Would rent control work in Washington?

Oregon’s new law could lay the blueprint for other states

Organizers in Washington are following an Oregon-led movement to establish rent control laws that protect hundreds of thousands of struggling tenants across the state.

The Tenants Union (TU) of Washington State organized a rally for rent control in Olympia on Feb. 27, which happened to be the day before Oregon’s statewide rent control bill, SB 608, was signed into law. It limits the amount a landlord can raise rents to 7 percent annually and prohibits no-cause evictions.

The bill’s emergency provision enabled it to go into effect immediately, “providing immediate relief to Oregonians struggling to keep up with rising rents,” according to Gov. Kate Brown.

The impacts of rent increases are being felt on the Eastside as well. According to Real Data/Apartment Insights, the average rent in east King County cities rose 5.6 percent from 2017 to 2018 ($1,836 to $1,939 per month).

From the most recent HUD Comprehensive Affordable Housing Strategy data (2011-15), 31 percent of all households were housing cost-burdened, or paid more than 30 percent of their gross incomes on housing expenses. According to Lindsay Masters, exceutive manager of A Regional Coalition for Housing (ARCH), 14 percent paid more than 50 percent of their incomes.

Impact of organizing

Violet Lavatai, TU’s interim executive director and membership and development coordinator, said rent control could affect 1 million tenants across Washington.

“For years, it’s been illegal in the state of Washington, and for years, advocates have been fighting to repeal it,” she said. “Now, people all over the nation are experiencing a housing crisis.”

Bans on rent control were passed in the early 1980s in both Oregon and Washington, but Oregon overturned theirs in 2016.

It took a few years and a lot of organizing to create the political will for rent control, even while both cities and rural areas were feeling the effects of the housing crunch, according to Katrina Holland, executive director of Oregon’s Community Alliance of Tenants (CAT).

Portland’s housing situation became dire in 2015, Holland said, prompting CAT to declare a “renter state of emergency.” She remembers entire buildings being cleared out by landlords using no-cause evictions, which especially hurt people of color and immigrant communities. Lavatai said it’s the same in Washington.

“The people that are most affected are the most vulnerable, marginalized communities, and that’s low-income people of color, senior citizens, people with disabilities,” Lavatai said.

Holland said many organizations that represent smaller landlords showed up to support rent control, with many viewing the modest protections as common courtesy. Organizations like the Realtors were and remain opposed, often representing larger and corporate landlords.

Lavatai said the Tenant Union’s hotline is overwhelmed with calls about certain landlords and management companies, and that buildings around Washington are also starting to organize, despite anticipated pushback.

“Landlords are going to come out swinging. For years, they’ve had their way with rent control being banned,” Lavatai said. “Now — guess what — it’s not so far-fetched… Rent control is high on the list of every state. If Oregon did it, which was great, then why can’t our state do it?”

CAT is focused on policies that aim to stabilize the market and allow families to stay in their homes, Holland said. She and other organizers say Oregon’s new law doesn’t go far enough on housing affordability, though it does protect against practices like rent gouging.

Predatory practices

One of the faces of the rent control movement in Oregon was the Titan Manor apartment complex. Coya Crespin, who now lives in North Portland, said she and her neighbors were all evicted on the same day. Later, CAT organizers came to the building for a meeting.

“All of my neighbors were there, and there was a very sad, defeated vibe in the room,” Crespin said. “I didn’t want to just put my head down and walk away.”

Fighting her eviction notice was the first foray into community organizing for Crespin, who worked in food service and now works for CAT. When she and her neighbors first banded together, their landlord rescinded the no-cause eviction orders.

After they wrote a letter demanding certain repairs to their units, the entire building was served a second eviction order, allegedly in retaliation to their unionizing. The landlord offered them around $3,000 each in moving assistance, but only if they signed a non-disclosure agreement. Despite concerns that her fellow tenants would take the cash, Crespin said they all refused.

“I was scared that people would take that deal and sign away their story,” she said. “I think that this bill (SB 608) will help… It might be a catalyst for change around the country.”

Crespin said renters want to be respected as viable — not “disposable” — members of their community. She is hoping people will form local tenant boards and get more involved with their city councils, especially in more rural parts of Oregon. Holland said rising rents are “not just a Portland issue,” and that “renters are voters.”

A similar situation happened at the Tiki Apartments in Tacoma last year, prompting the Tacoma City Council to pass an ordinance expanding protections for tenants.

Sarah Howe, a former Tiki tenant, said their landlord kept raising rents before deciding to evict them all in April 2018. Howe, who is blind and wheelchair bound, said she didn’t know what was happening because the notice wasn’t written in Braille. Many of the residents were seniors or disabled.

Howe said she’s still pushing for rent control and eviction reform, even though she’s personally in a more stable housing situation now. She believes that housing people will help with the state’s mental health and homelessness crises.

Molly Nichols, who works on the Tacoma Tenants Organizing Committee that formed after the Tiki struggle, said that although statewide rent control is a heavy lift, it’s “definitely on the agenda.”

Movement in Washington

Although most economists believe rent control will tighten the rental housing market, it’s gaining traction in California, Illinois, New York and other states.

In Washington, Nicole Macri (D-Seattle) floated the idea of repealing the statewide ban on rent control in 2018, but her bill didn’t make it out of committee. This year, she is focusing on eviction reform.

Rent control isn’t just about affordability, but mitigating “negative impacts on families and communities,” Macri said, adding that there’s a growing understanding of the issue in Olympia.

Macri said Oregon is “a few years ahead” of Washington in terms of tenant protections, but she expects the state to make progress this year. Her HB 1453 — with similar SB 5600, sponsored by Patty Kuderer (D-Bellevue) — would give tenants more time to pay rent before the expensive court eviction process can begin, extending the pay or vacate notice period from three days to 14.

“It really happens incredibly quickly, for people to be able lose their home when they fall behind on rent,” Macri said. “People don’t have a cushion because rents have gotten so high.”

Kuderer said that her bill received bipartisan support in the Senate, because it adds protections for landlords too, including a landlord mitigation fund and a uniform notice. It’s the “first reform to the Landlord-Tenant Act in many years,” she said at a Town Hall on March 23.

Macri said rent control could come back next session, and that its benefits and drawbacks will be discussed in the interim.

“The argument we hear on the other side around rent regulation is that it pushes landlords out of the market,” Macri said.

There are certainly ways rent control can fail. San Francisco’s rent control provides a cautionary tale: When the city created rent control in the mid-1990s, it only put rent restrictions on housing built before 1980, incentivising landlords to convert older, affordable housing into condos or newer units.

Studies conflict

Holland said in order for rent control to work, it needs to be implemented as part of an ecosystem of protections, including preservation and production of affordable housing, and tenant protections.

This was explored in a study released last year by the Haas Institute out of UC Berkeley. The report focuses on California, and argues that a tipping point has been reached where the private markets are failing to provide adequate housing as costs rise dramatically and wages flatline.

Additionally, the report argues that commonly touted disadvantages of rent control do not outweigh its benefits. These include claims that rent control has negative effects on the development of new housing.

“But if there are some modest effects in that direction, they should be mitigated by other policy and investment mechanisms. The urgent need for stabilizing rents for tenants in the state makes this a policy priority,” the study read.

Other researchers are less optimistic about the effects of rent control, including James Young, director of UW’s Washington Center for Real Estate Research. Young said rent control is one of the things that many economists agree can harm the housing market.

“Rent control is, from an economic standpoint, almost more damaging than the problem you’re trying to control,” he said.

Some say rent control can create fear among investors. Oregon’s rent control law makes an exemption for buildings that are less than 15 years old, but Young said this is right around when many property owners begin looking at making upgrades.

“You regulate the landlord and say, ‘OK, you have to maintain the place,’ and the first thing he’s going to do is to sell,” Young said.

Additionally, landlords could try to make money back by increasing rates of other services, like parking or storage spaces. For Young, the best thing to do would be to incentivise more and faster development of housing, especially housing for first-time buyers. That would let people exit the rental market and create more space for renters, including low-income renters.

Rob Trickler, president of the Washington Landlord Association had some of the same concerns as Young.

“Generally, in our opinion, it has failed in every venue it was tried in, and many have finally repealed it because it does harm to tenants and does exactly the opposite of what it’s intended to do,” Trickler said.

Trickler said he was worried that rent control could reduce inventory, push landlords to convert apartments into condos and reduce the amount of maintenance they could afford to do.

“It creates black markets — the maintenance issues are a big one,” he said.

The full effects of Oregon’s rent regulations have yet to be seen, and economists, renters and activists will be watching it closely to see how it unfolds. However, for Holland the Oregon Legislature’s decision marks a win and has changed the conversation around housing.

“Every now and then there are moments in our democracy where there are little shining lights,” Holland said. “Those moments happened so many times in SB 608.”