Washington State legislators are considering legislation stabilizing rents statewide.
Since 2019, the Washington state legislature has been hard at work to pass state policy that addresses our housing affordability crisis. This effort has been anchored by a three-pronged approach: supply, subsidy, and stability.
In recent years, the legislature has made nationally celebrated strides on the supply front. The legislature has also been prioritizing funding for the State Housing Trust Fund to subsidize affordable homes, with a record $400 million contribution in 2023.
Now it’s time for the legislature to catch up on the third leg of the tool, stability, by passing House Bill 1217 for rent stabilization. If you, like me, are someone who mostly focuses on the need to build more homes, this is an important moment to also show up in support of more stability for tenants.
Futurewise is a statewide land use advocacy nonprofit, and we’ve focused much of our recent work on increasing Washington’s housing supply. We have led successful statewide campaigns to overhaul the housing requirements in comprehensive plans (HB 1220 passed in 2021) and allow missing middle housing options in most single family neighborhoods (HB 1110 passed in 2023). We are currently leading a campaign to pass statewide requirements to add more housing near high-capacity transit (HB 1491).
At the local level, we have led successful coalition campaigns to pass similar local policies across the state. We have also supported a variety of other policies at the state and local levels to reduce construction costs and timelines.
Washington State has a shortage of homes, especially in the places where people want to live, which is typically near jobs, amenities, and transit. We make it too difficult and expensive to build new homes and that needs to change. While Econ 101 supply and demand models are often too simplistic to capture the full complexity of real-world housing markets, we ignore their basic insights at our peril. Increasing supply has to be part of the comprehensive solution. But supply strategies alone aren’t enough. We also need subsidy and stability strategies. And we can design these strategies to support a long-term commitment to increasing supply as well.
Supply strategies need rent stabilization as a bridge to a more housing abundant future. It will take years before we see a real uptick in housing from the recent policies to expand supply. Missing middle housing is a good example. HB 1110 was passed in 2023. But the requirements to allow middle housing types don’t go into effect until July of this year, and then only in the Central Puget Sound.
Even after the new zoning is in place at the local level, it will take years for developers to move the first projects through permitting and construction. Some developers will be eager to jump into building these new housing types, but many will wait to see how those first projects go before changing their business models. If interest rates stay high, that will slow down this process even more. We likely won’t see the full effect of these changes on the real estate market until the end of the decade. Other recent legislation on comprehensive plans, building codes, and permitting have similarly long-time horizons.
While we wait for these supply strategies to take effect, the market stays constrained and rents continue to go up. When the next big rent increase comes, more tenants will be priced out – out of the state, back to their parents’ house, onto their friend’s couch, or onto the street. It will be little consolation to tell them that those supply strategies are really going to bring down rents by 2028 or 2029.
If we are going to build the broad-based coalition that we will need to pass and maintain policies that lead to housing abundance over the long-run, that coalition needs to include renters who are at risk of being displaced in the near term by rising rents. Would you take time out of your busy life to advocate for more housing supply if you wouldn’t be able to stick around long enough to benefit?
Authored by Senator Emily Alvarado (D-34th, Seattle) and sponsored by 34 House Democrats, HB 1217 is a nuanced, thoughtful version of rent stabilization that tries to anticipate and correct for potential pitfalls that could negatively impact housing supply. HB 1217 exempts new buildings for the first 10 years. This is important because lenders and investors look most closely at the first 10 years of revenue when assessing profitability and deciding what terms to offer a developer.
Alvarado’s bill caps rent increases at 7%. This rate is well above the Federal Reserve’s 2% target for inflation, allowing flexibility to respond to fluctuations in the costs that developers and landlords face, while maintaining predictability for tenants. The cap only applies while a tenant remains in the same unit because the focus is on maintaining stability for those families and individuals. When the tenant moves out, the landlord can set the rent at whatever the market will bear.
Some developers and landlords point to dysfunctional housing markets in other cities that have some form of rent stabilization, particularly San Francisco. Housing in San Francisco is very dysfunctional, but that is because San Francisco took the opposite approach as Washington State. Instead of combining rent stabilization with policies to promote supply, they combined it with some of the most restrictive housing supply policies in the world.
In 1978, alongside implementing rent stabilization, San Francisco downzoned multi-family neighborhoods, reducing development capacity of the city by about 180,000 homes. Then, over time, San Francisco and the State of California created a multitude of obstacles in the permitting process. Projects have to secure 87 different permits. Many steps in this process are discretionary, meaning that the city can change the requirements mid-process and send a developer back to the beginning. If the neighbors want the developer to build them a park, the City Council can decide, at the last minute, to add that requirement to the process. This byzantine system can take over a decade and add huge costs.
Washington State is doing the opposite. We are trying to make it easier to build more housing, while also creating stability for tenants. The state legislature has already passed many policies to increase housing supply and reduce costs. We need to keep pushing on the supply front by upzoning near transit, reducing parking requirements, fixing our condo liability laws, and much more. But right now, if you care about those supply strategies, I urge you to also stand in solidarity with renters at risk of economic displacement. Support HB 1217.
We can and must stabilize rents and build a lot more housing. Washington State has the opportunity to lead the way.
Contact your legislators and urge them to support HB 1217 via the form on the bill webpage.
Alex Brennan
Alex Brennan is the executive director at Futurewise, a nonprofit that works to create more livable communities. He is a resident and renter in the 43rd Legislative District. He holds a Masters of City Planning from the University of California, Berkeley.
