A landlord group is suing the city of Seattle over a new law that caps move-in fees and allows renters to pay their deposit in installments over several months.
The ordinance was unanimously passed by the City Council in December and came into effect in January.
The law limits move-in costs like security deposits and non-refundable fees to one month’s rent. Pet deposits cannot exceed more than a quarter of one month’s rent.
Tenant rights advocates say this law helps renters who struggle with the expensive up-front costs associated with moving, especially in a market as hot as Seattle’s.
Xochitl Maykovich is with the Washington Community Action Network, the group that helped organize support for the measure.
She said she believes the legislation is a good compromise.
"It allows landlords to get the security deposits that they need, and it allows people to be able to actually access housing because these high costs are spread out over time,” Maykovich said.
The high cost of moving can keep people on the street or renting a place they can’t afford, Maykovich said.
But many landlords say that being unable to collect costs up front increases their risk.
In their lawsuit filed against the city, the Rental Housing Association of Washington (RHAWA) claims the ordinance amounts to rent control, which is illegal in Washington.
The lawsuit states that the city’s rules “unlawfully attempt to control the financial relationship between residential tenants and landlords, forcibly enlisting Rental Housing Association of Washington members in addressing social ills such as housing affordability that are the responsibility of the community as a whole.”
Sean Flynn, president of RHAWA and a landlord, said the measure puts undue burden on small operations because it goes to the heart of how they do business.
“If a tenant comes to me and has maybe a spotty rental history, in the past what most small landlords would’ve done is say, ‘Hey, you know, you give me last month’s rent and a little bit more on the deposit and we’re good to go. I’ll take on that risk.’ Because it gives the landlord some cushion in case things don’t go well,” Flynn said.
But without that option, he said, some landlords are compensating by raising rents, raising the requirements renters have to meet or selling their properties altogether.
"That's bad news for the city because small landlords provide the only organic affordability that's left in this city,” Flynn said.
Flynn said this is part of a pattern of measures in Seattle that are making things harder for landlords. He said many smaller operations struggle to navigate all the rules that have been placed on them.
A group of landlords filed a separate lawsuit in March targeting a Seattle law that requires them to choose tenants on a first come, first serve basis.