On April 18, the Seattle City Council voted 7-2 to cap late rental fees at $10.
The ordinance also banned landlords from imposing other arbitrary fees related to delivering notices to tenants. The council reversed a decision made in committee that would have raised the allowable limit
to the lesser of $50 or 1.5 percent of monthly rent.
The bill’s sponsor, socialist City Councilmember Kshama Sawant, said that the legislation is necessary to protect renters from landlords from using fees to squeeze extra revenue.
“It's really astounding actually to see how renters are being gouged by their landlords for these so-called rent late fees,” Sawant said.
“The other point that we need to note is that landlords are making an average — and this was reported by the Housing Justice Project, they reported this statistic at my committee — that landlords are making a profit of 30 percent on average. So this is just an avenue for landlords to continue making greedy profits hand over fist.”
Sawant also said that it was outrageous that landlords were often charging their tenants hundreds of dollars while letting apartments become dilapidated with dismal service.
“I have heard from hundreds of renters in the city, they tell me the landlords are not fixing major problems inside the rental homes, but the tenants don't get to charge their landlords fees for being late with fixing mold infestation, or fixing the stove,” she said.
The Seattle effort follows similar measures in other jurisdictions in the region in recent years, including Burien and Auburn — which imposed a $10 monthly cap — and Kenmore, Redmond and unincorporated King County, which implemented a 1.5 percent maximum. The Stay Housed Stay Healthy coalition, made up of a number of progressive nonprofit and advocacy organizations including Real Change, helped lead the efforts to pass these ordinances. In January, the group wrote to the City Council and mayor asking for Seattle to implement a similar cap.
The bill was reviewed on April 7 at the City Council’s Sustainability and Renters' Rights committee, where tenants shared their experiences of receiving bills, sometimes in excess of hundreds of dollars, for missing rent by just a couple days.
One renter who wrote to the City Council said that because they rely on Social Security payments which arrive on the first Wednesday of the month, they are hit with a $50 late fee for something outside their control. Another described receiving two overdraft fees if their payment bounces due to a temporary lack of funds in their account.
“So if I don’t have the money in my bank to pay, and they try to charge me, I owe $160 just for being poor,” the tenant wrote.
Sawant said that the ordinance would outlaw these types of junk fees, which amount to simple greed.
“We intended, from the very beginning, to make sure that all such fees … which has come to be known as junk fees, like literally charging for printing the notice ... to make sure that the bill says all such fees are limited to $10,” Sawant said.
At the committee meeting, conservative Councilmember Sara Nelson tendered an amendment raising the late fee cap from $10 to $50 or 1.5 percent of the monthly rent — whichever is less. This means that a renter who pays $2,000 a month would face a late fee of up to $30, while renters who pay more than $3,333 a month may not be charged more than $50. Councilmembers Nelson, Debora Juarez and Andrew Lewis voted in favor of the amendment, while Sawant and Councilmember Tammy Morales voted against it.
Sawant said that the vote showed that council members were out of touch with the realities renters in the city face when trying to make ends meet.
“Forty dollars can be the difference between whether you get to buy groceries for your family this week or not. That is exactly what we're pointing out,” Sawant said. “I was just reading this article this morning, a new report that was published by MarketWatch … it says that 39 percent of Americans have skipped meals to make housing payments. So this is not an exaggeration or hyperbole to say that it's shameful for Democrats, including self-described ‘labor Democrat’ Lewis, to take it from $10 to $50 a month when they're fully aware that those $40 makes all the difference to many families.”
Lewis did not respond to a request for comment by press time. At the April 18 meeting, Lewis reversed his vote, supporting the $10 cap.
Morales joined Sawant and Councilmember Teresa Mosqueda in sponsoring the amendment to reinstate the original $10 cap, arguing that renters cannot afford the additional fees.
“Housing is a human right and shouldn’t be commodified,” wrote Morales on Twitter. “Late fees are nothing more than a penalty on people who are struggling to pay their rent.”
This article has been updated with information from the April 18 City Council meeting.
Guy Oron is the staff reporter for Real Change. Find them on Twitter, @GuyOron.
Read more of the April 12-18, 2023 issue.