Interesting Anti-Landlord Ordinance Approved in Seattle
Rental Property Investor · SF Bay Area, CA · Member since 2015 · 206 posts · 156 votes
Interesting Anti-Landlord Ordinance Approved in Seattle
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Jennifer T.Pro Member
Investor · New Orleans, LA · Member since 2014 · 1k+ posts · 944 votesI don't have properties in that area. But, IMO, the only two issues I have with the ordinance are 1) not being able to select the best tenant and 2) unemployment as a form of income.
Unemployment as a form of income is RIDICULOUS. In most areas UE is 6 months, at the longest. And that is 6 months if they are applying for an apartment right at the beginning of their UE. What if there is only 1 month left anyway? Come on.
Do you know who also has to follow anti-discrimination laws? Companies, for hiring and promotions. Is there also a law in Seattle that companies need to hire the FIRST candidate with all of their requirements, instead of looking for the best qualified candidate? I'm guessing the answer is a giant no. So why would that same idea be different for LLs? It shouldn't. Also completely ridiculous.
72 Replies
- Buy and Hold Investor · Knoxville, TN · Member since 2013 · 450 posts · 270 votes10y
I think that's just fair business. Money from child support spends the same as money from any other legal source. Whether it is always reliable is beside the point. Also, if one person puts in an application before another and is fully qualified, then the first person should be approved. If someone else is better qualified, and the landlord would rather rent to them, then the landlord should raise their standards.
- HVAC Tech · Fort Wayne, IN · Member since 2015 · 423 posts · 223 votes10y
Doesn't look like that big of a deal. As long as they meet your criteria, you should be good. And if they don't meet your criteria, next one up.
- Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes10y
Love your profile pic! Cute puppy...
It would make me consider fix-and-flip / rehab rather than buy-and-hold.
...though I suspect forcing landlords to accept people with only temporary income (unemployment) and/or unreliable income (child support) will ultimately shake out as counter productive and be removed from the law either for that reason or maybe get struck down by the courts in a legal challenge.
- Rental Property Investor · SF Bay Area, CA · Member since 2015 · 206 posts · 156 votes10y
Interesting perspectives thus far. I suppose there are certainly workarounds for this ordinance. And thank you, @David Dachtera!
- Member since 2016 · 13k+ posts · 12k+ votes10y
Those are the same regulations we are forced to work with in our jurisdiction and I choose to ignore them to protect my business and my tenants.
You will learn from experience that : enforcement of the regulations will be rare if not non existent, reports by applicants few and far between, proving their case nearly impossible and landlords will quickly learn to operate their business as they always have.
Stupid landlords will tell their applicants why they were rejected and suffer the consequences while the smart one will operate with impunity by simply not being so stupid as to tell them they have discriminated.
Ignoring the regulations is necessary to protect your business and your other quality tenants.
- Investor · PO, WA · Member since 2015 · 197 posts · 95 votes10y
This is only one example of the crazy leadership of that "progressive"/socialist city. anytime the socialists of the Seattle city get involved you get what amounts to an attack on anyone that works hard and takes risks. Best of luck to any of you honest and caring landlords in Seattle...
- Investor · Century, FL · Member since 2015 · 950 posts · 603 votes10y
Originally posted by @Ana Marie B.:
In a nutshell, this ordinance aims to ban "discrimination by landlords against renters with alternative sources of income, such as Social Security benefits, veteran’s benefits, unemployment insurance, child-support payments and other assistance programs. The ordinance also will require landlords to review applications one at a time, then pick the first renter who meets their screening criteria."
Sounds quite reasonable, especially the last part - stops landlords burning applications fees trying to get the very best person. Take the first person who meets your qualifications and stop spending applicants money for no reason.
- Investor · Lancaster, PA · Member since 2016 · 68 posts · 12 votes10y
i am fine with the non discrimination laws...but this sounds like your not allow to pick the best qualified applicant from a pool of applications, but are simply required to pick the first one who meets your screening criteria....what if the next application is more qualified ?
- Investor · Century, FL · Member since 2015 · 950 posts · 603 votes10y
The way I read it that they are saying that you can't collect bunches of applications and application fees, process them all, and then choose the best. You have to process (with the fee) in order until you meet your criteria. Which is only fair frankly.
- Investor · Warminster, PA · Member since 2016 · 29 posts · 11 votes10y
How is that any less fair than colleges that charge application fees then choose only the most qualified students for admission? To me, application fees are a method of separating the serious inquiries from the tire kickers...They're more of a screening tool and less of an income source.
- Miami, FL · Member since 2016 · 13 posts · 1 vote10y
If the fee is the issue, then it might be best to rank your most qualified applicants based on stated information from the application. THEN start verifying all the info. If an applicant's info doesn't check out, then the lost app fee is their own fault. Everyone else gets their so fee back.
- Member since 2016 · 13k+ posts · 12k+ votes10y
You have a responsibility to pre-screen in advance of collecting any fees to efficiently operate your business. Your pre-screening, 9 times out of 10, should narrow all applications down to only a couple and you may then choose to do them one at a time.
You then are following the codes of selecting in the order the applicants pay the fee. It is a loop hole but until the fee is paid you have not officially received a application. The landlord controls the order.
Many landlords would disagree but the bottom line is if you are not doing everything possible to select the best candidates, regardless of the regulations, you are placing your business at risk.
I would rather reject applicants in violation of the codes than risk my business accepting a minimally qualified applicant since the risk of violating the code is practically non existent.
- 10yJennifer T.Pro MemberInvestor · New Orleans, LA · Member since 2014 · 1k+ posts · 944 votes
I don't have properties in that area. But, IMO, the only two issues I have with the ordinance are 1) not being able to select the best tenant and 2) unemployment as a form of income.
Unemployment as a form of income is RIDICULOUS. In most areas UE is 6 months, at the longest. And that is 6 months if they are applying for an apartment right at the beginning of their UE. What if there is only 1 month left anyway? Come on.
Do you know who also has to follow anti-discrimination laws? Companies, for hiring and promotions. Is there also a law in Seattle that companies need to hire the FIRST candidate with all of their requirements, instead of looking for the best qualified candidate? I'm guessing the answer is a giant no. So why would that same idea be different for LLs? It shouldn't. Also completely ridiculous.
- Oakland, CA · Member since 2015 · 2 posts · 1 vote10y
I agree that using unemployment income, and possibly child support, is questionable. It seems to me that one of your screening criteria could be that the source of income must be reasonably expected to last the length of the lease. So if someone tried to qualify with child support when their child is 17 years and 10 months old you would consider that income for 2 months only.
- Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes10y
It is illegal to discriminate due to some sources of income. Child support, Section 8, Social Security benefits just to name a few. There may be more. This ordinance doesn't sound like anything to be concerned about.
- Real estate investor · Pasadena, MD · Member since 2016 · 165 posts · 258 votes10y
Here in Maryland Baltimore County they just tried to pass similar legislation last week. There was many unfriendly landlord provisions in there. The core part of the legislation was that a landlord would have to accept section 8 vouchers. the legislation was defeated by a vote of 6-1.
We will see more of this social engineering legislation in the future I am sure.
- Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes10y
If section 8 is required in your jurisdiction you MUST accept it. If not, you may decline to get set up on that program. However, it is illegal to discriminate on certain sources of funds. This law does not sound "anti-landlord".
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes10y
Originally posted by @David Wandel:
Here in Maryland Baltimore County they just tried to pass similar legislation last week. There was many unfriendly landlord provisions in there. The core part of the legislation was that a landlord would have to accept section 8 vouchers. the legislation was defeated by a vote of 6-1.
We will see more of this social engineering legislation in the future I am sure.
I'm pretty surprised that in Baltimore City source of income isn't a protected fair housing class. In Montgomery County and DC it is so you have to accept section 8
District Invest Group546 Reviews - 10yJennifer T.Pro MemberInvestor · New Orleans, LA · Member since 2014 · 1k+ posts · 944 votes
I didn't realize there were areas that forced LLs to accept Section 8. I think that's horrible. This is my first year with Section 8 tenants and there is a lot more involved than just accepting/not accepting housing assistance as income. I had to take time off work multiple times to register as a new landlord, sign off on their paperwork, bring in paperwork, etc. And the inspections, at least in my area, were substantially more meticulous than I was expecting. It reminded me of the kind of condition houses for an FHA loan have to be in. Housing of any kind should be habitable, yes. But perfect condition? That should be up to the property owner.
For me, I don't mind the extra hassle...and it was a big extra hassle...to get a larger pool of tenants to choose from. But that was my choice in how to run my business.
- Falls Church, VA · Member since 2016 · 9 posts · 3 votes10y
Did I underststand this correctly? The rules require the landlord to accept the first qualified applicant?
How is selecting tenants different from hiring new employees for your business?
Should it also be required that businesses hire the first qualified applicant for a job versus selecting the best applicant from all who apply?
- Investor · Oakland, CA · Member since 2013 · 27 posts · 17 votes10y
Originally posted by @Freddie Walker:
How is selecting tenants different from hiring new employees for your business?
Because housing is more important than a job. Food, clothing, and shelter are basic human needs.
- Rental Property Investor · Portland, OR · Member since 2015 · 338 posts · 332 votes10y
Originally posted by @Ana Marie B.:
Curious what others think of this new pro-renter ordinance approved in Seattle. Would this make you think twice before investing in Seattle RE?
In a nutshell, this ordinance aims to ban "discrimination by landlords against renters with alternative sources of income, such as Social Security benefits, veteran’s benefits, unemployment insurance, child-support payments and other assistance programs. The ordinance also will require landlords to review applications one at a time, then pick the first renter who meets their screening criteria."
Here's the link:
"Anti-Landlord" is a bit hyperbole and sounds like click-bait, wouldn't many of you agree?
In any case, these are the same rules we in Portland have already been following. While there are ways around Section 8 (e.g. own higher-quality rentals that are more expensive than HUD limits, require an income from all sources to be at least X times the rent amount, require a certain credit score, require higher deposit, etc.), it's fair to accept the first tenant who fits your criteria. Otherwise if your criteria are constantly shifting and the goalposts moving, then what's the point of having criteria in the first place, and how can someone who has traditionally been discriminated against in society (e.g. racial minorities) ever meet them?
Many of the people here criticizing these anti-discrimination measures don't have profile pics, and anyway I won't make assumptions about anyone's ethnic background based on how they look. That said, if you believe anti-discrimination ordinances are fundamentally "anti-landlord" yet at the same time think you don't hold prejudices against certain groups of people, this may be a time for some introspection and soul-searching.
- Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes10y
Here is the Seattle definition:
“Discrimination” means any conduct, whether by single act or as part of a practice, the effect of which is to adversely affect or differentiate between or among individuals or groups of individuals, because of race, color, creed, religion, ancestry, national origin, age, sex, marital status, parental status, sexual orientation, gender identity, political ideology, honorably discharged veteran or military status, alternative source of income, participation in a Section 8 or other subsidy program, the presence of any disability, or the use of a service animal by a disabled person.
Here is the for anyone to get the real gist of the law. Here's the kicker, IMO, for property owners in Seattle:
14.08.040 Unfair practices-Generally
F. It is an unfair practice for an owner or lessor of real property, when determining tenant eligibility for purposes of leasing, subleasing, or renting real property, to apply income screening criteria (such as an income to rent ratio) in a manner inconsistent with the following:
1. Any payment from a Section 8 or other subsidy program that reduces the amount of rent for which the tenant is responsible must be subtracted from the total of the monthly rent.
2. All sources of income must be included as a part of the tenant’s total income except in situations where the rental housing unit is subject to income and/or rent restrictions in a housing regulatory agreement or subsidy agreement and income is determined pursuant to the agreement.
So 3x the rent as a screening tool per the prior poster from Portland is not applicable in Seattle. Are the eviction laws reasonable in Seattle? Because you can't place the best tenants, that's illegal and now outlawed. I wouldn't ever want to be a landlord in Seattle.
- Rental Property Investor · Portland, OR · Member since 2015 · 338 posts · 332 votes10y
Look, there's a reason people on Section 8 are on it. If you are a responsible landlord providing quality housing, your screening criteria will most likely except Section 8 by default. You may be able to put limits on the total number of humans allowed in the unit, credit scores above X for each adult, no rude people, people who smell like alcohol at 10AM, smokers, leather-wearers, vegans, etc. You can't discriminate based on protected classes, but you can discriminate based on whatever other factors you want, as long as you do so consistently.
And income can still be X times the portion of rent that the tenant pays. Because HUD subsidizes the rent and that's given directly to the landlord, and because section 1 above essentially states that the subsidy to the landlord should not be counted as qualifying tenant income but rather that it reduces the rent amount, it should follow that if you require an income that's 4 times what the tenant pays in rent (and apply that standard to all applicants), you will likely avoid Section 8 (if that's what you want) because as far as I know, Section 8 recipients pay up to 1/3 of their income in rent.
Rather than complaining about What Is, what would be more productive and helpful is for landlords to talk about their screening process and how they legally navigate anti-discrimination legislation while still managing to find great tenants. @Marcia Maynard, for example, is an expert in this. If you are a landlord without experience in this area, then it would be helpful for us if you brainstormed some potential solutions that we might not have thought of yet. I tried to do this in the previous paragraphs.
I wouldn't recommend, however, breaking the law. I would recommend even less breaking the law and then bragging about it on a public forum.
- Portland, OR · Member since 2008 · 123 posts · 73 votes10y
It doesn't seem like a big deal to me. How is having a job more stable than any other type of income? The applicant could be fired or quit their job just as easily as they could stop receiving child support (except it's not illegal to lay someone off, while it is illegal to stop paying child support).
It makes perfect sense to me to deduct a subsidized portion of the rent from your ratio. Why base it on a person's ability to pay $1200 when they are only responsible for $100 of that? If you don't want to hassle with the government paying your rent on time every month avoid section 8. Like @Account Closed said, have rents higher than HUD will allow.
Same goes for child support. So what if someone makes $2100 at a job and $1500 in child support? They still have an income at the time of the application of $3600, therefore qualifying for $1200 (in the 3x example). The job portion is just as likely to go away (or be reduced) as the child support portion. What if someone has two jobs, do you only count one of them in your 3x?
One question I have about the child support, are you allowed to ask for proof of payment, not just proof of the settlement? I'd expect that you should be able to count only what the applicant is actually collecting over time rather than what they "should be" getting.
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