In the first veto of his tenure, Mayor Bruce Harrell struck down a recently passed bill seeking to track more rent data from Seattle landlords. Because that bill passed with five votes and overturning a veto takes six votes, that veto appears likely to stick. In his veto statement, Harrell contended the bill would be too onerous on landlords, too costly to implement, and produce unreliable data because landlords would lie to guard their trade secrets.
Councilmembers Tammy Morales and Alex Pedersen, who was prime sponsor of the bill, expressed disappointment at the veto, arguing the bill would have helped combat displacement of low-income residents and had addressed many of the Mayor’s criticisms.
“I am deeply disappointed our solution to collect housing data helpful for preventing displacement of economically vulnerable people was not signed into law. Similar laws to collect rental housing data are already in place throughout the nation, so the veto means Seattle is still behind the times,” Pedersen said in a statement. “The amendments made to our legislation already addressed concerns about timing, budget, and implementation. Rejecting this law seems to be a victory for landlords unwilling to share data and a loss for those seeking data to make informed decisions on preserving and expanding affordable housing in our city.”
Morales said the City “needs solid data to help us make smart policy decisions” and lamented the loss of rent data to make those decisions: “This veto sends the message that we should make decisions in a vacuum, rather than make data-driven decisions and frankly I find that troubling.”
Morales said that relying on private sector real estate consulting firms, as Harrell suggested in his veto letter, was not an adequate solution.
“The fact of the matter is that we have no reliable source of data on average rents, rent increases, vacancy rates, or year-over-year trends in these areas,” Morales said in a statement. “Vetoing this bill means relying on a private for-profit firm like the now-shuttered Dupre + Scott. That option, which currently doesn’t even exist, would provide us with incomplete, voluntary data that would cost money every time we seek it.”
For 38 years, Dupre + Scott Apartment Advisors was a much cited and celebrated source of rental data in the Seattle region, but the wife and husband duo retired and closed up shop in 2017. This has left a lingering void for detailed and trustworthy rent data in the region. The City of Seattle has turned to relying on high level Census data, but the bill’s backers pointed out that was an insufficient snapshot and lacked the granularity to make policy decisions. Moreover, Pedersen said relying on a private sector real estate firm to voluntarily produce this data makes the City vulnerable to firms abruptly going out of business like Dupre + Scott did.
Bringing together an unlikely coalition of leftists and conservatives on Council, the rent data ordinance seemed to mean something different to each of its supporters, who seemed to have different motivations. For example, Pedersen opposes rent control, but co-sponsors Kshama Sawant and Morales are firm backers of rent control, and a rent-tracking apparatus could be a good precursor to an effective rent stabilization regime. The coalition opposed also ranged from the progressive to the centrist wing, with Councilmembers Teresa Mosqueda, Dan Strauss, Debora Juarez, and Sara Nelson voting no.
In his newsletter, Pedersen added he intended to use the data to curb development and force developers to make greater concessions to neighbors and to relitigate a Mandatory Housing Affordability (MHA) “grand bargain” that he’s long criticized. Pedersen appeared geared up to use the data to oppose the next round of upzones, which are anticipated with the Comprehensive Plan update due in 2024, while Harrell countered that “it will be difficult to implement [the program] in enough time to inform the update to the City’s Comprehensive Plan.”
Pedersen’s framing may often a hint at why he and Morales were not able to pull together a veto-proof majority behind the bill. Mosqueda in particular has been consistently calling for ramping up housing production and zoning more equitably rather than looking for more excuses to not do so.
During the MHA debate, opponents raised fears that inclusionary upzones would encourage development that would destroy older housing stock with lower rents, which is often deemed “naturally occurring affordable housing” or “NOAH” for short.
The Seattle Displacement Coalition, which was led by neighborhood activist ringleader John Fox, pushed this narrative and produced a report claiming to tally more NOAH units would be destroyed by the upzones than MHA would produce via affordable requirements. By extension, Fox contended these NOAH units would not be destroyed by less dense redevelopment or priced out of NOAH status if MHA upzones didn’t go through.
The Urbanist debunked this claim, noting that Fox’s analysis was not rigorous and had included several buildings that were no longer offering affordable rents or that were unlikely to be redeveloped even with the upzone. Moreover, a significant portion of redevelopment would have happened in either case, but blocking the MHA program would have meant no affordability requirements would have applied.
Mosqueda and Juarez have been strong backers of the MHA program and additional housing density, while Pedersen had criticized it from his blog and during his 2019 campaign for office. Linking his rent data ordinance to his mission to relitigate MHA and fight additional zoning changes may have cost Pedersen support for the bill.
That said, Budget Chair Mosqueda pointed primarily to the price tag in explaining her vote. The City’s fiscal note pegged the cost between $2 million and $5 million to implement, but Pedersen disputed this figure, pointing to the plan to competitively bid the contract and the increased funding for both the Seattle Department of Constructions and Inspections (SDCI) and the Office of Planning and Community Development (OPCD) that had been worked into the last budget. Mosqueda thanked the sponsors for these cost control efforts, but said her budget concerns remained, as did some worries about data quality.
Like Harrell, Mosqueda leaned heavily on a comment letter from James Young, Director of the Washington Center for Real Estate Research (WCRER), which was established by the state legislature and is housed at the University of Washington. Young’s letter walked a fine line affirming his organization’s neutrality on the bill and other similar landlord legislation while proceeding to unload criticisms of it which he said stemmed from WCRER’s unique role working with private landlords to produce their rental affordability report to the state.
Young stressed the program must be voluntary and disaggregated so that landlords do not need to worry about “disclosure of commercially sensitive business information that could adversely affect their businesses.”
Let’s unpack that statement for a moment. Why would the public knowing the rents that a landlord charges hurt their business? If a landlord is charging the going rate and setting its rents to the market, it seems like they would come as no big surprise or secret. But one reason this wouldn’t be the case is if landlords are squeezing their tenants for more rent than is typical in the building or neighborhood and don’t want tenants to realize and have hard evidence of this practice. Is it the government’s job to protect this kind of behavior?
Another reason could be worrying prospective investors would have too much insight into rent levels and vacancy rates leading them to struggle to sell their buildings or get financing on their next addition to their portfolio. But, again is it the government’s job to help shroud such real estate machinations in secrecy?
Young also claimed mandating landlord participation leads to inaccurate and incomplete information: “Based upon the experience of WCRER, informal discussions with city officials, and interested parties, there are several research and reliability issues likely to arise when collecting rent and vacancy data through a mandatory system.”
Expecting an industry to lie or obfuscate frequently isn’t necessarily a strong argument against a new regulatory system. It may, in fact, be an argument for a stronger regulatory system. The WCROR’s board is loaded with realtors and real estate insiders and chaired by Matthew Gardner, who is chief economist at Windermere Real Estate and has been outspoken in opposing new legislation affecting landlords or taxing corporations, frequently writing Seattle Times op-eds haranguing the progressive wing on Seattle City Council. Incidentally, one of those op-eds he co-authored with Alex Pedersen attacked the corporate payroll tax push in 2020, which ultimately succeeded as the JumpStart tax. (Spoiler: The op-ed wasn’t very good.)
The rent data ordinance may well have been inadequate and flawed, but doing nothing also appears untenable for renters. Expecting the industry to fix itself and voluntary produce its own rental data report seems a Hail Mary.
Young offered to convene a “working group” to bring together landlords, real estate professionals, and bureaucrats to hash this out. “Given the WCRER role as a neutral party whose only interest is in reliable data, we are well positioned to develop a framework with the city so that a working group on this topic can be convened and solutions can be found quickly,” he wrote.
Since Seattle mayors do tend to love taskforces, Harrell and the Council may well take Young up on his offer. And Harrell’s letter did pledge continued work on the rent data problem.
“We all share the same goal of ensuring Seattle is an affordable city where workers and community members of all backgrounds can live and succeed,” Mayor Harrell concluded in his veto letter. “Critical to that effort is using quality and accurate data to inform our policies. While I appreciate and respect the sponsor’s intent, this proposed legislation would not have collected reliable data according to experts at the University of Washington and likely could not have been implemented in time to influence our Comprehensive Plan update. I look forward to working with Council – in addition to renters and small landlords – to address the needs we have for better data and more affordable housing options.”
Doug Trumm is publisher of The Urbanist. An Urbanist writer since 2015, he dreams of pedestrianizing streets, blanketing the city in bus lanes, and unleashing a mass timber building spree to end the affordable housing shortage and avert our coming climate catastrophe. He graduated from the Evans School of Public Policy and Governance at the University of Washington in 2019. He lives in East Fremont and loves to explore the city on his bike.