UPDATE | Bill requiring more notice of rent hikes fails to pass WA Legislature

When Patricia Zachary moved into her four-bedroom Olympia home in 2019, the $2,185 rent seemed fair, despite some needed cleaning and upgrades. 

Then, last year, Zachary says her landlord began texting about increasing the rent. When a written notice finally arrived in late October, she learned the rent would jump to $2,600 in January.

“I was devastated,” Zachary told state lawmakers in a recent hearing. 

Under a new proposal in the state Legislature, Zachary would have received six months’ notice of that rent hike. And in certain scenarios, tenants in her situation could break their leases and move out.

With that extra time, “I could have probably gotten stuff packed up and put some stuff in storage” to find a smaller, more affordable rental, Zachary said in an interview. Instead, she said she is now borrowing money, putting off other expenses and planning to take on a second job.

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“This bill needs to be passed to help many people on a fixed income who cannot afford to go up on rent,” Zachary said.

Rent increases are “emotionally draining and physically draining to people,” she said.

Unlike other pricey West Coast rental markets in California and Oregon, Washington outlaws rent control. So, tenant advocates here have looked for other ways to help renters in a market with fewer than 5% of apartments vacant. 

Seattle now requires at least six months’ notice for any rent increase. This summer, the city will begin requiring landlords to pay relocation assistance if they raise rents by 10% or more on certain low-income tenants and those tenants move out. King County requires four months’ notice for rent increases of more than 3% in unincorporated areas, and Auburn has a similar law for increases of more than 5%

The state bill under consideration, HB 1904, would require landlords to offer tenants at least six months’ notice — but not more than 220 days’ notice — of rent increases of more than 7.5%. State law currently requires two months’ notice for all rent increases.

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“It’s certainly, in today’s rental market, extremely difficult if somebody does in fact find that a rent increase is unsustainable for their family budget and they need to find a new place to live,” bill sponsor Rep. Strom Peterson, D-Edmonds, said during a committee meeting this week.

Landlords are pushing back, arguing it’s difficult to predict rising expenses so far in advance.

Sixty days is “plenty of time for a tenant to find new housing,” said landlord Nicholas Horrocks, who owns and manages nine apartment buildings in South King County where he said most tenants are on month-to-month rental agreements.

Horrocks said he typically raises rents by 5% to 7%, though he increased them by 8-10% after pandemic eviction rules had limited rent increases for more than a year. Meanwhile, costs have climbed, including property taxes, maintenance and labor.

“It gets expensive, so we have to raise rents to cover it,” he said.

Rising costs and few apartments to rent

Tenants looking for a new rental face twin challenges: finding a place they can afford and finding an available rental at all. 

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The statewide rate of vacant apartments dropped from 4.2% in fall of 2020 to 3.6% last fall, according to a report from the Washington Center for Real Estate Research. 

It’s not just the Seattle area: Every county outside the Puget Sound region except Whitman had a vacancy rate below 5% in September.

For new leases, median rents are up all over the state from the same time last year. 

In Seattle, the $1,653 median rent is up 23% from January 2021, according to Apartment List. Much of that increase reflects a rebound from the early days of the pandemic, when rents dropped and then started to rebound.

But elsewhere, the rent increases are part of a more dramatic change. In many suburban areas and smaller cities, rents soared during 2020 and 2021, making for sharp increases over the last five years.

In Lacey, for example, the median rent for a one-bedroom apartment was up 57% in January from the same time in 2017 and 34% from 2019. Median rent for a one-bedroom in Spokane is up 52% from 2017 and up 35% from 2019. And in Tacoma, the $1,238 median is up 41% from 2017 and 25% from 2019.

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Costs are also up for single-family rentals. The median three-bedroom house in the area covering Seattle, Bellevue and Everett rented for $2,975 in October, up about 8% from a year earlier, according to CoreLogic

Moving after rent hikes

The state proposal includes a provision not included in Seattle’s six-month rule: If a tenant on a fixed-term agreement, such as a one-year lease, received a rent hike of more than 7.5%, they could break their lease early and move out.

Tenants would be required to provide 45 days’ notice, and landlords would be required to prorate rent if the renter moved out. (Tenants on month-to-month agreements would be required to give 20 days’ notice, the same as current law already requires.)

“That just in itself is a one-way contract,” said Jim Henderson, a lobbyist for the Rental Housing Association of Washington, which represents landlords and opposes the bill. 

If the bill passes, “we will see other policy, other reasons why a tenant should be able to just leave the contract,” Henderson said. 

Supporters say the rule would allow tenants more flexibility to find something they can afford.

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“The heart of the bill is to make sure that tenants do have an option if they are faced with a rent increase that is unsustainable for their budgets,” Peterson said.

Under current law, a tenant who breaks a lease is liable for rent until the end of the lease term and the landlord is required to attempt to re-rent the unit.

Democratic state lawmakers originally proposed tying the new rules to rent increases of 3% or more. Republicans wanted to increase that to 10%, and lawmakers settled, for now, on 7.5%. 

The bill would also limit fees for late rent payment to $75.