Seattle City Council passes bill to cap late fees for renter to $10

Seattle now has a cap for late fees for rental payments to no more than $10 a month after fierce debate in the city council.

The council passed the bill with a 7-2 vote, with Councilmembers Alex Pedersen and Sara Nelson voting against it.

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“$50 can be a week of groceries. It can be medicine or gas for many renters. We can not let landlords exploit renters any further in this city,” Marshall Bender, a Seattle renter, said in the public comment on the proposal. “Our city is already expensive, and housing is already tight. So let’s not make the burden on renters any worse.”

The $10 cap mirrors existing laws in Burien and Auburn. A statewide $75 late fee cap proposed this year died in the legislature last month.

“The exact same policy is working well, $10 a month, in two cities, Burien and Auburn,” Sawant said at the meeting.

A $100 increase in rent is associated with a 9 percent increase in the estimated homelessness rate, according to a 2020 study by the Government Accountability Office.

“Today, renters across the city can breathe a sigh of relief,” said Councilmember Tammy Morales, prime sponsor of the amendment. “Capping late fees at $10 is the bare minimum that the City can do for renters who are facing financial hardship. We know that wages are not rising at the same rate as the cost of housing. Being late on rent shouldn’t put people further in debt, and it should not jeopardize people’s ability to remain housed.”

In March, Councilmember Kashama Sawant originally proposed a $10 cap on late fees with legislation before an amendment passed out of committee that would have capped the late fees to $50 or 1.5% of total rent instead of $10.

Councilmember Nelson, who sponsored the change, said that this was done to create a compromise between renters and landlords, and late fees are still an important tool to encourage paying rent on time.

“We know renters consistently prioritize paying their rent over all other expenses,” Mosqueda argued against this change. “Losing housing can mean losing everything—and if a household is already having trouble paying their rent on time, adding large late fees on top only exacerbates their ability to pay, increases housing instability, and could increase the chance for more folks to fall deeper into debt or into homelessness.”

Councilmember Morales, Mosqueda, and Sawant sponsored an amendment to bring the cap back to $10, which passed.

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“For a moment, I thought about caving to the pressure, but I’m not going to because I care about this legislation and I care how it was developed and what motivated me to try and improve it,” Nelson said after voting against the late fee cap.

Evidence shows that late fees do not incentivize on-time payment. Rather, data shows that renters consistently prioritize paying rent before all other bills because the prospect of losing housing through eviction has dire and compounding consequences. Late fees can also accumulate as debt and harm people’s credit scores, making it hard or impossible to acquire new rental units in the future.

The rent late fee cap now heads to the Mayor’s desk. Mayor Harrell has not said if he will sign the bill.