Washington has new limits on annual rent increases.
Surrounded by affordable housing advocates, the governor signed the rent limits into law Wednesday – as well as a suite of other housing bills that the Legislature approved this year.
The governor signed legislation creating new notice requirements for the sale of manufactured home communities and bills adjusting various construction regulations and permitting processes. The governor also signed legislation offering new property tax relief for disabled veterans and accessory dwelling units in Pierce County.
But the limits on rent hikes took center stage. Officials have spent years wrangling the rent caps proposal, which was one of the most hotly debated policies to emerge from this year’s legislative session. The new law restricts annual rent hikes to no more than 7% plus inflation, or 10% – whichever is lower. Those limits expire in 2040, and newly constructed housing units are exempt from those caps for 12 years.
Gov. Bob Ferguson said after he signed off on the policy that he is satisfied with its final form.
“I’m confident that this legislation is going to work for everybody in our state – and what we need to have is a balanced approach,” Ferguson said.
Washington now joins a handful of states with similar rent limiting policies, including Oregon.
Advocates say the new law creates vital protections for renters, especially after housing costs skyrocketed in the wake of the COVID-19 pandemic. For people in manufactured home communities – who own their homes but rent the land they live on – the new law caps rent hikes at 5%, and those caps don’t expire.
Sen. Emily Alvarado (D-Seattle), a key lawmaker who worked on the legislation, says the new policy is “long overdue,” but that the state still needs to do more to improve housing affordability.
“This policy is a good start to rein in housing costs, prevent homelessness and make communities more stable,” she told the crowd at the bill signing Wednesday.
There is widespread agreement among the new law’s most vocal supporters and critics that the state needs to continue work on boosting supply. But housing developers have said the rent caps will drive away private housing developers and providers, spurring new tensions in the rental market.
Sean Flynn, the executive director for the Rental Housing Association of Washington, has called the rent limits a “death-knell” for the state’s rental market.
“My concern is that this bill doesn’t build a single unit,” Flynn said. “In fact, it reduces supply, and our underlying problem is supply.”
Lawyers for the association are reviewing the new law to determine whether the group will take legal action over it. For now, Flynn said there are several unanswered questions about implementation.
The law requires the Department of Commerce to post annual rent increase limits by June 1 each year to inform landlords of how much they can raise rents. But the cap on rents took effect immediately as the governor signed the bill into law this week – and without more guidance from the state it leaves landlords in “limbo”, Flynn said.
A spokesperson for the Department of Commerce said via email that the department is on track to publish the maximum rent increase percentage by the June 1 deadline, and has the “beginning of a webpage” to offer resources and guidance to landlords.
