Editorial: Rental cap balances needs of tenants, landlords

By The Herald Editorial Board

If you are among the more than 1 million renters in Washington state you’re potentially as few as 60 days from a rent increase — of any amount the landlord determines — under state law.

There currently is no cap on rent increases; the only requirement is that renters be provided at least 60 days notice.

And rent in Washington state, compared with elsewhere in the nation, isn’t cheap and for nearly half of renters isn’t considered reasonably affordable. The median rental rate in the state, according to U.S. Census Bureau data for 2023, is $1,731 a month, the sixth highest in the nation behind California, Hawaii, Washington, D.C., Colorado and Massachusetts.

Median monthly rent in Snohomish County — meaning that half pay more and half pay less — runs about $1,773 in Everett to $2,335 in Lynnwood and $2,667 in Bothell, according to figures from Redfin.

A rental increase of 10 percent could mean annual housing cost increases of $2,000 to $3,000 for many renters. Currently, nearly half of state renters are considered “cost-burdened,” according to a 2024 University of Washington housing report, paying more than 30 percent of their income for housing, above the threshold the federal government defines as affordable.

Those figures have brought a return of a proposal before state lawmakers that would cap rent increases at 7 percent each year, among other provisions. The legislation is part of a raft of legislation over the last three years meant to address housing supply and affordability concerns.

And while significant steps were adopted in the last two years aimed at the core solution of increasing the supply of housing, a more immediate remedy is needed for renters, said Emily Alvarado, a West Seattle Democrat, representing the 34th Legislative District. (Alvarado introduced the legislation, House Bill 1217, prior to her appointment this week to fill a vacancy in the state Senate in her district.

“Especially because we’re in a housing shortage we need common-sense guardrails in place to make sure that landlords don’t price-gouge and Washingtonians don’t get hurt,” Alvarado said at a Jan. 13 hearing for the bill.

“Since last year, 15 percent of renters in Washington reported receiving a rent increase of $250 a month or greater,” she said. “Imagine absorbing that on a fixed income.”

The result, she and others testifying on behalf of the legislation said, is that evictions and displacements are rising to record levels, more seniors are being pushed out of rentals and those with manufactured homes are being forced out of rental spaces, having either to find a new park often at higher rent or abandon their home.

Under the bill, which was approved earlier this week by the House housing committee by a one-vote margin and referred to the appropriations committee, would allow landlords to set rent at any amount they see fit, but would cap increases at 7 percent each year. There are exceptions for complexes owned by nonprofit agencies and residential construction that is less than 10 years old.

As well, 180 days’ notice would be required for rent increases of more than 3 percent, and some move-in and deposit fees would be limited.

Opponents of the bill, among them landlords, real estate agents and building industry representatives, have argued that the rent stabilization bill doesn’t address the core problem of supply and could actually discourage the construction of additional rental housing, pushing such development to neighboring states.

Additionally, opponents said, the bill provides no protection to rental owners when they face costs from inflation that exceed 7 percent, for expenses including insurance, taxes and labor and supplies for maintenance.

Yet, a 7 percent cap appears well balanced between the needs of renter and landlord. At that rate, someone paying the current median rent of $1,731 could expect to shoulder an annual increase of just under $1,500, not cheap but predictable.

That’s an amount that at least one small landlord at the hearing found reasonable and sustainable.

Kelley Rinehart, a Kitsap County landlord with one duplex in Bremerton and another in Port Orchard, which supplement his retirement income, said he depends on the stability of his renters.

With four units providing income, he said, he can’t afford for even one unit to sit vacant for long. Rinehart said he has kept past rent increases to less than 5 percent so he can better count on steady tenancy.

And with 70 percent of rental housing in the state owned by small landlords like himself, that stability is important to most who own rental housing.

“Smart landlords know that our revenue relies on our tenants’ stability. Having long-term stable tenants is the only way this works for me,” he said. “Keeping rent increases low is good business and fair to both tenants and landlords.”

Last year, similar legislation proposed by Alvarado passed the House, 54-43, but did not advance in the Senate during the shorter 60-day session. Companion legislation in the Senate, had a hearing Wednesday before its housing committee.

Two years ago, the state Department of Commerce projected the state over the next 20 years will need to see 1.1 million homes built, of which 800,000 will be apartments or other multi-family housing. The legislature in those two years took significant steps to open up land to development, streamline permitting and encourage more construction.

But 20 years is a long time frame, especially for a single parent or even a two-income family who get a notice on their door of a $250 monthly increase to their rent.

A 7 percent cap, while a stretch for many families, still offers some predictability to their costs, while allowing landlords the revenue they need to maintain properties, keep them on the market and still make a profit.

“This bill is the single-most cost-effective way that we can immediately stop the devastating effects of excessive rent increases on renters and manufactured homeowners in Washington,” Alvarado said. “The cost of inaction is far too high.”