Sawant will call on state lawmakers to lift rent control ban at Affordable Housing Town Hall

(Image: CHS)

(Image: CHS)

Screen Shot 2015-04-22 at 2.49.26 PMWhen City Council member Kshama Sawant started calling for rent control during her first campaign for public office in 2012, the idea was largely met with a “here we go again” attitude. Three years later, Sawant is harnessing public frustration over rising rents and the momentum from her role in passing Seattle’s $15 minimum wage law to make a push for rent control in Seattle a reality.

For years, many in Seattle have dismissed the issue (including House Speaker Frank Chopp), calling it a pointless political debate while a statewide ban enjoys widespread support in the state legislature. Today, the chances that Olympia warms to rent control still seems slim at best and mostly preempts any discussion about whether it could pass in Seattle.

But the former economics professor is making rent control a top issue in her bid to be the first representative of the Capitol Hill-centered Council District 3.

To further elaborate her thoughts and strategy on rent control — and give voice to the citizenry, Sawant is holding an affordable housing town hall Thursday night at City Hall. Council member Nick Licata, who is departing from the council this year, will be joining Sawant to lead the discussion.

During her campaign against then-council member Richard Conlin, Sawant sent CHS a series of emails that detailed her position on rent control. Her responses offer a good primer of her thoughts on the issue heading into Thursday’s forum and this summer’s campaign season.

San Francisco’s skyrocketing cost of living is often cited as the prime example of the disaster rent control would wreak on Seattle. When asked about it in 2013, Sawant called San Francisco’s law a “veritable lifeline” for tenants who would otherwise be priced out of the city.

The problem is that it is not broadly applied, and therefore many tenants aren’t able to obtain rent controlled units. While the way rent control was implemented in San Francisco has not eliminated high rents there, it has still played a major role in keeping rents lower than they would otherwise be. The example of Boston illustrates this all too well. When its rent control laws were eliminated in 1997, apartment rates nearly doubled within the months that followed.

So what exactly would a Sawant rent control program look like?

In a rent control program, the percent increase in rent would be determined by economic analysis that would include variables such as cost of living, mortgage expenses, prevailing interest rates, borrowing costs, and maintenance costs. Because of this model, rent control would still enable unit owners to keep pace with inflation and maintain housing. What it would prevent is the astronomical rate of returns to big real estate companies (something that small owners rarely receive anyway).

Many of Sawant’s fellow economists think rent control is a bad idea. Not surprising, Sawant doesn’t think too highly of those colleagues.

Unfortunately, economics as a discipline tends to provide academic cover for policies that mainly benefit corporations and the wealthy and hurt the majority of working people. For example, many economists are critical of even the existence of a minimum wage. Most oppose public health care systems, in spite of enormous historical evidence that single-payer healthcare is more cost effective and creates decisively better outcomes. As unbelievable as it may sound, several also oppose restrictions against child labor.

Meanwhile, both Mayor Ed Murray and the City Council are pursuing separate policies to bolster affordability in the city.

After compiling a list of recommendations from local experts, Murray’s Housing Affordability and Livibility Advisory Committee is currently drafting a plan to expand affordable housing options for the city’s middle income earners. The plan, due out next month, is also supposed to include policies to create or preserve 50,000 new housing units in the city over the next decade, 20,000 of which would be income restricted.

Last year, the City Council started drawing up plans for a construction linkage fee program to further fund the city’s affordable housing programs. Under the initial proposal, developers in certain areas could either pay a per-square-foot fee or dedicate at least 3% to 5% of the units in their project to those making below 80% of the area mean income.

Even as 600 or more new apartment units are predicted to be ready this year around Capitol Hill, the best news analysts can muster on the affordability front is that recent surges appear to be slowing. One recent study found that that average one-bedroom rents on Capitol Hill and the Central District were currently around $1,425 to $1,533. In a sample of recent Capitol Hill listings, the median monthly lease for a one-bedroom apartment was nearly $1,700. Studios weighed in just above $1,200 a month. Meanwhile, more than 70% of ads were for studios or one bedroom units.

Affordable Housing Town Hall
Thursday, April 23rd — 6 PM
City Council Chambers — 600 4th Ave, Floor 2

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49 thoughts on “Sawant will call on state lawmakers to lift rent control ban at Affordable Housing Town Hall

  1. What Ms. Sawant is telling Washingtonians is, “If you want to stay put forever, here’s a reward. If you want to move, even within the state, your initial rent is going to soar but it won’t increase much as long as you make a nice little rut for yourself.”

    Those economists that Kshama hates so much don’t condemn rent control because it benefits corporations. Corporate owners are smart enough to soak new tenants to make up for the rent controlled ones. Kshama’s economic opponents say what they say because they have facts on their side.

  2. Sawant is grandstanding (and campaigning)….again. Surely she knows that rent control doesn’t have a snowball’s chance in hell of being approved by the State Legislature. A much better approach is the Mayor’s committee, which has a real possibility of making a difference in housing affordability.

    • With more and more people in the city demanding some form of rent control, you can likely count on the mayor’s committee or the mayor himself (eventually) making a similar recommendation.

    • Wow, a politician campaigning for actions that her constituents want. By your logic we shouldn’t press the state legislature to approve a state high-earners income tax or to pay for decent public transit over highway projects, even though those things stand as much of a chance of getting approved as this does, unfortunately.

      Best wait for a group of 28 people no one elected to make a “consensus agreement”.

      • “Wow, a politician campaigning for actions that her constituents want.”

        It’s her responsibility to explain to her constituents how rent control will not solve the problem they have, but what she can do to help solve the problem.

        Price controls are easy for her to grandstand on because it doesn’t require critical thinking and can fit onto a campaign sign.

        However, if she legitimately believes that rent control will actually solve the issue, then she is incompetent and doesn’t deserve reelection anyway.

  3. The city should focus on getting affordable housing built in north and south Seattle and in west Seattle. Prices are are lower there and the land is more available. Capitol Hill’s future is not affordable due to its prime location, time to give up on that and face reality.

  4. Let’s imprison all the capitalist s in labor camps and give their property to the people. Then everybody will hold hands and love each other for eternity.

  5. As an economist, surely Sawant knows that artificial price controls are always bypassed by other market forces. With rent control, you can guarantee a precipitous drop in expenses, meaning repairs, utilities, management, cleaning, etc. Or, a correlating increase in other income, such as move in fees, cleaning fees, etc. If she plans to tackle each and every one of these, then she will form dozens of new regulations every year. And, demand will quickly outstrip supply, leading to dramatic housing shortages, with no incentive to build more units here, apartment waiting lists and dramatic quality decreases.
    In a 1990 poll of 464 economists published in the May 1992 issue of the American Economic Review, 93 percent of U.S. respondents agreed, either completely or with provisos, that “a ceiling on rents reduces the quantity and quality of housing available.”

    • You can’t guarantee anything because you have no idea what the actual law would look like, whether it’d be short term, long term, special provisions, terms, limitations, etc.

      Stop fear mongering, bro.

      • Facts and logic? There are different methods and different varieties of rent control policy. They aren’t all as simplistic (and therefore all destined to “fail”) and don’t all overlay onto the basic S&D models I’m assuming you and Travers are alluding to. So, facts and logic, great. But it’s a two way street.

      • “The analysis of rent control is among the best understood issues in all of economics, and — among economics, anyway — one of the least controversial. Sky-high rents on uncontrolled apartments, because desperate renters have nowhere to go — and the absence of new apartment construction, despite those high rents, because landlords fear that controls will be extended? Predictable. Bitter relations between tenants and landlords, with an arms race between ever-more ingenious strategies to force tenants out — what yesterday’s article oddly described as ”free-market horror stories” — and constantly proliferating regulations designed to block those strategies? Predictable.

        But people literally don’t want to know. A few months ago, when a San Francisco official proposed a study of the city’s housing crisis, there was a firestorm of opposition from tenant-advocacy groups. They argued that even to study the situation was a step on the road to ending rent control — and they may well have been right, because studying the issue might lead to a recognition of the obvious.”

        The above was written by Paul Krugman, someone who probably knows a bit more about economics than Sawant or her dozens of followers who are clamoring for bad public policy.

        So yes, once facts and logic are injected into the debate Sawant and her followers look as intelligent as climate change deniers.

      • Yes Bill! That’s the article linked to in the CHS post above. Thanks for cutting and pasting this reductive analysis of all strategies and potential strategies for rent control past, present and future! And while we’re heaping insults on one another, how about this one: Any fool who believes every single thing they read can cut and paste something they found on the internet.

        Your quote ignores any nuance and complexity of actual rent control ordinances from the past, what worked and what didn’t, and what may in the future, let alone the current situation in the local market and neighborhoods experienced by tenants and other residents.

        Some quick facts your quote ignores and your logic belies:
        -Boston’s vacancy rate went down four years after rent control was voted down statewide, while the median price for a 2 bedroom more than doubled, and while its homeless population doubled!!! (Where’s the improvement on inventory post-rent control? More on MA post-1994 here: http://www.economist.com/node/161526)
        -NYC’s largest housing booms in the 20th century occurred when rent control was in full effect
        -Not all economists agree that rent control leads to decreased maintenance of housing units (see economists Nandinee Kutty and Edgar Olsen

        The real fact here is that coming to the table to discuss policy meant to support the moral right to occupancy should be done with an open mind—not clouded by a zealous fervor for frictionless, elementary supply and demand models. Rent control isn’t one-size-fits-all, and any proposed policy should be analyzed through the lens of academic case studies and data, not rhetoric you pulled out of a linked article.

      • Congratulations Steve! You happened to find two economists who believe that rent control isn’t ALL bad (only parts of it). Really no different than trotting out Craig Idso or Patrick Michaels as proof that not all scientists agree that climate change is real.

        But for those who still have an open mind not clouded by “zealous fervor” the list of respected, accomplished economists who have weighed in on the topic is extremely impressive. In addition to Nobel winner Paul Krugman, economists who are on record as claiming that rent control is bad public policy with deleterious effects includes; Daron Acemoglu (MIT), Alberto Alesina (Harvard), Alan Auerbach (Berkeley), David Autor (MIT), Katherine Baiker (Harvard), Raj Chetty (Harvard), Judith Chevalier (Yale), Janet Currie (Princeton), David Cutler (Harvard), Angus Deaton (Princeton), Aaron Edlin (Berkeley), Ray Fair (Yale), Claudia Goldin (Harvard), Austan Goolsbee (Chicago), Michael Greenstone (Chicago), Robert Hall (Stanford), Caroline Hoxby (Stanford), Kenneth Judd (Stanford), Anil Kashyap (Chicago), Pete Klenow (Stanford), Edward Lazear (Stanford), Eric Maskin (Harvard), William Nordhaus (Yale), Maurice Obstfeld (Berkeley), Cecilia Rouse (Princeton), Emmanual Saez (Berkeley), Jose Scheinkman (Princeton), Richard Schmalensee (MIT), Hyun Song Shin (Princeton), Nancy Stokely (Chicago), Richard Thaler (Chicago), Christopher Udry (Yale), and Luigi Zingales (Chicago).

        I’d trust anyone on that list long before I’d take the word of someone like Sawant.

      • Your logic paralleling a minority of opinions on a particular piece of public policy to climate change denial is specious and really only spotlights the deficiencies in your own intellectual process.

        Economics is not a hard science, and economic models are not the same as scientific facts and laws (e.g. thermodynamics, evolution, relativity); economics does not provide hard and fast truths. Rather, it posits theory based on behavior in a specific milieu.

        If you form opinions based on majority viewpoints, more power to you. But, I’ll take facts and analyses of a specific scenario within the context of theory. Not straw polls eliciting comments like “Unless al [stet] the textbooks are wrong, this is wrong.”

        An outright state-ban on rent control seems rather anti-scientific and anti-democratic, in my opinion. RCW 35.21.830 is an antiquated law (1980), originally pushed through by a landlord lobby that raised nearly a half a million dollars to beat down the tenants union rental regulation initiative.

      • It’s not fear mongering if it’s based on very similar circumstances…..City after City (S.F,Bronx) has tried it and no one is happy with the results, except those who were “first in line” for their apartments. But let’s see what Sawant proposes and if it has any provisions for all the ways around it, and incentivizes new development and prevents flight of capital and, well, you get the picture.

      • So when can we comment on it? After it’s passed? 5 years later?

        Rent control will not fix anything, it just buys time for those already in the hill. How much depends on the law, but it won’t change the outcome, just how fast it happens.

  6. “But the former economics professor…”

    Please, if there is ANY evidence that she was a professor, let us see it. She taught classes at a community college. That’s more than a little different. A professorship would imply a goodly number of publications in the peer-reviewed literature. Teaching at the community college implies… they couldn’t find anyone else for so cheap.

    • Hey, say what you want about Sawant, but don’t go bashing community college teachers. There are many quality teachers at community colleges – and yes, you can be a professor at a community college – and you can get a quality education at one.

      I went to a community college before going to a top 25 university. I hate how smug people can be about community colleges.

  7. Again the “professor” that refuses to grasp the simplest of economic theories. Rent control is a disaster of a policy that will slow the development of housing supply in the city. Case study after case study show the effects of rent control in cities of every political stripe.

    If you want lower cost housing build more supply across the spectrum of qualities. Zoning variance for supplying low cost housing is a much smarter and productive long term solution to the problem.

  8. For me, the rent graph says it almost all, followed by all of the debate and the fact that under current income guidelines, I, as a middle-class-income professional, likely will never qualify for a rent subsidy, there will never be enough units to meet demand, and I will never be able to afford to rent my own place in my own neighborhood where I live and work now.

  9. Isn’t there a happy medium between San Francisco-style rent control and Seattle no-control?

    SF’s allowable annual increases are amazingly tiny: “Effective March 1, 2015 through February 29, 2016, the annual allowable increase is 1.9%” http://www.sftu.org/annualincrease.html

    But here in Seattle, your rent can be raised up to 10% with 30 days’ notice and by *ANY AMOUNT* the landlord feels like with 60 days’ notice.
    http://www.tenantsunion.org/en/rights/rule-changes-rent-increases

    That’s nuts, and it happens (if the landlord can get away with it).
    A 5 or 10% allowable annual rent increase might still be painful, but at least it would be predictable, and manageable for a lot of middle-class and working-class renters. And it probably wouldn’t create the weird situation SF has.

    (If my figures are wrong, let me know–I just looked up the SF ones out of curiosity, but I know the Seattle rules from personal experience)

    • Agreed. We need to all come to the table to discuss policy meant to support the moral right to occupancy with an open mind—not clouded by a zealous fervor for frictionless, elementary supply and demand models. Rent control isn’t one-size-fits-all, and any proposed policy should be analyzed through the lens of academic case studies and data, not rhetoric.

      • There is no moral right to occupancy.

        Also, trotting out the old “some scientists disagree” line when the overwhelming majority believe something else is the same insanity that stops us from dealing with climate change.

        You give Steves a bad name sir.

      • I’m sorry you don’t think there’s a moral right to provide places for people to live. Sounds like a dystopian wet-dream. Data and in depth case study should matter when planning policy, bad Steve. Not a majority, neo-liberal opinion.

      • Since when do we have a “Moral right to occupancy”?
        What we do have is the right to make our own decisions about where we live, but not the right to make others pay for it if those decisions include preferences like living in-city, alone, with parking, etc.

  10. I just spent what came to $750,000 fixing up a dilapidated (semi-illegal) triplex in central cap hill.

    Nobody from the government came to offer price controls on my contractors when they failed to adequately assess the site conditions and went $250K overbudget (should have fired them a lot sooner, but that’s my fault.)

    Now the government is going to come in and put an artificial ceiling on the amount of money I’m allowed to be paid back, and prevent me from recovering that investment?

    San Francisco is an affordability fustercluck because of bone-headed policies like rent control. Go read this article and decide if you prefer our current set of problems to the one SF has: http://techcrunch.com/2014/04/14/sf-housing/

    And make sure we don’t repeat their mistakes.

    • a ‘semi illegal’ triplex?

      So you’re SLUMLORD and you had to spend $750K so you wouldn’t be renting an illegal unit you shouldn’t have been renting to begin with.

      screw you and your “uncontrolled” contractors. You are trying to inject fear with your off-topic BS argument.

  11. That so many readers here would mistake what the practitioners themselves call “The Dismal Science” for actual science astonishes me. It is like the crash of 2008, which none of these “scientists” predicted never happened. People on here talking about supply and demand as if that is some sort of E=mc^2 analysis of the situation without realizing that to those who study these things seriously supply and demand only allows ad hoc analysis without discussing the fundamentals. Citing “case study after case study” without realizing the ideology which set the study and the laws. Without comparisons to Europe, Asia, or Latin America, but rather the anemic state of social democratic laws within the US.

  12. That chart about median prices as advertised on Craigslist is really irrelevant. There are a lot of places (affordable) that don’t advertise at all, they just put a sign out front and there you go. There are plenty of affordable apartments to rent on the hill if you are willing to walk the neighborhood and look. If you take the lazy Craigslist route then you deserve what you get.

    • Have you looked recently, though? From my experience, there aren’t many of those “sign on the door” vacancies anymore. At one time, it was definitely the best way to find a place, and gave you an advantage if you had time and opportunity to stroll around.

  13. To the cap hill land lord:
    Do you believe you have a Right to a return on investment? You purchased an asset and invested capital in to increasing it’s perceived value. Because this conversation isn’t about your right to make a decent return, but rather the right to live within the city. Why did you buy an asset that cost you more than a quarter of a million dollars more than you expected it to be? Why didn’t you rather invest your capital in GE, or Amazon, or Treasury Notes? If you had invested 3/4th of a million dollars in GE, and the government cut military spending and thus your ROI, would you expect that law to be declared null and void?
    If your tenants were subletting parts of their apartments to others, then you might have a case, but this is clearly not the case.

    • Your analogy is not quite fair. If the government said you could no longer sell your GE stock for fair market value, that would be comparable. But taking away GE’s contracts is no different than amazon moving out of the state. Landlords would have to absorb that loss of market and adjust to a weaker market, without any government help.

    • There is no right to live in the city.

      Also, you make exactly the argument that makes rent control a failed policy. Money will flow to where it can make return. If you cap the return on rental properties money will flow to other places and no new supply will be created.

      Stop thinking anyone owes you anything.

      • Exactly. If there were rent control in place, I can guarantee I would have never have made this investment in our neighborhood (or more importantly, nor would I or people like me do so in the future).

        Part of the amazingness of San Francisco and Berkeley are all of the vintage buildings that are basically falling apart because the landlords can’t charge enough money to afford maintenance.

        Really, there is no magic fairyland where people like me will put in $1 mil+ to make a nice home for people, short of the ability to charge enough rent to pay back those expenses over 10-20 years.

      • Absolutely. People keep repeating the Seattle-is-not-affordable mantra, creating this sort of strange urban legend that nobody challenges. There are definitely much less affordable Seattle neighborhoods, but not being able to live in Fremont, Ballard, or Capitol Hill does not a housing crisis make. White Center, Delridge, Lake City, Greenwood, Rainier Beach, Northgate et al. all have reasonable housing costs with nice parks (and other amenities), and provide frequent, one seat transit trips to downtown.

  14. I doubt rent control would even pass in Seattle. I’m pretty much a socialist (well, very pro Scandinavian style, at least), and this is one area where I absolutely fear legislative interference. Wasn’t there a Swedish economist who said that rent control was more effective than carpet bombing in its ability to destroy a city? High minimum wage?, yes please!, near universal membership in trade unions?, ya betcha!, free (or almost free) higher education?, most definitely!, super fantastic high speed transit?, get to it!, rent control? absolutely NOT!

    There are affordable, one seat bus ride (to the CBD) neighborhoods, it’s just that many of the “cool” (as defined by Seattle Magazine) boroughs are very expensive, and Capitol Hill just happens to be one of those places. People should be incentivized as much as possible to invest in and improve their neighborhood of choice.

    • Sweden is not a socialist country and never has been. It’s experienced positive reforms to its welfare state, but only through organized workers’ struggles (and these gains have been and are still being rolled back).

      Shops and restaurants aren’t the sole determinants in “improving” a neighborhood or sustaining a neighborhood’s livability and attraction: The spirit and will of the existing culture are largely responsible for this. But when you push that out through unregulated neo-liberal policies, you will be left with a bland hegemony that will lose its appeal very quickly.

      • It would take a lot of mental contortions to say Sweden is not a socialist state…at least using the modern, Western definition (democratic socialism). Heck, even the US is a socialist country in some ways (pooling resources for the common good is the very essence of socialism).

        I took several courses at the UW from the Scandinavian studies program, and studied abroad in Denmark, and I’m pretty sure I never heard anyone say Sweden is not socialist (again, using the modern European, geo-political definition). Sweden is not communist, if that’s what you mean.

        Also, I think you need to brush up on your Nordic history a bit. Even though worker agitation was an important part of the transformation, the big 20th century social changes geared toward producing the Swedish welfare state were (shocking, I know) pushed from top down. Granted, there have been some recent attacks from the right, but the overall strength of Swedish democratic socialism has been very resilient. Long live lagom!

      • If you want to call it a democratic socialist state, fine. It’s an ambiguous term, with little more difference than “strong welfare state,” which will have different applications in Europe, and unfortunately, here in America too. But it’s not socialist by the definition of Marxist socialism.

      • Well, okay, but in the modern vernacular I think most people would refer to Marxist socialism as communism, and socialism as Scandinavian type governance. It’s a bit deceptive to cloak the more radical form in what the majority accept as (for example) free daycare, mandatory vacation time, and universal healthcare, within the bounds of a still innovative liberal democracy.

    • Are you sure it won’t pass? Perhaps people should start a movement against it passing just in case. It was a Swedish economist that said rent control would destroy a city. In Stockholm there is almost a 15 year waiting list to live in the city.

  15. Hasn’t rent control been shown to be a bad policy time and time again? It creates more problems than it solves, and doesn’t fix anything.

    Personally, I’m of the opinion that we should accelerate the rent bubble so it pops faster and harder. It’s not going to go up indefinitely. If all the tech money prices out all the culture from Seattle, the culture will leave Seattle and would that really be so bad? Maybe Tacoma will be the next Capitol Hill. That’s OK. Seattle is not sacred.

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