How Effective is Seattle’s Tenant Relocation Assistance Law?

by Erica C. Barnett

Later this year, City Councilmember Kshama Sawant plans to introduce legislation that would require landlords who raise their rent more than 10 percent to pay lower-income tenants the equivalent of three months’ rent should they move out because of the resulting increase. The proposal, based on a similar law in Portland, is aimed at addressing “economic eviction,” when tenants are forced to move by rising rents.

The city already has a tenant relocation law on the books, although you may not have heard about it, because it only applies to certain renters in a limited number of situations. In anticipation of Sawant’s proposal, which her office says she plans to introduce later this spring, here’s a primer on the current law and what to expect from the proposal to expand it.

 

What is tenant relocation assistance and who currently qualifies?

Back in 1990, the Seattle City Council adopted a tenant relocation assistance ordinance (TRAO) to help low-income renters who have to move because of housing demolition, major renovations, or land use changes (for example, if an apartment building is converted into condos or a hotel). Tenants must make less than 50 percent of area median income (currently $33,600 for one person, or $48,000 for a family of four) to qualify for assistance; those who do receive a payment of $3,658 to help them move to a new location. Half that amount is paid by the city, and half is paid directly by landlords.

Property owners who are demolishing or converting a building have to get a tenant relocation license from the city, and are required to give tenants 90 days’ notice before demolishing a building or making other major changes.

The legislation has been amended periodically over the years—most recently in 2015, when the city council added a provision barring landlords from raising rent more than 10 percent in an effort to get tenants to move out so they can avoid paying relocation assistance before demolishing or renovating their building. The 2015 amendments also prohibit landlords from evicting tenants, except for good cause, after filing for a tenant relocation license.

                                          

How often does the city pay out rental relocation assistance, and how much does it cost the city?

Since 2004, the earliest year for which payout records are available, the city has paid more than $5.5 million to 1,881 tenants. In 2017, according to records from the Department of Construction and Inspections, the city provided relocation assistance to 235 households, for a total of $380,000 (landlords paid the other half).

 

What would Sawant’s proposal do?

Council member Sawant’s proposal would require landlords to pay three months’ rent to tenants who make less than 80 percent of the area median income ($48,500 for a single person or $72,000 for a family of four) and have to move as a result of a rent increase of more than 10 percent. Unlike the existing relocation ordinance, Sawant’s proposal would make landlords pay the full amount of assistance; Sawant’s aide Ted Virdone argues that the higher obligation is more than fair, given that it would only apply in cases where “the landlord has raised the rent substantially without having even the expense of a remodel or reconstruction.”

 

Couldn’t landlords just get around the law by raising rent by 9.9 percent?

Yes, although Virdone says the intent of the proposal is to address landlords who raise rents by an unreasonable amount, and 10 percent seemed like a reasonable floor. “People who have lived the majority of their lives here in Seattle should have a choice to stay,” Virdone says. “If we don’t put in place ordinances like this, there will be even more people moving out of the city.” Reliable information about individual rent increases in Seattle isn’t readily available, although rents went up 7.2 percent, on average, in 2016.

 

What do advocates for landlords say about the proposal?

Not surprisingly, groups like the Rental Housing Association, which represents about 5,500 landlords in Seattle, oppose the legislation, calling it another burdensome rule that will cause small “mom and pop” landlords to sell their properties to larger apartment management companies. “The biggest concern we should all have is that the more burden you put on landlords, the more risk you throw on them, the more likely they are to sell, and that property’s not going to be on the affordable end any longer,” says Sean Martin, external affairs director for the RHA. “We’re already seeing an uptick in folks that are selling.”

 

Isn’t imposing a penalty for rent increases over 10 percent a form of rent control, which is banned under state law? 

Sawant’s office says no—“This is just about what the tenant needs; it isn’t about trying to impact landlord behavior,” Virdone says—and the RHA, unsurprisingly, says yes. “If you’re making it economically unfeasible to raise the rent by whatever percentage is appropriate, that’s a restriction on rent,” Martin says. In either case, if it passes, the bill is certain to be challenged in court. In Portland, where rent control is also illegal, two local landlords sued the city over its almost identical. Although a federal judge upheld the ordinance, the landlords have appealed, and the case is currently working its way through the federal courts.  


Erica C. Barnett is a longtime Seattle journalist who covers city politics and policy as a freelance journalist for various print and online publications and at her blog, The C Is for Crank. Previously, she was a co-founder of PubliCola, the local politics blog, a staff writer and news editor at the Stranger, a reporter for Seattle Weekly, and news editor at the Austin Chronicle in Austin, Texas.

Featured image courtesy of the Seattle City Council

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4 thoughts on “How Effective is Seattle’s Tenant Relocation Assistance Law?”

  1. First, of course this is rent control. Second, for every action there is reaction. Due to the liability exposure caused by the first-in-time fair chance housing ordinance, we no longer advertise our 5 affordable rental units to the general public. It took a week to find our last tenant. We used to offer month to month leases Because it was simple and gave tenants flexibility, with just cause eviction, we have all 12 month term leases, so we don’t renew if we have a problem tenant. We have not been raising rents every year. Now, due to the uncertainty of what ordinance is coming next, we will start raising rents every year. We used to take chances on folks with past credit issues, or give extra consideration to young families, teachers, and those with diversified ethnic backgrounds. Now we raise our screening criteria so only those with the best credit qualify. The restrictive and punitive fair chance housing ordinances have removed my ability to give people a second chance. Now it is about protecting our investment. A relocation ordinance will incentivize maximum allowable rent increases. CM Sawant and the ideology shared by the city council is killing the small landlord affordable housing market. The reaction to the city’s action is anti-diversity, and it is on them.

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