Small Housing Providers Speak Up Against Eviction Ban Extension

A group called Seattle Grassroots Landpeople held a Zoom town hall meeting earlier today to express their concerns and opposition to an expansion and extension of Seattle’s eviction ban. Today we found out the Council appears prepared to pass this extension anyway next Monday, May 4th. We’ve been pushing people for weeks to contact the council. Please go to our letter which you can find here to send your thoughts to the Council. The group’s meeting got coverage on Q13 this evening and for once the story got through: an eviction ban extension would be a disaster.

Sawant Urges Theft, Violation of Stay at Home Order

When you take something without paying for it, that is typically called theft. For some reason, the idea that telling people to take their housing without paying for it, doesn’t seem like theft to some people. In fact, they might even argue that because housing is a “right,” rent is theft. This is the kind of thinking that has led Councilmember Kshama Sawant to urge people to not pay their rent next month. That’s urging theft. And the car rally she’s organizing for the non-payment is a violation of the Governor’s stay at home order.

We’ve requested a response on these two issues from the Seattle Ethics and Election Commission (SEEC). The question about free speech isn’t an interesting one. Anyone can say just about anything and it’s hard to stop them or create consequences for it. Maybe that’s a good thing. But our question is whether Sawant should be using City resources to urge theft and a violation of the order, which plainly states that non-essential activities are prohibited. This is a narrower question. Here’s our letter.

Ethics complaint from Roger Valdez

Housing providers across Seattle, the state, and the country are trying to keep people housed and healthy during this time. Now is not the time to be urging people to make that more difficult or to hurt people who work hard to build, manage, and operate rental housing. It’s time to bring this irresponsible behavior to a halt. We hope the SEEC will step in.

Tax on Jobs? One Business Owner’s Perspective

Dave Montoure is the owner of West 5 in Seattle and Kettle Fish in Silverdale. He has been a long time advocate for small businesses especially as they have faced increasing regulatory overreach. West 5, a long time West Seattle favorite is open for business for pickup.

Honorable Congresspersons Kilmer and Jayapal, 

I forward you this correspondence with urgency. The Seattle City Council simply will not listen to reasonable constituent voices during this time of global pandemic. They are acting with expedience and urgency to pass an enormous tax increase onto businesses during a State of Emergency in the City of Seattle. The Seattle City Council needs to hear from our Senior Delegation that this is simply not the time for such cynical, overtly-political shenanigans. 

I have main street, community-based businesses in both of your districts. I know that you both have been in my restaurants, West 5 and KettleFish. I truly hope to invite you back. I am not so hopeful with developments in West Seattle. In addition to dealing with Covid, my West Seattle business is now cut-off from the rest of Seattle due to the failure of the most-heavily travelled road owned by the City – the West Seattle Bridge. 

I opened a business on the main street of my hometown 17 years ago with the hope of watching an Urban Village grow and prosper around (and hopefully along with) my business. Overnight, that hope has been dramatically compromised. I remember the West Seattle Junction of my youth, prior to the City building the bridge and I know that survival will be a grind of reduced volume and dropping margins. But I love my employees, my community and my business and I can not simply walk away with zero or a pile of government loans.

Congressman Kilmer, thank you for providing the push for extended benefits for main street business – even more critical now that the initial funds have been disbursed. I was left feeling quite hopeful after your comments to KEDA yesterday morning.

Congresswoman Jayapal, I know you are new to West Seattle, welcome from an old timer. I was bred on these streets and I remember the Junction of the 1970s prior to the construction and opening of the high bridge. I am fearful for my business. 

Finally, I am so disappointed in my  City leaders (other than CM Lisa Herbold). CMs Morales, Gonzales, Mosqueda absolutely will not pick up the phone, answer a message, respond to an e-mail or put me on a calendar. Yes, it won’t be an easy conversation for them to hear, but it comes with the territory, as you are both well aware.

Thank you for your kind consideration. Be well.

Dave Montoure
ABS Kitchens, West 5, KettleFish

COVID-19: Inslee Expands Statewide Eviction Moratorium

Washington Governor, Jay Inslee, has issued a proclamation expanding the eviction ban he imposed in March. The ban means that no evictions can proceed through June 4 of this year. You can read the press release here and the full proclamation here. There is also a requirement to let residents pay down their back rent over time. This is a catastrophic intervention as we pointed out in a letter to state leaders last week. I managed to do some last minute advocacy with the Governor’s staff. Here’s what we talked about. We think income is the issue, not eviction.

Thank you for taking my call. I appreciate all the work you are doing now to help keep people in the state safe and figuring out how we recover from this economically. 

First, as I said, we’d like all bans to expire. This is an income issue not an eviction issue. We need to get as much help as possible to people who have lost their jobs and sources of income. 

Second, if this is moving forward, we’d ask that it end on May 31st. This sends a signal to people who can, that they should plan to pay June’s rent. With rents generally due, in effect, on the 5th, non-payment of rent would still trigger issues in June like a pay or vacate notice. Again, someone who can pay might if they see May 31st. 

Third, anything that the Governor can say to emphasize that this is not intended as a “rent holiday” or to support a “rent strike” but for people who have been materially affected by COVID-19. California has required documentation and even Seattle has some requirement in its proposal to show documentation of loss of job. Even a determination of application for unemployment benefits would be a useful way of distinguishing non-payers from people who can’t pay. 

Fourth, we need relief from delinquencies. The idea we discussed about matching pay back with state and/or federal funds is one that would send positive signals to lenders, housing providers, and residents. Residents will have some hope of paying back rent, protecting their credit and tenancy history and providers will be able to plan for pay back of the lost money.</q>

Then we elaborated on the idea of using relief funds to pay down delinquencies in a communication to legislators.

We don’t think that residents or housing providers should be left to pay for the logical outcome of eviction bans, a huge balance due of rental delinquencies. If state and local government is encouraging lack of payment of rent during this time, then there needs to be help paying the rent back.

We propose,

Some portion of dollars allocated for COVID-19 recovery either in packages passed by congress or by the legislature be set aside to cover the costs of unpaid rent;

To qualify for the program, residents would have to demonstrate simply that they lost their job and that they applied for some form of relief (i.e. unemployment);,

Such a program would match tenants repayment dollar for dollar, encouraging payment and avoiding defaults;

This would send a signal to lenders and banks that multifamily projects will recover big losses in rent revenue; and

The program would ensure many families would avoid bad credit and the consequences of default.

Finally, the Governor and the legislature should resolve that not paying rent while having income during this period amounts to theft, and those residents won’t be compensated. This should be a bipartisan effort. The consequences of not doing this will be a destabilization of the housing market when lenders and investors avoid building new housing because of the possibility that risk will be dramatically increased by government fiat without recourse.

Banning eviction at this period is like suspending the enforcement of shoplifting laws when people can’t put groceries on the table; it misses the point — lost income — and it encourages people to not fulfill their obligation to pay for services and goods rendered. It is a terrible precedent. But if the Governor has chosen this course, then there must be come compensation for the risk and costs being taken on by property owners who are providing housing for millions of people in our state.

The problem for many housing providers is lack of payment but it is compounded by the implicit encouragement by state and local leaders to prioritize other financial obligations. “Don’t worry about rent, there’s no way to evict you.” It’s a leap that makes no sense. If elected officials are going to impose these, along with rent freezes, they need to find a way to pay for it.

City Council Passes Commercial Rent Control, NAIOP Goes Along

Yesterday, the Seattle City Council passed commercial rent control. In a unanimous vote, and using COVID-19 as an excuse, the Council froze rent increases during the declared emergency and required that housing providers that rent to small businesses (50 employees or less) be given a year to pay any unpaid rent from the period of the emergency. Surprisingly, NAIOP Washington the organization that represents many commercial property owners went along with this after offering an amendment exempting chains and requiring a demonstrated 30 percent drop in receipts. 

The amendment doesn’t really help all that much unless a property owner rents to large chains, but even some of them aren’t making payments these days. As for the loss of receipts, that might exempt some businesses that are doing well, but aren’t those businesses paying rent? And the amendment does nothing about the requirement to let back rent be paid back in a year. As for the legislation you can read a one pager that we created before NAIOP’s amendment was added to the proposal, their amendment, and the text of the legislation here. 

And here’s NAIOP’s amendment: 

If you’re wondering, “Is this really rent control?” here’s a quote from City Councilmember Tammy Morales from the City’s press release patting itself on the back for passing this legislation:

Commercial rent control was necessary before this crisis and it is especially crucial now. Coupled with the ability to set up payment plans with landlords, this is a small lifeboat for local businesses to weather this storm.

City Council Press Release

That isn’t true, of course, if your small local business happens to be providing space for retail business. In effect, what the Council is doing is creating a forced loan from one business to another without assessing the risk or providing any assurance of recovery. There is probably good basis for a legal challenge, but the City knows it has endless legal resources and any resolution would be years away. 

And none of this mess is helped by NAIOP lending its support to this effort, something that the Council can now point to and say, “real estate people agreed with this. Presumably, NAIOPs member base has larger businesses and chains, so they just wanted to protect themselves from having to deal with the problems created here. It is yet another example of how parts of the real estate community can’t see the bigger picture.