Friday, September 18, 2015

Pass the Licata & Sawant Rent Control Resolution

(Testimony to a hearing of a Seattle City Council committee considering a resolution on the Washington state ban on any form of rent regulation)

To the Mayor and City Council of Seattle,

I’m writing to urge you to support the Rent Control Resolution introduced by Councilmembers Licata and Sawant. This resolution calls on the State of Washington to repeal or modify RCW 35.21.830, the state law that prohibits ordinances or other provisions that regulate the amount of rent. It also requests that the U.S. Department of Housing & Urban Development consider whether RCW 35.21.830 is an impediment the State’s obligation to affirmatively further fair housing.

I am probably one of the few citizens left standing who can speak from personal experience to how this state ban on local autonomy was enacted. I was one of the founders of the Seattle Tenants Union in 1975, and served on the executive board of the National Tenants Union in the early 1980s. I volunteered full-time on the Initiative 24 Fair Rent campaign in 1980, and briefly lobbied afterwards in Olympia against the state restrictions.

The real estate and financial industries reportedly raised over $870,000 dollars and spent nearly $500,000 to defeat I-24, a record for city initiatives that may still stand. The I-24 campaign raised and spent $40,000 in support of the initiative. With this 12 to 1 advantage, the opposition to I-24 hired a San Francisco public relations firm, Donald Solem & Associates, that specialized in defeating rent stabilization initiatives. They blanketed the city with an estimated seven mailings to each household opposing I-24. The campaign had little to do with democratic debate, and much to do with the raw power of concentrated wealth to impose its will on electoral processes.

With its remaining war chest and tremendous statewide cloud, real estate and finance went to Olympia and easily pushed the ban on local autonomy through the legislature. There was virtually no investigation or debate: it was a gimme putt for the big money and property guys. And it was a reflection of ignorant resentment, among some legislators from other areas of the state, of the big city that pays a lion’s share of the state’s bills.

As is still the case, restricting local autonomy runs counter to many conservative positions on other issues. Is this hypocritical? It certainly is wrong-headed. Ironically, there  may be no issue on which local autonomy is more sensible and necessary than affordable housing. In Washington state, as in many others, housing markets and issues in big, booming cities like Seattle are qualitatively different from those in most smaller cities and rural areas. One-size-fits-all legislation for the whole state is not a solution, but a barrier to solutions.

Incidentally, have we forgotten that those same real estate and financial industries, and their ideological co-dependents, are guilty of inflating a huge housing bubble and entangling us in a financial crisis that triggered a global Great Recession? Does anyone remember Washington Mutual and credit default swaps? Nobody has gone to jail for these economic crimes, and now the same laissez-faire hucksters are back trying to sell us very similar snake oil: shut out local democracy and accountability; blindly trust the same markets that melted down less than a decade ago.

This vote is not about rent regulations, but about the ability of cities to enact the kinds of measures they see fit to deal with the intractable problems they face of preserving and expanding affordable housing and protecting tenants from the ravages of housing market failures.

However, you should know that modern rent stabilization covers over a million units in New York City, and millions more in hundreds of cities in New Jersey, the District of Columbia, Maryland and California. It is not a rent freeze – the old NYC law dating from World War 2 that imposed a hard ceiling is now close to defunct, and nobody has proposed a similar one anywhere in the U.S. for the past 50 years. The standard model of rent stabilization adopted everywhere allows rents to increase according to a formula usually tied to inflation, and grants landlords further increases when necessary to ensure a reasonable return and to cover improvements. All such laws exclude new construction and many exempt small landlords. Modern empirical studies of their effects have nearly all found that they have no negative effects on rental housing construction or maintenance of existing units, and promote tenant stability by limiting extreme rent spikes and moderating the pace of rent increases in hot markets. They also often help to protect low-income communities, especially those of color, from displacement and gentrification.

If you give us a chance, I think we supporters of modern rent stabilization will be able to convince you that it is a useful tool to preserve existing affordable housing and protect vulnerable tenants, in conjunction with the many promising ideas being considered to stimulate new construction, such as those suggested by the HALA report and the linkage proposal. But for now, all I’m asking is that the City of Seattle show the intestinal fortitude to stand up to the power of concentrated wealth and demand that the state stop tying our hands.

Sincerely yours,

Peter Costantini
An important afterthought that I would have liked to include:

California has demonstrated that voters with long experience with rent regulations believe they should be decided on a local, not state, level.

In 2008, California voters defeated a statewide initiative by the real-estate industry that would have eliminated all rent regulations by a landslide 61% to 39%.

Sixteen cities in California, including Los Angeles, Santa Monica, San Francisco, Oakland and San Jose, have rent stabilization ordinances in effect, many since the 70s. Voters have had three or four decades to evaluate how well they work. Their verdict was clear.

This vote came in spite of a well-funded and deceptive campaign by real-estate and big landlords, who tried to disguise the initiative as one opposing the abuse of eminent domain.

The vote said in effect that a large majority of citizens have found that rent stabilization has worked well in many cities, and should be available as a policy option to others who want to implement it.

This August, the East Bay city of Richmond passed a rent stabilization ordinance, the first new rent regulations anywhere in many years.

Washingtonians may traditionally have mixed feelings about Californians, but in this case we should thank them for demonstrating the value of implementing rent stabilization on a massive scale, and rejecting the proposed statewide ban on it.

Peter Dreier. “Californians Defend Rent Control”. Montclair, NJ: Rooflines, June 5, 2008.

Jake Blumgart. "In Defense of Rent Control". Santa Barbara, CA: Pacific Standard Magazine, April 1, 2015.

Two related posts:

Testimony by Professor Dennis Keating to Seattle Mayor and City Council on state preemption of local rent regulation. September 18, 2015.

Testimony by Professor Peter Dreier to Seattle Mayor and City Council on state preemption of local rent regulation. September 18, 2015.

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