District 3 representative Kshama Sawant is proposing new legislation to limit move-in costs and “ease moving barriers” for Seattle renters.
A representative from Sawant’s office tells CHS the the legislation proposes changes to many small aspects of move-in fees.
“When you take them together, they have an impact,” Sawant staffer Ted Virdone said.
Virdone said that when a new tenant moves in, landlords can currently charge a variety of nonrefundable fees including for pets and cleaning.
The legislation would limit nonrefundable fees to no more than 10% of the first full month’s rent. But when the cost of background screening exceeds 10% of one month’s rent, the excess can be included in the nonrefundable fees.
As per state law, background checks cannot exceed the actual cost of the screening.
The proposal would also require that the security deposit and the nonrefundable fees don’t exceed the first full month’s rent.
Sawant’s office expects the portion of the ordinance that will have the most significant impact is the requirement for landlords to provide tenants with the option of payment plans for move-in fees including the nonrefundable fees, security deposit and last month’s rent.
For example, if a tenant had to pay $1,500 for last month’s rent when moving in, the tenant could choose pay it in six monthly payments at $250 each.
“It suddenly becomes a lot more manageable,” Virdone said.
Landlords wouldn’t be allowed to charge additional fees or interest on the installments.
Virdone said the council could consider the ordinance in September.
Sawant, along with council member Lisa Herbold, will present the legislation at a morning announcement Thursday at the Washington Community Action Network! office, 1806 East Yesler Way, where the organization will also be presenting a report on the housing affordability crisis.
Virdone said Sawant’s office consulted with WashingtonCAN! while drafting the legislation. The organization provided Sawant’s office with rolling results from their survey, providing information from renters throughout Seattle.
“We were really focusing on getting the voices of the community,” said Xochitl Maykovich, with WashingtonCAN!, about the report.
The community organization, which works to “achieve racial, social, gender and economic justice,” surveyed more than 300 people from throughout the city about substandard housing, affordability and barriers to accessing housing.
Virdone said the survey really highlights the effects of move-in fees on tenants.
Maykovich described the survey as broad, but said it collected good, and at times surprising findings. Maykovich declined to go into detail about the survey results detailed in the report ahead of the Thursday event, but said the data collected came from residents with a variety of race, gender identities, age and location backgrounds.
Tenants impacted by Seattle’s rent prices are also expected to speak at the event on Thursday.
Sawant is coming off some recent victories in her battles for affordable housing. Earlier this year, the council passed Sawant’s anti-slumlord law that stops landlords from raising rents in poorly maintained buildings while also protecting tenants from surprise rent increases.
In September, the Seattle City Council passed a resolution urging lawmakers in Olympia to modify or repeal the state’s ban on rent control, and Sawant is continuing her efforts to fight the ban, Virdone said.
This post has been updated to correct the spelling of Maykovich. CHS apologizes for the error.
As much as I hate having to agree with anything Sawant suggests, I think these proposals are reasonable and should be enacted.
I disagree. As long as evictions are so lengthy and expensive, a landlord should be able to insure themselves against loses by delinquent renters. Would you loan your $5000 car to a total stranger for a $1000 deposit? A non-refundable fee is a fee for service. Service includes a LOT of paperwork and processing. If the city stopped requiring more and more paperwork with each renter, the fee might be smaller.
Dan, all that burdensome paperwork and processing those poor poor landlords have to do is the cost of doing business. When housing is upwards of $3/sq.ft. I can’t begin to give a fuck.
@tournant,
Fair enough (except the profanity) Then move in fees and $3/sf rents are YOUR cost of doing the business of renting.
I’m with Bob on this one – agreeing with anything the airbag Sawant isn’t something I savor. Kind of makes me throw up a little, to be honest – but this sounds like a good idea. My only question would be that if someone couldn’t afford the move-in fees, and now they move in and get to pay it over several months, what if they don’t pay it? Now the property owner has someone they have to go through the long and probably expensive eviction process for someone who probably shouldn’t have moved in there at all.
Whereas many of Sawant’s proposals appeal only to the far left, this one should appeal much more broadly. First+last+deposit+fees to move into an apartment prevents those who do have income from having stability thru housing.
The issue with not satisfying the monthly payments will be handled in the same way as an individual who isn’t able to make their monthly rent.
to @abledanger’s point, let’s look at it this way.
i rent out an apartment for $1500/mo and allow last month’s rent to be paid in installments. renter pays one month’s rent but fails to pay second month’s rent or installment payment. ~30 day eviction process and by the time it’s all over i get one month’s rent for the three months the renter lived in the apartment.
while it has been “handled in the same way as an individual who isn’t able to make their monthly rent.” the landlord would be out two months of rent vs. just one had they collected both first and last upfront. i’m not sure that aspect has been thoroughly thought out.
I agree with @zee. Shorten the eviction process and security deposits will shrink. Most are way higher than actual risked damage coverage because of this factor.
One more reply from me…. Sawant is playing “Whack-a-mole.” The market will find a away to cover itself for its risk. Take away the cash coverage, and landlords will just use tougher rental credentials to manage that risk. How about 5 years rental history, 5 times the income/debt ratio, etc. etc?
The market has already found a way for landlords to recoup costs involved in having a new tenant. If the socialist Sawant removes those fees, the market will simply find a new way to recoup those costs. Ironically, the new ways the market finds may have worse consequences than the ones Sawant is trying to fix.
Doesn’t this move toward defeating the purpose of tenant deposits? If a landlord requires first, last and sec deposit. He is hedging his bets against any delinquent payments. Any missed payments can start the lengthy process of eviction mitigating any potential future shortfalls. I do not think this is a fair rule. If a tenant cant come up with a last months payment wouldn’t that automatically make them a less ideal candidate? Why would one chose a less fiscally responsible candidate?
I get the intent I just dont agree with the results.
“We were really focusing on getting the voices of the community,” said Xochitl Maykobich, with WashingtonCAN!,
The RENTER community, of course. I’m guessing probably no input from landlords. Because they’re all inherently evil, of course.
I used to have one rental unit, and was probably the easiest, nicest, most reasonable-rent landlord ever. Still didn’t stop my last tenant from screwing me on move out. I read grandstanding shit like this and I’m SO glad I’m not a landlord anymore, even just my one little rented condo apartment. This won’t hurt large apartment bldgs. at all–all it’ll do is hose smaller landlords with one or just a few properties. The ones who get hosed when they have to evict a deadbeat who doesn’t pay rent and can’t be thrown out for 2 or 3 months even without paying. The ones who suing afterwards is pointless because you can’t get blood from a stone. But in Sawant’s mind, they’re all rich, “the man” anyway.
Many places require first, last, and deposit. They are equal. With rents for a 2-3 bedroom you’re looking at $2000+ per…and not a lot of middle class people have $6,000 sitting in their bank account to move in with. One place charged us $9000 for move in costs, but let us split it apart over 2 months…..that was rough on us despite good paying jobs we also pay over $2000 a month in childcare….your average rent for a studio here in Seattle is $1000/mo. so with as expensive as rent is becoming it is far exceeding what most landlords are actually paying on home repair and mortgage payments for their facilities.
“…it is far exceeding what most landlords are actually paying on home repair and mortgage payments for their facilities.”
what is the “it” you are referring to? first and last month’s rent? you’d pay that anyway and it’s covering the mortgage. you’re providing that in the event you turn out to be a deadbeat renter.
also, the mortgage has to be paid regardless of whether or not the renter pays their rent. in my example above, that could be a landlord having to pay 2+ months of mortgage payments while being unable to having a paying tenant while they go through the eviction process.
and what if the tenant destroys something in the apt? repairs come out of the landlord’s pocket; while being unable to rent the unit until repairs are complete. first, last and security deposits seem pretty fair to me.
It may be uprising how little a landlord may cover on a property. We rent out a condo in Everett, with HOA’s, property taxes, insurance, and mortgage we are only making $50 more a month on rent. That $50 a month has to cover any repairs or other unit issues that may arise. Until a landlord clears their mortgage they don’t make a large profit. The people who make profit are the larger buildings and multi-holding companies.
I think it would surprise a lot of renters how much things really cost to landlords. Especially the never-ending series of property tax levies that just keep coming on every ballot, at least twice a year. Plus there are water/sewer/garbage that cost a lot more than people would think.
It’s true – I rent my house out in Charleston, SC – while a vastly different price structure than Seattle, the principle remains the same. I clear only $100 net because of property management fees and property taxes (which tripled when it’s now an income property).
Life circumstances have prompted me to become a newly minted landlord of a single tiny, older condo unit on First Hill. This proposal would make it impossible to cover the basic costs of renting out the unit. My building’s HOA charges a sizeable move in/move out fee which I split with the renter but even splitting the fee, it is still more than 10% of one month’s rent. I agree that smaller landlords would be most negatively affected by this proposal. As a long time Capitol Hill/First Hill resident, I’m doing all I can to keep my rental affordable by only charging enough to cover my mortgage, HOA dues, and management costs. I’m not making a profit and would have to raise the rent to cover these extra costs.
Not a Sawant fan at all but agree with lowering the often prohibitive add on fees to move into an apartment. Remember that 85% of the people who work in the area are NOT tech workers on tech worker salaries. The overwhelming majority of renters are not generating evictions or doing damage.
Yes. Put another way, is it fair to require a responsible renter to pay all these extras in order to cover the landlord for losses due to an irresponsible renter?
Bob, let me put it another way. If you legislate a cap on fees, you reduce incentive to take risks on renters. I’ve had many who moved out leaving more work than their deposits could cover. If Sawant’s proposal becomes law, my screening standards will likely double so that I can be assured I no longer rent to anyone with any history of leaving any damage or cleaning to for their landlord. So while it will be cheaper to get a place, only those who never leave their landlord with damages or cleaning will be allowed to rent. is that any kind of improvement in the housing shortage problem? The real solution is more housing. Amazon and friends should be building some themselves too offset some of their impact on the local market. Make them put 40 or more units in to each new building they put up.
Dan, thanks for your insight. But I would say that those with a history of leaving an apartment damaged and a mess SHOULD have trouble finding a place to rent in the future. It’s called “consequences.” However, I don’t suppose there’s any way a landlord can check on this when considering a prospective tenant…that kind of behavior wouldn’t come up in a background check.
I own and manage one unit on the hill. It comes available every few years and is in high demand. And guess what. I discriminate in who I rent to, quite legally I would add. I insist on people who demonstrate the ability to save enough to manage 1st and last month’s rent. If they can’t, I don’t want them renting from me and since I have high demand, I can be selective. If one can’t, or should I say won’t save two month’s rent, what happens when their job ends suddenly? Do they pay what they owe, or stare at me sullenly when I have to ask? Been there once and it was not fun. Sawant discriminates on hiring her staff based upon their political leanings, education, and perhaps a nice ass? Just saying. When there is competition, there is discrimination in who wins. It may be the best athlete, the most attractive person, the best writer and any number of factors that some may argue are not fair. Life is not fair folks.
One is not entitled to live on my property, or in Seattle for that matter. Most of us are more than fatigued at the games she plays with the hard work of others.
As a bleeding heart liberal and a small landlord so I see both sides of the story. I only charge the modest fee that I pay for the background check. Everything else is a deposit.
I rent safe units that are clean on move-in and tenant should pay for damage if it’s their doing. On the other hand, it can take 4 months to evict a bad tenant (ones that the neighbors that share the common walls complain about). I rent to teachers, the disabled and other “workforce’ tenants for below HALA rates. I can easily charge more if I have to risk my capital and 1,000s of hours of actual sweat equity I have put into making the rentals a healthier and more attractive living space.
I believe I am one of the white hats, but with all these restrictions, I will just rent to the brogrammers as I can’t afford to take the risk on someone that can’t manage their own money from their own bad choices and decide to camp out while an eviction works it’s way through the waiting period. I will charge 30% more than I do now, easily and not have to finance the tenants that already know how to work the system in place (I can attest there are professional bad tenants). As it is now, I have the choice to lease to honest, responsible people that make much less than the median wage. I love my tenants, respect them and they reward me with staying there for years.
Tech people tend to move often, I enjoy the stable tenants I have in place, but will change my business model if these restrictions go into place or sell my building and it will be torn down and turned into much more expensive housing. The increasing demands on landlords will force out the good ones too. We should enforce the laws that are already in place first.
In theory with the last month and deposit, a new tenant will have already saved a months rent from their last rental. So in a sense they most aren’t starting a zero anyway. People should rent what they can afford with a bumper in savings. This type of legislation, block the landlords that do help the people that have a bad month or two and allows their tenants to catch up. It’s much too risky to carry that many people. We have huge bills as building owners.
The limit looks reasonable for the general case.
However, I hope the legislation provides at least two exceptions. A) it should exclude tenants who receive “credit adverse action notice”. In situation, a person has a credit history problem (such as young people who has no history, or medicinal related charges), in those case a landlord might still willing to take the tenant if they pay higher deposit or last month rent. Those situation might cause the fee to cross the line. Without an exception, landlord might simply rather reject the tenants. B) For landlord who just starting out, or renting out their first home, the payment plan might be problematic. It shifts too much risk to the owner. I think it is reasonable to only require payment plan for building that has 4 or more units.
The misconception here was that landlord really owning the place out right. But in practice, most has a very sizable mortgage and if the miss a payment because the tenant fail to pay, they risk losing their life saving in a default. A lot of owners are essentially “working for their banks”, especially in the first few year.
Harsh rules will reduce the willingness of people renting places out and it doesn’t help the supplies of housing. And supplies of the housing is the most important factor driving up the rent price.
I am a professional property manager. Now with the new rules, I am actually charging more for move in fees than I used to, because now I am charging last month rent. I used to want, say 1.25 – 1.5% of the rent as security (depending on other factors, too, like if there was brand new carpets for example.) So for a $2,000/month rental, I might charge $2,500 or $3,000 as Security. (and not last month rent.) And I would allow tenants to pay it in over 2-4 months if they needed. Which gave me a month worth of money plus some cushion for damage. Well now I can only charge $2,000 tops for Security Deposit. But I can charge last month rent also. (and allow for payments.) So you better believe I will do that, to make sure my owners are financially secure, since I can’t use any last month rent for damage. So under the new law, I am charging $4,000 for move in fees, vs. $2,500 or $3,000.