Wrapping up Legislative Biennium and Looking to 2023 Legislative Session

As the day of the general election quickly approaches, lets take a quick look back to the last two years of legislative changes. For those who do not know, Legislative Session functions in a biennium. The first year being a long, 90 day, session and the second being a short, 60 day, session. Any bills that are proposed during the first year of the biennium that die are automatically alive again the following year. That is why bills such as HB 1300 and 1515 were considered again this year. However, as we are now at the end of the biennium, we will start the 2023 Legislative Session with a clean slate. The only bills that will be considered on day one of session are the bills that will be pre-filed. So as we anticipate seat changes and potential majority changes in the Legislature, we must also start thinking about what policies we might see again.

Going back first to the 2021 Legislative Session and the expansive changes that came with it, primarily HB 1236 and SB 5160. HB 1236, codified as RCW 59.18.650, permanently and fundamentally changed the value of a fixed term lease among other things. Requiring just cause to terminate nearly all tenancies and only providing extremely narrow exemptions for specific leases. This bill went through a long, contentious process with a number of amendments before its final passage. It resulted in one of the longest sections in the Residential Landlord Tenant Act (RLTA). We have provided a number of resources to help housing providers make sense of and navigate this complicated law, such as our Support Center article: Good Cause to End Tenancy (Statewide Guide). Following its passage a number of local jurisdictions created and passed their own local just cause ordinances, like Unincorporated King County last June. Between the state requirements and the increasing number of local ordinances that overlapping, its no surprise that we have heard many members are struggling to keep up.

One of the other contentious and far-reaching bills was SB 5160. Proposed under the pretense of addressing the Covid pandemic and provide an off ramp to the ongoing eviction moratoriums. Codified in a number of sections, including RCW 59.18.625, RCW 59.18 630, RCW 59.18.640, and RCW 59.18.660, SB 5160 was an enormous bill that continues to impact the rental housing market. First, the bill made mandatory the Eviction Resolution Pilot Program which was a system created by the courts as a pilot program, as the name implies. It made mandatory a yet untested and experimental program for all nonpayment of rent evictions to be allowed to proceed. As a result, we have heard from a monumental number of housing providers that the programs are adding weeks to the process and in many cases not issuing the certificate of completion even if every step is followed.

Additionally, the bill prevented late fees for unpaid rent from being assessed from March 1, 2020 through six months after the end of the eviction moratorium. This has now expired, however housing providers are still not permitted to take adverse action on any tenants nonpayment history during that same period. It continues, as the bill requires a housing provider to offer a payment plan, where each payment is no more than 1/3 of on month’s rent, for the entire public health emergency. The public health emergency continues to be in effect, as does this requirement. The bill did require an end to the eviction moratorium on June 30, 2021. While the moratorium did end technically on that day, the Governor’s bridge proclamation had a majority of the same restrictions and was in effect until October 31, 2021. The last thing that SB 5160 did was require the state to provide free legal counsel to all indigent tenants getting evicted.

While those are the two most expansive bills, there were a number of others that passed in the 2021 Legislative Session. In the MHC space there was HB 1083, addressing relocation assistance. Initially it would’ve reneged on the agreement made by lawmakers and housing providers. After immense feedback from housing providers the bill was amended to expand on the relocation assistance available to housing providers for the removal of manufactured homes. Another bill that was beneficial for housing providers was HB 1332. This bill allowed housing providers who showed a loss in 2020 to defer their property taxes due to Covid. While not forgiveness of the property taxes, it gave many of our members an opportunity to address nonpaying tenants before the taxes became due. Finally there was SB 5096 implementing a capital gains tax. This was another bill that had many amendments over the course of the session. In its original draft, the tax would’ve applied to all real estate sales. After some discussion of exempting certain forms of real estate or capital gains under a certain amount, we were able to get real estate exempted from the capital gains tax all together.

Those are some of the bills that passed that impacted housing providers. There are even more bllls that didn’t pass and returned in the 2022 Legislative Session. One such bill was HB 1300, addressing documentation for security deposits. The bill was reintroduced in the 2022 Legislative Session in a form that tried to provide specific definitions to wear and tear and would’ve required housing providers to conduct a move out walkthrough prior to the tenant vacating the unit. Our members testified en masse during both years in the biennium and we managed to kill HB 1300 both times. As per usual, rent control was also proposed, and as per usual it did not pass. Rent control is the number one issue that faces housing providers and we have not gone through a session in a long time without it being proposed. Many lawmakers on the hill do understand the danger to the rental housing industry and new housing development that rent control causes. SB 5139, proposed initially in 2021 and again in 2022, would’ve prevented all rent increases for six months following the eviction moratorium, which itself prevented rent increases. Additionally, it would’ve limited rent increases for another six months after to 3%+CPI based on March 1, 2020 rent. Looking back now at when the moratorium ended, housing providers would only now be able to increase their rents based on their costs. After strong opposition in 2021, SB 5139 was not given a hearing in 2022.

One bill that had an extremely unique process was HB 1515. A bill that authorized and set restrictions for a monthly fee in lieu of a deposit. The bill centered around a third party system that offered a type of insurance on a unit for a monthly fee. While not a major concern for housing providers in the 2021 Legislative Session with HB 1236, SB 5160, and others, this was a bill that was simply unnecessary. It had a couple of hearings in committee but didn’t get any further. The bill came back, in a way, in 2022. While HB 1515 was not passed, it effectively replaced the more problematic HB 2064. HB 2064 as drafted would’ve required housing providers who offer this service to purchase it themselves and bill the tenant. There was no system in place for a tenant that refused to pay that fee, and did not count as rent so did not fall under a 14 day pay or vacate. HB 2064, after having many concerns being brought up through testimony, was amended to be nearly identical to HB 1515. The bill as it passed has documentation requirements and a cost breakdown for housing providers that offer this option. Again while not necessary as it adds extra administrative burden to a program that is already not often used, it does not pose major negative impacts to housing providers.

Before we look to what we might see in the 2023 Legislative Session, lets look at the bills that we saw for the first time in 2022. One such bill that was supported by housing providers and tenants alike was HB 1593. The bill expanded the Landlord Mitigation Fund to allow victims of domestic violence to get rent and deposit assistance. The other bill that had an impact to housing providers was SB 5749. This bill requires housing providers to offer the ability for a tenant to pay using cashier’s check, personal check, or money order. While there were some concerns with the original bill, amendments were added that specified only a mailing address was required for payment and if a check bounced a housing provider did not have to accept that payment method for 9 months following.

Finally, a couple of bills that had outstanding advocacy efforts to oppose, HB 2017 and HB 2023. Both bills had unusually short notice prior to their committee hearing. HB 2017 was a criminal record ban in screening and HB 2023 would’ve allowed tenants, or tenant advocates, to sue housing providers under the Consumer Protection Act. A pair of devastating bills that were a part of the same committee meeting. In that meeting we had over 1000 people write in and sign up to testify. Neither bill had another committee hearing.

With the recap of the eventful biennium we are now closing off, lets think about what we might see in the new biennium with a lot of new lawmakers. We are too early to know for sure what will and wont be discussed, and much too early to have drafts. However based on historical trends, we have a few policies that we can be confident will rear their head once again. Chief among them is rent control. We have battled rent control in one form or another for many, many years. There is no reason to believe that the 2023 Legislative Session will be any different. Hopefully with good results in this year’s election, there will be more moderate, data-observing lawmakers that will understand the dangers of rent control. What we are also likely to see is a bill, or bills, addressing security deposits. Many local jurisdictions have added limits and additional requirements to security deposits and as we saw multiple bills the last two sessions, more might be coming. Finally would be screening limitations. Criminal record bans as well as income and credit screening restrictions is a hot topic right now among tenant advocates and some lawmakers.

While these three policies I think we are very likely to see next session, this is by no means the limit. We have seen bills year after year that restrict, regulate, and strip away housing providers rights. We will be reliant once again on our members to read the Calls to Action, write to their lawmakers and provide testimony on our priority bills. Our advocacy efforts are only as strong as our membership. We have seen incredible success in the past, and hope to continue to do so. Thank you to all of our members who participated this biennium. If you aren’t sure how to get involved, please contact me at arobertson@RHAwa.org.

Remember to vote, and we will see you in session.