Editorial: Lawmakers should seek deal to keep rent cap at 7%

By The Herald Editorial Board

Math story problem time:

Scenario 1: You and your spouse and two children pay monthly rent for a three-bedroom residence of $2,438 a month, which happens to be the state average. Your landlord has notified you that — in compliance with a new state law — your rent is being increased by 10 percent to $2,681.80 a month, and would likely be even higher depending on the current consumer price index, a measure of inflation.

Scenario 2: You and your spouse and kids, in the same $2,438-a-month rental, are notified that — in compliance with a new state law — your rent is being increased by 7 percent, $170.66 a month, to $2,608.66.

Question: What are you cutting from your budget to make up the $73.14-a-month difference — $877.68 a year — if your rent increases 10 percent, rather than 7 percent?

That’s one question state lawmakers should be asking themselves on behalf of their constituents as they deliberate in conference between versions of rent stabilization legislation that have now passed House and Senate, but with significant differences in the extent of a cap to be placed on rent increases and for which rental residences.

Last week, the state Senate on a largely party-line vote passed House Bill 1217, which sought to place a percentage limit on how much rent could be increased on a yearly basis, among other provisions. But an amendment made in the Senate increased the cap to 10 percent plus the consumer price index rate, up from the 7 percent cap approved in the House.

The amendment, proposed by Sen. Sharon Shewmake, D-Bellingham, passed by one vote, 25-24, following debate during which Shewmake called both caps “risky,” but the 10 percent limit as less so.

That and other changes in the Senate have disappointed House Democratic supporters of the effort, including the bill’s author, Sen. Emily Alvarado, D-West Seattle, who started the session in the House, but was later appointed to fill a vacancy in the Senate. Alvarado, in comments after the vote, said the changes in the bill were a disappointment, offering fewer protections for renters, but still saw the legislation as a landmark change to state law.

Among those resisting the higher cap is Rep. Strom Peterson, D-Edmonds, who serves as chair of the chamber’s housing committee. Peterson, in an interview Monday morning, said the 7 percent limit was a reasonable compromise to begin with, following a proposal last year that started with a 5 percent cap on rent increases.

“I think the 7 percent is very reasonable,” Peterson said. “We think that that’s a very generous cap. And also, as a reminder, if a tenant moves out, the landlord can reset the rent to whatever they want.”

There’s public support for a lower rate, as well.

A recent poll, commissioned by Futurewise and the Washington Low Income Housing Alliance and surveying 1,100 registered voters in the state, found that 81 percent supported rent stabilization legislation with 61 percent strongly backing a cap of 6 percent or less. The same survey found that 29 percent of current renters and 57 percent of past renters said they had moved from a residence because rent became unaffordable.

“Voters across the state know that rent increases are happening too often, are too high and are unnecessary, and that they’re destabilizing our communities,” said Michelle Thomas, with the housing alliance during a recent online news conference. “Most people in our state are either personally impacted by a rent increase, or have a friend or loved one who is personally impacted.”

Peterson is likely to be one of those working on a deal. Differences are now expected to be hammered out in a conference committee among six lawmakers — two Democrats and one Republican — from each chamber, appointed by respective leaders. Peterson, as chair of the committee where the bill originated and the bill’s current sponsor, Rep. Nicole Macri, D-Seattle, are likely to represent House Democrats on the conference panel.

Along with the cap percentage, Peterson also has concerns about another Senate amendment proposed by Sen. Marko Liias, D-Everett, that seeks to exempt single-family homes that aren’t owned by corporations, real estate development trusts and the like. The problem with the amendment, Peterson said, is that the state has no landlord registry, making the exemption difficult to enforce.

With families the most likely to rent single-family homes, he said, the protection of a rent cap remains important to a family’s ability to remain in the same residence and the same neighborhood, with kids at the same schools.

“Protecting those single family homes is just as important as protecting people that are in apartments,” he said.

Whether at 7 percent or 10 percent, passage of a rent stabilization law, is likely to turn on the ability of Democrats in both chambers to agree. Peterson said he was doubtful that House Democrats would support a 10 percent cap, if a deal comes out of committee.

Republicans have opposed the legislation at any cap level, voicing concerns that a cap would discourage new construction, driving down supply amid growing demand.

Peterson and Thomas disagree.

“There’s no empirical evidence anywhere in the country that any place that has had rent stabilization or even rent control has impacted supply,” Thomas said. “But that is still a talking point for the opposition.”

The stabilization bill — which itself has numerous exemptions — isn’t being adopted in a vacuum, noted Peterson. It joins two previous years of affordable housing legislation, much of which has been aimed at streamlining permitting, easing development regulations and opening up more opportunities for development in order to increase the stock of housing.

Among legislation this year that has either passed or is close to passage are bills promoting transit-oriented developments, lot splitting to increase density in rural areas, converting buildings to residential uses, relaxing residential parking regulations, simplifying condominium construction standards and more.

“This was all legislation driven by developers and realtors to spur construction, and I believe in that, too,” he said. “We’ve been really busy on supply, and this is the one piece of legislation that really protects tenants.”

After three years of the “Year of Housing,” a bill that looks out for tenants — at the lowest reasonable cap — is overdue.