Rent control is illegal in Seattle. Here’s why | KUOW News and Information

Rent control is illegal in Seattle. Here’s why

Apr 3, 2017

It’s not an easy time to find an apartment in Seattle. You’d be hard pressed to find a one-bedroom on Capitol Hill for less than $1,400 per month — and rents for similarly-sized apartments in swanky new buildings regularly soar upward of $3,000.

Given the costs, it’s not surprising that KUOW listener Rachel submitted this Local Wonder question: “Why was rent control originally outlawed in Washington state?”

Rent control regulations are in place to hobble rents in some of the nation’s most expensive cities, including New York, San Francisco, Los Angeles and Washington, D.C. But rent control has been illegal in Washington state since 1981, when the state Legislature passed a law forbidding cities and towns in the state from regulating the residential rents changed by landlords.

Why did it happen? You can blame Ronald Reagan (at least a little bit).

In 1980, Seattle voters rejected a ballot initiative to enact rent control. The battle over the initiative was contentious and expensive, with opponents pouring hundreds of thousands of dollars into their efforts — ending in the most costly political campaign in Seattle’s history at the time.

Timing might have been the biggest stumbling block for the initiative. The proposal appeared on the same ballot as presidential candidate Ronald Reagan, who rallied conservative voters and ushered in a wave of deregulation that would last for years.

Reagan unseated President Jimmy Carter, a Democrat. Slade Gorton, a Republican, won a Washington Senate seat from Democratic incumbent Warren G. Magnuson. And Republican John Spellman became governor, beating out Jim McDermott (aka Baghdad Jim).

“There was this dramatic move to the right — and as a result, the initiative failed abominably,” said John Fox, a long-time advocate of affordable housing in Seattle.

Fox, who was on the initiative's steering committee, said the campaign for rent control could have made it onto a 1979 ballot, but the movement’s leadership decided to wait for the presidential election — not foreseeing the nation’s politics would swing to the right with a Reagan victory.

Then things got even worse for advocates of rent control.

With a conservative majority in Olympia, a bill backed by pro-developer lobbyists successfully banned all cities in the state from enacting rent control in 1981.

“The change in the political climate, particularly down in Olympia allowed them to do that — and it’s remained in place ever since,” said Fox, who currently works with the Seattle Displacement Coalition.

Even so, proponents of rent control continued to look for ways to stop housing costs from climbing even higher in Seattle — especially as the rise of the area’s tech industry sends real estate prices soaring. Efforts to repeal the statewide ban are discussed often; Seattle City Councilmember Kshama Sawant made rent control a central talking point in her election campaign — and in 2015, the City Council adopted a resolution urging the Legislature to repeal the law.

But repeal efforts have failed to gain traction. Critics point to mounting evidence that rent control is a flawed system — landlords evicting tenants in San Francisco and the high cost of unregulated units in New York, for starters.

Rent regulations can take many forms, the most common of which are rules about how much landlords can increase rent or a cap on how much they can charge. Controlled increases tied to inflation rates, technically called rent stabilization, is how San Francisco and New York approach regulation — but those rules only apply to certain buildings.

New York also has a small percentage of buildings that are rent controlled — meaning there’s a hard cap on how much landlords can charge — but those units must have been occupied by one family since 1971.

James Young, director of the Washington Center for Real Estate Research at the University of Washington, said basic economics doesn’t bode well for enacting rent control in a booming city like Seattle — it’s a question of supply and demand.

The cycle has three parts, and they go like this: Employers are paying high wages, landlords are charging what the market will bear, and developers are building new units for all the people moving here for those high-paying jobs.

“There’s no such thing as unaffordable,” Young said. “If it were unaffordable, no one would buy it. And people are buying it.”

Young said that imposing rules on how much landlords can increase rent is a disincentive for builders, which can result in a housing shortage — the opposite of what you need to create lower rents and home process. Rent control can also create disincentives for landlords to maintain buildings and might make them seek to evict tenants paying disproportionately less than the market rate.

“If you’re going to think of a political solution, the economic consequences might actually be more extreme than the problem you're trying to solve,” Young said.

In the absence of direct regulation, some are seeking other ways of influencing housing policy. In March, the City Council voted to create a 15-member renters’ commission board that would have the ear of the council and advocate for ways to keep rents affordable.

Fox said he still believes rent control is the answer to Seattle’s affordability problem and hasn’t lost hope. But he says the state Legislature, narrowly divided between Democrats and Republicans now, will need to swing more to the left if the ban is ever to be repealed.

Barring that, he predicts rents will keep rising.

“It’s going to get a heck of a lot worse before it gets better,” Fox said. “Maybe that’s what it will take to galvanize — finally — a more aggressive response from tenants.”