At a July 21 meeting of the Seattle City Council’s Sustainability and Renters’ Rights Committee, the committee voted 3-2 against recommending an ambitious rent control bill aimed at shifting the balance of power toward the city’s renters.
The proposal will now go before a full vote Aug. 1 but could face an uphill battle to passage if it fails to garner the support of more moderate Democrats on the council.
The bill’s sponsor, outgoing socialist Seattle City Councilmember Kshama Sawant, sees the bill as an opportunity for one last crowning achievement in her decade-long fight on behalf of poor and working people.
“Rent control has been one of the top issues for my office and for Socialist Alternative, my political organization, ever since we won our first election in 2013,” Sawant said. “In fact, what’s happened since then is that the crisis that we had recognized at that time — which is why we called for rent control 10 years ago — that crisis has now gotten a whole lot worse. You’ve seen the statistics; they’re just dire. Rents in Seattle almost doubled between 2010 and 2020. And we’ve seen many working people, especially disproportionately communities of color, being pushed out of Seattle because of the skyrocketing rents. We’ve also seen the corresponding increase in homelessness.”
If passed into law, the rent control ordinance would come into effect as soon as the Washington Legislature repeals a statewide ban on rental housing price regulation.
Since the council passed a non-binding resolution supporting the repeal of the statewide restriction in 2015, little progress has been made in the Legislature. Setting up the enforcement mechanism for rent control and outlining how it could work in practice is seen as a way to ramp up the pressure on Washington Democrats.
The ordinance would cap the maximum annual rent increase a landlord can levy to the last year’s rate of inflation. Unlike rent control policies in many other cities, the law would apply to nearly all rental units, including new construction. Affordable housing providers would be exempt from the restriction, and landlords could petition the city for a waiver in certain instances, such as unforeseen natural disasters.
To handle these requests, seven volunteer boards representing each of the city’s council districts would be established, made up of five renters and one landlord each. Together, these district rent control boards would also comprise a unified 42-member rent control commission tasked with making recommendations to the city about the rent control policies and ensuring their fair and consistent application.
If a landlord violates the rent control ordinance, they would be subject to warnings and fines of up to $1,000. The city could also prosecute repeat violators, and tenants would be granted the right to sue their landlords for damages.
Sawant said the law is necessary to help mitigate economic exploitation of workers by landlords and the capitalist class.
“The housing market, just like capitalism itself, is a zero-sum game, meaning you see increasing exploitation of renters and gouging of renters that translates into increased profits for the corporate landlords for the multimillionaires and the billionaires in the whole nefarious housing industry, all the way from the landlords on the ground, the property managers on the ground, to the major shareholders and the venture capitalists and speculative investors on Wall Street,” Sawant said.
She added that rent control on its own would not be able to solve Seattle’s housing crisis and that increased investments in social housing, funded by taxes on the rich, were needed to increase supply.
As a trained economist, Sawant believes that rent control will ultimately benefit Seattle. However, the policy is not very popular among most members of the field, which tends to skew rightward. A 2012 survey by the conservative University of Chicago school of economics found that four out of five economists were critical of the policy. Left-of-center economists have also raised some concerns.
Among them is Dean Baker, senior economist at the Center for Economic and Policy Research. When asked by Real Change about the proposal, Baker said that a few aspects of the ordinance gave him pause, including the prohibition on “vacancy decontrol.” This essentially refers to the ability for landlords to raise rents above the normally permitted levels in the case of a vacancy.
Baker said that this would lead to a big divergence between the market price for housing and the controlled price and thus would not contribute to reducing the overall market-determined rate for housing. He also added that the ultimate path to alleviating the housing crisis is building more homes to increase supply.
“Rent control is great for protecting someone in the place that they’re at, for as long as they want to stay there. It provides some cushion in a rapidly rising housing market with rapidly rising prices,” Baker said. “But really at the end of the day, if you have a shortage of housing, you have to deal with that by building housing.”
The major concern among economists is that rent control could decrease housing production in the long term, Baker said.
Sawant countered these arguments, saying vacancy decontrol was almost like a Trojan horse used by landlords to gut rent control laws when they’ve been implemented in other cities.
Including vacancy decontrol, she said, would be essentially “writing language that will not enable the rent control law to work properly.”
Sawant added that studies suggest rent control has little effect on housing construction.
“The statistical evidence shows actually that there is no connection between rent control and how much housing is built,” Sawant said.
“In fact, New York City’s largest building booms took place during the times of the strictest rent controls, which [were] the 1920s and the post-World War II period. And then more recently, UC Berkeley researchers have found that the six cities that had rent control in the Bay Area actually produced more housing units per capita than cities without rent control.”
Sawant also said that she preferred social housing to for-profit development, because for-profit landlords economically exploit their tenants. One of the additional benefits of the rent control ordinance in her eyes is that it would make private development less competitive, ultimately driving down land speculation and aiding in the production of social housing.
Unsurprisingly, the rent control ordinance has engendered fierce resistance from landlord lobbyist groups.
“LANDLORDS FLEE IN 23’ RENT CONTROL KILLS HOUSING @SeattleCouncil,” wrote the Rental Housing Association of Washington, a group that represents rental owners, in a July 21 Twitter post.
However, Sawant is not afraid of direct confrontation with landlords and openly siding with renters against them.
“Fighting to win strong rent control, fighting to lift the state ban on rent control,” Sawant said, “fighting to massively expand social housing in Washington state by taxing big business and the wealthy — all of this actually will move the balance of power towards renters more much more than it is right now where renters are exploited. And that has everything to do with the quality of housing that’s available for working and poor people and the affordability of that housing.”
Read more of the July 26-Aug. 1, 2023 issue.