Seattle landlords must rent their units to the first qualified person to apply after the Washington Supreme Court upheld the city’s “first come, first served” rental law today. The Supreme Court overruled a lower trial court which had struck down the unique law as unconstitutional.
The 2016 law is intended to remove implicit bias in the rental process, which can negatively affect the ability for disadvantaged groups, like minorities and people with disabilities, from otherwise finding rental properties. The law requires landlords to openly advertise what criteria they will use to pick tenants for their units, like credit scores and pets, and then screen applicants in chronological order based on that criteria. The landlord is then required to give the rental unit to the first person in the list that meets all of their criteria.
The “First In Time” (FIT) law went into effect in July 1, 2017 and was challenged a month later by a group of Seattle landlords, who said the law violated their constitutional rights. The landlords, represented by the Pacific Legal Foundation, a libertarian public interest law firm, claimed that Washington law gives all property owners the fundamental right to exclude people from their property, and any infringement on that right to exclude is fundamentally a taking of their property. The landlords also argued that the requirement to advertise rental criteria was an infringement on their free speech rights.
A King County Superior Court Judge agreed with the landlords, ruling in March of 2018 that the law was unconstitutional. Judge Suzanne Parisien, who herself is a landlord, said she was bound by existing Washington law to rule that Seattle’s law amounted to an illegal taking of private property without compensation. Parisien also said the law’s requirement to post rental criteria was unconstitutional because it “restricts far more speech than necessary to achieve its purposes in stopping discrimination.”
Seattle appealed the ruling to the Supreme Court and, today, the state’s highest court overruled the lower court’s ruling today. Rather than disagreeing with Parisien’s interpretation, the Supreme Court effectively threw out an earlier precedent that defined what a property taking was and instead changed the court’s definition to meet the nationwide standard of law.
“Therefore, we disavow our precedent, adopt the federal definition of regulatory takings, and hold that the plaintiffs cannot show the FIT rule facially meets this definition on the record presented,” the court ruled today.
This nationwide standard only defines a property “taking” as when a government creates a “permanent physical invasion of” property or when regulations “completely deprive an owner of all economically beneficial use” of their property. Seattle’s FIT law does neither according to this federal precedent. The Supreme Court also ruled that the FIT law is not an unconstitutional limit on free speech and that the law did not violate the landlord’s right to due process.
Council Member Lisa Herbold, the primary sponsor of the law, celebrated today’s ruling, saying that it would protect renters who belong to disadvantaged groups. Herbold said a study by the city had found unfair housing treatment in 60 percent of cases.
“I’m heartened that, three years after passage of the legislation, the (upper) courts agree: landlords must accept the first qualified applicant to live in a rental property,” Herbold said in a press release.
The Pacific Legal Foundation vowed in a Thursday press release to challenge the ruling to the U.S. Supreme Court.
“This decision is troubling for Washington state property owners whose rights have been under constant assault,” said Brian Hodges, a senior attorney at Pacific Legal Foundation. “The decision is also a loss for Seattle’s renters, who are faced with dwindling housing opportunities and rising costs as many rental property owners have left the market in response to the city’s draconian restrictions.”
The State Supreme Court’s interpretation of the due process rights for landlords is already having effects on other cases, including a lawsuit challenging the city’s Fair Chance Housing Law (FCH). That law bars landlords from unfairly denying rental applications based on criminal history and does not allow landlords to categorically block people with arrest or conviction records from renting their units. Landlords, also represented by Pacific Legal Foundation, challenged that law and that lawsuit is currently being heard at the U.S. District Court.
The federal district court judge deciding that case had asked the Washington State Supreme Court what standard should be applied for evaluating the landlords’ due process rights. In a separate ruling on Thursday, the state’s highest court told the federal court deciding on the Fair Chance Housing law that they should apply a “rational basis review” for any due process claims, meaning the landlords must prove that the criminal history law fails to serve any legitimate government interest in any situation. That’s a high legal bar for the landlords to meet. It's not clear when the federal court will rule on this separate court case.
Today’s ruling could also affect how the State Supreme Court rules on Seattle’s income tax, which is currently being challenged to the State Supreme Court. A spokesperson for the city attorney’s office declined to comment on the impact of today’s ruling on the city’s fight for an income tax.