This morning at 10:00 in Olympia House Bill 2583 will have a hearing in front of the House Judiciary Committee. The legislation would repeal what amounts to a ban on local governments enacting rent control, a widely discredited and failed policy of price controlling housing. That we are even arguing about rent control is a sign that the political process is failing. But worse than that, the actual policy itself would make housing scarcity worse. Here’s a letter that a local builder sent to his legislators explaining what rent control would do to one of his projects. The loss of 39 units might seem insignificant, but this story will be repeated dozens and dozens of times adding to housing scarcity. Take a minute or two and go to the Legislature’s website to send a message to your legislator. The link has a search feature, and just click on “Email” and there is a form you can fill out. 

Hello,

This email is being sent regarding the state of Washington and rent controls. I am a Seattle builder of single family and town homes for the last 20 years. I am now in permit to build a 35-unit apartment in West Seattle. These units will be called SEDUs (small efficiency dwelling units) these are low rent affordable units to the public. I am planning to build own and operate this building as a supplement to a retirement plan. These units will become available in 2019 at current market rate rentals.

This is what will happen if you elect to bring in rent controls into the city of Seattle (my city of 62 years). I will not be able to gain financing to build this project. My banks (3) that I am talking with will stop lending to apartment builders leaving me and many other builders without financing. This simple fix called rent control will leave 35 people or couples and or others without these homes available to live in. This decision will leave many apartment projects to look for other means of completion or other uses like leave in the scrap heap.

My retirement plans will change. We the builders will no longer look to the city of Seattle to build apartments. We don’t just build and get rich as people think we do. We build to meet a market need taking on great amounts of risk and much stress in the process hoping to make a profit or just get paid for our time. One of the risks of building is artificial rent controls as it artificially causes us to go bankrupt as we soon may not be able to cover the raising of taxes and interest rates and other expenses of ownership.

I also own a 4-unit mixed use building in Seattle. This building has 4 apartments and 2 commercial spaces I maintain and rent. The apartments will be converted to commercial spaces and the renters will end up dispersed with 4 less apartments to live in. These spaces converted to commercial will bring about the same as apartments do today but without the artificial rent controls to deal with.

I am only one small guy here and already your vote will immediately serve to eliminate 39 apartments if rent controls are placed into law. How many more will be converted to other uses or never brought to reality due the lenders walking out and the builders unwilling to take the risk? You will see rents far higher than they are today with rent controls as the new needed unit stop being built. If you vote to enact rent controls, you are ultimately agreeing to vote to eliminate housing for a growing population of this state. I hope you choose well to serve the real needs of the people of this state.

 

Kind regards,