Tammy Morales Wants to Finally Close Seattle's Just Cause Loophole

Comments

1

"Seattle's fixed-term lease loophole, which allows landlords to evict people on yearlong leases without reason by not renewing their lease."

How is this a "loophole?" I can't imagine this characterization being applied to any other fixed-term agreement.

2

@1 - no kidding. A lease is an agreement to rent a place for a fixed period of time. This law would mean that 100% of the control of how long a tenancy goes on would be with the tenant and the landlord would have nothing to do with it.

The right to control what happens to a piece of property in perpetuity is very valuable and this would give it to tenants at no cost. If the City Council wants to strip that right from property owners, they should be willing to pay for it. Bet you a dollar they are not.

3

Is a landlord permitted to increase the rent at the end of a lease term before going month to month or writing a new lease?

4

This is part of the proposed legislation:

"10. If a tenant has agreed to terminate a tenancy, including but not limited to agreement via a termination clause in a rental agreement or in a separate termination agreement, the tenant may rescind such an agreement:

a. Within ten business days after signing the agreement by delivering written or electronic notice of rescission to the landlord; or

b. After more than ten business days since signing the agreement by establishing that the tenant entered into the agreement improvidently. Improvidence may be demonstrated by inequality of bargaining power, the tenant’s vulnerability, legitimacy of the landlord’s reason for seeking termination, and the tenant’s ability to procure alternative housing."

So, as a landlord, even if your tenant signs an agreement to leave the unit, that can be unwound at any point if the tenant comes back and says they are having a hard time finding another unit. What are landlords supposed to do, keep a certain number of units vacant in case a tenant decides to rescind their agreement to terminate the lease?

5

@1 @2 The qualified right to renew isn't exactly a radical, unheard-of addition to contract law. Renewal clauses and default right to renew (for particular types of contract) are everywhere, and have been for a long, long time.

This isn't by any stretch control granted "in perpetuity" to tenants, either-- "just cause" would include redevelopment and renovation in addition to outstanding rent owed, documented history of disturbance, or any other violation of the terms of the contract.

Don't you worry, the all-important rights and powers of the rent collectors won't be significantly diminished by this. If push comes to shove your sainted "mom-n-pop landlords" will still be able to use the old standard CYA "a relative needs a place to live" gambit, file a bit of paperwork with a third cousin's name on it, and then find a new tenant.

6

@4 As the text clearly states, after ten days the tenant would have to establish improvident agreement to terminate by demonstrating said inability to procure alternative housing, presumably to a judge.

They can't just say "nah not feeling it" twelve days after agreeing to vacate, thus wrecking your landlording plans by, um, continuing to pay rent on the unit.

7

Knock knock.
Who's there?
Unintended consequences
Unintended consequences who?
The unintended consequences of making being a landlord unprofitable.

8

@3 Yes, provided they've notified the tenant as required by current law (60 days in advance for a rent increase, 30 to 'em with utility fees). And there's no cap on rent hikes in WA of course.

9

@8 "30 to stick 'em with utility fees"

10

@7 why do you assume this is an unintended consequence? I don't think you give the SCC enough credit, especially Morales/Mosqueda/Sawant. They know exactly what will happen the more they increase risk for investors. Capitol will leave the real estate market in pursuit of better returns which will lead to a massive need for housing that can now only be filled by one source...government. Once the cry becomes loud enough they will look to pass new taxes to build publicly subsidized housing and voila you now have a whole slew of voters completely dependent on keeping you in office so they can maintain their housing. Thank you, drive through.

11

As a small-time landlord and short-term rental operator, I wanted to chime in with another overlooked unintended consequence if this legislation was enacted. Over the last year I've rented to numerous traveling nurses on fixed 3 month leases for a fully furnished unit I took off of Airbnb when the pandemic hit in mid March 2020. Starting in June I'm putting the unit back on Airbnb for short-term stays during the more lucrative travel summer season in Seattle but if this legislation passed I'd hesitate to sign future 1month-6month leases with nurses or anyone else on the unit, fearing I'd have no say over when I'd be able to go back to running my short-term rental business.

I don't expect personal sympathy from most people for being a landowner in a greatly appreciating market but as the city council tries to continue limiting the choices landlords have in structuring leasing agreements, other small landlords will be more reluctant to take a break from the part-time job running a short-term rental (which many rely on to supplement their income) by not leasing medium term furnished units to not just traveling nurses but visiting families, locals who need temporary stays in between longer term housing without any control over the length of their stay.

12

@11 You can still change the rent at the end of the 3-month nurse-lease, provided you give the legally required 60-day notice. What difference does it make if a nurse is paying your summer rate or a tourist is paying your summer rate?

Just be up-front about it. Tell the nurses the rent will go up substantially for the tourist season. If they want to pay it, fantastic! You don't even have to prep the place for short-term occupants. And if the nurses don't want to pay the summer rate, you just put it on AirBnB when the lease is up and your business goes on same as it ever was.

I don't see how this affects your income; if anything, you'd end up earning more thanks to the lower vacancy rate for units your nurses decide to stay in through the silly season.

13

@10 - point to single land constrained growing city anywhere in the world that has solved its housing issues without public housing. Not a single one. There is no conspiracy, only the acknowledgment of what actually works. I suppose you love your "freedom" so much you also love paying twice as much for healthcare and drugs as everywhere else in the world.

A community has a clear vested interest in efforts to create stable housing. Housing instability is a far bigger direct issue than any "unintended consequence" profiteers can dream up.

But but but what about the poor landlords!?! If you are in an industry where your lobby complains the moment anyone (no matter how inexperienced or inept) fails to make a profit, you are not running a business, you are part of a racket. Many of these rule changes are just catching up to the way it is done in cities all over the world. There are plenty of other businesses to invest in. Housing is a public good, and if you don't want to operate in a regulated space, put your money elsewhere. But there is a reason people put their money in housing... because the racket is so much easier, even after adding renter protections.

There is still one glaring just cause loophole: economic eviction. Just jack up the rent to encourage them out, or evict them when they can't pay.

@houndlover, you are correct, you have no sympathy. The far more salient "unintended consequence" in Seattle is the loopholes that allowed apartments to be turned into de facto hotels leading to the loss of thousands of units during a housing crisis.

14

@7 - it's "intended" as hell. Everything that the City Council has done re rentals in the last few years has been designed to make owning rental property less profitable and more of a headache. I don't know anyone who has a problem with cracking down on truly bad landlords. I lived in some pretty shitty rentals back in the day. But the programs that have been put in place are in some cases quite burdensome (i.e the "first in time rule, which can easily result in a unit being vacant for a month when it would not otherwise have been), and in others just stupid (i.e. the requirement that landlords give tenants, who are legally adults or they would not be allowed to even sign a lease, information on how to register to vote).

The idea is clearly to make owning rental property less profitable so that it will become less valuable. The REAL unintended consequence of that course of action is that the single biggest asset that most middle-class people in the city own (their homes) will also lose value when property values come down. Does the City really want to see that happen?

@10's anti-landlord screed is correct in one aspect: The issue of housing affordability is never going to be solved without creating substantial amounts of public housing. But that needs to happen by ACTUALLY creating public housing, at public expense, and which will result in an actual increase in the number of units available. Telling landlords that they have to operate their properties for public purposes not only puts the burden on a very small percentage of the public, but it does not result in any increased availability of housing. At best it helps tenants who already have a place and leaves anyone else SOL.

15

@12 - Robotslave - The hypothetical scenario wouldn't bother me if short-term summer renting on Airbnb wasn't substantially higher that a multi-month furnished lease, we're talking $1800/m all included during the off-season for a 3 month lease compared to $4000-$5000/m to rent short-term during the summer months (average stay about 3-4 days for me). This difference requires a lot more work prepping, re-stocking, communicating and effectively running a small hotel for a few months that also puts my cleaner back to work as well. October-April the difference between renting for 3 months compared to short-term on Airbnb is significantly less, maybe a few hundred a month after expenses. Assuming this was passed I guess it would be a small annoyance to serve a massive 200-300% rent increase notice prior to when I'm hoping to get unit back on Airbnb for less than 30 day rentals which could be a needless provocation and minor hassle. Without Sawant's Economic Eviction Assistance Ordinance on the books, it would be doable but I'd probably prefer to just run the unit year round as a short-term Airbnb and keep my cleaner busy for whole year who's been with me for years.

16

@13 I think its interesting you view this as a mutually exclusive issue. Why does the council feel the need to increase the barriers for private landlords thereby creating additional supply restrictions as part of the solution to the housing shortage? How does this help them create the affordable, subsidized housing you say this city so badly needs? The short answer is it doesn't unless you want to force them to sell their land so you can then purchase it on the cheap and build on top of them.

The other issue with your hypothesis however is there is no amount of subsidized housing that can be built that will meet the demand. People that commute today from Federal Way and Montlake Terrace will want reduced housing in the city just as much as some guy living in a tent in Cal Anderson. I'd also point out that most public housing projects in the US were abject failures last time they were tried and there is nothing that would lead me to believe the city will do a better job this time around. New York public housing is currently under federal oversight due to the deplorable conditions people are living in replete with mold, lead paint and rat infestations. NYC currently has over 176K units of subsidized housing and rent control and has any of that solved their housing crisis?

The real answers lie in a regional solution that the city will never embrace because like most politicians they are mostly concerned with power and money. On the demand side, they could immediately reduce pressure on housing by invoking work from home policies and requiring major employers (e.g Amazon) to do the same thereby allowing employees to live elsewhere. There are a great many people that live in Seattle simply because they don't want to commute all the time. They could also encourage these employers to reduce their footprint in the city and create a regional office hub encompassing Everett, Tacoma, Seattle and Bellevue and even move some work to central and eastern WA to share the wealth. On the supply side build subsidized housing with strict qualification requirements so people who currently live outside the city are not eligible, relax zoning restrictions and regulations that come with building multi unit housing and offer incentives (tax credits or subsidies) to encourage people to rent out spare rooms in their own homes. Acknowledge though, that there is a capacity limit for the Seattle area and not everyone who wants to live in Seattle has a "human right" to do so.

These are some suggestions that don't employ the blunt hammer approach that treats landlords as pieces of garbage to be demonized and punished. A nuanced politician would know that is the way you create successful solutions to social ills. What we have however is a bunch of ideologues who prefer to burn it down to remake society in their own perfect image. What can go wrong?

17

@13 ps how is that socialized healthcare working out for Canadians right now? While you can almost walk in a get a shot right now in the US they are still sitting at single digit vaccination rate. There are always tradeoffs with things and if you want "free" healthcare understand that will also come with restrictions and reduced levels of service. Saying you will receive the same care you do today for the same price through a government program is just dishonest.

19

@15 I dunno man, if you balk at telling nurses their rent is going to go up 200-300% for the tourist season, that's your nerve that's lacking, not some regulatory imposition.

If you're just not hard-headed enough to maximize your profits, well that's fine by me but it isn't the government doing it to you.

20

@17:

You know why it takes longer to get scheduled for a COVID vaccination in Canada? Because 66% of Canadians over the age of 16 want it NOW, as compared to a mere 46% here in the U.S. And the number who don't want to get vaccinated ever is around 7% up there as compared to 13% here. The reason Canadians are coming down here to get jabbed is because there are so many COVIDiots in the States refusing to get vaccinations that we have a huge surplus supply, whereas so many Canadians want to get jabbed that they're having a challenge keeping up. And most of the border states aren't even asking about citizenship or residency; you show up, you get a jab, no questions asked.

So, it's not the inefficiency of the Canadian health care system that's driving our neighbors to the north to come down here for vaccinations, so much as it is them taking advantage of the stupidity of our own citizens who refuse to get vaccinated themselves.

21

@17,

It's got niothing to do with the vaccination being free, as it's free down here too. Did you somehow not know that?

22

Or I guess you could be arguing that the imposition of financial barriers to healthcare is a net positive as it increases general access in the midst of a global pandemic. Which.... I gotta say is a rather scaldingly hot take that I don't think stands up to a whole lot of scrutiny, though good on you for taking a bold stance if that's really what you're suggesting.

24

@20/21/22 none of the above. I’m simply suggesting adding the government into a process rarely improves the efficiency of said process. I’m not an expert on the issues in Canada (althoughI did stay at a holiday inn) but what I’ve been told by people I know up there is the scheduling and supply chain is completely f’ed up. Similar to the debacle when Obamacare first rolled out. They’ll get it fixed but the free market is more efficient even without a profit motive. That’s all.

25

So, when is a contract not a contract?

26

@24:

Yeah, fucking gubbamint - what do they know? I mean, those dumbass gubbament folks only rebuilt Europe after WW II; created the interstate highway system; sent astronauts to the moon; reduced discrimination in the work place; cleaned up your air and water after your beloved "free marketeers" nearly killed you with their pollution and toxic waste; strengthened consumer protections; protected endangered species; built, maintained and enhanced the national power grid; improved public health; and a whole bunch of other stuff too numerous to mention.

But yeah, you're so right - what a total bunch of dumbasses they are...

As for Canada's supply chain problem, well, when one or two countries cough! USA, UK cough! refuse to relinquish their own overabundant supplies, and you have to source from elsewhere, like, say, Europe, just like almost every other country on the planet (with the notable exceptions of China, Russia, and India which are manufacturing their own vaccines) there are going to be backlogs in distribution. Everybody else has to wait in line until the pharmaceutical companies dose out those countries with manufacturing infrastructure or - as in the case of Israel - are willing to pay above-market rates for exclusive access. So, yeah, it's a problem, although it's improving literally by the day. Fortunately, as I noted above, our Canadian friends have a ready, abundant supply available right over their own back fence, so why shouldn't they take advantage of that proximity, especially if the idiots who actually live next door are too stupid to do so themselves?

27

i'm looking forward to the next upzoning in single family neighborhoods to allow for middle-housing (or more) so we can sell our little rental property to a developer. that way we can cash-out at top dollar and lose the headaches of being a small landlord in this city. we will use the money to develop our acreage on the peninsula and build our dream compound. it's been fun though