If you already have an investment property in Seattle or you have been thinking about purchasing an income property in the Seattle real estate market (which you should be doing because it is one of the hottest US real estate markets at the moment), then this is something which affects you directly. The Seattle tenant law has been changed!
What is the change in the tenant law?
On 8 August this year the Seattle City Council approved an ordinance which reportedly aims to eliminate discrimination by landlords against tenants from vulnerable social groups. There have been three substantive changes to the existing tenant law:
1. First Come – First Served
The first new rule can be summarized as “First come, first served”. In specific, the new legislation requires landlords to review and evaluate tenant applications one at a time and pick the first tenant who meets the screening requirements. This means that starting on 1 January 2017, Seattle landlords cannot afford rejecting applicant renters with such sources of income as Social Security benefits, unemployment insurance, child-support payments, veteran benefits, and other support programs as this will be deemed illegal. According to the Seattle City Council, the aim of this change is to prevent discrimination against renters with alternative sources of income.
From now on, Seattle landlords will be obliged to include the minimum screening criteria together with the property listing. They will then need to keep track of the date and time they receive each application. Although prospective renters will not necessarily know their order in line, they will have the ability to sue landlords if they believe they have been skipped in the application reviewing process. The Seattle Office of Civil Rights (SOCR) has the right to investigate whether applicants were processed and granted access in the rightful order, for which they will need to add another two officers to their staff who will be in charge of the execution and enforcement of the new law.
Furthermore, the new law provides for the needs of people with disabilities who might require more time to fill in and submit the application. In such cases, the landlord will have to give applicants a number in the line based on the date and time when they asked for the extra time instead of when they actually received the filled in application.
Related: 8 Steps to Becoming a Landlord
2. Protection against Eviction
The second change in the Seattle landlord-tenant legislation is directed at helping tenants on the verge of eviction because of their inability to pay the rent. This change obliges landlords to accept pledges from community-based organizations to cover the unpaid duties of renters as long as the money is received within 5 days. This means that Seattle tenants will be able to use community resources to prevent eviction while securing that landlords receive their money.
3. Ban on Employer Preferences
The third and final major change in the Seattle tenant law is that as of next year, landlords will not be allowed to offer special move-in discounts to renters who work for specific companies. Alternatively, landlords are encouraged and advised to offer move-in discounts on non-discriminatory basis, to all tenants.
Seattle Councilmember and Chair of the Council’s Civil Rights Committee Lisa Herbold commented, “Our city is a city of renters. Their interests must be protected if we intend to reduce the number of people living homeless and increase affordable housing opportunities.” About half of Seattle’s housing units are rental properties, and about half of Seattle residents are renters at the moment.
How have the changes been met by landlords?
Seattle landlords have had mixed reactions to the changes in the city’s tenant law. Some of them claim that the new legislation will not affect their business at all since they are already operating on the first come-first served principle. Others, however, believe that as business owners and managers they should have the right to choose whom to deal with and whom not to deal with. Another group of landlords claims that the process will become too complicated and potentially too costly.
Will the modified law actually achieve non-discrimination?
Some opponents of the new Seattle tenant law have expressed valid concerns that the law will not be able to achieve the desired goal of protecting vulnerable groups (namely, such with alternative sources of income) from discrimination in applying for a rental property. Some argue that by turning the tenant application process into a race, the new law will give individuals with quick and cheap access to the Internet and to transportation an unfair advantage. Such people generally tend to be from the better-off social groups with stable jobs and thus sources of income. Moreover, the new law allows for some major exceptions. For example, landlords are allowed to ignore the first come-first served principle when dealing with domestic-violence survivors among other groups. Since individuals who went through domestic violence are one of the most marginalized groups in need of support in the US, it is doubtful how good the new Seattle legislation will be at protecting the rights of vulnerable populations.
Having said all that, don’t allow the new landlord-tenant legislation to discourage you from purchasing an income property in the Seattle real estate market. Seattle is still a great place for real estate investing – whether Airbnb or traditional – because of the beautiful landscape, the entertainment opportunities, the strong economy, the high wages, the high population growth/migration, the expected growth in the labor market, and the forecast increases in real estate property prices in the coming years.
Related: Your Next Investment: Airbnb Seattle
If after reading this article, you don’t think that the new Seattle tenant law will affect your business as a Seattle landlord and would like to invest in the Seattle real estate market, make sure to check out Mashvisor for important analytics and comparisons on thousands of actual Airbnb and traditional properties in the city.