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Sawant keeps rent control debate alive after rejection by mayor’s affordability committee

A 1980 Seattle Daily Times headline captures the uncertainty surrounding rent control, even during a time when it was up for serious consideration. (Image: Seattle Public Library Archives)

A 1980 Seattle Daily Times headline captures the uncertainty surrounding rent control, even during a time when it was up for serious consideration. (Image: Seattle Public Library Archives)

20150612SeattleOverallRentTrendByBR-600x360There were 60+ recommendations included in the Mayor Ed Murray-commissioned affordable housing study released last week, but rent control wasn’t one of them.

It was mentioned in a little noticed section in the back of the report, where the Housing Affordability and Livability Agenda Committee said its members couldn’t agree on the issue:

“The HALA could not reach consensus on the issue, even despite proposed amendments and changes.”

According to Jon Grant, committee member and at-large City Council candidate, a majority of the 21-member committee did support adding a call for rent control, but there weren’t enough votes for an official recommendation. The report notes that opponents argued it would “only divert attention from other more feasible strategies that can achieve more affordable housing.”

“It was on the table from the start,” HALA co-chair Faith Li Pettis told CHS. “The HALA could not reach consensus on the issue, even despite proposed amendments and changes.”

While the committee’s deliberations on rent control were conducted in secret, the public will get an opportunity to witness some of that debate during a Monday night event at First Hill’s Town Hall.

Arguing in favor of rent control will be City Council member and District 3 candidate Kshama Sawant and her Council colleague Nick Licata. Opposing rent control will be Republican state Rep. Matthew Manweller of Ellensberg and Smart Growth Seattle director Rodger Valdez. Former City Council member Peter Steinbrueck will moderate.

Seattle Channel will be live streaming the event here.

Proponents of rent control typically argue that by linking allowable rent increases to something like the Consumer Price Index, working-class families have more stability thereby allowing them to keep roots in a neighborhood without getting priced out. This in turn adds increasing value to the neighborhood as residents become more invested in their community.

Opponents of rent control, including most economists, argue that artificially depressing rents stymies new housing development, creates animosity between renters and landlords, and may benefit a small number of renters lucky enough to land rent controlled apartment.

If you’ve been following the rent control debate in Seattle, you probably know such policies are currently prohibited in Washington. Overturning the ban will be the first and probably tallest hurdle to passing a rent control ordinance in Seattle.

That will almost certainly require convincing House Speaker Frank Chopp that a bill to repeal the ban is not DOA in the Legislature — which he believes it is. Chopp, who represents Capitol Hill’s 43rd Legislative District and was on the HALA steering committee, actually supports lifting the ban and was part of a coalition pushing for rent control legislation in the 1970s.

Sawant says it is a lack of political will that’s keeping rent control off the agenda. Fellow Socialist Alternative member Jess Spear vowed to get it on the agenda if voters replaced Chopp with her in last year’s election (they didn’t).

While there’s different ways to slice the data, rents are undeniably on the rise in Seattle. Average rents rose 8.3% last year, according to data from Dupre+Scott Apartment Advisors. Analyst Mike Scott says that spike can largely be accounted for by the opening of new units with better amenities. But even when new units are taken out of the equation, average rents still rose 7.5% over the past year.

On Capitol Hill, the situation is even more dramatic. Average rents went up 12% from 2013-2014 and have climbed 38% since 1998, according to a recent report from KUOW. This May utilizing a much smaller set of data, CHS reported that the median one-bedroom ad listing in Craigslist had climbed to $1,795 per month. A tenant would need to make at least $72,000 a year for that apartment to remain affordable, assuming a 30% affordability threshold.

Tracing the history of rent control, both nationally and in Washington state, is a strange saga, which CHS summarized in 2013:

Back in 1930s New York there was a store clerk who was fined by the state for selling milk below the state-set minimum price. The case made it to the U.S. Supreme Court, where in 1933 the court found no reason to strike down the power of states to set reasonable retail price limits. That has since been interpreted to give states and cities the constitutional grounding to enact retail price controls, like those on rents.

In 1980, a Seattle group called Renters and Owners Organized for Fairness (ROOF) filed a rent control initiative with the city. It would have set up a rent control board and tied rent increases to the Consumer Price Index. The effort was ultimately unsuccessful. The following year, the Washington state legislature banned rent control, although much of the fight came over moorage fees for houseboats.

The statute prohibits and cities and counties from establishing any limits on rent hikes, moving the rent control fight to Olympia.

On Monday night, both sides will likely use some form of the argument that “rent is already controlled” to support their positions. Sawant says developers and landlords control rent by exploiting the basic need for housing. On the other side, Valdez has pointed out that the city already has thousand of units that are rent controlled and could expand those programs.

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20 thoughts on “Sawant keeps rent control debate alive after rejection by mayor’s affordability committee

  1. Can that be right? Rents have risen 38% since 1998? If that is the case’ why the calls for rent control? I do think they have risen faster, but not enough since that time to justify the calls for imposing price controls. If these controls are justified, perhaps we should consider imposing controls on the cost of water, sewer, garbage, whose costs over time have clearly exceeded the increase in rents over a twenty year period. Hoising purchase prices have also increased at rates exceeding the cost of living over the period. Why not price controls on the price of owned homes for sale? After all, if housing is a right, why differentiate between homes owned or rented? Groceries, clothes, health care – all essentials whose price is generally unregulated. Shall we regulate them as well?

    • These examples are taking the concept to the absurd. Nobody (well, maybe 1 or 2 stray people) arguing in favor of rent control is arguing for price controls in all markets (food, clothing, home sales, etc.). What fear-mongering nonsense.

      • These comments are not intended to inspire fear. They are intended to ask the question, why control the price of rent but not control the price of other commodities whose costs have risen above the inflation rate over time? I would argue that there is no valid distinction, and that rental costs should not be controlled any more than any other commodity. And it is incredible how everyone forgets how recently rental costs were flat or declining, even when costs of ownership were increasing.

  2. Rent control is a fantastic idea to win votes: tell your constituents you’ll guarantee they can stay where they live for only inflation-pegged rent raises and they’ll love you for it.

    Should rent control be enacted, all that will happen is that rents in non-controlled apartments will go up even more to make up the difference. Techies will still afford them and displacement will therefore be even faster.

    I know it’s cool to hate “developers” (both land and software) but please think about what will actually happen under a rent control system. You might be able to stay put, but if you ever want to move to another neighborhood or if you want your friends to move to your neighborhood, the rent will be prohibitively high even compared to now.

    Instead of trying to stabilize Seattle wherever it was when you think it was best, let’s build it up. Build in plenty of affordable housing, build bigger, continue to invest in transportation (not parking) and we’ll be better off in the long run than we would have been with rent control.

      • I never see any discussion about control of water/sewer/garbage/property tax rates. Lots of ranting about greedy landlords and developers; but anyone who owns a home knows when they open their Seattle Public Utilities bill, it’s not chump change. Ditto for the annual property tax statement. Every ballot, usually twice a year, has another levy that “only” raises taxes a hundred or two per year for the “average” home. Nope, we don’t see any limits on those, then lots of screaming about greedy landlords.

      • You cannot compare a service provided by private industry with a goal of generating the most profit possible to a public company without that kind of profit motive.

        If water, sewer, garbage were run by a private company charging “what the market will bear” I would imagine you would see people screaming for regulation of their prices.

      • you totally miss the point. Some of the contributors to increased rents are higher costs attributable to property tax, water, sewer, garbage, recycling, etc. Landlords can’t just absorb it. It’s not insignificant. Property taxes especially have been on a steady uphill climb lately, hundreds of $$ every year on an “average” house. Of course municipal fees do not have the *objective* of maximizing increases. That’s not the point. The point is they ARE going up anyway. There is no check on them. And nobody is proposing one (which would be silly to do anyway). Those who advocate rent controls seem to place all the blame for upward-spiralling rents onto greedy landlords, as if landlords and developers are immune to other cost increases. You can’t just control the rent if there are no checks on anything else. And nobody is suggesting that.

  3. Rent control. When calculating rapidly increasing rents consider that during the last downturn some landlords actually lowered rents, in some cases by about 20%, to keep their apartments filled. As our economy started booming those same landlords retracted the increases and raised more to meet supply and demand. That is how you can have huge rent increases and still stay within the average 38% since 1998.

  4. With each new story I hear of a friend being constructively evicted from a market-rate apartment by being handed a 30-40% annual rent increase, I grow more in favor of reasonable rent control. It is great that business in Seattle is booming, but I would prefer not to be boomed right out of my home or my neighborhood.

    • What’s the point in meeting the demand for new housing if you know ahead of time you’re capped below market rates at what you can charge for it?

  5. If you want something cheaper you have to:

    A, build it cheaper.
    B, have someone else subsidize the cost.

    If you force or fix a price without either A or B then people will stop producing the desired product as there is no ROI in it.

    What Seattle needs is more affordable housing built (taller sites without stainless and granite) and/or subsidized housing. Landlords of existing units became greedy when aPodments started skewing the price per square foot.

    I’m worried about the rental market. What will happen when condo conversions resume? What will happen when discounts on subsidized units expire? What will happen if we allow rent control and the pace of new builds slows and existing buildings dilapidate? The Seattle rental landscape is scary but rent control is not the answer.

    • None of that really makes any sense.

      It’s a gross oversimplification of the situation, and it’s not like rent control is a one time only fix for a situation that can’t be adjusted.

      • Making something cheaper/scaleable and passing on the savings or offsetting the costs doesn’t make sense to you?

        Yes, the current situation is complex – but it doesn’t have to be….

      • No, Sooo. It actually makes quite a bit of sense. If you demand a price to be fixed and don’t offset the lost profit, the profit seeker will seek profit in other place.

        Why build in rent controlled Seattle when you can build in Bellevue, Shoreline or Tukwilla etc. etc?

        You’re asking to be given something for free when you demand rent control. By what right?

    • Rent control will do nothing to lower the current overpriced rent. It only adds controls on increases from their current unaffordable state. People who can afford rent today will be better off with the controlled costs; people who can’t afford rent today will still be unable to afford the new controlled rents, because they won’t magically drop by 50%.

      What people really need is a commitment to lower-cost and subsidized housing (how is this paid for? who knows?), or they need to accept that Capitol Hill is now an expensive place to rent and move somewhere that’s cheaper. Why not the CD? Why not Georgetown?

      This is such a schizophrenic issue. When old houses are being torn down for apartments, it’s “embrace change! Embrace density!” When an old commercial building is torn down, it’s “ugh, more ugly new buildings! We’re losing our identity!” When it’s rent increasing, it’s “why isn’t it like it was X years ago!” And now that white people are being gentrified, “it’s time for new laws!”

  6. Here’s a thought: Why not legalize an increased supply of cheap housing that doesn’t require rent control OR subsidies?

    • Apodments/microhousing are NOT “cheap housing.” On a square foot basis, it’s actually very expensive. And I’ve noticed that the apodment rents are increasing too. $800 (and up) for a closet in an ugly, sterile building?

      • For many people cost “per square foot” is meaningless if all they want is *someplace* inexpensive as a whole in the area; especially people who don’t plan on spending much time at home in the first place.