How does a city manage to lose 11,521 rental units in a year? When you look at the city of Seattle, you understand how. The latest issue of Current, the publication of the Rental Housing Association of Washington suggests it is because of the “City Council’s repeated passage of ordinances that further increase the costs, risks, and onerous burdens on housing providers.” Typically, Current reports, these homes “become owner occupied rather than continuing as a rental.”
In case you haven’t heard about them, here are some of the onerous regulations instituted by the Seattle City Council. Just three of them are those passed in June 2021, the school year eviction ban, which prohibits evictions during the school year; a prohibition of evictions for COVID debt; and mandatory lease renewal that must be offered 60 to 90 days before the lease expires. In addition, they cap move-in fees, pet deposits, and security deposits regardless of the qualifications of the applicant. They have a rental registration and inspection law and a requirement to rent to the “first qualified applicant.”
There’s more, in fact far more, that’s too much to list here. Suffice it to say that it raises the costs of owning and managing rental properties and makes it questionable whether a rental owner can even turn a profit on his or her investment.
The usual suspects think you can do just one thing. How ignorant and arrogant can you be? The effect has been the loss of rental housing in a city that already finds itself with a lack of rental housing, both affordable and market rate.
For more than 20 years, I have advised rental owners to sell their rental properties to owner-occupants in areas where government makes investing in real estate unprofitable and more difficult than in areas that welcome rental investment. Now Seattle rental owners seem to have had enough, and are getting the idea, and bailing out of the Seattle rental market. You have to wonder how their City Council will react. Figure, considering their past behavior, it will be more of the same driving more of “those evil landlords” to cities that welcome their business.