Is the Seattle City Council partially responsible for rent increases?

Though it’s slowed of late, Seattle rents are among the fastest-rising in the nation. But this may be partially due to the Seattle City Council itself, argues William Shadbolt, the landlord board president of the Rental Housing Association of Washington (RHAWA).

The RHAWA and Pacific Legal Foundation last week launched a lawsuit against the City of Seattle alleging that the law banning rental denial based on criminal records is unconstitutional. Under the law, landlords cannot screen applicants based on criminal convictions.

KTTH’s Todd Herman pointed out, “If you’re a landlord with a small rental unit and you’ve got a single mother and her two daughters living next door, and this guy comes in and wants to rent next door, and you get a real bad feeling. If he’s first come, and he has the money, you’ve got to let him in.”

Landlords like Shadbolt are concerned that over-regulation and taxes are exacerbating the financial risk of managing small properties.

“You have to deal with federal rules. You’ve got to deal with the residential Landlord-Tenant Act in the State of Washington,” said Shadbolt. “Then in Seattle there’s an inordinate amount of regulation.”

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Shadbolt pointed to the ban on criminal records, as well as the First-in-Time law, which forces landlords to take the first renter that applies and meets the criteria. It was recently struck down by a Superior Court judge, but the City of Seattle has filed an appeal.

For many landlords, the issue is not merely about rent being paid, it’s about protecting the property against risk.

“If somebody damages it, is there something to go after? You can’t garnish social security income, you can’t garnish a Section 8 voucher,” Shadbolt said.

“So in that case you’ve got people coming out of prison, and the Department of Corrections gives them a three-month voucher. As long as they meet your rental property standards, under the First-in-Time, you’ve got to rent to them.”

The small landlord is just giving up

The virtual jungle of regulation and potential risk is causing many small-property landlords to vote with their feet and leave the housing industry.

“The amount of time and effort that I’ve got to figure out all these all these regulations, and the risk that comes with them,” Shadbolt said. “I might as well put my money in the stock market. Literally thousands of small landlords have sold their properties in the City of Seattle because of the failures of the City of Seattle council, and that’s taken ten of thousands of units off the market.”

“And there goes an affordable place for some people to live,” Todd added.

According to Shadbolt, the single-family homes become owner-occupied, the duplexes and triplexes get scraped down and turned into town homes, and smaller apartments are bought by investors, who see it as an opportunity to raise the below-market rent.

“So the City of Seattle council is directly responsible for tenant’s rents going up.”