Give Spokane City Councilman Breean Beggs credit for honesty about a proposed landlord-tenant ordinance. “It is not a baked ordinance,” he told Spokesman-Review reporter Adam Skanks. “If we need more time, we’ll take more time.”
They definitely need more time for the public and council to discuss an unbaked ordinance. True to Beggs’ statement, council last week put the ordinance on hold for a few months. That was a wise decision to give everyone more time to understand the unintended consequences that would arise from the proposal as written and come up with something better.
The ordinance would impose what amounts to rent control by way of a renter relocation program. If a landlord increases the rent by 5 percent or more over a 12-month period and that causes the tenant to become “rent-burdened,” the landlord must pay $2,000 to help the tenant move.
That’s sure to make housing less affordable overall.
Reputable landlords don’t gouge their tenants. Rather, big rent increases occur when there’s an emergency or other large cost coming up. Maybe the building needs repairs. Maybe voters approve a big property tax increase. Maybe council charges a bunch of new fees, as it would with this ordinance. Owning a rental property is full of uncertainty, and landlords need the flexibility to balance their books.
Under the proposed ordinance, landlords instead would have to find ways to build in costs. Tenants should expect regular annual increases of 4.9 percent so that landlords can hedge against future emergencies. Landlords also would have an incentive to charge more for rent from the start to build in a buffer. That won’t help affordability.
A 5-percent cap is so extreme that even Oregon wouldn’t go that far. Portland set its relocation threshold at 10 percent, and the Oregon Legislature followed up with a rent-control cap of 7 percent plus inflation.
Spokane’s relocation assistance would apply only to rent-burdened renters, but landlords have no way to know which tenants are rent-burdened and which are not. It’s not as if landlords can demand to see monthly pay stubs or annual tax returns when making decisions about rent increases
What constitutes “rent-burdened” is not even defined in the ordinance. The best hint is in the proclamations (the “whereas” section), where the ordinance suggests that anyone who pays more than 30 percent of income is “cost-burdened.” That aligns with federal standards, but experts increasingly question whether those standards are any good.
When it comes to city code and enforcement of relocation penalties, precise definitions are essential. Is that net or gross income? Is it income for the current month or a rolling average? What sources of income count?
Evictions and other costs
The proposed ordinance also would restrict under what circumstances landlords could evict tenants. They would have to cite one of seven specific “good cause” reasons that cover a lot of ground but aren’t nearly flexible enough. No itemized list can encompass all of the reasons a tenant might warrant eviction.
The rule would open the door for lawsuits and confrontations between tenants. State anti-discrimination laws protect tenants from being evicted because of their sex, race, sexual orientation, disability and more. All the limited list of causes would do is force landlords to factor into rents the potential legal costs and risk of problem tenants generating expenses and upsetting neighbors.
Other costs in the ordinance are more direct. For example, it would force every landlord to register as a business and pay annual fees for each unit. While tenants’ rights advocates might cheer that as sticking it to the landlords, the reality is that landlords will pass those costs on to renters. Each such charge pushes housing affordability further out of reach.
All of these costs and hindrances would pile up, making it less attractive to rent housing, let alone build new rental units in Spokane. Council and advocates should use this pause to start over. Bring stakeholders back to the table to develop a combination of incentives to landlords that provide affordable housing and rent assistance to tenants that need it. That would be far more effective than burdensome legislation bound to backfire.
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