Washington State Legislative Update - Next Cutoff: March 26th

Tuesday, March 9, 2021, marked the legislative session's theoretical midway point and the house of origin cutoff in the Washington legislature. The next important cutoff is March 26, when all proposals must be considered by the opposite chamber’s policy committee.

Overall, most landlord/tenant bills moved from their policy committee, as did additional tax-related proposals. There remain a few bills alive yesterday, but they are significant and require your continued advocacy on behalf of the industry. 

WMFHA continues to fight for reasonable policy to address the recovery from the extended moratorium and pandemic. This means:

• Creating a gradual pathway away from the eviction moratorium
• Providing sufficient rental assistance resources to those directly affected by the COVID19 pandemic
• Building opportunities for communication and productive resolution of nonpayment of rent issues

On rental assistance, Congress passed the American Recovery Act of 2021, which includes approximately $30 billion in additional rental assistance. We anticipate that on top of the approximately $650 million in rental assistance already provided or becoming available in the state, an additional $400 million will come to Washington.

The Department of Commerce is finalizing guidance on the distribution of rental assistance across the state. We anticipate the availability of rental assistance beginning this week through April. Two-thirds of existing rental assistance funds must be spent by September. Given estimated rental arrears, this should not be a problem.

Recap of bills currently moving forward:

House Bill 1236 was passed by the House of Representatives on Sunday by a vote of 54-44 after a two-day debate. The bill heads to the Senate Housing & Local Government Committee for its first hearing on Thursday, March 11, 2021.

1. This proposal would enact statewide just cause eviction requirements and, as drafted, would eliminate the fixed-term lease. Broadly speaking, just cause eviction creates adversarial relationships between housing providers and tenants, pits neighbor against neighbor, and makes it more difficult to address minor nuisance issues. More importantly, just cause eviction does not prevent evictions.
   

While WMFHA has provided suggested edits to this bill, it continues to need significant changes before we would consider changing our current opposed position. 

• Senate Bill 5160 passed the Senate 29-20 last week and has been referred to the House Housing, Human Services & Veterans Committee and will have its first hearing on Tuesday, March 16, 2021. Senate Bill 5260, which requires a report on the effectiveness of and improvements to the eviction resolution pilot program was added to this bill on the Senate floor.

• House Bill 1277 increases the document recording fee by $100 to fund a permanent rental assistance program, provides additional funding for affordable housing operations and maintenance, and provides additional financial support towards the Landlord Mitigation Fund. The policy is being considered by the House Appropriations Committee and remains alive despite no vote by the House of Representatives before the Tuesday cutoff. The fiscal note estimates this fee will generate approximately $292 million between July 1, 2021 and Jun 30, 2023.
  
  
• House Bill 1515 would statutorily permit security deposit waiver fees in place of a security deposit. The proposal was unanimously passed by the House of Representatives on Monday.
  
  
• Senate Bill 5287 was passed by the Senate 43-5 and moves to the House Finance Committee. A hearing has not yet been scheduled. Two important components: 

1. The bill permits a property with an expiring exemption within the next 18 months the opportunity to extend that exemption for an additional 12 years. 
   
   
2. The bill requires the property owner to offer the tenant relocation assistance upon the termination of the expiration and return the affordable units to the market rate. 
   

• Capital gains tax proposals continue to receive significant attention in both the House and Senate. Senate Bill 5096 was amended on the Senate floor and now taxes real estate gains where the gains result from a property where the individual is not the property's primary owner. The Senate passed this proposal 25-24 on Saturday, and it heads to the House for further consideration. 
  
  
• Other tax preferences under consideration by the legislature: 

1. House Bill 1035 would permit a limited property tax exemption in properties more than 25 years old in exchange for certain rent limitations. The policy remains in the House Finance Committee. 
   
   
2. House Bill 1189 would allow local governments to implement tax increment financing. This policy remains in the House Finance Committee. 
   

• Senate Bill 5191 would create a consumer protection act violation for excessive price increases during any state of emergency. It includes price controls on housing where housing prices cannot increase by more than 15 percent than the price at which the person sold, rented, or offered for sale or rent the same product or service immediately before the state of emergency.

The following have been defeated in 2021:

• Senate Bill 5139 would have enacted rent control in Washington state. The policy did not receive a vote in his policy committee of origin.
  
  
• House Bill 1228 was a common-sense gradual pathway towards normality receiving significant public interest. The policy did not receive a vote in its policy committee of origin.
  
  
• House Bill 1398 was another COVID-related recovery bill. The bill did not receive a hearing and is considered defeated.
  
  
• House Bill 1300, which would have reformed the return of the security deposit, failed to advance out of the House of Representatives.
  
  
• House Bill 1421 would have properly allocated the responsibility of unpaid utility charges to the resident and relieved the landlord of responsibility for the tenant’s unpaid utility costs.
  WMFHA supported this legislation.
  
  
• House Bill 1441, which would have prohibited the use of COVID-related rental debt, failed to advance out of the House of Representatives. We anticipate this proposal to be included in Senate Bill 5160.

Washington state rental owners can show their support for these ongoing updates by becoming a member of the Washington Multifamily Housing Association! Visit https://www.wmfha.org/ to sign up.

For more information about these proposals and others, please contact Brett Waller at

brett@wmfha.org.