SB 6400: The State Senate’s Version of Rent Control

This morning I’ll be testifying against Senate Bill 6400, the Senate version of the House’s bill, 2583. The bills do the same thing, repeal the state level preemption of rent control policies by local governments. I’ll mention much of what I said on the Dori Monson show last week: rent control doesn’t work to lower prices by destroying housing finance which reduces supply.

What rent control does is it kills off supply because you destroy financial inventive to be able to invest in making more housing,” he told Dori Monson, who believes lifting the ban on rent control would be disastrous. “If you believe in supply and demand, and high prices are an indication of scarcity, then rent control just accelerates lack of supply.

I’ll also talk about rising costs that with rent control will outpace rent revenues. Rent control doesn’t include cost control, ensuring lack of maintenance and the sales of many smaller affordable units. Here’s the Seattle Times recently on big property tax increases:

Property-tax bills due to be mailed next month across King County will be higher than last year’s by an average of nearly 17 percent, Assessor John Wilson says.

The increase in Seattle will be 16.9 percent, and the only way to pay for those increases is with rent revenue. When added together with utility costs putting a cap on rents would mean many smaller operators would have to sell their townhouses or single-family homes they currently rent to people who want to own and live in them.

The good news is that the Chair of the House committee charged with considering HB 2583 has pulled it off the calendar, and with cutoff for passage out of committee in a few days it is looking like these bills won’t make it any further. The bad news? That might just give the Seattle City Council the rationale they need to pass rent control anyway. They’ve passed illegal measures already, like an income tax, and dared opponents to sue. We won’t know until Friday what the final score is on these two bills.


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