The Next City Council Weighs in on Rent Control in Seattle

Not the first time Sawant has been alone at the table. Screengrab

This is part four of a five-part series on rent control in Washington state. In part one, I lay out the need for rent control. In part two, I lay out the case against it. In part three, I showed how and why California and Oregon passed rent control laws despite the case against it. In part four, I ask incumbent and incoming council members what they think about the issue, and wrestle with Council Member Sawant's rent control bill. In the final installment, I take the temperature of key state lawmakers and discuss a potential ballot threat.

In late September, Council Member Kshama Sawant filled City Hall with supporters and introduced a draft of her long-awaited rent control legislation . If implemented as is, it’d be the strongest rent stabilization law in the country, free of the loopholes that arguably contributed to economic evictions and housing supply losses in California.

One big problem: rent control is illegal in Washington.

In 1981, a conservative majority in the legislature banned rent controls statewide thanks to intense lobbying efforts by realtors who intended to squash a burgeoning rent control movement.

Sawant’s legislation, however, accounts for that snag. It’s a “trigger law,” which means she intends it to go into effect once the legislature lifts the ban.

Sawant believes passing the ordinance while working with “progressive state legislators like Rep. [Nicole] Macri to build pressure in Olympia at the same time” will push state lawmakers to act, she said in an e-mail.

Over the phone, Rep. Macri said her colleagues from the Seattle delegation don’t seem particularly compelled by that theory, though she says that might change if Sawant’s legislation builds more momentum.

We’ll take the temperature of some key state lawmakers tomorrow. But before we start talking about pressuring Olympia, Sawant and the rent control movement will need to convince incoming and incumbent council members to work on the bill.

What the New Council Is Saying

For Council Member-elect Tammy Morales, the issue is personal. In an e-mail, she said her friend Chase recently had his rent doubled. Morales “could see advocating for…state-level action to pass rent control,” but said Seattle will need to act if the state won't. “I haven’t yet spoken with Kshama about her proposal, but I am interested in continuing the discussion next year so we can find a solution,” she added.

Council Member Lisa Herbold, who has long advocated for the state to lift the ban and who still “feels strongly” that cities should have “local control to regulate rent,” pointed out that the City of Seattle’s official position on the matter for the last three years has included a call for the state to “repeal or modify” the ban “without causing a negative impact on the quality or quantity of housing supply.”

Council Member-elect Andrew Lewis also likes the idea of the state lifting the current ban on rent control.

He’s more supportive of “anti-gouging legislation,” he said over the phone, and believes there’s “broad consensus among this incoming city council that some kind of prohibition against rent gouging” is good.

“We’ve had a lot of rent gouging, where a new property owner will buy a property and then they’ll increase the rent by 100 percent. At that point, there is no tenable connection between rising costs for the landlord or rising property values and the rent increase. And that is just manifestly unfair,” he said.

Lewis also wants to work on the supply side of things. He advocates for a “public option for housing.” A “dramatic increase” in the amount of public or nonprofit housing would “have the same effect that public option health insurance would have on private insurance—private housing would have to come down a little if it’s competing with a nonprofit,” he said.

Council Member-elect Dan Strauss compared rent regulation in Seattle to “chasing windmills” due to the statewide ban, and added that trying to pressure Olympia on the issue isn’t one of his priorities. “From the time that I worked [in state government] until today, I have never seen a political pathway for rent control at the state level. We have ways of creating income-restricted rents with policies on the books already, and that’s the way forward,” he said.

Council Members Debora Juarez, Teresa Mosqueda, and Lorena González did not respond to requests for comment. However, when the Seattle Times asked Juarez earlier this year if rent control could benefit the city, she answered “maybe.” In 2017, Mosqueda said the city "should adopt rent control," according to the Times. And back in 2015, González told the Globalist that, if Seattle was allowed, the city should “take strong and immediate steps to mitigate rising rents…this includes limiting the percentage by which the rent may be raised in a period of 12 months.” Council Member Alex Pedersen told the Times the city could not benefit from rent control.

So! That’s the state of play at the city. Six council members might want to talk about some kind of rent regulation, two are ambivalent or want to do something else, and one is Alex Pedersen.

But, Um, Is Sawant's Bill Good?

Well, it does close the loopholes landlords used in California to get around regulations, and it does try to tip the balance of power from landlords to tenants.

As I wrote when she first introduced the bill, Sawant’s legislation caps rent hikes at inflation as determined by the Urban Wage Earners (CPI-W), but allows landlords to raise rents higher than that in case of “natural disaster” or "large and unusual changes to the taxes or other legal obligations applied to renters and property owners.” If landlords get caught raising rents beyond that, they’ll owe tenants triple the rent overcharged plus 12 percent annual interest.

With a few exceptions, all non-public rental housing would be subject to rent control, so there’d be no exemptions for new construction, which will piss off builders and developers. Once an apartment is rent stabilized, it will stay that way even if a renter moves out. And if developers want to raze their building and turn the whole thing into condos, they’d have to include as many rent stabilized units in the new construction as they had before.

To govern all this, the bill would establish in every council district elected rent control boards composed of five renters and one landlord, who would keep policies updated and handle emergency exemptions.

SCC Insight makes a strong case for why Sawant’s bill is “terrible.” Among other things, he thinks the cap is way too low, the condo conversion loophole closure is “unworkable,” the control boards will be too “expensive to run,” the enforcement will be too difficult to manage, and the amount of potential paperwork and bureaucratic hoop-jumping will be too cumbersome for small landlords, who will likely jump out of the market and make the housing shortage worse.

In another post for Capitol Hill Seattle Blog, he argues that “rent control is suicide in places where there is already a shortage of housing,” such as right here in Seattle, and adds that any fixes to the problems rent control poses would create a “regulatory cluster” that would “create investment uncertainty” and scare off developers and small landlords.

In an e-mail, Sawant said “SCC Insight’s criticisms are garden-variety pro-corporate-developer talking points against rent control, and not based on the data from, or the experience of, renters.”

“The substantive points from SCC Insight—to the extent that there are any—have generally been answered already in our rent control FAQ," she added. “Our movement understands that while universal rent control is absolutely necessary to address the deep housing unaffordability, we will need to couple it with a massive expansion of social housing (quality, public-owned, affordable housing) funded by taxing Amazon and other large corporations.”

At the risk of repeating the garden-variety anti-corporate-developer talking points I reviewed in the second installment of this series, it’s also worth noting that SCC Insight’s critique of rent control undervalues the need to end rent gouging.

As he mentions in the post for CHS, making large investments in public housing is the answer to the affordability crisis, but progressives and advocates argue it’s only one part of the answer, and it’s one that unfortunately takes a long time to come online.

Seattle has been waiting for federal money to solve this problem since the late 1970s, and the city is still waiting. Meanwhile, tens of thousands of Seattleites have been paying usurious rents, and many thousands of residents have been displaced or kicked to the curb. More to the point: pouring a bunch of money into public housing doesn’t preclude the passage of a rent stabilization measure, which, if done right, could help stop the bleeding in the short-term if not the long-term.

As for some of the other details about rent control legislation more broadly: while the fear of landlords treating potentially high caps as targets is real, raising rent so high each year is also risky for the landlord. Landlords and developers generally only assume 3 percent annual rent increases in their 15-20 year models anyway, and revised legislation could add stronger exemptions for big repairs.

Though SCC Insight understandably expresses concern about a “regulatory cluster” scaring off developers, California Business Roundtable president Rod Lapsley, former VP for a real estate company, didn’t seem too worried about that earlier this year. When California passed its statewide rent stabilization bill, he told the AP that the legislation provided “certainty to both renters and developers during our ongoing housing crisis.”

Finally, the bill, despite its “terrible drafting,” is an opening volley. Council members can address the problems SCC Insight outlines during the legislative process, if that process ever gets going.

The truth is, of course, that the state needs to act no matter what happens. The question is, will they? How far will they go? And what will it take to kick them into gear? I’ll try to answer all those questions in the series conclusion tomorrow.