Seattle's Rental Law and Unintended Consequences

I heard a good deal from landlords and others in real estate about the potential downsides of Seattle’s new first come, first served rental law. Here are a few points, especially from small landlords, who complain about lack of city outreach in advance (“We literally learned about this from your newspaper after City Council approved.”):

• Some small landlords might opt to take units off the market and leave them empty, reducing supply. Although they wouldn’t have a rental income, they also wouldn’t face the city’s extra oversight. In such a hot market, the properties will continue to appreciate in price. This is a problem in Vancouver, B.C. City Council could respond, of course, by putting a tax on unoccupied properties.
• “Small landlords will shift from Craigslist to private workplace social network, when threatened with (Seattle Office of Civil Rights) litigation the first time we decline a tenant who we objectively think does not belong in our home.”
• “As a small-time landlord for 20 plus years. If you get a bad tenant in your property, you have no rights and it’s a nightmare and very costly. This law will destroy the small-time, thoughtful landlord that doesn’t usually ask for top dollar rents for their properties. They are looking for a good fit for both the tenant and landlord to build a good relationship. The hope is always that the tenant enjoys the house and stays a long time. Big-time apartment buildings can hire all the people they need to take care of the City Of Seattle’s crazy ideas.  The small-time landlords are the ones that are really going to be hurt by this new law.”
• “When I put a property up for lease in Seattle as a leasing agent and there are multiple offers, under this new policy it will cost my landlord clients money if they have to accept an applicant who doesn’t plan to move in for 6 to 8 weeks after their approval just because they may be the first applicant to respond. There may be another candidate who meets the minimum written criteria who will take the unit sooner…”
• “I have handled rentals for many years. I always drove to the place they live in before renting to a family. I then ask myself if I want my property to look like the place they are moving out of. It looks like that can’t be done now. I think that many landlords will have their properties trashed and sell them instead of renting them further. This silly policy will make the already impossible rental situation worse, like other policies in Seattle. There is a tremendous risk with rentals. This new idea will make thev risk much much worse.”
• The law might cause landlords to write much tougher minimum requirements so they face less risk in taking the first applicant. Some tell me they often exercise their judgment and take a less qualified candidate who seems like the right fit. First come, first served would eliminate that.
• Landlords already must comply with an array of federal, state and local laws and ordinances. Why not better enforce these rather than adding another layer?
• People working rigid shifts, often making less money than the median, will be less able to quickly apply for a rental. On the other hand, highly paid renters with flexible work schedules can get there first.

Maybe this is why more than 81 percent of respondents to my unscientific poll on the law said it was a bad idea, while another 12 percent said it needs more study.

Jon Talton: jtalton@seattletimes.com; on Twitter: @jontalton. Jon Talton comments on economic news, issues and trends, with an emphasis on Seattle and the Northwest.

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