Seattle preparing to cap move-in fees and force landlords to offer payment plans

Seattle Councilmember Kshama Sawant is continuing her political march against independent landlords as she prepares to push CB 118756 through her Energy and Environment Committtee meeting tomorrow at 2pm - a proposal which would institute hard caps on rental housing move-in fees and force landlords to provide payment plans for those fees at the request of tenants.

WashingtonCAN! has the attention of Sawant, with this newest proposal due in part to a July 2016 report published by the group which advocates for increased protections for renters. Cited as a research study indicating the need for caps on move-in fees, the report is actually based on information collected by a methodology known as “snowball sampling.” Essentially, what this means is that Seattle Council is creating legislation using "data" based entirely on responses received from WashCAN!'s own members, their members’ friends, and individuals who actively seek out their information on social media.

Objectivity in creating rental housing regulations in Seattle appears to be out the window for the foreseeable future if this type of information is what public policy is based upon.

A September 13th hearing was the first opportunity for the public to digest this new proposal, and tomorrow (September 27th) is likely to see the legislation voted on and moved forward to full council for its consideration the following Monday, October 3rd.

That the proposal is based upon flawed reports and arguments is enough of a reason for it to not move forward, but that is only one of a lengthy list of concerns about unintended consequences for both tenants and independent landlords.

For independent landlords the issue is very simple. Deposits and fees are necessary as a means for mitigating risk when renting housing. Move-in fees are the only means, outside of monthly rent, for independent landlords to cover their risk. If move-in fees are artificially restrained, rent is the only relief valve.

That risk is exacerbated by a provision to force Independent landlords to offer move-in fee payment plans at the request of the tenant. The payment plans - essentially 4 to 6-month term, 0% interest loans – would allow tenants to skip out on rental agreements without any serious financial repercussion after just a month or two.

Sawant and tenant advocates appear to be believe that capping and spreading out the payment of move-in fees over a period of time will not force landlords to take alternate measures to safeguard their property.

However, in the realm of unintended consequences, increased rents and massively restrictive screening standards for renters are the likely outcomes. In particular, this proposal paired with the recently adopted “First in Time” ordinance essentially forces landlords to raise the bar so high that only well-heeled renters are likely to see any benefits.

If there were one simple, short way to describe what will happen should this legislation pass it appears to be “rents will go up, tenant screening criteria and standards will go up, and housing opportunities for those most in need of help will go down.” Without the ability to negotiate and offer alternative terms to renters what choices do landlords have left?

RHAWA is urging Council to consider alternatives to placing independent landlords at huge risk, causing rents to increase, and restricting access to rental housing for underqualified renters. The simplest, most direct way of assisting tenants at move-in is for the City consider allocating dollars within the renewed housing levy to create a revolving fund for move-in fees, or to consider increasing funding of the Landlord Liaison Project.