Olympia committee reviews potential update on rental housing policies

The Olympia Land Use and Environment Committee met on Thursday, January 25, to discuss the potential update to the city's rental housing policies.

Housing Program Specialist Christa Lenssen gave a presentation outlining proposals around relocation assistance, limiting 'junk fees", allowing tenants to install air conditioner units, and breaking leases after a significant rent increase.

The committee first considered draft language around providing relocation assistance for displaced tenants.

According to Lenssen, the first type of assistance would apply to properties that have been condemned or need rehabilitation.

The second type would assist in redevelopment cases, such as if a property is being demolished, undergoing substantial rehabilitation, or having a change in use. In these redevelopment scenarios, the costs can be shared between the city and the landlord according to state law. Lenssen said the costs could be shared between the city and the landlord.

She noted that they have state laws - RCW 59.18.085 and RCW 59.18.440 – allowing relocation assistance.

Lenssen proposed that if the landlord fails to provide the required relocation assistance within seven days, as outlined in state law, the city will pay the assistance upfront and then seek reimbursement from the landlord. She suggested that the relocation assistance amount would be $2,000 or three times the monthly rent, whichever is greater. For the second type of assistance due to redevelopment, the assistance would only apply to low-income tenants as defined by state law. Additionally, under state law, the city cannot require landlords to pay more than half of the relocation costs.

For junk fees, Lenssen said they have heard from both tenants and tenant advocates about excessive fees. "I recently heard from a tenant who was going to be charged a $500 month-to-month fee to be converted to a month lease, or fees for mandatory services like a garbage valet service. There's been increasing national attention on this issue."

She discussed information on proposals to limit excessive fees or "junk fees" charged by landlords. She presented two potential approaches to address this:

Prohibiting certain types of fees, such as:

• Late fees
• Fee for posting notice or legal consultation
• Lease renewal feed or admin fees
• Garbage valet fee/ nonessential services
• Month-to-month fees

Define and limit what type of fees a landlord may charge, such as:

• Late fee
• Fees for damages or actual costs incurred by landlord
• Application fee

The committee favored defining allowable fees to prevent landlords from creating new fees.

Lenssen reported that some cities have capped late fees. The committee directed staff to draft a proposal limiting late fees to $10 monthly.

Lenssen also proposed allowing tenants to install air conditioning units by adapting language from Oregon law. The committee supported this proposal to allow tenants to provide their AC units according to any safety guidelines set by landlords.

Lenssen proposed allowing tenants to break their lease early if they receive a rent increase notice of 5% or more. The committee agreed with this proposal, believing tenants could end their lease without penalty if they find alternative housing in response to a substantial rent increase.

The city staff also provided details on recent changes to tenant protections passed in Tacoma and Bellingham. She noted that both cities approved ballot initiatives requiring relocation assistance if rent is increased above a certain percentage over 12 months, with Tacoma at 5% and Bellingham at 8%. Tacoma also prohibits evictions of students or eviction during cold months, while both cities increased notice periods for rent hikes. The committee learned about these policies to inform potential approaches for Olympia.

Looking ahead, the committee agreed to monitor potential state legislation and consider the next steps in March once the legislative session concludes to avoid duplicating any laws passed at the state level. They look forward to further refining proposals and holding a public hearing before the potential adoption of any new policies.