AdobeStock
Housing market experts say rent control is a factor in Seattle having one of the biggest cost gaps between renting and buying.
According to a recent study from Bankrate, the Seattle metro area has a buy-rent gap of 119.5%, behind only San Jose (185.6%) and San Francisco (190.7%), two other tech hubs.
Sean Flynn, executive director at the Rental Housing Association of Washington, says the tech sector brought more high-wage jobs into Seattle, which drives up the price of homes and mortgages. At the same time, rent has been relatively flat for several years with more and more apartments coming online. This caused the 119.5% buy-rent gap.
Despite the gap, Flynn does not expect a housing crash in Seattle any time soon. Instead, he expects rent to rise rather than home prices and interest rates to fall.
Flynn argues recent policies, including Engrossed House Bill 1217, may undercut affordability goals and disincentivize investments in new rentals. This bill – signed by Gov. Bob Ferguson earlier this month – caps annual rent increases at 7% plus inflation for most tenants, prohibits rent increases during the first 12 months of a new tenancy, and requires 90 days’ notice for any rent increases.
Supporters of the rent cap legislation say it will provide renters with stability and predictability, allowing them to budget better and plan for the future.
Seattle can’t pass its own rent caps, but it’s gone big on tenant protections, like requiring landlords to provide 180 days' written notice for any rent hikes.
Flynn likened rent caps to unfunded mandates in healthcare, arguing that enacted policies shift the housing market, causing cost burdens on housing providers.
“If people are having a difficult time medically, we have Medicaid, which pays the doctor. We don’t go to the doctor and say, ‘Oh no, you have to give this person a heart scan for free because we told you to,’” Flynn said. “Somehow housing is different.”
The Rental Housing Association of Washington suggests direct subsidies to help those struggling to pay rent rather than handicap the market and for local cities and counties to streamline the building process so that more housing can be constructed to fit demand.