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To blunt COVID-19 crisis, Seattle leaders make call to cancel rent, house payments

It’s the end of the month and Capitol Hill and Central District renters know the check is due. For homeowners, it is time to pay the lenders.

With that in mind, the Seattle City Council unanimously passed a resolution Monday calling on Gov. Jay Inslee and the federal government to impose an immediate moratorium on rent and mortgage payments as workers are laid off amid the COVID-19 pandemic.

More than 133,000 Washingtonians filed for unemployment benefits from March 15-21, up from just over 14,000 the week before, according to the Employment Security Department, as the state’s moves to blunt the spread of the novel coronavirus virus got more and more restrictive.

King County residents accounted for 37,296 of the jobless claims that week. More than 41,000 were in the accommodation and food services industry.

“All of us as a council is eager to make sure that we’re protecting our neighbors,” council member Tammy Morales said, adding she’s been getting hundreds of emails from worried constituents. Morales, the sponsor of the resolution, also said this effort is in tandem with legislators across the country, from San Francisco to Boston, who are working on similar measures to push federal lawmakers to act.

Last week, CHS reported on District 3’s Kshama Sawant calling for a COVID-19 rent freeze to combat “shockingly unconscionable” rent increases. Monday, she said a petition in support of the movement had over 6,300 signatures calling on Inslee to immediately suspend rent payments.

“Elected officials have a moral and political duty to ensure the burden of this serious crisis does not land on the same working people and marginalized communities who are already struggling under ‘normal’ periods of capitalism,” Sawant wrote in a letter to Inslee on Thursday. “It would be criminal to allow landlords to carry out rent increases during this pandemic, leading to further evictions and putting public welfare and health at grave risk.”

Monday, the resolution passed with Sawant unable to participate in the initial vote thanks to a momentary technological blip. The council held its session via teleconference, joining thousands of workers across the region under COVID-19 “work from home” restrictions. The District 3 representative said later that a technical difficulty prevented her from voting and that she was able to add her support.

Mayor Jenny Durkan previously ordered a 60-day moratorium on evictions in both residential and commercial properties because of nonpayment of rent amid the coronavirus, which as of Sunday has over 2,100 cases in King County and caused 141 deaths, according to health officials. Renters, at this point in the crisis, are still obligated to pay landlords and the same goes for mortgage-holders and lenders.

But tenants advocates say that won’t be enough amid the financial and health impact of the crisis.

According to the council’s non-binding resolution. 47% of Seattleites are considered rent burdened, so keeping the obligation to eventually pay rent despite these circumstances would mean that those who choose to defer payments would incur significant debt.

Monday’s session was held via videoconference

“If I don’t pay rent for four months, especially in Seattle where rent is $2,000, there’s no way that that accumulated debt is something I will ever be able to pay off,” Morales said, describing what she’s heard from constituents recently. She noted that the resolution has the support of Rep. Pramila Jayapal, who represents Capitol Hill in Congress.

Council member Alex Pedersen had concerns about the legislation forgiving rent payments during the pandemic, instead of simply pushing them back when renters will be receiving “relief from other angles,” but voted in favor of the resolution.

District 6 council member Dan Strauss added an amendment to include provisions in the resolution for a moratorium on property taxes and insurance payments that cover one’s home or business.

“Beyond rent and mortgage, we also need to be aware that insurance policies need to maintain coverage despite a person’s ability to pay this month if they were laid off or for other economic reasons,” Strauss said in the Monday afternoon hearing via video conference, “as well as property tax for some folks may be the final straw that breaks their back during this moment.”

The amendment passed unanimously. King County also extended its spring property tax payment deadline on Monday to June 1 from the original April 30th due date for individual taxpayers

Meanwhile, council members Lisa Herbold and Morales are also pushing an ordinance for commercial rent control that places a moratorium on increasing rents and provides for a payment plan for late rent for small businesses and nonprofits. This follows Durkan’s state of emergency proclamation early this month and would last as long as the declaration remains in place.

Many small businesses, defined as those with fewer than 50 employees, and nonprofits have been forced to close or significantly scale back their operations as COVID-19 has wreaked havoc on the industry. This bill aims to provide them temporary relief from these pressures.

The measure would also place a moratorium on rent increases under a new or renewed lease. And for the six months after the emergency, the bill holds that, if a small business or nonprofit is unable to pay rent, the landlord and tenant shall negotiate a payment plan.

The ordinance requires the plan provide for a full repayment of past due rent within a year, but also says the plan must not require that one-third of past due rent be due in any single month.

The legislation has not yet been heard by the council, but is on the agenda for early April. It needs approval from three-fourths of the council to pass.

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25 thoughts on “To blunt COVID-19 crisis, Seattle leaders make call to cancel rent, house payments

  1. So ironic

    This would be the very same council that hasn’t stopped wanting its property tax paid (now due on June 1st) and will charge an astonishing late fee (8% of full year) if you don’t pay while never contacting you with any form of reminder.

    • Property tax funds local community initiatives, while rents and mortgages go to debt holders with no expected return benefit for society. Why should they be considered equally? Not to mention property taxes far less regressive than things like sugary sweetened beverage taxes. If the city is too expensive to own a home, blame amazon, microsoft, and boeing. Oh, and don’t forget capitalism

      • Interesting attitude. You say that rents go to debt holders with no expected benefit to society. Say that as part of a person’s retirement plan, they purchased a small retail space years ago. Now they rent that space to a retail store. This store provides jobs and shopping opportunities to the community. Is this not a benefit? And in exchange for using this space, the store owners agree to pay rent. So are you saying that old demon capitalism is the problem here? Those darn landlords are just takers, right?

      • I’m saying that the rent collected by the landlord (who owns the retail space) is wasted money from the perspective of the business owner, and thus the cost of rent is factored into prices, which is wasted money for the consumer. This added cost would be resolved if the business owner also owned the property and did not deal with the middle-man landlord.

        Instead, the landlord collects a fee SPECIFICALLY for having the space occupied by someone else. Sure, the landlord could charge just enough so as to cover the property taxes and related maintenance/utility charges, and break even. BUT, that would be a pointless venture in the eyes of someone making an investment. So the landlord always charges more, so as to make a profit. This profit is in essence created by the profit used to purchase the property in the first place.

        Whether the business is successful or a benefit is beside the point…the key takeaway is that the landlord is completely unnecessary and unconnected to any services or benefits provided by their tenant. They just skim off the top, and make the business more expensive for the consumer.

        Capitalism is the problem, yes.
        Landlords are just takers, yes.
        Any other questions?

      • Yeah, here’s a couple. The rent people can’t pay contains a portion the landlord uses to pay property taxes. The mortgage payments people can’t make contains a portion the lender escrows to pay property taxes. So pray tell– where does the property tax money come from, out of those payments that aren’t being made? Or is it (once again) assumed the property owner is so rich they can just float it?

      • Let’s look at the reality. The return on investment on most rentals is 5% or less after expenses. You can see all the numbers if you look at an apt complex on Redfin etc.

        The major expenses (again visible on any property listing) are property tax, WSG, insurance. All of these things keep coming. So let’s say no rent means no WSG ?

        The returns and hassle of running a rental property have gone beyond the point of being worth it in Seattle.

      • GG Palin, you claim the landlord makes the retailer’s product more expensive to the consumer because he owns the building and requires the retailer to pay more so that he will profit from his ownership of the building. Theoretically, that is true, of course. But following that logic, and if the retailer came to own the building as you espouse, wouldn’t the lender’s need to make a profit (interest) from the retailer also have the same effect? Would the lender also be skimming profits? Or would you expect the lender to provide capital for the building’s purchase without making any profit from the venture? Or do you simply expect the retailer to have the money to purchase the building before opening the shop?
        What if the retailer has another job and simply opens the shop as an investment, hiring a manager and employees to run it while she keeps her day job? Is she allowed to make a profit on the shop even though it is, for her, an investment? Would she be skimming as well? Things get tricky in a hurry when you start defining one person’s income as “skim” and another’s as somehow more virtuously obtained.

      • My parents had a dream—to own their own business. They could afford the inventory, but certainly not the building, so they found a suitable building, rented it, and opened their auto parts store. The rent they paid was an affordable expense and it went to a very nice older woman who owned the building. After 8 years, the business had been fairly successful, so they approached the woman and bought the building. About 10 years later, as my parents approached retirement, they sold the business, but kept the building as a supplement to their retirement. About 10 years later, my mom sold the building to the purchaser of the business. To me, this is how communities are built. It keeps the cost of starting a business within reach to more people. It provides an income for people in their retirement, as instead of putting money into the stock market or other investments, they kept the money in the community. To me, this is capitalism, and perhaps why I still believe in it—not blindly as if it can do no harm, but it is also capable of doing much good.

    • It it’s too expensive to be a “property owner”, maybe you should only own property that you live in. That way you only have to pay property tax on your own dwelling, and not others’, too. And if that’s too expensive, you could always become a tenant ;)

      Although I wouldn’t suggest it, as it’s not the optimal living situation in today’s economy…

      Death and taxes dawg

      • GG, you can always move to Russia, China or even North Korea if you would like to get away from this terrible capitalism. I hear you can even get free rent in some of the shared housing projects. You do have to wait in line to use the bathroom and kitchens though. Or you can make good investments in yourself and actually make a positive difference in this great country. Get off your lazy ass and educate yourself so you too can become financially independent and stop sucking off the tit.

  2. Neither the city council nor Jay Inslee has the ability to put a moratorium on mortgage payments. It has to be done on a federal level. For small landlords, if tenants withhold rent, we may lose out homes. This is a dire situation for everyone – not just tenants.

  3. One way or another rent and many mortgages will not be paid: people simply won’t have the money.

    The only options are a debt crisis–which have a tendency to spark uprisings–or forgiveness. If “rent strike” seems too radical now, think about the kinds of radical conclusions people will draw when hoards of them are getting mired in debt and evicted.

    • Just offering a theory here… if someone was working prior to this crisis, say making $60k annually and living in Seattle, and they became unemployed one week ago, won’t they be collecting a decent percentage of their former salary soon from state unemployment and the federal provision adding $600 weekly to state unemployment benefits? By rough calculation they would get about $400 weekly in state unemployment payments plus $600 weekly in federal benefits. That’s $52k on an annual basis, so more than 80% of their previous salary. They will also get the one time $1200 federal stimulus check, hopefully by the end of April.

      If we waive their requirement to pay rent, let’s say they were paying $1800 monthly for a one bedroom and lived alone, won’t they have more disposal income during the crisis than they did before it ? I mean, if you eliminate rent that frees up a lot of income. And if you provide state and federal unemployment benefits that provides much of the income that was lost. Are we seeking to provide affected people with more disposal income than they had before this crisis arose?

      Now I know people who were making higher salaries might be laid off and unemployment benefits will not make up as much of their lost income, but it is reasonable to expect they have more accumulated assets to weather this storm. Should we be waiving their rent and mortgage requirements? I am not convinced we should be. Happy to hear other perspectives.

  4. A previous CHS article claimed that Capitol Hill Housing wasn’t going to go through with rent increases for the rest of the year. I asked my apartment manager who said this wasn’t the case. Can you get some answers?

  5. I think in the VERY specific case you listed, the renter in question would be able to pay rent with fairly little difficulty. However, I definitely don’t think it’s the case that most of the people recently laid off by their employer have an annual salary anywhere near $60k.

    Even if they apply for benefits and got full payment of 80% of their previous salary, what is wrong with people, specifically low-wage workers, getting a little more than they normally would under normal circumstances? We’re in the midst of a public health crisis. What little bit extra they may or may not get, would still be completely outweighed by the structural and societal advantages of just having a higher average salary to begin with, or maybe just having the certainty that the economy will still function in a time of crisis.

    Because the economy is based on approximately 70% consumer spending, and no one can safely participate in most regular spending, people’s ability to earn profit from the market is significantly impacted as well. To prevent the societal decline that becomes inevitable when an economic system dictating a social class structure fails to take care of the needs of a LARGE number of citizens, we (the people i.e. the government) need to accept that waiving most if not all financial requirements during a time of crisis is not enough if many people can’t even continue to earn a wage.

    Rent and mortgage freezes for ALL. If you’re worried about poor people’s income now relative to when they were poor before, you’re missing the point by a lot

    • Not sure what your point is? Everyone is guaranteed a $15-$30/hr effective salary for 4 months while unemployed.

      The vast majority of people in Seattle right now are not unemployed.

      We don’t need to give 100% of people “free rent” because ~5% of people switched their income from their employer to the federal government (and in many cases are bringing in more money).

      I’m going to ignore you now, since it seems clear you’re operating from an ideology POV rather than an economic/policy analysis POV.

    • People making less than $60k would get an even higher percentage of their former salary. If you are making $40k, you might get $300 unemployment weekly plus $600 weekly from the federal govt. That is about $46k annually. Waive their rent payment (say they had a roommate and were paying $1200 monthly) and that person is suddenly doing better financially .than they were when they were employed. Those making higher salaries would be most at risk of suffering a large drop in weekly earnings, but again, it is reasonable to expect they have some accumulated savings to help during the crisis. So, I set these examples out to provoke deeper examination of whether waiving rent and mortgage payments is good policy. I don’t think the blanket prescription fits here, and agree with the sentiment below that more targeted relief should be utilized to address the financial problems some people are facing.

      • The worst case is if you were self employed contractor, gig worker etc. unemployment will supposedly happen as of last week, but may take 2-3 months to show up. Also big problems if you owned bar, restaurant, retailer etc. don’t think you would get unemployment ?

  6. Neither the state nor federal government have the legal authority to impose a moratorium on rents or mortgages (they might have more power on mortgages due to their relationship with Fannie Mae and Freddie Mac). It violates the 4th amendment by taking property without compensation as well as state constitutional provisions.

    Frankly, it’s dishonest for the Council to send out this message knowing it’s got zero chance of happening, but this isn’t the first time that’s happened (see high earners tax). If the city thought this was such a great idea, why didn’t they just pass as law it for Seattle rather than a symbolic resolution?

    If the state or federal want to keep people in their homes, then the option is greater financial assistance.

  7. If you have the money to pay your rent. Great, pay your rent on time. If you don’t have the money, talk with your landlord. They rather have some rent, then no rent.

    If we’re talking about a rent moratorium, it needs to include real estate taxes and all those silly inspections the City requires.

    Otherwise, we’re looking at Depression 2.0. BTW, does everyone know what started the great depression in the 30’s? What got us out the great depression was World War 2.

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