran a survey asking tenants about recent rent increases. Of 105 respondents, 13 were Seattle tenants who received notice of a 10-percent-plus rent increase after June 30, 2022. Of these, only three reported getting an EDRA notice from their landlord.

The survey results suggest several other interesting conclusions. First, a disproportionate number of Seattle rent increases hover just under ten percent, suggesting that EDRA may be changing landlord behavior to impose lower rent increases than they otherwise would. As annoying (and costly) as these increases can be, it’s a heck of a lot better than a much larger rent hike. This shifting of incentives would be a positive side effect of the law.

Second, some landlords appear to be misinterpreting the law. The key number isn’t base rent, but “housing costs,” which includes other monthly charges such as pet rent, parking, and storage, and may include utilities, internet, and cable if these are paid to the landlord in a fixed monthly amount. One person reported receiving notice of a 9.8 percent rent hike and wrote that the landlord also steeply raised parking and other fees, effective immediately. That brought the total increase to well over 10 percent, but the respondent didn’t receive an EDRA notice.

Tenants face an additional timing bind, since Seattle’s law requires them to give their landlord notice that they plan to move in order to complete their EDRA application. That means they have to commit to leaving without knowing for sure whether or when they’re going to get relocation assistance.

Third, many landlords, both inside and outside Seattle, appear to be giving shorter notice of rent increases than required by law. (The immediate fee increase reported by the person who got a 9.8 percent rent hike was also illegal, since Seattle law requires 180 days’ notice for any increase in housing costs, including fees.) A surprising number of respondents reported receiving only a single month’s notice, when even Washington state law requires 60 days.

All of this suggests a need to better inform both renters and landlords about EDRA and notice requirements.

Seattle has encountered some additional challenges implementing the new relocation assistance law.

First, the process of determining income eligibility has proved time-consuming, requiring a lot of back-and-forth between city staff and tenants. “Applications are often missing required income information, which adds time to the process of filing a complete application before SDCI can determine eligibility,” SDCI spokesman Bryan Stevens said. So far, it’s taken an average of 37 days from the time a tenant files an application until SDCI determines it’s complete, which leads some tenants to leave and find new housing before SDCI deems them eligible for assistance.

Tenants face an additional timing bind, since Seattle’s law requires them to give their landlord notice that they plan to move in order to complete their EDRA application. That means they have to commit to leaving without knowing for sure whether or when they’re going to get relocation assistance.

After the city pays relocation assistance to a tenant, it tries to recover those funds from the landlord—and that’s been a challenge, too.

“My little family is quite privileged in terms of income, and even that’s not enough to be able to stay here,” one survey respondent wrote. “I’m exhausted of moving every two years (if I’m really lucky).”

“By law, it’s necessary to communicate with the owner of the property, and it’s often very difficult to determine the real owner,” given that many property owners structure their businesses as quasi-anonymous LLCs or have outdated contact information, Stevens said. And many landlords are appealing the charges, which causes delays. As of February 21, the city had billed $126,738 to landlords, but recovered only $52,578.

These challenges suggest some straightforward ways to revise and improve the ERDA program. City staff should be able to communicate with someone other than the owner, like a manager. Tenants should be allowed to apply for the program before committing to moving out. And the income qualification should be jettisoned altogether—a great example of how the U.S. obsession with means testing creates costly bureaucracy and hurts the very people that programs like this are supposed to help.

It’s also not true that renter households above 80 percent of area median income are doing just fine. “My little family is quite privileged in terms of income, and even that’s not enough to be able to stay here,” one survey respondent wrote. “I’m exhausted of moving every two years (if I’m really lucky). I don’t know how much longer we will be able to live with reasonable access to public transit, which is essential to me as a disabled person.” The survey respondent’s income is too high to qualify for relocation assistance,  “so we have to wait and pay the new fees until we either get desperate enough to take on some (more) debt or the lease runs out,” they wrote.

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This respondent wished they could leave before the end of their lease. That’s another idea to consider. House Bill 1124 would have (among other things) given tenants the right to terminate their lease without penalty with 45 days’ notice, if they received notice of a rent increase greater than 5 percent. Since that bill died, Seattle could take action to allow tenants facing significant rent increases to leave early.

Understanding the inner workings of this program does raise questions about the ability of smaller cities, like Tukwila, to implement something similar. Setting up a program that requires significant staff time is a lot harder in cities with populations in the tens rather than the hundreds of thousands.

There is another model out there for cities to consider. In 2018, Portland, Oregon passed a relocation assistance law that can be triggered by several events, including a rent increase of 10 percent or more over a 12-month period. The assistance is a fixed amount based on unit size—for example, $3,300 for a one-bedroom apartment—and all tenants are eligible, with no income-based restrictions. But the biggest difference in the program design is that the city doesn’t mediate the transaction; the landlord is supposed to pay the tenant directly, then report the payment to the city.

A community-labor coalition in Tacoma is taking a similar approach a just-launched citizen’s initiative campaign that’s aiming to win an ambitious “Landlord Fairness Code.” Among other pro-renter policies, it would require landlords to pay relocation assistance equal to two months’ rent for rent increases over 5 percent; two and a half months’ rent for increases over 7.5 percent; and three months’ rent for increases over 10 percent. As in Portland, the landlord is supposed to pay the tenant directly and report the payment to the city.

It may be possible to give more power to tenants, too. For example, instead of relying on the landlord to write a check, what if tenants faced with large rent increases had the right to simply not pay rent in the final months of their tenancy, up to the amount of relocation assistance?

There is an obvious downside to this approach. If Seattle, with all the authority of the city government, is struggling to recover funds from landlords, how many will do the right thing by their tenants on their own?

You might think that four full years of Portland’s program would answer that question. But about a year after the law went into effect, Oregon enacted a statewide rent stabilization law that limited rent increases to seven percent plus the rate of inflation. Between 2019 and 2022, the maximum allowed rent increase ranged from 9.2 to 10.3 percent. As a result, according to the Portland Housing Bureau, only 33 tenants received payments as the result of rent hikes through the end of 2021, most of them in 2018. (For comparison, the total number of relocation payments reported for all reasons throughout the life of the program, as of March 7, was 1,478.)

But thanks to roaring inflation, the maximum rent increase for 2023 climbed to 14.6 percent, so starting sometime last year landlords once again began giving notice of rent increases that trigger the law. Landlords reported making 13 payments for raising rents more than 10 percent in the last five months of 2022 and one in January 2023. A few months of data isn’t much to go on, but, in a city with more than 130,000 renter households, it’s hard to avoid the suspicion that these represent only a fraction of the payments Portland tenants are legally entitled to.

Nevertheless, an approach like Portland’s is probably more feasible for smaller cities, and they could take steps to improve compliance. An obvious one is to work harder to ensure that tenants and landlords are aware of the law. But it may be possible to give more power to tenants, too. For example, instead of relying on the landlord to write a check, what if tenants faced with large rent increases had the right to simply not pay rent in the final months of their tenancy, up to the amount of relocation assistance?

Adequate enforcement of renter protections is a problem that goes way beyond EDRA—even in Seattle, which unlike most King County cities has a large department overseeing its landlord-tenant laws. Often the only effective recourse a tenant has when a landlord breaks the law is to sue, and not many renters have the money and time for that. One solution was floated in last year’s legislative session: House Bill 2023 aimed to create a streamlined process for tenants to address violations and obtain relief in superior court, without having to lawyer up. Seattle, at least, could explore establishing a similar “summary proceedings” process in municipal court.

But cities should not let the challenges of enforcement deter them from passing good policies. If, extrapolating from the results of TRU’s survey, about 25 percent of Seattle landlords aren’t following the 180-day notice requirement, 75 percent are. As a Seattle renter who did get six months’ notice of a $130-a-month rent increase last year, I’m grateful for the law, and I know that many thousands of my fellow renters are benefitting too.

Katie Wilson is the general secretary of the Transit Riders Union and helps to coordinate the Stay Housed Stay Healthy Coalition, an alliance of over fifty organizations fighting for stronger renter protections in Seattle and King County.

homelessness, housing, legislature

With an Eye on Preventing Homelessness, State Dems Introduce Tenant Protection Bills 
Graph showing strong correlation between rent increases and housing instability/homelessness
Homelessness is a housing crisis: As rents go up, so does housing instability.

By Andrew Engelson

Responding to Washington’s ongoing homelessness and housing affordability crisis—more than 25,000 people across the state live without permanent housing—several Democratic state legislators have introduced bills that would protect tenants and help prevent them from becoming homeless.

Last week, Reps Nicole Macri (D-43, Seattle), Alex Ramel, (D-40. Bellingham), and Strom Peterson (D-21, Edmonds) each introduced rent stabilization bills intended to give tenants advance notice of rent increases, set limits on how much landlords can raise rent, cap move-in fees, and give the state attorney general authority to pursue violations under the Consumer Protection Act. 

Separately. Gov. Jay Inslee proposed a $4 billion referendum that would raise the state’s constitutionally mandated debt limit to fund a host of new capital housing projects over the next six years. 

Lack of housing and high rents are the primary causes of homelessness, and the state Department of Commerce estimates Washington will need more than 1 million new homes by 2044, with more than half of those affordable to people earning 50 percent or less of the median income in their area. Though the rise in rents in Seattle actually tapered off slightly in the past year, rents in other cities across the state saw significant increases, including Bellingham (5.5 percent), Kent (8.9 percent), Renton (10.1 percent), SeaTac (9.4 percent) and Spokane (5.1 percent).

Macri’s bill would limit annual rent increases to 3 percent or the rate of inflation, capped at 7 percent per year, limit total move-in fees to the equivalent of one month’s rent, and give the state attorney general new power undert to investigate and prosecute landlords that flout the new rules

Shannon Corrick, a Safeway employee who lives in Cheney, a college town south of Spokane, spoke at a press briefing for Macri and Ramel’s bills this week, noting that in 2021, her landlord raised the rent on her $995-a-month, 3-bedroom house by $300. 

“He wasn’t very nice about it,” Carrick told PubliCola. “He was like: Well, that’s what the market will bear.” Since more than half of her minimum-wage income went to paying rent, Carrick had to move to an apartment that was much smaller. “I could have swallowed maybe 5 percent or 8 percent, because I could always pick up more hours or work some overtime or volunteer to work the holidays,” but not an increase of more than 30 percent, she said.

Macri’s bill would limit annual rent increases to 3 percent or the rate of inflation, capped at 7 percent per year. The bill would exempt buildings newer than ten years old from the caps. Macri’s legislation would also limit total move-in fees to the equivalent of one month’s rent, and give the state attorney general new power under the state Consumer Protection Act to investigate and prosecute predatory landlords that flout the new rules. 

“We have to respond to people who are homeless, and we have to do all that we can to keep people who are precariously housed in their homes,” Macri said.

Ramel’s bill would also limit annual rent increases to 3 percent or inflation, capped at 7 percent, but would allow landlords to “bank” rent increases—so, for instance, an apartment owner could choose to not raise the rent by 3 percent for five years, and then raise it 15 percent in the fifth year of a renter’s tenancy.

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Macri says allowing periodic larger increases would “invite more uncertainty for the tenants, but a lot less uncertainty than they have right now.” She notes that her bill also allows landlords to raise rent beyond the limits, but only if they can prove hardship or the need for large capital or repair costs. 

“Legislators like the concept of consumer protection, generally,” Macri said. “They like the framing of this as prohibiting predatory behavior.”

Peterson’s more modest bill would require landlords to give six months’ notice before any rent increase of more than 5 percent and allow tenants to terminate their leases, without penalty, at any time after learning their rent will be increasing by more than 5 percent. It would also cap late fees for rent paid more than five days after the date it’s due to $75.

A similar bill failed to pass out of committee last session. 

Peterson, who chairs the House housing committee, is optimistic about moving a host of housing reform and tenant protection legislation this year. “I think the tenor has changed,” Peterson said. “I think our caucus has changed. We have a bunch of new members that are the most diverse class that’s ever come in, and they’re extremely motivated when it comes to housing.” 

As part of this sea change, the House Democratic Caucus recently removed Rep. Gerry Pollet (D-46, Seattle) from a leadership position he had used to block pro-housing legislation, as PubliCola reported in December.

Macri noted that city and county jurisdictions aren’t affected by her bill or Ramel’s. “We can set statewide policy on rent stabilization,” she said, “But what neither of these bills do is expand the authority for local [governments].”

Other tenant protection legislation includes a bill from Rep. My-Linh Thai (D-41, Bellevue) that would require landlords to provide evidence of damage or disrepair in order to justify not returning deposits. Another bill that Peterson is co-sponsoring would give groups of tenants or nonprofits the opportunity to purchase manufactured home communities if they’re put up for sale. Peterson he crafted the legislation inspired by three manufactured home parks owned and operated by the Housing Authority of Snohomish County.

Katie Wilson, general secretary of the Transit Riders Union (and an occasional writer for PubliCola), says these tenant protection bills complement policies her organization and the Stay Healthy Stay Housed Coalition have been pushing in Seattle and across King County for several years, including limits on move-in fees and advance notice for rent increases.

“Macri’s bill is particularly exciting,” Wilson said, “because it deals with very large rent increases.” She noted that because state law prevents cities and counties from limiting rent increases, to have a state-level law “would be amazing.”

Macri noted that city and county jurisdictions aren’t affected by her bill or Ramel’s. “We can set statewide policy on rent stabilization,” she said, “But what neither of these bills do is expand the authority for local [governments].” Seattle City Councilmember Kshama Sawant recently floated the idea of a local $10 cap on late fees. 

The Washington Multi-Family Housing Association, an organization representing large apartment landlords, declined to comment to PubliCola and the Rental Housing Association of Washington, which generally represents smaller, independent landlords, did not respond to requests for comment.

Affordability, housing, Renters

Big Rent Increases Are Coming For Some Affordable Housing Residents
Bellwether Housing's Anchor Flats building in South Lake Union
Bellwether Housing, whose properties include the Anchor Flats apartment building in South Lake Union, is limiting rent increases this year. Image via Bellwether Housing

By Katie Wilson

It’s no secret that rents are rising. Landlords are making up for lost time after pandemic-era rent freezes, and passing inflation-driven cost increases on to tenants. After a brief exodus from urban areas, many renters who left have now returned. Climbing interest rates are forcing potential homebuyers to wait, crowding the rental market.

With all these pressures driving up market-rate rents, it must feel great to live in an affordable, rent-restricted apartment right now. Right?

Maybe not. A quiet wave of large rent hikes is coming. For some, it’s already here. Earlier this month, seniors at a building operated by Mercy Housing in Bellingham hit the streets to protest a 9 percent rent increase that left some residents owing more than 60 percent of their monthly income to their nonprofit landlord—twice as much as the US Department of Housing and Urban Development (HUD)’s definition of “affordable” housing.

Every April, HUD releases income and rent limits for certain types of affordable housing, based on area median income. Once upon a time, these limits might rise in King County by 1 or 2 percent a year, but starting in 2017, the annual increase jumped as high as 7 percent. The pandemic briefly slowed this ascent, but the increase announced this April is truly startling: In HUD’s calculation, King County’s median family income rose by 16.3 percent from 2021 to 2022. That means rents at properties governed by HUD’s formulas may also rise by 16.3 percent this year—or even more, if a unit wasn’t already priced at its upper limit.

Of course, the fact that King County’s median household is now pulling in $134,600 instead of $115,700 doesn’t mean that lower-income households suddenly have more money to spend on rent. Seniors and people with disabilities living on fixed incomes, working families earning near the minimum wage—they’re not getting raises like that. Therein lies the problem.

Although many types of affordable housing are protected from large rent increases, many buildings financed with federal low income housing tax credits (LIHTC) and tax-exempt bonds are not. The same is true for most units whose rents are restricted through state and local multifamily tax exemptions (MFTE) and programs like incentive zoning and Seattle’s Mandatory Housing Affordability program.

When the HUD limits began rising sharply several years ago, the city of Seattle changed the rules for new MFTE units so that maximum rents wouldn’t go up more than 4.5 percent a year. That change has kept rent hikes within reason for more than 200 units so far, but tenants living in older MFTE units—about 5,600—are subject to the escalating HUD limits.

That’s how Fatima ended up with a rent increase of over $600 a month. (We’ve changed the names of renters to protect their privacy).

More than a year ago, Fatima moved into an MFTE unit in North Seattle thanks to a rapid rehousing program run by a domestic violence organization. (Rapid rehousing is a form of temporary rent subsidy that helps low-income renters pay for housing). The rent was $1,500 for a 2-bedroom—significantly less than the going rent for the area, possibly because there weren’t many takers during the pandemic slump. 

Fatima’s housing advocate said the building’s owners assured her the rent wouldn’t go up by much—$100, or maybe $300. When they got the final lease papers, they were shocked: The new rent was more than $2,100 a month, an increase of more than 40 percent.

Fatima said her landlord assured her that the rent wouldn’t go up drastically. After the rapid rehousing support ended, she was selected for an emergency housing voucher, a federal COVID relief program similar to Section 8 (now known as Housing Choice) that pays for a portion of a tenant’s rent.

Fatima’s housing advocate said the building’s owners assured her the rent wouldn’t go up by much—$100, or maybe $300. When they got the final lease papers, they were shocked: The new rent was more than $2,100 a month, an increase of more than 40 percent.

“We said, hold on, you told us it wouldn’t be that much. They said, you know, it’s based on the market,” said the housing advocate. “That put it over the [rent] limit for her voucher.” 

This week, Fatima’s landlord agreed to lower her rent to fit her voucher limit, allowing her to stay in her home. But not every renter is able to negotiate that kind of agreement.

Seniors on fixed incomes are an especially vulnerable group. King County’s area median income has been rising faster than social security payments for some time now. When the rent rises beyond seniors’ means, “we simply have nowhere else to go,” said Sarah, who lives in a senior housing complex in Seattle.

Sarah’s building was financed through the federal LIHTC program, and up until four years ago, it was run by a nonprofit. “Rent increases were minimal, and management was responsive to tenants’ needs,” she said. Then a national for-profit company bought the building. By that time, many tenants were also voucher holders, seeking out lower-cost units as market-rate rents rose beyond what their vouchers would cover. The corporation quickly showed itself to be all business.

“A tenant association begun under previous ownership was not allowed to use common rooms for meetings,” said Sarah, and a manager threatened to evict a tenant who started a Facebook group for residents. The corporation also tried to require electronic rent payments, until residents pointed out that this is illegal in Seattle.

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Now some tenants are facing rent increases of $175 a month, surpassing some residents’ voucher limits. “Because some voucher holders have disabilities involving psychological difficulties, this situation caused much anguish,” said Sarah. “All tenants, including those with vouchers, know that buildings like ours are their only answer—they are shut out of market-rate housing and waiting lists for low-income apartments are years long.”

Not every resident of affordable housing is in trouble. Programs that receive federal operating funds typically limit the amount of rent tenants must pay to 30 percent of the person’s income; this includes many buildings owned and managed by the King County Housing Authority and the Seattle Housing Authority. Housing Choice voucher holders are similarly protected—as long as they live in units with rent low enough that a voucher will pay for them. Many nonprofit housing providers also receive operating funds from other sources that come with limits on rent hikes.

“The city of Seattle is a funder in most of our buildings,” said Michelle House, director of compliance at Community Roots Housing. “This year, Seattle restricted [rent increases] to 4.2 percent. We did follow that guideline for most of our apartments.”

Susan Boyd, CEO of Bellwether Housing, says that rent increases at their properties depend “on the building and which entities regulate the building, if any.” But Bellwether made a decision this year to limit rent hikes to an average of 3 percent.

“Notwithstanding ever-increasing rents in the market and significant inflation in operation costs, this will be the first year since 2019 that we have raised rents at all. We are very careful to ensure that our residents do not get overwhelmed by steep rent increases, regardless of what is happening with the HUD rent levels,” she said.

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