Spokane leads the nation on rent inflation, forcing tenants to make tough choices

For the past two years, Spokane Valley resident Mary Odette rented a two-bedroom apartment for $1,085 a month.

When Odette approached the apartment complex about renewing her lease in June, she learned the monthly rent would rise by $300 a month.

“When you have a special-needs daughter with a host of doctors’ appointments – even with adequate health insurance, you’ve got co-pays,” she said. “Now, it’s just going to make it significantly more stressful if there was something major coming up.”

Odette is among many Spokane-area tenants grappling with double-digit rent hikes, following the expiration of Gov. Jay Inslee’s eviction moratorium in June.

Observers say it’s a situation, in part, fueled by demand outpacing supply as out-of-area homebuyers and renters flocked from larger metros to more affordable, midsized cities like Spokane during the pandemic.

Spokane’s brisk and competitive real estate market has squeezed housing supply and that is spilling over into the rental market, James Young, director of the Washington Center for Real Estate Research at the University of Washington, told The Spokesman-Review in May.

Spokane had the nation’s fastest monthly rent growth at 8.1% in June and rates are up more than 31% since the start of the pandemic, according to Apartment List, a rental-listing site that compiles monthly rental data for cities nationwide.

Median rents in Spokane in June were $965 for a one-bedroom apartment and $1,326 for a two-bedroom unit.

The median rent was $1,290 for all apartment types in Spokane in June, according to Apartment List.

More than 59% of renters in 2020 relocated from another area to Spokane. Some 25% of those renters were from Seattle and Tacoma, according to a Kiemle Hagood 2021 market report.

Rental inventory remains tight in many cities across the country and monthly rents have surpassed the level they would have been if price growth had not been disrupted by the pandemic, according to Apartment List.

Spokane has a 0.5% apartment vacancy rate for all unit types, according to the Washington Center for Real Estate Research’s Spring 2021 apartment market survey.

Terri Anderson, the Spokane director for the Tenants Union of Washington, said she hasn’t seen anything like Spokane’s current rental market.

“I’m getting calls and emails (from tenants) every day. These aren’t $50 or $100 rent increases – they are $500,” Anderson said.

In one case, a tenant reported rent rising from $1,105 to $1,810.

“We call those economic evictions because that’s what they are,” Anderson said. “If you can’t afford it, you can’t live there. It’s an eviction without having to go to court.”

Anderson thought massive rent hikes would occur after Gov. Jay Inslee signed a ‘just cause’ eviction law in May requiring landlords to provide a legitimate reason for ending a month-to-month tenancy. Previously, landlords were able to end month-to-month rental agreements with 20 days notice without providing a reason.

The next best way for landlords to terminate a tenancy easily, quickly and for free is to raise the rent so high the tenant can’t pay it, Anderson said.

There is no state law on how much landlords can raise rents. However, state law indicates landlords must give 60 days written notice before imposing a rent increase, which also can’t take effect during a tenant’s current lease.

Gov. Jay Inslee issued a bridge proclamation in June between the eviction moratorium and housing stability, and right to counsel programs. The bridge proclamation is in effect through Sept. 30.

Legislative actions also included allocating more than $650 million for landlord and tenant assistance in the state, in addition to the $500 million dollars previously released by the state Department of Commerce to local governments for rental assistance.

Those monies are expected to help more than 80,000 landlords and renters.

Under the bridge proclamation, renters are expected to pay rent beginning Aug. 1 or actively seek rental assistance funding.

Landlords may only evict tenants if none of those actions are being taken, but are required to offer the tenant a reasonable repayment plan before beginning the eviction process.

“I feel like something needs to be done. (The rent increases) seems so widespread and so systemic. It doesn’t seem to be based on the moratorium,” Anderson said.

She added that U.S. Census data show 80% of tenants paid rent during the pandemic. As a result of the rent hikes, Spokane area tenants likely will begin moving in with friends, relatives or obtaining roommates, she said.

Daniel Klemme, president of the Landlord Association of the Inland NW, said the Spokane rent boom came about from a variety of reasons.

The Landlord Association of the Inland Northwest’s membership mostly includes mom-and-pop landlords with fewer than four rental properties.

“I think one of the biggest things is there is just this massive increase in demand with people working from home,” Klemme said. “There’s a lot of jobs – whether it’s the west side of Washington or Denver – that are allowing people to permanently work from home. It makes more affordable cities like Spokane very attractive.”

Some landlords are raising rents to keep up with rising property taxes and maintenance costs, while others are looking to offset expenses incurred by going months without collecting rent during the eviction moratorium, he said.

Spokane’s hot housing market is also prompting people to sell their rental properties, further dwindling housing supply.

Landlords are also selling properties because of difficulty with navigating new statewide tenant protection laws and regulations, he added.

“It’s kind of this perfect storm of these reasons why the rent is going up and the housing availability is going down,” he said.

Klemme said would like to see more support for landlords, such as a helpline to answer questions with the new statewide tenant laws.

“Nobody wants to kick a good renter out … with taxes going up and regulations changing, there’s not a lot of support for us,” he said. “We are kind of all feeling this right now. There has to be room for us to work together on this.”

Anderson, of the Tenants Union, encourages residents concerned about rent increases to contact city council members.

The Tenants Union is holding a meeting via Zoom Wednesday from 5:30-7 p.m. to discuss concerns with rising rents. Attendees must register in advance for the meeting.

Odette, the Spokane Valley renter, said she didn’t want to move from the area because her daughters would have to change schools.

She looked at other apartments in Spokane Valley, Liberty Lake, Post Falls and Hayden, but either monthly rents were much higher at $1,500 to $1,600 or nothing was available.

Eventually, her apartment complex offered a lower rent increase – $1,235 instead of $1,385 – if she agreed to an 11- or 12-month lease.

But even that rent hike will make it more difficult to save for an emergency fund, she said. Odette understands that supply and demand dictates the housing market, but she would like to see a limit on rent increases.

“There’s got to be a way to make it more equitable for rents by having a 10% cap yearly or something,” she said.