Rep. Greg Cheney, R-Battle Ground, is proposing a bill this upcoming legislative session to pay back Washington landlords who reduce rents or keep them the same.
Low-income housing advocates argue the bill rewards landlords for raising rents in the past, but Cheney maintains the policy is sound, and details can be refined through the legislative process.
House Bill 2033 creates a rent relief incentive program through which landlords can receive state property tax relief. Cheney said the idea is a dollar-for-dollar match from the state for the income the landlord would be giving up.
A landlord who maintains the current rental agreement would receive 2 percent of the annual rent, while landlords who offer 3 or 7 percent decreases would receive back 4 and 7 percent of the annual rent, respectively.
Landlords who charge rents up to 200 percent of fair-market rent would be eligible. In Clark County, that’s $3,220 a month for a one-bedroom apartment, according to the U.S. Department of Housing and Urban Development.
The bill is geared toward “mom and pop” landlords, Cheney said, and arose from his constituents’ concerns about increasing rents, as well as smaller landlords struggling to maintain their properties without raising rents.
If tenants can’t afford to stay in their housing and landlords can’t afford to not raise rents amid inflation, Washington will lose housing stock from landlords selling their properties, he said.
“What the goal is here is saying, ‘Listen, we’re asking you, the landlord, to provide immediate relief to your tenant. And if so, we will use part of those record-breaking state surpluses as a thank you or as an incentive to you, the landlord,’” Cheney said.
This bill is particularly important to retain small properties that make up the rental markets in Central and Eastern Washington, as well as rural Clark County, he said.
The program, if passed as it’s written now, would start Jan. 1, 2025.
“The way this would work operationally is you would sign the lease with your tenant, you would then send a copy to the state,” Cheney said. “The state would then say, ‘Yep, this complies, so we’re going to give you now that match back.’”
‘A better option’
Cheney said the rent relief incentive program is a better option than rent stabilization — a key topic during the last session that will continue with two more bills this session. Rent stabilization limits the percentage a landlord can raise rents. In the case of upcoming HB 2114 and Senate Bill 5961, by no more than 5 percent within a year.
Sue Denfeld, president of the Clark County Rental Association, which represents landlords, said Cheney’s bill is a good start, but she has some reservations.
Any help small landlords can receive is positive, especially since many small landlords want long-term tenants who can afford to pay their rent, she said. But the bill is too vague as it’s written now, she said, and seems like it will take a lot of work to make operational.
She’d like the bill to clarify what happens if a renter moves out early.
“I’m encouraged, but I have reservations. There are a lot of details that are not clarified,” Denfeld said.
Cheney said many of the program’s details would be worked out by the agency administering it.
Michele Thomas, director of policy and advocacy for the Washington Low Income Housing Alliance, said she’s been inundated with stories of excessive rent increases in recent years, but this bill will not help.
“Landlords should not be paid by the state and rewarded for excessive rent increases in the crisis that they created,” Thomas said.
Landlords charging extremely high rent could participate in the program if rents up to 200 percent of fair market value are eligible for the program, she said.
Most Vancouver waterfront one-bedroom apartments have rents less than 200 percent of fair market.
Thomas said she’s also heard many stories of landlords raising rents without making repairs or maintaining the property for the tenant, so she believes the premise of the bill is faulty.
She said the state should not pay landlords to keep their rents the same after such large increases.
“It’s definitely a bill for landlords, and it’s definitely a bill that was introduced in response to rent stabilization being such a key, large conversation,” she said. “Tenants need predictability in rent increases.”
Potential loophole
The bill also has a potential loophole as it’s written now.
Landlords could potentially receive money from the state for maintaining or decreasing rent while finding other ways to charge tenants more, such as through increasing fees for garbage or pets.
“We’re hearing tons of reports from tenants across the state that in addition to these big rent increases, they’re also being forced to pay money in other ways to landlords through these fees that are not regulated by the state,” Thomas said.
There is a place for incentives from the state in some cases but not in the midst of the affordable housing crisis, she said.
“Renters can’t be left to the mercy of whether or not their landlord agrees that this is a good deal for them or not,” Thomas said.
Cheney said he understands her concerns about a potential loophole. He believes the Legislature could work on addressing that and adjusting some of the percentages if the bill gets to a hearing.
“It probably needs tweaking, and certainly as it goes through more of a broader conversation, I’m certainly open to that,” he said. “I think the key here is to try to get a conversation piece going about what we can do from a market perspective to incentivize homeowners to reduce rents to tenants.”
The legislative session begins Monday.
