Sue Lani Madsen: Housing Policy Forums, the end of the beginning

Spokane City Councilman Breean Beggs described it as “the end of the beginning.” In opening remarks at the last in a series of four housing policy forums, Beggs pointed to the “suite of ordinances” passed at Monday’s City Council meeting as a first step in removing barriers to new multi-family and infill housing. But he admitted those changes will take at least three years to start having an effect.

According to Beggs, Spokane adds approximately 400 multi-family and 400 single family residential units per year. And according to population trends forecast by the state of Washington, the City of Spokane needs about 1,700 new units per year to accommodate the current growth rate. It isn’t the immediate solution tenant advocates were looking for to help displaced tenants in a tight housing market.

Vacancy rates are currently hovering around 1 percent. Breakout sessions on Wednesday evening focused on requirements for more notice or protection from eviction when the vacancy rate is below 4 percent. While there were questions on how the vacancy rate would be determined, there was general agreement that 20 days is an unrealistic timeline to find a new place when few vacancies are available.

From a tenant’s point of view, they need more time to move, and more flexibility. From a landlord’s point of view, a longer notice period increases time for non-payment of rent and retaliatory damage. Any proposed legislation has to address the real concerns of both groups.

Kathleen Nichols of River City Management manages Spokane property for local and out of town owners. “We don’t give notice to vacate if tenants follow the rules, it costs a lot of money to turn over the property. All they have to do is follow the rules and renew their lease. If they aren’t following the rules, we give them notice to vacate and that is just cause.”

While it wasn’t on the agenda by name, a so-called Just Cause Eviction ordinance was behind one breakout discussion. Public housing and tax credit projects already incorporate Just Cause protection. When adopted by a municipality, such ordinances usually apply to all month-to-month tenancy and verbal agreements, establishing longer notice periods and a specific list of reasons for eviction.

Several small landlords perceived injustice when tenants’ had access to free legal services while they absorbed the full cost. Attorney Eric Stevens quoted typical fees of $750-$850 for a simple non-payment of rent eviction, $1,500 to $3,500 for eviction for cause. Documenting cause is costly, whether it’s unauthorized residents, harassing other tenants in a multi-family building or pets in a no pets unit. “This will be a real boon for lawyers like myself and for big management companies. We’ll see a large sell off and loss of inventory,” said Stevens.

The tight housing market has made it difficult for families to find affordable units, but it isn’t because property managers’ profits have risen. Recently Dan Bertolet, senior urban policy researcher at the progressive leaning Sightline Institute in Seattle, dug behind the greedy landlord stereotype to figure out how the rent check relates to cost.

Bertolet concluded rents are what they are because buildings cost what they cost. There are no windfall profits to tap to lower the rent, but adding regulations does add cost to new construction of both private and public housing.

Small landlords who own and manage their property, the ones who put in the sweat equity to restore a neighborhood eyesore as a decent rental, are the ones who will occasionally take on high risk tenants trying to turn their lives around. More regulation increases their reluctance to take a chance. Property management companies protect their property owners by tightening the qualifications for new tenants, requiring a minimum of a one year lease and a zero tolerance policy on the rules.

“If we could put the horror stories aside for a moment, we know we need to have more rental units,” said David Jeffers, a self-described small landlord who hopes to be a bigger one. “More laws and more regulations are not going to encourage more rental units. I’ll sell and those houses will be off the rental market or managed by a large corporation.”

And that would be a loss for everyone.