Should Seattle cap what landlords charge for move-in fees, security deposits?

VIDEO: Restricting renter fees

A Seattle City Council committee has approved an ordinance for the full council to consider, which puts a cap on what landlords can charge for move-in fees and security deposits.

The council delayed its vote in October, with some councilmembers saying they needed the expertise of landlords to make sure the bill's provisions can be enforced. The final vote for the full council is scheduled Dec. 12.

The ordinance limits security deposits and non-refundable fees to a total of no more than the first month’s rent.

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Some landlords also charge last month’s rent, so the maximum a tenant is charged before moving in comes out to three times the monthly rent. However, the bill also requires landlords to spread the fees out in a payment plan, unless the tenant waives this option.

In the case of leases longer than six months, tenants would be able to pay any security deposits, non-refundable fees and last month’s rent, across six months’ time.

For leases between one and six months, tenants would have at most four months to pay the fees. For month-to-month agreements, tenants must pay those fees in at most two installments.

"It's just very demoralizing," said Michelle Dillon, describing rent increases and fees.

Dillon, who works in non-profit, said her rent increases far outpace any raises she may get. When she looked at cheaper places to live, she found that the move-in fees were more than she could pay.

She finally got connected to a landlord through a friend, who required much lower move-in fees.

“It’s like a lottery…If you don’t get lucky, you don’t have any recourse,” Dillon said.

While tenants like Dillon encouraged council members to move forward, an equal number of landlords showed up to Seattle City Hall, to state their opposition.

“I am offended by the city to tell me that I cannot protect my own investment,” said Chuck Cady, a landlord.

Another landlord, Lizbeth Lyles, said she is an artist and depends on the rental income to get by.

“I’m feeling a little under attack by the city council,” Lyles said. “Putting all these restrictions on the landlords is not the solution. It’s just going to make us sell the properties.”

While Lyles said she would offer a payment plan if she trusted a tenant and liked her, she feels she loses her ability to use her discretion. Instead, she would be obligated to do so.

Most of the landlords who attended the meeting said they only have a handful of properties. Many pleaded for the council to consider exempting small landlords.

While the version of the bill currently does not state any exemptions, Councilmember Lisa Herbold asked for that issue to be explored.

Councilmember Kshama Sawant said exemptions could get tricky, especially if corporations start creating subsidiaries to get around the rule.

“It would be a slippery slope that would not benefit the mom and pop landlords, would not benefit landlords doing the right thing, and it certainly would not benefit renters,” Sawant said.

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