Sean Martin | Director of External Affairs
Cash flow should be the number one rental term that you develop a complete understanding of as a rental property investor. Cash flow is the money left over after deducting all expenses from your rental income. This means that your cash flow is what is left after mortgage payments, insurance, taxes, reserve funds, etc.
If you have a positive number once you’ve deducted all expenses, your cash flow is a net positive. If, however, the number is negative, it’s time to re-evaluate how you’re operating your rental property to get things back on track.
Thank you for writing to me about the Fair Chance Housing Legislation. This legislation will not go into effect until 150 days after the Mayor signs the bill. This will give the City time to implement a new Fair Housing Home Program to help property owners get ready to adjust their practices consistent with this new law. The Fair Housing Home program will help landlords learn how they can implement practices that will affirmatively further fair housing by reducing biases in tenant selection. An estimated 30 percent of Seattle residents over the age of 18 have an arrest or conviction and seven percent have felony records.
This ordinance prevents landlords from screening applicants based on criminal convictions; arrests that did not lead to a conviction; convictions that have been expunged, vacated or sealed; juvenile records; or status of a juvenile tenant on the sex offender registry. The bill also prohibits the use of advertising language that categorically excludes people with arrests or conviction records. The legislation does not apply to people registered as sex offenders who committed their crime as an adult.
Some of you have posed questions or concerns regarding this legislation, I have done my best to compile them here and provide answers that I hope will be helpful. Please see the attachment.
City Councilmembers are required to juggle and balance the needs of all members of the community. Today, largely because of the new access to data that historically has been less accessible, landlords can reject tenants because they’ve been arrested in the past seven years – not convicted – arrested. This was not a practice most landlords used 20 years ago.
Punishing someone who hasn’t been found guilty is a true injustice, especially for a criminal justice system that disproportionately arrests and convicts people of color. In the case of those who have been convicted, the way I see it, you’ve paid your debt to society if you’ve served your time. Blocking formerly incarcerated people from accessing stable housing is an extrajudicial punishment not consistent with the rule of law.
It is also a recipe for recidivism and less safety for our communities. Recidivism decreases significantly when people get housing. With housing, a person is seven times less likely to reenter the criminal justice system. I would expect anyone in favor of a safer Seattle to support this bill.
Further, we are in a homelessness state of emergency. If we do not do more to ensure housing providers provide housing for the 55% of unsheltered homeless people in Seattle with criminal backgrounds as a barrier to accessing housing, then we are derelict in our duty to address the homelessness state of emergency – for which we have the authority and moral obligation to act with expedience.
Given the benefits of a. greater public safety by reducing recidivism, b. addressing acute housing needs, c. as well as redress for the racial inequities of our criminal justice system, the Council voted unanimously in favor of this legislation, including two Councilmembers who are themselves landlords.
Again, I appreciate hearing from you and I do take your opinions into account.
District 1 Councilmember, Chair Civil Rights, Utilities, Economic Development, and Arts Committee
Sean Martin | Director of External Affairs
Rent control is the Holy Grail for many low-income housing and tenant advocates who see it as the only solution for escalating housing costs in Washington State, particularly around the Puget Sound region.
Currently, State law – RCW 35.21.830 – bans any local jurisdiction from implementing rent control. This has been the case since 1981 when the Rental Housing Association successfully passed legislation to ban rent control after Seattle voters shot down a city initiative which would have created rent control in the city.
Since then, no serious threats have been made to repealing the state-wide ban until the past couple of years.
The current push to repeal has largely been unsuccessful due to the split legislature in Olympia, where the Senate is controlled by the Majority Coalition Caucus (MCC) – a group made up of 24 Republican Senators and one Independent Democrat.
Two years ago, Seattle Council passed a resolution calling for the legislature to repeal the ban on rent control so that it could pursue its own ordinances to implement the policy, but its lobbying efforts have largely been shut down by RHAWA and the Senate MCC.
That could dramatically change. If a special election this fall for deceased State Senator Andy Hill’s seat in the 45th district is won by the Democrats. If that were to happen, all three branches of state government would be controlled by Democrats, the political party likely to adopt rent control as a favored policy in addressing housing affordability issues.
The potential ramifications of rent control becoming a reality are based on what we’ve seen in countless other areas when rent control is enacted – rental housing costs will soar, new rental housing construction will stop, and housing opportunities and mobility will be limited for anyone not lucky enough to already be living in their preferred rental unit. The most glaring examples of all of these problems have been found in San Francisco and New York City, two cities with the strongest rent control protections in the US, the two most expensive rental housing markets in the nation.
On the 65th Washington Legislature
Washington State’s 65th Legislature began its 2017 legislative session on January 9th, with the one requirement to produce a 2017–2019 biennium state budget. As session opened, the elephant in the room was the McCleary education funding decision, which required the Legislature to enact significant changes to the size and structure of K-12 education funding in the state. This combined with a narrow one seat Republican majority in the senate and a two seat Democratic majority in the House made for a particularly contested session.
After three special sessions, and on the brink of a state government shutdown, the House and Senate agreed to a compromise between their two proposals and were able to pass a budget without instituting a major new tax on Washingtonians. But huge issues still linger, as Republicans and Democrats were not able to come to any agreement on a Capital Budget. Many had hoped that a deal would be brokered that would have funded around $4 billion in capital projects, for a solution to the Hirst decision. Legislators remain around Olympia in attempt to make progress Capital Budget solution, but Governor Inslee surprised many by vetoing a tax preference on manufacturers that was part of the agreed upon final budget negotiation, and it remains to be seen what impact that will have on delicate negotiations.
Dear City Councilmembers,
As you’re aware, the Rental Housing Association of Washington represents more than 5,500 small, independent landlords. Our mission is to serve their needs by providing them with property management products and services, education, and to advocate for effective policy on their behalf.
The majority of RHAWA members are not professional property owners. They own and operate, on average, two rental units, in addition to working full-time. Their rental units are their long-term retirement plan.
RHAWA opposes CB 119015 not because of its purpose or mission, but because it represents poor policy which will not succeed, and poses many unintended consequences. A mandate offering no supportive services will not encourage landlords to take chances on under-qualified applicants.
Research cited in CB 119015 as supporting this policy should also be more closely scrutinized for context. In particular, the study summarized in “Assessing Criminal History as a Predictor of Future Housing Success for Homeless Adults With Behavioral Health Disorders” acknowledges its results are based upon homeless individuals receiving DESC supportive housing, which includes 24 hour staffing, psychiatric treatment and counseling, social support, and basic needs. This is in no way comparable to renting private-market housing with no support services in place.
The study’s author, Dr. Malone, writes as much, saying:
“Because the study presented here involved individuals with specific characteristics (lengthy homelessness and behavioral health disorders) who received a particular intervention (supportive housing), generalizing the results of our study to other situations may not be valid. It may be that the robust array of clinical, social, and recreational services tailored to the individual needs of DESC’s supportive housing residents, which has been described in part elsewhere (2,16), is what allows participants with a criminal history to succeed in housing.”
RHAWA recognizes the need for housing solutions for ex-offenders having difficulty finding housing due to prior criminal convictions. However, as the City’s Race and Social Justice Initiative recognizes, the barriers ex-offenders face in accessing rental housing are not caused by landlords, but by structural and institutional barriers.
One of the three critical components listed in the Race and Social Justice Initiative to be achieved by 2017 includes a statement that the city will “Work with community-based organizations to support the movement to end structural racism.”
That is a critical step that the Council must take with RHAWA and the rental housing industry as we discuss issues such as access to affordable rental housing. While we appreciate being at the table for stakeholder discussions, we’ve not seen the city willing to work on initiatives of partnership with the rental housing industry to proactively solve problems.
There are solutions that can make a real difference in helping ex-offenders find access to rental housing, and which would also address the three primary concerns landlords have when renting a unit. Those being that an applicant will take care of the unit, pay rent on time, and be a good neighbor. Examples of partnership include:
Landlord Liason Project
This creates certainty for landlords who offer their rentals to the program, and mirrors many of the DESC services cited in Dr. Malone’s study – Guaranteeing deposit payments and funds for damages, offering a 24-hour help line when issues arise, and offering training and other resources. With a proper level of funding from the Housing Levy and administrative expertise, this program is an attractive and effective model.
ADU/DADU Emergency Housing
We support Councilmember Bagshaw's idea of emulating a city of Portland program to create ADU/DADU for emergency housing for homeless and low-income individuals for a period of 5 years in exchange for those construction costs being covered by the city.
Buying Down Rents
Denver's Mayor is creating a program using housing levy dollars to buy-down rents in vacant units for a 3-year period to levels affordable for families making 40% to 80% of the area median income.
Our membership has been clear that CB 119015, on the heels of the First in Time and move-in fee restriction ordinances, places them at higher risk. Their only tools to mitigate that risk are raising screening qualifications standards, or selling their Seattle properties. Neither are positive outcomes for renters or the rental housing market.
We can make meaningful differences when we work on the same page and stay focused on the big picture issues in rental housing – access to, and affordability of, housing.
Thank you for your time and consideration.
Sean Martin, External Affairs Director Jason Dolloph, Legislative Chair
Sean Martin | Director of External Affairs
If you’re a landlord, you’re a business owner. Incorporating your rental property under an LLC is the formal creation/recognition of that fact, and can serve to offer valuable protections to you. However, there can be some drawbacks, too.
What are the pros and cons? Let’s explore them.
Cameron Cowan | Knowledge Steward
Your tenant has left. This can be at the end of the lease or an abandonment. You may have gotten the keys back or not. You open up the unit to inspect and clean it and you find stuff! It can be in boxes, bags or just junk strewn about. This can especially be a problem after an eviction. Dealing with items left behind by a tenant is probably one of the most common landlord problems. However, handling these items is not as simple as packing them up and dumping them into a dumpster. There are specific rules governing the tenant’s items. It might seem like trouble to deal with the previous tenant’s items, but with a quick notice to the tenant and a little bit of work, you can get your rental ready to lease again and be in compliance with your legal responsibilities.
Here's how to deal with items left behind by your tenants. These rules apply for end of lease, evictions, and abandonment of the tenancy. There are specific rules in Washington for this situation.