The agreement says the landlord must roll back the rent increases temporarily and provide tenants with relocation assistance. Still, the building may continue to empty out.
Tenants hit with rent hikes and disruptive construction after their building near Pike Place Market was sold to an out-of-town investor are being promised relief in a deal that underscores Seattle’s ability to enforce protections for people facing displacement.
Seattle’s Department of Construction and Inspections (SDCI) — which accused the landlord this month of using rent increases of more than 20 percent to avoid the city’s tenant-relocation assistance law — has agreed to settle the case at 104 Pine St.
Under the agreement, which goes beyond what the law normally requires, 1st and Pine Property Owner LLC must try to track down and pay $3,658 in relocation assistance to each of the many households that moved out after being notified about the January increases.
Seattle laws for renters:
• Landlords seeking to terminate a month-to-month tenancy must have good cause and must usually give a termination notice of at least 20 days before the start of the next rental period.
• Landlords increasing housing costs (rent, parking, storage, etc.) less than 10 percent must give 30 days’ notice; an increase of at least 10 percent requires 60 days’ notice.
• Landlords cannot unilaterally increase rent before the end of a fixed-term lease.
• Landlords displacing tenants by demolition, change of use, substantial rehabilitation or removal of subsidized-housing restrictions must obtain a tenant-relocation license; give all tenants 90 days’ notice of activity which requires them to move; and help the city provide eligible, low-income tenants with cash relocation assistance.
• Landlords cannot use rent increases to avoid applying for a tenant-relocation license.
• More information can be found at www.seattle.gov/dpd/rentalrules
Source: Seattle Department of Construction and Inspections
The agreement says the company must roll back the rent hikes until July for tenants still living in the building, and the money those tenants have paid in higher rents since January must be credited to their accounts. Additionally, 1st and Pine must make payments to any household that elects to move out in the coming months.
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In July, rents will return to pre-settlement levels and remain fixed until 2019.
“This is the fair and just thing,” tenant Brent Zimmerman said. “I’m able to take a deep breath.”
Before the settlement, 1st and Pine faced fines of more than $120,000 — $1,000 for each day since Oct. 30, when the tenants were notified of the rent increases.
Under the agreement, the company must set aside $168,268 — enough to make relocation payments to each of the 46 households that were living at 104 Pine St. in October. Whatever is left over must be donated to an SDCI emergency-relocation assistance account for tenants across the city.
“We’re pleased to have worked with the city to come up with a good resolution,” said 1st and Pine’s manager, Los Angeles real-estate investment executive Jerry Wise.
Change of ownership
A 55-unit brick building constructed nearly a century ago, 104 Pine St. was owned in recent decades by a local family that kept the rents relatively low, with some tenants paying less than $1,000 on month-to-month leases.
But when the family put the building up for sale last year, the global commercial real estate firm Colliers marketed it as “a distinct and rare opportunity to re-imagine” the property, citing the property’s proximity to “a critical mass of impressive tech employers.”
1st and Pine bought the building for $14.9 million, directed the rent increases and began extensive renovations, making no attempt to re-rent apartments as tenants moved out, SDCI said in a violation notice.
The same sequence of events has played out across Seattle as the city’s economic boom and a housing shortage have encouraged luxury upgrades and rent increases.
State law forbids Seattle and other cities to impose rent control, but the city’s tenant-relocation assistance law has since 1990 offered some protections.
The law requires landlords seeking to displace tenants for demolition or substantial rehabilitation to apply for a relocation license, give extra advance notice to tenants and help the city provide $3,658 in assistance to tenants with low incomes.
Since 2004, the earliest year for which records are available, 1,881 Seattle households have received relocation assistance — for a total of more than $5.5 million.
Initially, the law targeted landlords serving eviction notices. But since 2015, the law also has explicitly covered landlords who use rent hikes to force tenants out.
That’s what SDCI accused 1st and Pine of doing, although the settlement agreement includes the company denying that it intended to circumvent the law.
In November and December alone, 18 households moved out of 104 Pine St. 1st and Pine subsequently filed plans to enlarge some units, add a rooftop deck and build a small basement gym.
Not often reported
Enforcement of the tenant-relocation assistance law is somewhat limited, with SDCI having opened 16 cases against landlords in 2016 and 2017. The agency relies on complaints by tenants and believes the problem is underreported.
When tenants do file complaints, it’s usually when they receive advance notice of a rent increase, allowing SDCI to seek compliance from landlords prior to displacement rather than penalize them afterward.
SDCI’s records show only one penalty meted out in 2016 and 2017, totaling $1,000.
The situation at 104 Pine St. was more challenging because the agency didn’t hear about it until the remodeling began, spokesman Bryan Stevens said.
“Tenants should feel free to call SDCI once they receive notification of a large rent increase, especially if they suspect there are plans to renovate the building,” he said.
Even when landlords adhere to the tenant-relocation assistance law, the city can’t actually prevent displacement from occurring.
Longtime 104 Pine St. tenant Cindy Quiring said the temporary rent reductions in the settlement will help her and her husband, but the couple will likely end up leaving anyway, perhaps for cheaper Spokane. The building may continue to empty out.
“We’ll probably move,” Quiring said. “We know they’re going to raise the rents more as soon as they can.”