The Washington state Senate on Thursday approved a proposal to cap annual rent increases, putting the contentious policy just a few steps closer to becoming law.
The “rent stabilization” policy, House Bill 1217, passed 29-20 with one Democrat, Sen. Annette Cleveland, D-Vancouver, voting against it.
The bill would cap yearly rental increases at 10% plus inflation, for renters in apartments, and 5%, for mobile homeowners. It also sets some limits on move-in and late fees and security deposits for mobile homeowners.
This is the first time such a proposal has passed the chamber. The policy has faced significant pushback in recent years from moderate Democrats and Republicans who say it could discourage new development and raise rents. Thursday’s debate highlighted that division.
Several Democrats joined with Republicans to approve amendments to increase the cap and exempt more landlords from the law – changes that bill supporters say will lessen protections for many renters across the state.
Before Thursday, the proposal capped rent increases at 7% each year. An amendment to increase that to 10% plus inflation passed the chamber 25-24, splitting Democrats.
Sen. Sharon Shewmake, D-Bellingham, offered the amendment. She said a low cap could have lasting effects on the state’s rental market, where rents are too expensive for working- class people to afford.
“A 7% cap is dangerous,” she said. “I hope I’m wrong.”
Backers of the original version of the bill argued against the amendment.
“I’m disappointed at this point of the changes that were made here that I think strip far too many people of the protections that we could have afforded them,” said bill sponsor Sen. Emily Alvarado, D-Seattle.
Another major change made to the bill Thursday would exempt single-family homes not owned by corporations from the new policy. Sen. Marko Liias, D-Edmonds, offered the amendment, saying he hoped it would keep small property owners in business.
“Let mom-and-pop landlords keep their homes and serve those families,” said Sen. Keith Wagoner, R-Sedro-Woolley, who owns three rental properties.
Alvarado said that the single-family home exemption will result in fewer families protected from large rent increases. She said about 30% of rentals in Washington are single-family homes.
Many of the provisions for mobile homeowners who rent the land where they live remained untouched Thursday.
For those homeowners, move-in and security deposit fees cannot equal more than one month’s rent, and late fees cannot exceed more than 2% of rent for the first late month, 3% during the second late month and 5% during the third.
The bill also leaves in a requirement that the state study the housing market, tenant stability and social vulnerability within 10 years of the bill becoming law.
Under the policy, rent caps will expire July 1, 2040. Until then, any tenant or the attorney general’s office can sue a property owner they believe to be in violation of the law.
The bill now heads back to the state House of Representatives, which must approve the final changes. It’s unclear how they will feel about the updated version of the bill.
“They sent us a different bill,” Alvarado told reporters. “There will be a lot more conversations.”
If the two chambers can reach an agreement by the end of session on April 27, the bill will head to Gov. Bob Ferguson’s desk.