Effective January 15, the Seattle City Council approved
legislation capping move-in fees at the first months rent plus no more than
that for any move-in related deposits. Renters
will be able to opt for payment of move-in costs above this (such as last
months rent deposit) over a 6 month payment plan.
Historically, landlords could
charge security deposit, last months rent and pet deposit fees up front before a tenant could move in.
Now, combined move-in fees cannot exceed the equivalent of the first month’s
rent. The ordinance also forces landlords to accept additional payments in
installments, allowing tenants to pay gradually over a period of six months if
they cannot afford the fees when they first sign the lease. Landlords are now
also limited in how much they can charge for pet deposits: No more than 25% of
one month’s rent (and payable over a 3-month payment plan).
RD House is fully prepared to
work with these new requirements and are able to collect Last months rent and
pet deposits in installments. There is
an administrative cost to billing, tracking and collecting installment
payments, and we will have to charge a $9.95 per month fee to owners when
tenants request this option (but only during the period of installments). We generally would pass tenant-related costs
like this to tenants, however the council legislation specifically prohibits
doing so.
Seattle
Landlords Push Back
Seattle landlords disagree,
arguing that the new ordinance is an overreach of local authority. RD House agrees with this pushback and
lobbied against these new provisions with our local councilmembers and with the
Mayor.
“I am offended by the city [telling] me that I cannot protect my
own investment,” said Chuck Cady, a local landlord. Lizbeth Lyles, another landlord, echoed that
sentiment. “I’m feeling a little under attack by the city council. Putting all
these restrictions on the landlords is not the solution. It’s just going to
make us sell the properties.” This could lead to units being purchased,
renovated, and re-listed for rent at even higher prices.
Other landlords warned City Councilors to prepare for the
unanticipated consequences of the new ordinances. Landlords will simply shift
to risk mitigation by increasing rents or increasing the tenant screening criteria
to favor more financially stable residents.
RD House will advise our owners on a case by case basis if the
restrictions pose risks that require consideration.
Tenant
Protections in Other Markets
Seattle isn’t the first city to adopt new legal protections for
tenants in the wake of growing concerns over housing affordability.
Just last year, we highlighted an ordinance passed by the San Francisco City
Council that
made it harder for landlords to initiate no-fault evictions against educators
employed by local schools and childcare centers. In September, a San Francisco
Superior Court judge ruled that the ordinance was in conflict with state law,
and the city had to revoke the policy.
Other cities have implemented new inclusionary zoning
policies that
require developers to reserve 20% of all new units for affordable housing.
Whether these policies will actually make a dent in the affordable
housing crisis
remains to be seen. If so, we suspect that other cities will follow suit by
implementing new landlord-tenant policies of their own. It is important for
landlords and property managers to monitor these proposals closely, weighing in
at local hearings as appropriate.
