Seattle landlords on Tuesday sued the city over a law requiring them to allow tenants to pay move-in costs in installments. The move represented the latest pushback from property owners against a series of new city policies protecting renters.
“Our members provide safe and affordable housing," Sean Flynn, board president at the Rental Housing Association of Washington, said with a completely straight face at a press conference today.
The 5,400 landlords represented by RHA "set the standard for ethics and best practices in our industry," Flynn said. "Yet, this city council has never missed the chance to lambaste, demonize, and hold landlords responsible for problems they did not create.”
The RHA took the city to court today, seeking to block a law the Seattle City Council approved in December, which requires landlords to allow tenants to pay their security deposits, fees, and last month's rent over the course of a payment plan. The law, which passed unanimously under the sponsorship of city council members Kshama Sawant and Lisa Herbold, also caps the total amount of security deposits and nonrefundable fees landlords can charge at no more than one month's rent. Nonrefundable fees can't exceed 10 percent of one month's rent unless the cost of the tenant's screening report exceeds that amount.
Josh Whited, the lawyer representing the RHA, called the requirements "onerous." He argued the law violates the state ban on rent control, constitutes an illegal "taking" of private property, and violates landlords' due process rights.
Court precedent in Washington, Whited said, has found that “local governments are not entitled to shift the burden for solving societal problems to individual property owners.”
The suit comes several months after another group of landlords, represented by a libertarian law firm in Bellevue, sued the city over another tenant protection. That law requires landlords to rent to the first qualified applicant in an effort to overcome unconscious bias.
In other words: Two of Seattle's newest and boldest tenant laws could be struck down in court as the city faces a housing and homelessness crisis. Meanwhile, races for mayor, city council, and city attorney are heating up and RHA looks poised to play a political role. In 2015, when all nine seats on the council were up for election, RHA donated $24,000 to the Seattle Metropolitan Chamber of Commerce's political action committee, which then funded ads in support of Council Members Tim Burgess, Rob Johnson, and others. This year, RHA has donated $7,500 to the Chamber's PAC. That PAC has not yet spent that money on any candidates, according to state campaign finance records. (It's not clear what that money is buying the RHA, exactly. Burgess beat housing advocate Jon Grant in 2015, but Johnson and Burgess both voted for the move-in fee legislation in December. Johnson added an exemption for landlords who rent rooms in their single-family homes where they also live.)
In response to the move-in fee legislation and other tenant protections, RHA has argued that small landlords are becoming so burdened by new regulations that they are considering selling their properties to large property management companies that may be less willing to rent to tenants in need. Today, RHA spokesperson Sean Martin could not provide data on how many landlords have left or are planning to leave.
Xochitl Maykovich, an organizer with the nonprofit Washington CAN, which advocated for the move-in fee law, called it "both moral and sound policy."
Martin has argued that requiring payment plans increases financial risk for landlords and may cause them to increase rent. For security deposits, state law requires that landlords not spend that money, but instead hold them in trust accounts. That means allowing tenants to pay deposits over several months should not translate to a financial hit for landlords, Maykovich said.
"There's a huge power imbalance between landlords and tenants," Maykovich said, "and landlords are the ones with the power."
UPDATE: In an email, Council Member Kshama Sawant, one of the sponsors of the move-in fee bill, said:
Seattle is the ninth most expensive city to rent in the world. We desperately need rent control, but in the meantime, we need pro-renter laws like the move-in fee payment plan. A determined movement of housing justice activists, with socialist politics on the City Council, has succeeded in defying the landlord lobby and winning gains for renters. Unable to defeat the movement, the rich landlords in the Rental Housing Association, under the guise of “mom and pops”, are now turning to the courts. We will bring our movement to the courts and we will win there too.
