Economist explains how Seattle’s eviction moratorium has actually raised rent prices
The COVID-19 pandemic has had wide-ranging effects on Washington’s housing and rental market, and as Windermere Chief Economist Matthew Gardner notes, things haven’t gotten much easier in recent months.
Gardner points to the fact that available housing inventory in early 2022 has been at its lowest in the Puget Sound region in over two decades, while the price of a new home has continued to balloon accordingly. That’s produced a market of so-called “forced renters,” who are unable to even consider buying a house in the current climate.
“Home prices are so extreme and so expensive that this has created a lot of forced renters — those who would like to buy that simply can’t afford it,” he told KIRO Newsradio’s Dave Ross. “And because of that, we’ve seen rents continue to spiral. That makes it even more unaffordable for them to start saving up in order to buy a home.”
In terms of addressing the ongoing struggles of renters, Seattle City Councilmember Kshama Sawant has held up rent control as a possible solution. But that’s also something Gardner thinks could cause more harm than good.
“We’ve tried rent control in Washington state; I think we did it back in the 60s and might have done it again briefly in the 80s,” he recalled. “Rent control doesn’t work, and we know it. There have been a million academic papers written about it — all it really leads to is a lack of development of new product, and deferred maintenance on the existing buildings.”
Over the course of the pandemic, cities like Seattle have continued to keep an eviction moratorium in place to provide additional assistance to renters. After nearly two years, though, Gardner says the longer-term downsides have been substantial.
“The reason being is a lot of people perhaps assume that if you’re a renter, you rent an apartment — well, that’s actually not the case,” he described. “There are a lot of families out there that are renters that do need to be close to where they work. But what’s happened is that a lot of the individual investors own single family homes. Well, they were hurt a lot, obviously, through the moratoria, they had debt on those homes, and those still had to be paid even though they were not getting rent in.”
“Ultimately, a lot of those home owners said, ‘yeah, the market’s great, I can sell this house for a lot of money very quickly,'” Gardner continued. “Ultimately, that will lead to less single family rentals, and therefore, rents rising again.”
Seattle’s eviction moratorium is currently scheduled to end on Feb. 14, after getting a 30-day extension from Mayor Bruce Harrell in January.
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