Tag: renters’ rights

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.

housing, legislature, Renters

Landlords Target Renters With Predatory Junk Fees
Photo by Tony Webster on Flickr; CC by 2.0 license

By Katie Wilson

Editor’s note: This story first appeared in The Progressive, and is reprinted here with permission.

Last summer, Seattle renter Jake Thoennes received a written notice from his landlord demanding that he remove the potted plants from his balcony within ten days. That might sound absurd, especially given that Thoennes’ lease permitted planting flowers on balconies. But here’s the kicker: The notice came with a $75 “Notice Fee.” This hefty fee was charged “for preparing and giving the notice” that the plants had to go.

When President Joe Biden announced an offensive against “junk fees” in his State of the Union address, many renters around the United States must have been nodding their heads knowingly. The nation’s 44 million renter households, especially tenants of corporate landlords, are facing an explosion of bogus fees.

Like the hidden charges that appear when you buy a ticket to a sporting event, these fees are not correlated with any tangible service being provided, or with any special effort or cost incurred by businesses. They are predatory fees that landlords charge simply because they can, and today’s rental market appears to be amplifying rather than correcting them.

Rental “junk fees” are arguably more noxious than those attached to consumer purchases. They can cause families to lose their housing and become homeless. They can tank people’s credit scores and imperil their ability to successfully apply for rental housing in the future.

Notice delivery fees like the one imposed by Thoennes’ landlord are becoming more common, according to Devin Glaser, an attorney who represents tenants in legal disputes with their landlords. “More often than not the landlords just surprise people with a fee after delivering a notice,” he said.

But sometimes a new policy is officially announced. “Hello Residents,” the property manager at Sorento Flats Apartments in Seattle began in an email to tenants in December 2022. “Sorento will now be implementing notice fees. This means that any notices given in regards to lease violations and or past due payments will accrue a notice fee. The notice fee is: $50.00 and will be issued per violation.”

In addition to imposing notice delivery fees, landlords are increasingly adding on nonrefundable charges when a tenant signs a lease. Renter Corina Pfeil paid a $300 “administrative fee” and a $162.75 “application fee” when she signed her second-year lease renewal last fall. 

This new fee, the email emphasized, is not the same as a late fee. Rather, “the notice fee will be in addition to the late fee and you will be responsible to pay both fees along with the past due balance. Thank you for your tenancy.”

In addition to imposing notice delivery fees, landlords are increasingly adding on nonrefundable charges when a tenant signs a lease. Renter Corina Pfeil paid a $300 “administrative fee” and a $162.75 “application fee” when she signed her second-year lease renewal last fall.

“They told me the administrative fee was for employee time and whatever it took to process the lease,” said Pfeil, who serves as a city council member in Kenmore. How about the $162.75? “They were never really clear about that.”

Washington Democratic State Representative Nicole Macri, a longtime advocate for stronger renter protections, explains that fees like these can be used in a discriminatory manner: “People looking for rental housing have reported to me that a landlord said something like, ‘Normally I don’t rent to people like you, but if you pay this fee, we can work it out,'” Macri said.

That means the most vulnerable renters—people with imperfect credit scores or criminal histories, as well as low-income and Black and brown families—may be the most likely to get stuck with additional fees.

Lease-signing fees like these are not a universal practice, as my own experience as a Seattle renter highlights. I’ve lived in one building since 2018 and signed five leases in that time. The property is managed by a company that oversees over 6,000 units in the Seattle area and is known neither as an especially good nor an especially bad actor; it gets a measly two stars on Yelp. But never once have I been asked to pay any kind of administrative fee for the privilege of signing a lease. Why should I? I pay a lot of rent to my landlord every single month.

“The property management did not tell me, ‘Oh, by the way, you will have to go month-to-month, you can’t sign a new lease,’” Kirkland renter Lynda Hardwick said. And that meant paying an extra monthly fee of almost $600—on top of rent and the repayment plan.

So does Pfeil. On top of the lease renewal fees, her landlord raised her rent from $1,793 a month to $2,043 a month—an increase of 14 percent. She did have the option not to sign a new fixed-term lease. Instead, she could have let her tenancy convert automatically to a month-to-month lease. But, she said, “if I went month-to-month it would be $817 a month more.” Her rent would have jumped to $2,860, or a total increase of nearly 60 percent.

Month-to-month fees are not a new phenomenon, but Glaser and other attorneys I spoke with said they appear to be increasing in prevalence and magnitude. In part, this may be a response to regulation. In 2021, the Washington State legislature passed a Just Cause Eviction law, requiring landlords to cite a good reason when evicting a tenant. This law, however, exempts many fixed-term leases, allowing landlords to force a tenant out at the end of a lease for no stated reason. The exemption creates an extra incentive for landlords to keep tenants on fixed-term leases, and charging prohibitive month-to-month fees is one way to do that.

But some landlords seem to be pushing tenants into month-to-month leases with outrageous fees. A landlord will simply let a tenant’s lease expire without offering a new one, and months later the tenant will be informed that thousands of dollars in month-to-month fees have been accumulating on the ledger. This is also illegal, since Washington state law requires sixty days’ written notice of any rent increase, and a number of local jurisdictions have established even higher notice standards.

Lynda Hardwick, a renter in Kirkland, found herself trapped in a different way. After losing a major source of income during the COVID-19 pandemic and falling behind on rent, she worked out a repayment plan with her landlord. When her lease expired last fall, with $1,800 left to pay off, she got a nasty surprise: She couldn’t renew her lease.

“The property management did not tell me [upfront]… ‘Oh, by the way, you will have to go month-to-month, you can’t sign a new lease,’” she said. And that meant paying an extra monthly fee of almost $600—on top of rent and the repayment plan. Continue reading “Landlords Target Renters With Predatory Junk Fees” →

Affordability, City Council, housing, Renters, South Seattle Emerald

How Effective Is Seattle’s Tenant Relocation Assistance Law?

This post originally appeared at the South Seattle Emerald. 

Later this year, City Councilmember Kshama Sawant plans to introduce legislation that would require landlords who raise their rent more than 10 percent to pay lower-income tenants the equivalent of three months’ rent should they move out because of the resulting increase. The proposal, based on a similar law in Portland, is aimed at addressing “economic eviction,” when tenants are forced to move by rising rents.

The city already has a tenant relocation law on the books, although you may not have heard about it, because it only applies to certain renters in a limited number of situations. In anticipation of Sawant’s proposal, which her office says she plans to introduce later this spring, here’s a primer on the current law and what to expect from the proposal to expand it.

What is tenant relocation assistance and who currently qualifies?

Back in 1990, the Seattle City Council adopted a tenant relocation assistance ordinance (TRAO) to help low-income renters who have to move because of housing demolition, major renovations, or land use changes (for example, if an apartment building is converted into condos or a hotel). Tenants must make less than 50 percent of area median income (currently $33,600 for one person, or $48,000 for a family of four) to qualify for assistance; those who do receive a payment of $3,658 to help them move to a new location. Half that amount is paid by the city, and half is paid directly by landlords.

Property owners who are demolishing or converting a building have to get a tenant relocation license from the city, and are required to give tenants 90 days’ notice before demolishing a building or making other major changes.

The legislation has been amended periodically over the years—most recently in 2015, when the city council added a provision barring landlords from raising rent more than 10 percent in an effort to get tenants to move out so they can avoid paying relocation assistance before demolishing or renovating their building. The 2015 amendments also prohibit landlords from evicting tenants, except for good cause, after filing for a tenant relocation license.

How often does the city pay out rental relocation assistance, and how much does it cost the city?

Since 2004, the earliest year for which payout records are available, the city has paid more than $5.5 million to 1,881 tenants. In 2017, according to records from the Department of Construction and Inspections, the city provided relocation assistance to 235 households, for a total of $380,000 (landlords paid the other half).

What would Sawant’s proposal do?

Council member Sawant’s proposal would require landlords to pay three months’ rent to tenants who make less than 80 percent of the area median income ($48,500 for a single person or $72,000 for a family of four) and have to move as a result of a rent increase of more than 10 percent. Unlike the existing relocation ordinance, Sawant’s proposal would make landlords pay the full amount of assistance; Sawant’s aide Ted Virdone argues that the higher obligation is more than fair, given that it would only apply in cases where “the landlord has raised the rent substantially without having even the expense of a remodel or reconstruction.”

Couldn’t landlords just get around the law by raising rent by 9.9 percent?

Yes, although Virdone says the intent of the proposal is to address landlords who raise rents by an unreasonable amount, and 10 percent seemed like a reasonable floor. “People who have lived the majority of their lives here in Seattle should have a choice to stay,” Virdone says. “If we don’t put in place ordinances like this, there will be even more people moving out of the city.” Reliable information about individual rent increases in Seattle isn’t readily available, although rents went up 7.2 percent, on average, in 2016.

What do advocates for landlords say about the proposal?

Not surprisingly, groups like the Rental Housing Association, which represents about 5,500 landlords in Seattle, oppose the legislation, calling it another burdensome rule that will cause small “mom and pop” landlords to sell their properties to larger apartment management companies. “The biggest concern we should all have is that the more burden you put on landlords, the more risk you throw on them, the more likely they are to sell, and that property’s not going to be on the affordable end any longer,” says Sean Martin, external affairs director for the RHA. “We’re already seeing an uptick in folks that are selling.”

Isn’t imposing a penalty for rent increases over 10 percent a form of rent control, which is banned under state law? 

Sawant’s office says no—“This is just about what the tenant needs; it isn’t about trying to impact landlord behavior,” Virdone says—and the RHA, unsurprisingly, says yes. “If you’re making it economically unfeasible to raise the rent by whatever percentage is appropriate, that’s a restriction on rent,” Martin says. In either case, if it passes, the bill is certain to be challenged in court. In Portland, where rent control is also illegal, two local landlords sued the city over its almost identical. Although a federal judge upheld the ordinance, the landlords have appealed, and the case is currently working its way through the federal courts.