After hitting Council roadblock, Seattle cap on move-in fees back in motion

Tenant advocates are calling for supporters at City Hall Tuesday morning as the City Council takes up a proposal to cap move-in fees in Seattle that was one of the rare pieces of Seattle legislation to be kicked back by a full vote of the council after committee approval.

Under the measure from District 3 representative Kshama Sawant, landlords could only charge tenants the first full month’s rent upon move-in and would need to allow tenants to pay the security deposit, non-refundable move-in fees, and last month’s rent in installments. According to an example provided by Sawant, a tenant moving into an $1,800 a month unit today could pay $5,600 to sign the lease. Under her proposal, the same tenant would only have to pay $2,400 to move-in as other upfront costs would be spread out over six months.

In September, District 5 representative Debora Juarez successfully lead an effort to kick the bill back to committee, citing concerns from the city departments that would need to enforce the restrictions. Sawant said the move to stop the bill in its tracks was an example of the way the City Council works against its citizenry. “Jam it up as much as possible,” she said of her colleagues’ response to progressive legislation, but “ram the process through” for the police and business interests.

Council president Bruce Harrell had pledged that Sawant’s committee would be given a time to meet despite the busy upcoming budget schedule before December 13th so that the bill could be in place in time for the New Year.

City Hall staff bill summary:

  • limits the amount a landlord can charge a tenant for a security deposit and non- refundable move-in fees to the amount of the first full month’s rent;
  • includes an allowance for a separate pet deposit, limited to 25% of the first full month’s rent;
  • allows tenants to pay the security deposit, non-refundable move-in fees and last month’s rent in installments;
  • adds requirements for the return or retention of security deposits, including requirements for providing a move-in checklist;
  • updates requirements for local and state regulations that must be included in a summary prepared by SDCI;
  • adds authority for SDCI to enforce the regulations included in this chapter;
  • requests a study of these requirements, completed by the Office of City Auditor; and
  • requires that SDCI work with the Office of Immigrant and Refugee Affairs and the Department of Neighborhoods on outreach and education to better inform limited English proficient communities and immigrant and refugee communities about these regulations.

A roster of six amendments (PDF) will also be considered Tuesday morning including one from Juarez that would change the legislation to create “a tiered enforcement scheme” specifying how the city will handle complaints.

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14 thoughts on “After hitting Council roadblock, Seattle cap on move-in fees back in motion

  1. What a nightmare for Seattle rental property owners. So now, the only way to try and prequalify tenants that will most likely pay their rent on time and stay for the length of the lease, AND not face charges of discrimination, is to raise rents even higher.

  2. They should just say it can be up to 2 installments and be done with it. The accounting for installments of the the SD and the enforcement of that really does sound like a big headache, even with a certain level of automation (due to amount and diversity of types of property owners). The first split of paying the SD is the biggest benefit to affordability and keeps it within a reasonable limit of financial viability for owners, along with mitigating administration costs. Although I could be wrong on the administration costs (for individual owners those costs are quite low).

  3. Seattle City Council ignores the unintended consequences. Landlords will have no protection if they have no security deposit when a tenant moves in. It’s a months long effort to remove a destructive or nonpaying tenant. Result – higher rents for higher risk and less incentive for property owners to rent their property.

    • Are they saying the installments don’t start on move-in? The bill summary doesn’t make it seem that way but I could be mistaken. Just don’t make the installments so long that it become immaterial.

  4. Or, landlords are just going to increase rent further to offset the deposit.

    Why not offer a lease with a higher monthly payment for the first six months, then add a clause to reduce the rent at month six for the remaining six month term?

    This is a great example of ‘trickle down’ economics. The burden will always trickle to the consumer…. ALWAYS

  5. Sawant doesn’t really care about the ramifications, so long as she can put on her list of accomplishments that she got the initiative passed.

    • Able gets this one dead right! Sawant is supposed to be an economist, but suspends economic principles for her self serving goals.

  6. I own one unit. Rented by word of mouth. No way in hell would I rent under such terms to a person who would put my comfort at risk.

    If a person can’t come up with a second month of rent on move in day that means they lack any financial responsibility if things go wrong.

    Wonder if this is legal. Hope it gets chall Nye’s or the state passes laws that preempt this nonsense.

    Credit check, job reference and an eyeball check.

    And if pet deposits are limited, units of quality will become no pet zones.

  7. This sounds like a reasonable proposal at first glance, but what happens if the renter chooses 6 installments and then moves out before the six months is up? Will they still be liable for the various fees and security deposit? Won’t the landlord have a difficult time collecting this money from a tenant who has moved on?

    • This is the folly of the whole thing. What if a tenant stops paying their installment, and even their rent entirely, after 2 or 3 months? Then you have no rent and barely any deposit either. Everyone knows it takes months and months to evict someone. Will the City reimburse the landlord? Of course not. This may not hurt big properties, but it will kill landlords with one or two properties. I’m with you, Seeking Truth. I used to own 1 unit too, and thank god I sold it and got out of that whole landlord bit. My tenants were mostly OK, but I’d never do it now.

  8. Work long hours, study hard, save more than one spends, make a home available to rent for responsible people = bad capitalist

    Save nothing, spend too much, work not as hard = good victim, entitled to the resources of the former.

    Screw the details.

  9. Another invitation to unintended consequences: higher rents, rental units being taken off the market. As owner of a single rental unit, security deposit and last month’s rent is the only protection I have against an irresponsible tenant. Fortunately my tenants so far have been great, but landlords in my extended family have had far different experiences so I know the risk I’m taking.

    Oh, and I can’t interview prospective tenants; I have to take the first one that applies that meets the criteria (which I’ll have to raise since I can no longer make judgment calls to rent to someone who might previously have fallen into a gray area). I suppose I’ll just sell the condo and pocket the appreciation when my current tenants decide to move out.

    I appreciate the goal is to reduce the financial burden on renters. So why doesn’t the city provide low- or no-interest loans to low-income/low-asset tenants to cover the move-in costs? It can afford to insure itself against (or acquire insurance for) its losses. Instead, let’s foist the responsibility onto small-time property owners who are not in a position to distribute their risk.

    I love Seattle but I do not remotely see how this is a positive thing for the city to do in its current form.

    • So far the laws do permit credit and background checks. You can decide you want college graduates from Kansas if you choose. You can run a background and credit check and nix anyone who has not paid all bills on time, or whose score is below a certain number. You can set any criteria that are not specifically illegal. And you could charge a whopping first month rent payable in advance that is equivalent to first and last, and then lower subsequent rent amounts. Having to look in the eyes my tenant years ago who could not make rent was unfortunate for both of us and I will do what it takes to reduce the risk of this in the future

  10. The biggest problem with this proposal is that state law does not allow eviction for anything other than failure to pay rent. Therefore there is no incentive for a tenant to pay a security deposit beyond the first installment.

    As the owner of two small rental houses (20+ years), I cannot afford to take the risk of having the accept the first person who submits an acceptable application with no security deposit and no last month’s rent. My only alternative is to raise the rent rather dramatically.

    In the past I have amortized security deposits over the first several months of a tenancy, according to the needs of the individual tenant, whom I have already accepted for tenancy. I have also on occasion accepted a tenant with a less than stellar credit rating, but with a well-paid, stable job and a good explanation for their bad credit. I will no longer be able to do that with the hard and fast numerical credit ratings I will be required to publicize.