HB 1389 Concerning Residential Rent Increases Under The Residential Landlord-Tenant Act...

HB 1389

Bill Summary

• Applies to both residential housing and manufactured home communities.
• Prohibits a landlord from increasing the rent more than the CPI-U or 3%, whichever is greater, up to a maximum or 7%. Commerce is required to calculate and publish the maximum annual rent increase percentage.
• Prohibits a landlord from increasing the rent in the first 12 months of a tenancy.
• "Rent increase" is defined to include any new charges added to a rental agreement that were not identified in the initial rental agreement. For example, new parking, utility, or other charges.
• Requires a landlord that increases rent above the limit to include facts supporting the exemption in the written notice of the rent increase.
• Creates a private cause of action for a tenant to recover actual damages, punitive damages equal to 3 months' rent, and reasonable attorneys' fees and costs.
• Provides the following exemptions from the maximum annual rent increase limit:
  • Dwelling units that are less than 10 years old.
  • Tenancies for which the landlord is required to reduce rent to 30% or less of the tenant's income because of a federal, state, or local program or subsidy.
  • If a landlord has paid for improvements to the dwelling unit that cost more than 4 months' rent and the improvements were made during the 12 months preceding the notice of the rent increase, then the landlord may increase rent for the following calendar year by up to 7%, or 4% + the maximum annual rent increase percentage for the calendar year, whichever is greater.
  • If a landlord is experiencing significant hardship in complying with rent control for the current calendar year due to a disparity between the local costs for providing housing and the statewide costs for providing housing, the landlord may request an individual exemption from Commerce.
• If a landlord participates in the banked capacity program, the landlord may increase the rent above the maximum annual rent increase percentage by an additional 3% for each year that the landlord has banked capacity. The banked capacity program operates as follows:
  • If a tenant is evicted or if a tenant leaves after an eviction has been initiated, for any rental agreement entered into within 12 months of the termination of the prior tenancy, the amount of rent that a landlord may charge a new tenant is limited to the previous tenant's rent plus any banked capacity that was accrued under the prior tenancy, unless another exemption applies.
  • If a tenant voluntarily moves out, the amount of rent that a landlord may charge a new tenant is not limited by the maximum annual rent increase percentage or any banked capacity, and the landlord may reset the rent to market rate.
    • However, if the landlord increases the rent for the new tenant beyond the previous tenant's rent, any banked capacity is lost.
    • If a landlord chooses not to increase the rent and charges a new tenant the same amount of rent that the landlord charged the previous tenant, the landlord may retain any banked capacity that was accrued under the prior tenancy.
  • If a new owner buys a property and takes over a lease, the new owner may not increase rent for existing tenants beyond the amount that the previous landlord would have been allowed to increase rent.
    • The former landlord's banked capacity may be transferred as part of the property sale.
  • A landlord who participates in the banked capacity program must provide an annual notice to current and prospective tenants of the total banked capacity and possible future rent increases.
• Requires Commerce to calculate and publish the maximum annual rent increase percentage on September 30, 2023, and on each following September 30.
• Includes an emergency clause and an immediate effective date.

Bill History

• Jan 17 First reading, referred to Housing. (View Original Bill) 
• Jan 24 Scheduled for public hearing in the House Committee on Housing at 4:00 PM (Subject to change). (Committee Materials)
• Feb 9 Executive action taken in the House Committee on Housing at 8:00 AM. (Committee Materials)
  HOUS - Majority; 1st substitute bill be substituted, do pass. (View 1st Substitute) (Majority Report)
  Minority; do not pass. (Minority Report)
• Feb 14 Referred to Appropriations.
• Feb 22 Public hearing in the House Committee on Appropriations at 1:30 PM. (Committee Materials)
• Feb 24 Scheduled for executive session in the House Committee on Appropriations at 9:00 AM (Subject to change). (Committee Materials)

Sponsors

Ramel, Macri, Peterson, Duerr, Gregerson, Alvarado, Ormsby, Doglio, Riccelli, Cortes, Mena, Thai, Kloba, Bateman, Street, Taylor, Lekanoff, Simmons, Farivar, Pollet, Stonier, Berry, Reed, Bergquist, Davis, Santos, Senn, Reeves, Stearns, Fosse

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