A special interest group in Bellingham is once again pushing a rent control initiative that will only increase the cost of rental housing and make living in Bellingham more expensive.
Initiative 2, officially named “AN ORDINANCE OF THE CITY OF BELLINGHAM, WASHINGTON REGARDING THE ADOPTION OF AN ECONOMIC DISPLACEMENT ASSISTANCE MANDATE IN LANDLORD-TENANT RELATIONS” will increase lease notification requirements and require a property owner to pay 3 months rent to the tenant for relocation if the rent is increased over 8% in a 12-month period.
This policy is not going to help keep rents down, it will do exactly the opposite. The potential that a 3-month rent penalty could be assessed on the property owner will be passed onto the renter in the form of higher rents.
The law also doesn’t consider the situation where there is a bad renter in a property. It is quite possible that a renter in a home that has failed to pay rent on time, can demand to be paid 3 months’ rent to leave the property should the rent increase by 8% or more. Given recent inflationary pressure, this is a likely scenario. Not only could the property owner not receive the rent they are owed, but they would also have to pay to relocate the bad renter.
Property owners are likely to add 3 months of rent to a rental agreement to mitigate the risk they are going to have to pay for relocation costs at the end of a lease. For a 1-year lease that should cost $1,000 a month, the lease would now cost an additional $250 a month, or a 25% increase in rent.
The impact from ill thought out, regressive rent policies fall hardest on those least able to pay and directly reduces the amount of household income available. While supporters of Initiative 2 describe it as “rental relocation assistance”, it will have exactly the opposite effect and increase the cost of living in Bellingham and reduce the supply of cheaper rental housing in the community.
Initiative 2 is bad policy and voters should consider the true effect of the legislation when voting this fall.
