In a reversal, the Seattle City Council voted 7 to 2 to set a $10 limit on the amount landlords can charge tenants who do not pay rent on time.
Since the City did not previously regulate late fees at all, the law amounts to a huge victory for renters who have been at the mercy of their landlords when they fall behind. According to the Housing Justice Project, which provides free legal aid to tenants facing evictions, landlords sometimes get so charge-happy that late fees add up to more than the tenant’s rent, doubling what they owe.
The win did not come without council members attempting to make small concessions to landlords. In a committee earlier this month, council conservatives Sara Nelson, Debra Juarez, and self-described progressive Council Member Andrew Lewis attempted to water-down Council Member Kshama Sawant’s effort with a last-minute amendment to raise her proposed $10 cap to the lesser of 1.5% of the tenant’s monthly rent or $50.
In response, progressive Council Members Tammy Morales, Teresa Mosqueda, and Sawant proposed an amendment to restore the original cap in the final vote Tuesday. With all eyes on the supposed progressive, Lewis switched sides because, as he said, he got pushback from his friends.
Lewis, Working People Would Like a Word with You
Ahead of the final vote, Sawant told The Stranger she wanted to expose the so-called “labor” Democrat’s many “betrayals” of working people to rally the troops. And boy did they rally. According to Sawant’s office, more than 1,200 supporters sent emails to the council and more than 1,000 signed her petition supporting the original cap. The council heard more than an hour of public comment from renters and landlords alike, almost exclusively on Sawant’s side.
Many commenters addressed Lewis specifically.
One public commenter, who lives in a low-income apartment in Lewis’s district, said his landlord slaps him with fees every month, sometimes as much as $100, as he struggles to pay back rent and current rent after the end of the COVID-19 eviction moratorium. He argued that the difference between $10 and 1.5% of rent means much more to tenants who fall behind than to property owners who profit from housing.
Under Sawant’s rule, a tenant who rents a $1,900 apartment, which is the price of an average one-bedroom, would pay no more than $10 in late fees. Under Nelson’s rule, that same renter would pay $28.50. This difference won’t save struggling landlords from defaulting on their mortgages, but for a renter $18.50 could mean missing several meals, losing internet, or skipping a prescription refill, as Council Member Lisa Herbold noted in the meeting.
The public commenter told Lewis that his neighbors canvassed for his council campaign in the building, the same low-income renters who would be most impacted by any increase to the late fee cap.
“If working-class people are willing to volunteer their limited free time to help you get elected, a self-proclaimed ‘labor’ Democrat, you should also be willing to help us out and keep the late fees cap at $10,” he said.
Noted Twitter Urbanist to the Rescue
made my debut on @SeattleChannel as “Ryan Watt” pic.twitter.com/T6vzO3q8qu— Rian Watt (@rianwatt) April 19, 2023
Ultimately, Lewis said his friend Rian Watt, a board member of Futurewise and the Urbanist, showed him the light. Watt argued that the costs of issuing late fees do not “scale” with the cost of the unit’s rent. It costs the landlord the same to stick a late notice under your door whether you pay $1,000 or $3,000 a month.
This is the key point. The costs to landlords don’t scale with the cost of the unit — and the dollars matter far more to those renting than those leasing. https://t.co/ARBZHMmszC— Rian Watt (@rianwatt) April 7, 2023
Still, Lewis had trouble faulting himself for caucusing with Nelson and Juarez at first.
He argued there were “still fair considerations” for building-in “a certain amount of progressivism” in late fee charges, so that people who could afford higher fees would pay more than those who couldn’t. “I still think that can be a reasonable perspective for someone who is seeking to make a decision on this,” he said.
Of course, that reasoning relies on the false assumption that people pay rent late just for fun and need an incentive to do so on time. As I’ve written before, the data disproves this. The biggest motivation for paying on time is not avoiding fees, it’s avoiding eviction and homelessness.
Lewis did not address his other grievance with the flat-rate $10 cap. In the committee meeting earlier this month, he said he did not want to put the City in the “position where we are periodically having discussions about what we reset the certain number to.”
Sawant said Lewis’s argument would make sense for wages that needed to be increased as the cost of living increased, but she said the City does not have to increase penalties on poor people as inflation rises.
Lewis did not respond to my request for comment about his reset concerns.
Conservatives Renew Their Vows with Landlords
Even though Lewis changed his mind, Nelson and Juarez stuck to their guns.
Juarez said she doesn’t like when council members bring back dead ideas to full council, since she has such a deep respect for the “process.” Plus, she did not see a good “reason” to switch sides based on what she heard from public comment. She also made a stink about “personal attacks” and being called a Democrat.
“We take tough votes. That doesn’t mean we’re bad people,” Juarez said after arguing that landlords should be allowed to take a little more money from struggling renters.
Nelson said she almost caved into the pressure. She was afraid of protesters coming to her house or a nasty headline that described exactly how she voted. The Stranger did not put her name in the headline because it's not really news that she represents landlords and votes accordingly.
While most of her arguments would make more sense if she were openly advocating for no cap at all, she called her sliding scale a “reasonable compromise” between renter and landlord interests, a famously equal power dynamic.
She seemed to believe if the council had listened to landlords more, then the council would have known that landlords claim they don’t usually charge late fees and they don’t make their profit from them.
According to Nelson, Sawant’s cap would change those landlords' attitudes and make them charge late fees more strictly to make up for the loss in late fees that they are apparently already not charging. It's unclear why a cap would change the philosophy of a landlord who did not already charge fees. It is also unclear why Nelson’s proposal of a slightly higher cap would maintain the supposed practice of not charging late fees.
She also said this new law could be the reason some landlords stop lording land or, in her words, stop being “housing providers.” Again, if she really believes that landlords don’t use late fees to make money, then it wouldn’t make sense for any landlord to leave the market because of this regulation because it allegedly would not affect their bottom line.
When the council passed Sawant’s amendment, Nelson threw up her hands and joined Council Member Alex Pedersen in voting against the whole dang thing. Who could have seen that coming?