Capitol Hill renters might be getting slightly better deal in 2017 — but new commission is about more than rents

Screen Shot 2017-03-02 at 4.11.25 PM Screen Shot 2017-03-02 at 4.11.31 PMFriday morning, the Seattle City Council is taking its first steps toward forming a first of its kind commission to represent renters at City Hall. Formation of the Seattle Renters’ Commission comes as rents for the first time in ages appear to possibly be softening on Capitol Hill — but immediately lower rents aren’t necessarily the goal. The city is going to need political help widening the new apartment pipeline to keep new construction in motion and new apartments coming into the Seattle market.

“Rising rents are pushing residents out of the city, and that’s unacceptable,” Seattle City Council member Mike O’Brien representing Northwest Seattle’s District 6 said. “Low-income renters are nearly twice as likely as homeowners to be displaced by gentrification. I believe that the Seattle Renters’ Commission will bring much needed perspective to our policy work about how we can grow equitably and inclusively.”

O’Brien is talking about lots of things — Source of Income Discrimination and Move In Fees legislation, enforcement of existing laws like the Just Cause Eviction Ordinance, Rental Housing Registration and Inspection Program, the Tenant Relocation Assistance Ordinance, and the Rental Agreement Regulation Ordinance — but he is also, of course talking about HALA.

Seattle is passing through a decade of an “historic apartment surge” in which 100,000 new units are projected to be created in King, Pierce and Snohomish Counties. Still, in a Colliers International report, the Seattle area showed a 5.9% annual rent growth in 2016. The Housing Affordability and Livability Agenda is an attempt for the city to build thousands more — including 20,000 affordable units in the next decade. UPDATE: Thanks to Ethan Phelps-Goodman for pointing out an error in our explanation of the 100,000 number. Here’s more from the Seattle in Progress founder on that particular datapoint:

That 100,000 figure is for King, Pierce and Snohomish Counties together, not Seattle. And it’s a projection through 2020, not a historical fact. Moreover, that projection is extremely optimistic, assuming that production over the next four years will be more than double what it has been in the last few years. A much safer bet, in my mind, would be to extrapolate from current trends, which would leave us at around 70,000 apartment units in the three counties from 2010-2020. If you want the number of apartments built in the City of Seattle from 2007-2016, that number is around 40,000.

“This commission will create a platform for renters to participate in other important pieces of legislative initiatives before the City Council, such as Mandatory Housing Affordability, or recommending new policies,” Council District 1 rep Lisa Herbold said.

That power could especially be useful in areas like Miller Park where city planners have their hands full managing concerns about planned upzoning to encourage more affordable development. “The goal is to attract folks across the whole spectrum,” said Capitol Hill Community Council’s Zachary DeWolf, who is credited with inspiring the proposal to form the commission. “Families, seniors, geographic diversity, vouchers, newer units, older units. Everyone.”

Joel Sisolak, Capitol Hill EcoDistrict director with nonprofit developer Capitol Hill Housing, meanwhile, says the time has come for the power of renters to be recognized. “Renter households now outnumber homeowner households across the City, and as with Seattle homeowners, ‘Seattle renters’ comprise a large and diverse group,” Sisolak writes. He also argues that the commission will be good for homeowners — even those in Miller Park who have so far spoken out against proposed building height increases. “It will address development and affordability issues, as well as transportation, open space, education, and public health,” Sisolak says. “This bodes well for Seattle’s neighborhoods and should be welcomed by all of Seattle’s renters and owners.”

According to the council members, the legislation to be introduced Friday would set up a 15-person volunteer commission designed to address topics “ranging from housing affordability and neighborhood rezones to transportation and access to open space.”

The Seattle Renters’ Commission (SRC) will be expected to:

  • Provide information, advice, and counsel to the City Council, Mayor, and City departments about a range of issues impacting life in the city, from transportation to education and public safety;

  • Monitor the enforcement and effectiveness of legislation related to renters and renter protections; and

  • Provide periodic advice on priorities, policies, and strategies for strengthening and enhancing the enforcement and effectiveness of renter protections.

Regardless of how the Renters’ Commission takes shape, it looks likely the edges of Capitol Hill and the Central District will be a big part of the early march to create needed new housing. Some 4,545 units are in the development pipeline across the Central District/Beacon Hill/Rainier Valley segment of the city. First Hill will contribute 5,005 alone. More than 3,600 new units, meanwhile, are destined to open on Capitol Hill over the next four-plus years.

“As rents continue to rise, it’s increasingly urgent that renters are given a forum to engage city government with a strong and organized voice,” said Council member Tim Burgess,  the prime sponsor of the legislation. “Half of households in Seattle are renters, with renters making up more than 80% of residents in certain neighborhoods, and that number is only climbing. That’s why we are creating this Commission, a kind of community council for renters.”

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7 thoughts on “Capitol Hill renters might be getting slightly better deal in 2017 — but new commission is about more than rents

  1. One benefit of moving from property tax to income tax is that the burden of funding the city would be shared equally rather than hidden in rent increases. The city just put up the property tax on rental I own by 20% – perhaps time to do Airbnb :)

    • Your interesting comment is an example of how increasing property taxes can negatively impact the availability of affordable housing. If apartment owners are converting all or some of their units to Airbnb, then those are units which are no longer available to local residents.

    • One benefit of moving from property tax to income tax is that the burden of funding the city would be shared equally rather than dumped disproportionately onto homeowners.

    • @ Zach, I can’t answer for @Nope, but the company I work for owned an apartment building where the valuation went up 50.9% between 2014 (for the 2015 tax year) and 2016 (for the 2017 tax year). For the same time period the actual tax bill itself increased 50.5%. On a per-unit basis, taxes increased approximately $150 per unit per month (which was a little over 7% of the average rent of $2,100/mo).

      In our case, we couldn’t/wouldn’t convert to Airbnb, we simply sold the building. The new landlord not only has the higher tax expenses that they’ll try to pass through, but they also have a significantly higher basis in the property (thanks to the sub 5% cap rates).

    • Now paying $3600 property tax, up $600 from last year on the rental.

      Rent income is $2500 month, 12% of that is property tax ($300). Add on hoa fees ($400), mortgage payment, insurance, and maintainence – you are lucky to make any profit with a rental in Seattle.

      You can certainly do better with Airbnb, but ultimately with the value in the property it may be easier to sell.