WA Statewide Rent Control Measure

[Sean Smith]

Over the weekend Washington State Legislature passed controversial rent control measure EHB 1217. It is now out for signature with Governor Bob Ferguson.

For anyone who owns investment real estate in Washington, make sure to read up on the details. If there's information I missed please chime in the comments below.

Residential Housing:

- No rent increases within the first year of tenancy.

- After the first year, yearly rent increases are capped at 7% plus CPI (up to 10%).

- 90-day notice required for rent increases.

- Rents can increase beyond the cap in between tenancies.

- Month-to-month leases cannot differ by more than 5% from term leases.

Manufactured/Mobile Homes:

- No rent increases in the first year of tenancy.

- After the first year, yearly rent increases are capped at 5%.

- A one-time increase of up to 10% is allowed if the tenant sells the mobile home, with prior notice.

- Move-in fees capped at one or two months' rent (if a pet is involved).

- Late fees are tiered based on consecutive months of late payment (2%, 3%, 5%).

Exemptions:

- Buildings under 12 years old, public housing, nonprofit organizations, and owner-occupied duplex, triplex, and fourplexes are exempt.

- Real estate investment trusts, corporations, or LLCs with corporate members are not exempt for residential properties.

I'm curious if anyone here feels this will meaningfully affect their portfolio. How are you adjusting strategy going forward, if at all?