Everything you always wanted to know about Sawant’s rent control bid but were afraid to ask

Sawant’s check boxes from 2017 could add another check in 2020 — though “TAX THE RICH” needs more work

Monday night, the Seattle City Council’s Renter’s Rights Committee, chaired by District 3 representative Kshama Sawant, will discuss draft legislation for rent control at City Hall during a public hearing. It’s a cornerstone moment in the final months of her term and in her race to retain her seat in November.

Sawant’s draft legislation follows her six-year-old call for rent control, a 2015 City Council resolution supporting the repeal of a State-wide rent control ban, plus an April letter from the Seattle’s Renters’ Commission urging the council and Mayor Jenny Durkan to pass a rent control ordinance in Seattle.

In the letter, the commission’s co-chairs noted that “the unpredictability and rate of rent increases in the past decade has caused a massive burden on renters which has led to both homelessness and displacement of Seattleites.”

So, what does rent control mean to Sawant?

It’s an umbrella term that can mean different things depending on specific rules and regulations. Overall, rent control, in some cases also called rent stabilization, means limiting rent increases. This can happen in various ways: it can be tied to inflation, the cap can apply only per tenancy or beyond the duration of a tenancy, and come with or without restrictions on evictions. Some include only buildings of a certain age and exempt new buildings.

Here are a few more questions about the whole thing — and as many answers as we have heading into Monday night’s session.

What does Sawant propose? Sawant’s office remained tight-lipped about the details of the draft legislation ahead of the committee meeting on Monday. What is clear: rent increases would be tied to inflation (around 2% or 3% per year), and the legislation will be “free of corporate loopholes.” 

What does “free of corporate loopholes” mean? In other states, landlords have found ways to work around rent control by converting rental units to condo’s, for example. Other so-called “loopholes” includes rent control not applying to ADU’s and single-family homes. Another famous “loophole” is “vacancy decontrol,” which means landlords can raise the rent after a tenant leaves a rent-controlled apartment, charging whatever they want to the next tenant.

By contrast, vacancy control caps the rent on a unit even after someone moves out, and Sawant’s legislation will likely include this. It’s not clear yet what other “loopholes” the legislation will address.

How realistic is the plan? There is one major roadblock: a state-wide ban on rent control. The bill in question, backed by pro-developer lobbyists, dates back to 1981. State legislators will have to repeal that ban. Sawant’s draft legislation says that rent control will go into effect in Seattle as soon as the state-wide ban is lifted.

So Olympia needs to be convinced. What is Sawant’s strategy here? Winning rent control in Seattle and building a “movement” will put pressure on Olympia, Sawant argues. “After our movement wins these policies in Seattle, the goal is to build mass protests for the next session of the legislature in Olympia,” Sawant notes in her Rent Control FAQ.

Sawant did not say whether her office was working with legislators in Olympia as well.

But organizers, such as Be:Seattle and the Tenants Union, part of a coalition of over a dozen groups behind the Seattle Needs Rent Control Campaign, have extended their efforts to other parts of the state, including Bellingham, Tacoma, Yakima, and other places. Since the launch of the Rent Control campaign, over 12.000 people have signed on to the petition.

“Seattle led on $15, it can lead on rent control as well,” Sawant said in an email.

Will her strategy be similar to her 15$ minimum wage strategy? Sawant’s office didn’t directly respond to a question about it. But let’s go back in time a bit, to the $15 minimum wage negotiations in 2014. The $15 Now campaign held the threat of a much more aggressive minimum-wage package ballot measure over the head of elected officials, which some say has helped speed up and expand the compromise then made.

When rent control was approved by the Sacramento City Council this summer, that was partly a compromise to avoid a more strict rent control ballot measure. It had been approved for the 2020 ballot after it received roughly 44,000 signatures.

If Olympia is convinced, how soon can the ban be repealed? State legislator Nicole Macri’s ordinance to repeal the ban died in committee last year and the earliest the legislature can restart those efforts is 2020.

By then, of course, Seattle will have a different-looking City Council, with seven seats up for re-election this November, including Sawant’s. A new council could be another potential roadblock if the Council Bill is not approved before the new council members, even if it includes Sawant, are sworn in.

Why now? The draft legislation follows an April letter from the Seattle’s Renters’ Commission urging the Council and Mayor to pass a rent control ordinance in Seattle, and ties in with Sawant’s re-election campaign call for Rent Control.

In an email, Sawant said “the legislature has failed to act,” and pointed to the affordability crisis as the reason for urgency, as well as “nationwide momentum.”

Recent state-wide rent control measures (which cap rent-rises at around 7 percent plus consumer price index, averaging 2.5% a year) have passed in Oregon and California. In June, New York lawmakers, in defiance of an intense lobbying campaign by the real estate industry, passed new rent (control) laws closing loopholes that allowed landlords to raise rents or deregulate properties. It also allowed localities in the state to adopt their own rent regulation.

What do supporters say about rent control? Supporters argue rent control gives renters stability and predictability. It also helps people stay in their neighborhoods, housing advocates say, which means people can benefit from more immaterial gains: a neighborhood support network, proximity to schools and jobs, and others.

Advocates say it’s a stopgap for the affordability crisis (rents have risen 69 percent between 2010 and 2018 in the Seattle area) and that it’s an anti-displacement tool that acts quickly. Sawant points to Berlin, Germany, where within one month of passing, the law was bringing down housing costs.

What do detractors say? Landlords and developers are among those strongly opposed, often highlighting a famous Stanford study, which concluded that rent control ultimately undermined its own goals, though the paper also said that it had prevented displacement of lower-income tenants and older people.

Economists and market urbanists argue that though the policy might help tenants in the short run, it will eventually lead to fewer rental units and higher rents. They say that it lowers incentives for developers to build more housing, which would decrease the housing stock and lead to higher rents in the long run.

Another much-heard argument against it is that it would disincentive landlords to keep up the maintenance of rental units because they can’t recoup it by raising rents.

SCC Insight’s deep dive into why rent control would be “suicide” in places with a shortage of housing can be found here.

Proponents argue that the loopholes in legislation are mostly to blame for some of the failures of rent control.

Some also say the “supply and demand” lens is too narrow.  A recent report by UC Berkeley’s Haas Institute, which claims rent control disadvantages do not outweigh its benefits, noted that the housing crisis also harms the physical and mental health, for example.

Laura Loe of housing advocacy organization Share The Cities said housing stability as a public health issue is often out of view of the data-driven economic lens. “It’s not capturing the health impacts, or the fact that worker productivity could be lost as people have to transfer from close by to their work to far away (…) It’s about emotional wellbeing for kids, being able to stay in the same school, for families to be able to stay near their jobs, for people to not have to scramble,” she said. “That emotional instability [is] very hard to quantify in terms of a ‘dollars and cents’ analysis.”

What does Sawant’s D3 opponent think? Egan Orion, running against Sawant for City Council in D3, followed some of the arguments of the detractors above and said that if the policy would include new construction, it would “destroy our affordable housing future.”

Orion said he thinks Oregon’s rent control (though he calls it “stabilization”), which limits rent increases to 7% annually plus inflation and exempts new construction for 15 years, would be a “more balanced remedy” than Sawant’s plan.

Asked whether he would want to limit rent increases within tenancies or also between them, aka vacancy decontrol, he said: “I’m open to working with stakeholders to define that. There are good things about OR and CA laws but want to make sure we find the right balance for WA.”

What does Sawant say? Sawant, who has a Ph.D. in economics, agrees that the region needs more density/housing, but she doesn’t think we should wait on or trust “speculators and corporate developers” to do this and repeats her call for building social housing.

“Responsible landlords who care for their tenants and only do moderate rent increases, using rent money for repairs, will be totally unaffected by rent control,” she also says.

She also argues that as long as “Seattle is growing as a metropolitan region and remains a job creation center, developers will have an incentive to build in Seattle because they can make profits. Rent control will be no more responsible for developers halting building than will a higher minimum wage cause job losses.”

CHS will have more details of the draft legislation following Monday night’s session.

 

SUBSCRIBE TO CHS:  Appreciate CHS's breaking news? SUBSCRIBE HERE TODAY. Subscribers help pay for the writers and photographers who provide CHS's daily coverage and help us swing into action on BREAKING NEWS. Join NOW to become a subscriber at $1/$5/$10 a month to help CHS provide community news with NO PAYWALL. You can also sign up for a one-time annual payment. Why support CHS? More here.


Subscribe and support CHS Contributors -- $1/$5/$10 per month

40 thoughts on “Everything you always wanted to know about Sawant’s rent control bid but were afraid to ask

  1. Rent control sounds great. So did Prohibition. That didn’t work, and neither does rent control. It’s pushed by tenant groups and renters as a way to stabilize their cost of housing. I get that. But what it does is limit what a landlord can charge for rent. Hmmm. But it doesn’t limit what landlords can be charged for property taxes and all the other hard costs like new roofs, boilers and other overhead. Oh, and their lost income due to tenants not paying their rent. So if we put a limit on what they can charge for rent, without limiting their costs, they will either not build new units, or put as little money as possible into maintaining the units. Why put money in if you can’t get it back? I lived in New York with rent control. It didn’t work. It created a black market. Talk about closing loopholes, good luck with managing that.

    • The end game of rent control is that a large corporation who can absorb costs ends up being the only landlords.

      Either it’s the government or a big real estate business. Sawant wants it to be the government.

      I like the idea but I don’t believe that it will create more affordable housing. No city has become more affordable across the board after rent control. It picks winners and losers, just like the current system.

      • Rent control is essentially just a union tenure system for renters.

        It’s great for people with union seniority.

        But all it does is steal wealth from future residents, to redistribute it to current ones.

  2. “What does Sawant say? Sawant…repeats her call for building social housing.”

    You’d think that, given that she’s a City Councilmember, she’d be able to introduce legislation to build more social housing—as opposed to a vague ‘call to build more.’

    I’d be willing to put stock in what Sawant has to say if she’d introduced legislation for building more affordable housing alongside rent control. Instead, she’s just going for glib answers that sound great in soundbite form.

    I’ve voted for Sawant twice before, and cannot imagine doing it a third time. I agree with her on 90+% of the issues, but I don’t see that as being a sufficient reason to put her back in the City Council.

  3. Movement, movement, movement. Kshama’s answer to everything.

    Let’s put Kshama’s “movement” in context: Socialist Alternative has maybe 1,000 members nationwide. If they were churchgoers, this wouldn’t make much of a flock–there are numerous self-promoting, self-proclaimed “pastors”in Seattle with more attendees. Mark Driscoll of “Mars Hill Church” (you remember him), another world-famous bloviating Seattle fraud, had several thousand congregants weekly.

    Lots of inertia in Kshama’s mythical “movement”.

  4. “Responsible landlords who care for their tenants and only do moderate rent increases, using rent money for repairs, will be totally unaffected by rent control,”

    This is possibly one of dumbest things Kshama has ever said.

    As a small landlord of multiple units in Cap Hill, I don’t raise rent for good tenants (or I limit it to 1-2%/year max) — because I know that they’re eventually going to move out in 2-3 years.

    I don’t care if it’s $200-$400 below market by the time they move out, because I’ll be resetting it shortly afterwards.

    The economics of tenant longevity absolutely change when tenants are suddenly incentivized to stay in a home permanently, because I’m suddenly required by law to provide subsidized housing due to their arbitrary move-in date. At that point, the economics of a well-cared for building are no longer viable, and the tenants, by necessity, become my adversary who are preventing me from bringing in enough revenue to offset tax/cost increases.

    At that point, yes, the rational choice would be to sell the properties to be bulldozed for mid-rise condos (which are luckily now free of the state liability laws that previously discouraged their construction).

  5. Just wanted to correct her quote – the unpredictability and rate of *tax* increases in the past decade has caused a massive burden on *everyone* which has led to both homelessness and displacement of Seattleites…

  6. This is what we get when we continue to elect people who work in the non-profit homeless services industry as our legislators. Nicole Macri, noted in the article as sponsoring legislation last session to allow rent control, is a prime example. If we want a different approach we need to elect different legislators.

    I have many tenants enjoying below market rents due to their relatively long term residency. Yes, I also opt to limit rent increases for tenants who remain in residence beyond the term of their original lease. As soon as it becomes apparent that rent control will be implemented they will be receiving notice of rent increases. I will push rents to market rate immediately to avoid being locked in at current lower rates. I imagine many other landlords will make the same decision. So much for encouraging affordability.

    It continues to puzzle me why rent should be one of the few things we consider worthy of price controls. Why not control grocery prices? I mean, after all, people have to eat. Isn’t that a fundamental human right?

    And restricting rent income without controlling other landlord costs (insurance, property taxes, construction costs, maintenance costs, costs of appliances, etc.) is a recipe for declining profitability. When profitability declines people do not build investment properties because they can make more money elsewhere. So, housing supply constricts while population expands, resulting in increased housing shortage. Problem solved!

  7. One thing Sawant proves over and over again is that she doesn’t have a basic grasp of economics, which is iron since she was a professor of economics I believe. Our housing issues are an issue of supply and demand. Instituting rent control will only worsen this problem by forcing landlords to remove their rentals from the market and lessening the supply. I’m as hard left as they get but this is just a bad idea. We need to build, build, build. We can only build our way out of this problem. Period. And sometimes that means we will need to tear down the precious building where you once had a memorable moment in your twenties.

    • I remember the same tired, knee-jerk, weak argument repeated over and over again about A.O.C. by Sean Hannity, Laura Ingrahm, Tucker Carlson and Don Jr. What makes it particularly nonsensical this time around is that Sawant was an economics professor and is uniquely qualified to speak on the subject. Renters have been pushed far beyond their tipping point by greedy landlords and slimy developers and are welcoming fresh ideas that promote the best interest of the people over corporations.

      • health care is a necessity and a “right” and has been increasing in cost just as fast as housing has. How come doctors and nurses are not greedy and slimy too?

        Maybe we should cap the pay increases for them to whatever they earn when they first complete medical school, plus annual inflation adjustments. I bet there won’t be any problem with recruiting new doctors after that.

  8. To her credit, she’s actually doing some legislating! Now try doing that during the non-election years too and you might become a good council representative for D3.

    • So by that logic, somebody who does BAD legislation should get more credit that doing nothing? Making the problem WORSE is better than not doing anything at all? Not sure about that.

    • Yes people keep falling for it, so why not keep spewing it? The TrumpHole spewing the same stupid shit but his minions keep falling for it– so why change a story that sells?

  9. Here’s a question I’d love an answer to: What large city has implemented rent control successfully? What does that look like? Does it mean that people can easily find affordable, quality places to live?

    Or does it mean once someone gets into an apartment they’re motivated to never move, and new renters struggle to find affordable places to live? Will it mean buildings will fall into disrepair or be sold for development if they aren’t revenue-positive?

    There’s a lot of factors that have gone into Seattle’s rent increases, including (but not exclusively) huge increases in property taxes and new regulations on landlords which increase cost. Using a blunt instrument like a price control will almost certainly come with a host of unintended consequences that will be negative for both renters and landlords.

    • Oh, c’mon now Adam. Sawant minions are no more interested in actual facts that dissuade them from there dearly-held dogmas than are TrumpHoles. Don’t try to confuse them with facts. That’s just mean.

    • Additionally, people tend to ignore the interaction effects with other policies, when considering rent control.

      For example, SF is a great case study in how Prop 13 (basically: rent control for property taxes) and the city’s rent control essentially prevent any existing resident from caring about addressing lack of additional housing supply.

      (since the consequences are externalized onto others)

      https://techcrunch.com/2014/04/14/sf-housing/ is a great case study on how the interaction effects between policies like rent control make housing into an intractable problem.

    • so you’ll be buying a house?
      Or will you be building one yourself?
      You should be thankful for landlords, especially the small landlords with just a property or 2. They’re the ones taking the brunt of the tax burden so you can coast along with the relatively easier ride you’re getting. You’d better hope rent control never passes.
      Don’t believe it? Just wait.

    • Not to mention doing all the maintenance for you, probably a lot of cleaning and landscaping work, taking all the risks associated with ownership (natural and unnatural disasters, political upheavals, losses due to fire, vandalism, etc)

      In exchange for all that all you have to do is be reasonably respectful of other residents, the property, and pay a fair monthly rent for use of the place, no further strings attached. If the “big one” hits or Mt. rainier blows up or Jeff Bezos decides to relocate amazon to the moon, you can pile up your stuff and leave with no further responsibilty or loss.

    • That’s actually an interesting idea but would “Rent Control Island” be legal? Not sure you can have one policy on one side of the street and another policy on the other.

  10. We need rent controll bad single mothers out here work are butt off to make 2 thousand a month my rent hike went up this month from 820.00 a month to 1300.00 that is more then half of my income that leaves me 5 hundred to pay car insurance gas food and all orher bills all over pierce county rent for 2 bedroom is 1300 to 1500 what is going on looked up house rentals same price for renting a 3 to 4 bedroom house people I’m speaking to alot are becoming homeless because they can’t afford the rent and people that have money want to buy a house now to rent it out to make money this is becoming a money making scam how sad I see people out here in Tacoma sleeping on the side walks parking lots buying vans and rvs and living in them what is going on in wa.state it’s going down fast

    • according to HUD 80% AMI in pierce county is about $41K for a family size of 2. so if you are earning $24K a year you are well below that.

      You should be eligible for SNAP, Section 8 assistance, and probably several other benefits like utility rebates, reduced or free cell service, etc. I am no expert on these benefits especially for pierce county so I don’t know the details, but these should help you cope. If you aren’t receiving these benefits you should be looking into it. Yes, there are waiting lists for some of those benefits, but the sooner you are on the list, the sooner you get the benefit.

      Forcing the landlord to keep renting to you at $820 would probably also prevent them from performing likely badly needed updates and maintenance, and the house or building would start to degrade if it hasn’t been doing so already for some time. If you were renting at a beautifully maintained property for that price for any length of time, lucky you but hopefully you saw that the situation was not sustainable, and were able to plan for when it would eventually end.

      Nobody doubts you are in a comparatively tough situation, but slowly forcing housing providers out of the business will not help you or anybody else in the long run.

  11. Only two things can happen when prices are capped:
    1. The costs are made up in other places. In the case of rent-control, as noted, costs are made up by not maintaining the properties, or by coming up with add-ons, like the “discount” airlines do, or by prices rising in other kinds of properties.
    2. Providers decide they can’t make enough profits at the capped price and get out of the market.

    What >never< happens is an increase in supply at the capped price.

    I could be wrong, however. Maybe I just bought into the wrong narrative after running my own businesses for 30 years, studying economics and finance and owning rental property. Perhaps someone has a different view of economics that can show how more people, rather than fewer, will be able to get into affordable housing if rents are capped. I'm willing to learn.

  12. I would like to comment to just point out about the farce that Seattle is a “liberal” city. It’s liberal if you need a trans bathroom, or you want to hang up a rainbow flag on every corner and paint them on every wall. The second you talk about economic justice the libertarians come out of the woodwork, funded by the Koch brothers and big developers. Look at this message board: it’s downright Republican sounding. There is nothing “progressive” about Seattle. We cater to big business. We serve the rich. MEANWHILE California has passed a state wide ban on raising rent more than 5% on renters, Oregon 7% – both these states have moved forward with state wide rent control. We are supposedly “so progressive”. Anyways, capitol hill liberals, keep on sipping those lattes as you step over a homeless person, and bitch about how awful rent control is, and how awesome developers are. This site is totally trolled and funded by developers I am sure.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.