WA State Rent Control Bills in committee NOW (Jan 22 2023) : HB 1388 and HB 1389

[Brian Hughes]

Apologies if this is wrong forum.   This is of interest to anybody investing in WA State.

As has been the case the last few years in WA,   statewide rent control bills have been proposed which would severely limit housing provider's ability to adjust rents to meet costs or to improve and reposition a property.

This year there are TWO bills - House Bill 1388 and  1389 - that could pass together or separately and each would limit rent increases to a maximum of 3% annually or inflation (up to 7%) and add a host of other rules governing whether maintenance,  repairs or upgrades would allow for further increases.  1388 also has language basically making any amount of rent increase unallowable if tenant cannot afford it,  might relocate as a result of it, or if it is deemed too much by the attorney general based on whatever criteria they choose to apply.    1388 also includes language that effectively creates vacancy control,   meaning a vacancy may not allow for resetting to market rate.     1389 is a somewhat more 'conventional' bill and also includes rules around exceptions for "necessary" repairs and updates as well as rules for "banking" rent increases if you do not take the full increase amount allowed in a given year,  but the process for taking advantage of that requires serving a lot of notices properly.     1389 prohibits resetting your rent to market rate if you had to evict the prior tenant for any reason.   This is particularly bad since evictions often come with lost rents,  legal expenses,  increased turnover costs, and repairs.   

I tried to avoid getting my opinions into this but spoiler alert this would not be good for anybody operating rental housing in WA.    Please consider going to the WA legislature home page,  looking up these bills,   and submitting testimony or at least a position (pro/con) against them.   

Thanks!

[John Barrett]

@Brian Hughes I have provided responses to both bills and will attend today's meeting virtually.  I have long provided straight forward logical analysis of the consequence for these terribly thought out pieces of legislation.  For this bill, beyond the normal comment, I provided the following.

HB 1388

Thank you for finally addressing the shortage of housing in WA by creating an even worse morass of overly complex legislation that will further harm the average resident. Your complete ignorance of and disregard for the basic rules of economics, supply and demand are certain to lead to the utopian vision of overly abundant housing our state so desperately needs. While many might scoff at the idea that someone can arbitrarily dictate that all rental prices will follow the CPI-U, you have boldly chosen to assert yourself and demand that the world conform to your ideas. Congratulations, the dismal science of economics holds no sway over you! History is filled with an abundant number of examples where governments have chosen to ignore economic reality in order to deliver unparalleled prosperity to their citizenry. If you can’t find any, then it’s clear that none of those “other” leaders were as brilliant, charismatic, social media conscious, oblivious to reality or frankly anywhere near as good looking as you.

To those who might point out the obvious logical fallacy in your proposed legislation, it is clear they simply do not understand the power of this legislature to demand laws of economics be suspended whenever or in whatever fashion are necessary when they conflict with your vision of the world. Thankfully after the successful passage of this legislation and the other House and Senate bills of equivalent quality, the residents of WA will no longer have to worry about prices of anything rising faster than CPI-U (between 3%-7%). Finally, the world will be put on notice that only our legislators will decide what prices are allowed to increase in our State.

By crafting a bill this incredibly vague with little to no explanation as to how or who will decide what costs are “necessary to maintain the dwelling unit” or “substantially likely to force a tenant household to move or involuntarily relocate”, you have guaranteed ample employment opportunities for attorneys to argue both for and against this. Just like that this dreg of a piece of legislation has now made you a job creator!

Like the missing member of a group project who contributes nothing to the finished assignment but demands to present the material to the class; you are giving our court system the opportunity to shine by spending years and huge sums of money litigating this legislation. Undoubtedly, they will take this opportunity to evolve your atrocious piece of legislative tripe into something far worse.

Clearly claiming the power to reshape the rules that govern reality (economic & otherwise) is highly dangerous and can only be entrusted in your “highly capable” hands. Going forward it is clear that legislature will need to address the fact that many people have chosen to relocate to WA for employment opportunities. I have full confidence that you will address this issue of increased “demand” for housing no less eloquently than you have address price controls in this legislation. As such, when can the residents of WA expect your new legislation to require all people relocating to our beautiful state to bring their housing with them? Additionally, any insight into where you will create / manifest the new land these incoming dwelling units to occupy would be greatly appreciated. I assume all of this will be handled via legislative decree but wanted to clarify, asking for a friend.

It has been said that “Hard times create strong men, strong men create good times, good times create weak men and weak men create hard times.” While many people worry about the future of our State, it is clear based on your leadership that we will soon have the opportunity create many more strong men and women. Until they can come along to lead us back to good times, keep up the great work!