Annual Effort in Olympia to Target Small Housing Providers

Posted By: Tim Hatley 2024 Legislative Session, Government, Policy News,

Once again small housing providers are in the crosshairs by the progressive Democrats in Olympia who do not seem to understand how they are killing the single-family and small multi-family housing rental market by trying to pass rent control bills this legislative session. 

House Bill (HB) 2114 and Senate Bill (SB) 5961 are companion bills scheduled for hearings on January 11 and 12 that would impose statewide rent control in Washington State by limiting rent increases to no more than 5%, requires 180-notice for any rent increase over 3%, limits total move in fees to one month’s rent, and even caps late fees to $10. These bills would also exempt new construction less than 10-years old from any of these provisions but not small housing providers who provide the most affordable family rental units.

Targeting Mom-and-Pops
HB 2114 and SB 5961 will harm small mom-and-pop affordable housing providers the most by eliminating their ability to properly fund and maintain their rental housing units. By placing a strict 5% rent increase on rent increases, with no recognition of inflationary factors, and no means to afford expensive capital investments in their rental units such as a new roof or furnace, small housing providers will be forced to sell their rental properties.

Bills will Lead to the Continued Elimination of Single-Family Rental Housing
Recent published studies, including one most recently authored by the Seattle City Auditor, have detailed how small single-family providers have been chased out of the market due to the increasing burdensome and complicated “tenant protection” measures that have been passed by local authorities. 

Several thousand single-family and small multi-family units are no longer on the market since 2016 when local governments made a concerted effort to impose new restrictive rental housing regulations. These once affordable rental housing units have been sold, and many of the properties purchased by corporate investors who demolish the affordable units and replace them with new construction with rents triple of the older more affordable units. Now, with HB 2114 and SB 5961, these units will be exempt from rent control while the traditional mom-and-pop units must suffer under this new regulation.

Mom-and-Pop are Fighting Back
Two hearings were scheduled for these bills during the very first week of the legislative session. Over 150 RHAWA members attended the hearings and express their opposition to these rental housing killing bills. Wearing their “Rent Control Kills Housing” t-shirts and passing out buttons. RHAWA members made a strong impression to legislators that the proposed rent control proposals were a bad idea.

Studies Continue to Show Rent Control’s Negative Impact on the Rental Housing Market.
A December 2023 report authored by Eco NW details how rent control impacts housing and affordability. In their detailed analysis:

“Evidence across decades of academic literature show that will-intentioned rent control policies often have 
unintended harmful effects on the overall housing market and the populations they intend to support. Even if rent 
control appears to help renters in rent-controlled units in the short run, it could decrease affordability and fuel gentrification.” The report reads and goes on to conclude “price control is inefficient because it decreases the quality and quantity of goods. Rent control reduces prices and improves housing stability for incumbent 
renters, but limits housing options for new renters.”

Simply put, the report says rent control creates a schism between the haves and have nots limits housing choices for families. 

If you are a current renter, you benefit by having a price lock on the place you have. But, if you plan to move, looking for a single-family house for your growing family, or you are a new renter entering the market, you will have limited choices for the type of housing you seek, and if you find it you will pay more than the someone who has lived in an identical place for the last couple of years.

There is a near consensus amongst academics and economists on the negative impacts of rent control.  When will left leaning pro-housing politicians understand they are hurting the very same folks they say they want to help?