Landlords say renter protections being floated in Olympia could put them out of business

By Abby Spegman

The Olympian

Retiree Cindy Larsen owns six rental units in Olympia that she says barely break even. Larsen moved to Washington from California in late 2017 with plans to invest in rental properties to supplement her income.

She chose Olympia in part for its lack of regulations on rentals. But that could change soon.

Larsen and other landlords are worried about city policy proposals intended to protect renters, including one that would require landlords to take move-in fees and deposits in installments. They argue the changes could have the unintended consequences of raising rents and pushing small landlords out of business.

“The basic proposal is someone needs to pay for this — let’s make the landlord pay for it,” Larsen told The Olympian. “If they do anything that cuts profits for landlords, the result will be prices will go up. That’s just how economics work.”

As the city grapples with a homelessness crisis, officials see troubling signs in the rental market: a low vacancy rate, rents rising faster than wages, and demand outpacing new housing production. More than half of Olympia residents are renters, and eviction is a leading cause of homelessness, according to the county’s most recent homeless census.

This year, state lawmakers acted to give renters more notice ahead of rent increases or major renovations on their units, and more time to catch up on late rent before a landlord can start an eviction lawsuit.

Meanwhile, officials in Tumwater have circulated a list of renter protections that could be adopted regionally. That would give renters and landlords consistency when dealing with properties in Olympia, Lacey, Tumwater or unincorporated Thurston County.

The Tumwater City Council plans to take up the matter next month, though it is not clear if all the jurisdictions would pass the same policies.

Last month, the Olympia City Council gave city staff the green light to flesh out the installment payment policy and others, including specifying reasons someone can be evicted, capping nonrefundable fees and deposits, and creating a relocation assistance fund to help people forced to move. That might be funded by landlords.

“We want to slow down evictions and reduce the number of people who get evicted and end up homeless,” said Cary Retlin, who works on housing programs for the city. This list is just a starting point and could change, Retlin said.

Another step Olympia is considering is creating a landlord registration system to communicate and enforce new policies. The city now doesn’t track rental properties and doesn’t know how many small landlords like Larsen are out there.

City Council members say they will seek public input before approving any changes. At a study session last month on the topic, they said they wanted to hear from small landlords in particular.

“What I don’t want to create is something where we’re actually going to limit the availability of rentals because small landlords and others are going to step away and go ‘I can’t handle this, I don’t know how to do this paperwork, it’s overwhelming to me, it’s not worth the trouble. …’” Mayor Cheryl Selby said. “We can’t afford that either.”

Branden Raftery owns about two dozen rental units in Thurston County, including 11 in Olympia. He sold a property in Lakewood after that city started registering and inspecting residential rental properties.

“You’re going to scare the small landlords such as myself out of the business and out of the area. And we’re the ones who will work with tenants,” Raftery told the council at a meeting last month.

Curt Bidwell, another landlord with properties in Olympia, said collecting move-in costs up front mitigates the risk of doing business with a less-than-perfect renter who might not have a steady income or spotless rental history. If that goes away, he said, he would be less likely to rent to someone like that.

“There’s really a small percentage of people that get a legal eviction, and yet they’re taking huge action that affects the broad range of housing providers. …” Bidwell said.

Bidwell owns a 24-unit apartment building and two single-family homes in Olympia, with other properties in Grand Mound, Puyallup and Shelton. He said he sold off three units last year and is now looking at selling a property in Shelton, all because of regulatory changes.

He said he would rather invest in a more landlord-friendly state.