There is zero justification for that (assuming its a good appraisal with proper comps).

Basically I used the price we paid in 2015 as justification of the "value" of our house in 2016.

Therefore, their justification was that they "technically never were evicted".Yeah but the online records show EIGHT dispossessory notices. 

Acceptable discrimination in real estate and lending is well defined by law.What's being done is simply looking for justifications to not serve the public interest in providing housing and placing personal conveniences ahead of the needs of others.

I would hire a contractor to repair the holes and use the contractor's invoice as justification for the deduction of security deposit.Also, if they were responsible for the yard/garden, then any repairs due to their neglect of that duty would also be reasonable to deduct.  

That becomes justification for rent increases.Don't set a precedent by acquiescing to every request. 

My current plan is to cite that section from the RCW and essentially state that I am in my rights as the landlord, but I don't want that action to provoke her or worse, find out that my justification was not compliant with the RCW. 

Had you hired someone to do the clean up I would say deduct the cost from the deposit, such as in the $65 garbage fee, but since you did the clean up yourself and are not out of pocket you do not have a justification to withhold.

You can find the proposed budget, allocations of funding and the justifications for allocations if you're really concerned after being excited by a "news" article.

I thought it was a valid justification.