Talking Points: SHB1217/SB5222

  • Price control measures like rent caps distort the housing market, discourage investment in new construction and ongoing maintenance, and ultimately make overall rents higher by reducing the quantity of available rental units. Even those residents who initially benefit often find themselves with limited housing options and missed economic opportunities. 
  • Operation costs have significantly increased in recent years. Insurance is one of the biggest contributors of these increases. Multifamily owners have higher insurance costs because they access insurance more often than a single family homeowner does. And when an insurance event occurs, it affects more units and costs more money than what might occur in a single family home.
  • Rent pays for employee wages, taxes, maintenance and other local investment. On average, just 6 cents of every dollar of rent is returned to the investor, and for the 45th, that money is reinvested into Washington state in new housing in areas where there is a critical shortage of housing. 
  • Eviction is not a leading cause of homelessness but is a contributing factor to the homelessness equation in the State. Often another issue begins the cycle of homelessness. Eviction and high rents are not solved by enacting rent control. In fact, in Oregon, eviction rates have increased by 70% since the rent control policy was enacted in 2019. In St. Paul, Minnesota the eviction rate has increased 50% since they enacted their rent control policy. In each jurisdiction, housing underproduction has remained stagnant or gotten worse.

Partnership for Affordable Housing (PAH) commissioned report, "Modeling the Impacts of Rent Growth Caps on Washington State’s Apartment Market” released last year and analyzes how a 7% rent control/rent stabilization policy would affect Washington State’s economy, several important statistical conclusions were drawn: 

  • The estimated probability that an apartment in Washington would be affected by a seven percent growth cap is quite substantial at 46 percent, while the estimated probability in Seattle is 31 percent.
  • A seven percent rent increase would lead to an estimated reduction in maintenance spending of $16 million per year in Washington. Seattle would have an estimated annual reduction of $6 million.
  • Total annual rental income loss for apartment owners in Washington is estimated to be over $57 million, while owners in Seattle would experience a total income loss of $23 million. These estimated losses result from the combination of restricting rents and reduced income from foregone construction.
  • This income reductions translate into declines in apartment property value. We estimate aggregate property value losses to be $1.12 billion in Washington and $449 million in Seattle.
  • The reduction in property values would also cause a reduction in revenue of $11 million per annum for Washington State, and $4 million for Seattle.

Check out our Rent Cap Policy Comparison HERE!