The City of Olympia is considering adding extreme restrictions for property owners on the tenant background checks they can run prior to a tenant occupying a rental property.

A recent article in The Olympian highlights a statewide trend to restrict property owners’ ability to conduct criminal and credit background checks on prospective tenants, citing the Fair Chance Housing Ordinance and similar policies. While the intent is to reduce barriers for renters with past convictions, these restrictions create significant challenges for property owners and, ultimately, harm the very renters they aim to help.

The Olympian quotes Christa Lenssen, senior Housing Program specialist, as saying ‘staff has recommended policies that limit the use of criminal, credit and rental history, as well as the use of social security numbers in tenant screening.’

Property owners rely on background checks to assess the risk of renting to a tenant. A criminal history, bad credit or poor rental record doesn’t automatically disqualify applicants, but it does allow property owners to make informed decisions. For example, a tenant with a history of property damage or chronic late payments poses a higher risk, which property owners might mitigate with adjusted lease terms, such as higher deposits. By banning these checks, as a Seattle’s 2017 ordinance initially did before a partial reversal in 2023, property owners lose the ability to tailor agreements, forcing an owner to adopt a one-size-fits-all approach.

Washington Policy Centers’ (WPC) analysis warned that limiting background checks discourages property owners from renting, shrinking the housing supply. When property owners can’t assess risk, many exit the market entirely, some sell properties, converting rentals to owner-occupied homes or short-term rentals like an Airbnb. In Seattle, after the Fair Chance Housing Ordinance passed, rental availability dropped, and rents rose, as predicted. A Stanford study on San Francisco’s rent control policies showed similar outcomes, a reduced housing supply and higher costs when property owners face restrictive regulations.

Instead of restrictive policies, Olympia should focus on increasing housing supply through streamlined permitting and relaxed zoning. Background checks benefit both property owners and tenants by fostering trust and flexibility. Restricting the background check process creates a lose-lose scenario, fewer rentals, higher costs, and less access for everyone.