Initiative 2021-01 aims to implement rent control in the City of Bellingham
Bellingham rent prices have increased 13% over the last year. As rents soar, progressives have turned to rent control in attempts to solve the problem. Initiative 2021-01 aims to implement rent control in the City of Bellingham. People First Bellingham, a coalition of progressive organizations, is collecting signatures and if they meet the signature quota, the initiative will be put to Bellingham voters this Fall.
Rent control uses price controls to regulate the amount of rent a landlord can charge. Initiative 2021-01 requires landlords to pay a relocation fee if rents are raised more than 8% over a rolling 12 month period or if a landlord ends a rental agreement without cause. The relocation fee is equivalent to 3 months rent. This initiative pairs with another topic, Just Cause Eviction, which limits the reasons a landlord cannot renew a lease. If this initiative passes the November ballot, it will be the first case of rent control in Washington State and will be some of the most progressive housing policy in the entire state.
If the history of rent control has taught us one thing, policies like this spread, only getting worse. Strong actions need to be taken now to stop this from making inroads into Whatcom County and Washington State.
Rent control creates more problems than it solves and here is a short summary on just some of those issues.
Helps Bad Renters: Landlords are financially motivated to renew leases. Turnovers cost money and vacancies hurt rental income. The main reason a landlord would not renew a lease is because the renter is a bad tenant. Initiative 2021-01 forces landlords to pay bad renters to move out or renew their leases. An unfair dilemma to property owners and bemoaning to the neighbors of these renters.
Hurts Good Renters: Landlords do not want to pay relocation fees to bad renters. They avoid this by raising screening standards on credit, income and security deposit amount, weeding out possible bad tenants. Making it increasingly difficult for average people to qualify for rental housing. Furthermore, landlords are motivated to raise rents 7.99% every rental term and increase rents over market every time a tenant moves out. Eliminating naturally occurring affordable housing and only spiking rent prices. This scenario has played out time and time again in rent controlled cities around the country. Initiative 2021-01 only ends up hurting the people it claims to help.
Harms Retirees and Minorities: Retirees make up one-quarter of small property landlords and ethnic minorities are statistically more likely to own small rental properties. Rent control hurts the profitability of entrepreneurial people who use real estate to meet their capital needs. The impact on profitability is systemic, affecting everyone from builders to realtors.
Illegal Rent control is currently illegal under our state constitution. In fact, it is illegal in 38 other states too. Initiatives can still pass the ballot because we have no mechanism to audit their legality. The only response we have is to take municipalities to court. Options like this are costly and time consuming.
Response A coalition is building, of state and local stakeholders who want to see this initiative stopped in November. As the campaign develops, you will have opportunities to engage more formally. The best thing you can do now is stay informed and tell a friend. Our opponents believe renters are victims and landlords are exploitative. We want to tell the true narrative about rent control. The policy only hurts renters, harms mom-and-pop landlords, cuts company profits and holds back our economy. Links:
Initiative 2021-01 https://peoplefirstbellingham.org/one/index.html
State Ban on Rent Control https://app.leg.wa.gov/RCW/default.aspx?cite=35.21.830
Article on Rent Control Problems https://aoausa.com/why-rent-control-is-unfair-and-hurts-landlords-tenants-and-the-public-interest-by-paul-guppy/