Spokane landlords would need ‘specific cause’ to evict renters under City Council proposal

Rents in Spokane are rising, and the evidence is abundant.

More than one-quarter of renters in Spokane spend at least half of their monthly income on rent, which on average now exceeds $1,000 per month. In surveys, many homeless people in Spokane cite a lack of affordable housing as a primary cause behind their situation.

But would a new slate of tenant protections help, or hurt, the city’s efforts to address this side effect of a flourishing housing market and economic growth?

The Spokane City Council will try to answer that question on Dec. 9 when it tackles a set of laws that would create a broad array of new regulations on city landlords.

The package that will be considered by the council is broken into two parts.

The backbone of the first ordinance, considered to be less divisive than its counterpart, is a tenant relocation program that would force landlords to pay $2,000 to help relocate any tenant forced out due to substantially increasing rent.

The second ordinance, which is expected to face stiffer opposition from landlords, is what is frequently referred to as a “just cause” eviction protection, though labeled as “specific cause” in Spokane’s proposal. The new law would force landlords to cite one of seven specific reasons for a tenant’s eviction.

The proposal is the culmination of years of negotiations between tenants and landlord organizations, with the City Council in the position of arbiter.

Stakeholders agree that Spokane’s housing costs are increasing, and that there is a need for more housing supply. But the crux of the debate before the City Council will be whether tenant protections are necessary before new construction can relieve the ever-increasing stress on the city’s housing market, or if, like landlords complain, such laws will make the situation worse.

“It’s meant to balance out the market power between landlords and tenants in a tight market,” Councilman Breean Beggs explained.

City Council President Ben Stuckart has said the best approach to improving housing in Spokane is to think of it as a “three-legged stool,” as leaders in larger cities like Minneapolis already have. One leg is to encourage housing development through zoning, the second is to subsidize housing, and the third is to protect the rights of tenants.

The first two legs, Stuckart argues, already are in progress.

The City Council has adopted standards to encourage housing density downtown and along centers and corridors. And, on the same night as it considers tenant protections, it will consider a proposal to recoup sales tax revenue to subsidize construction of affordable housing.

“Until we get more supply and more subsidy, you have to put rental protections in place,” Stuckart argued. “You can increase the supply all you want … if you don’t have that third leg of rental protections, your stool will collapse.”

To Stuckart, low-income housing providers believe the answer is more subsidy. Tenant organizations believe the solution is in better protections. Landlords, however, believe the answer to the city’s housing woes is simple: Build more housing.

“They’re all ignoring the different legs of the school, and to me that’s why Dec. 9 is important,” Stuckart said.

Steve Corker, president of the Landlord Association of the Inland Northwest, believes the regulations actually would disincentivize investment in low-income housing and push smaller landlords out of the market entirely.

“They’re not willing to invest in an environment that makes it so difficult to manage the properties,” Corker said of investors.

Beggs questions how relatively small fees could be so burdensome.

“If you have a specific thing that you think is going to cost you a significant amount of money such that you wouldn’t be in the market anymore, let me know. We specifically designed it with the intent not to do that,” Beggs said.

Corker, a former Spokane city councilman, argued that about 1,200 landlords in Spokane would suffer the consequences of bad actions by four major landlords that control 800 apartments in the city. He compared levying fees on landlords – who make smaller profit margins than most would imagine, he added – to taxing “hospitals to create the ability for them to provide more free services.”

“They want to penalize all landlords with business licenses and new fees,” Corker said. “They’re taxing the very industry that is trying to hold rents down.”

Landlords contend there are 42,000 rental units in Spokane, and only about 500 to 600 evictions are carried out every year. The vast majority are due to nonpayment of rent, Corker said.

“Unless they really believe all low-income housing has to be publicly funded, they’re basically shooting the area that’s providing most of the housing in the foot,” he said.

Relocation assistance

The rental relocation assistance program is the centerpiece of the proposed legislation. Under the program, a landlord would be required to pay $2,000 and refund all deposits within seven days of any rent increase that makes a tenant unable to afford rent.

The rent is considered unaffordable for a tenant if it has increased by more than 5% in the last year and the tenant fits the definition of “rent burdened,” meaning they spend at least 30% of their monthly income on rent.

If a landlord does not comply with the law and pay the tenant within seven days, the city will front the tenant the relocation funds. The city will then look to collect the payment from the landlord directly, and the balance will begin accruing interest after 60 days.

The relocation assistance program would be funded by a new $10 annual business registration fee for each dwelling a landlord owns.

A relocation assistance program has existed in Seattle since 1990.

The proposal includes a number of other protections for tenants. Under the proposal, landlords would be required to give tenants 90 days’ notice before increasing the rent.

Rules also would set limits on the fees and deposits landlords can impose on new tenants. Total deposits would be limited to one month’s rent. Pet fees would be limited to 25% of one month’s rent or $150, whichever is higher.

The proposal also would set standards for housing. If a tenant identifies a problem with the apartment – say, a leaky faucet – they can notify the city. The city would alert the landlord within five days, and the landlord would have 30 days to remedy the problem.

New housing units would be inspected by the city before coming onto the market.

Just cause

Tenants rights advocates have long called for Spokane to adopt a “just cause” protection like the one in Seattle, which has a list of 16 reasons a landlord can cite for eviction.

“This will help protect tenants against retaliation,” Councilwoman Kate Burke and Terri Anderson, co-executive director of the Tenants Union of Washington State, wrote in a Nov. 7 op-ed in The Spokesman-Review. “Having just cause means you won’t be evicted for simply reporting a health or safety problem. It also means that a landlord couldn’t evict a tenant for petty or discriminatory reasons.”

Under the Spokane proposal, landlords who manage 10 or more apartments would be limited to seven reasons for eviction: failure to pay rent under the terms of the lease; failure to meet the duties of a tenant under state law; to allow a family member of the landlord to occupy the unit; to make renovations that will make the space temporarily uninhabitable; to “perform substantial rehabilitation work” on a unit; to take the unit off the market entirely; or to demolish the unit.

A landlord must cite the cause for eviction, provide at least 30 days’ notice and allow at least 14 days for the tenant to remedy the problem, if possible. If a tenant has twice been given notice for failing to pay rent under the specific cause eviction law, they would not be given a third chance.

Complaints about process

After three years of study, Corker wonders why it’s suddenly an “emergency” set of ordinances that the council is considering, meaning the public will have only one opportunity to comment – at the Dec. 9 meeting.

The council’s leaning majority is the same following November’s election, he noted.

“I just don’t understand what the rush is,” Corker said.

The council will hold a study session at 3:30 p.m. on Dec. 5 to discuss the proposals, but will not take public testimony, as is typical at such meetings.

Beggs said the housing situation in Spokane is the very definition of an emergency, but that nothing is set in stone.

“It is not a baked ordinance. We’re looking for specific recommendations and comments from everybody,” Beggs said. “If we need more time, we’ll take more time.”