(WSB photos)
When older apartment buildings are put up for sale, the accompanying listing often assures prospective buyers that a little work can bring the rents up to market level. That might be good news for the buyers, but not necessarily for the renters. West Seattle/South Park City Councilmember Lisa Herbold says the city is investigating what happened after a building in her neighborhood, 900 SW Holden in Highland Park, changed hands. This is republished from her weekly newsletter, published on the city website today:
Last Wednesday, while I was walking from my house to the Highland Park Action Council (HPAC) meeting I noticed one of the large apartment buildings in my neighborhood was boarded up. I didn’t know why that had happened, and because I work hard to keep up on what is going on in my District, and especially my neighborhood, I was feeling disappointed in myself for not being aware that a new major development was apparently occurring just two blocks away from my home. But then, during the meeting with HPAC, one of the attendees mentioned that the very building I had noticed on my walk to the meeting had been recently cleared by the landlord of all its tenants and some of them had become homeless as a result.
This immediately alarmed me because the City of Seattle has, since the 1980s, had a Tenant Relocation Assistance Ordinance (TRAO) that gives renters at least 90 days’ notice and financial moving assistance whenever a building is going to be renovated, demolished, or if there’s a change of use. It was immediately apparent to me that there was no way that the legal process for the Tenant Relocation Assistance Ordinance could have occurred so quickly and I became worried that people had been improperly displaced. On my way home that evening, I walked around the perimeter of the building and indeed, it was apparent that all but a couple of the units were vacant.
When I got home that evening, I looked up the address on the Seattle Department of Construction and Inspections (SDCI) website to see what development activity was planned at the site. But there were no planned development activities associated with TRAO or a demolition, renovation, or change of use associated with the address. This further confirmed my suspicion that renters in the building had been improperly forced to move. The next morning, I contacted SDCI and asked them to send an inspector out to the property.
I am saddened to report that I learned yesterday that SDCI has found that the tenants in the building recently had received a 100% rent increase and that this increase led to 20 of the 23 households being displaced from the building. Again, I’ve been told by my neighbors that several of these households are now homeless. This is, I believe, a shameful result and an abuse of a landlord’s right to increase rent free from any regulation.
The TRAO says that it is unlawful for landlords to use excessive rent increases to circumvent the requirements for 90 days’ notice and access to moving expenses assistance. But, there is no limit to how much a landlord can raise the rent. You see, the TRAO entitles low income renters who must move because of renovations to money to help them pay their moving costs ($3188). But if a tenant moves because of a big rent increase, they won’t get the assistance.
Not only do rent increases in Seattle lead the nation, but some rent increases are actually used to circumvent other tenant protections such as the TRAO. In 2014, Councilmember Nick Licata brought attention to the fact that “each year more and more tenants find out they were deprived of critical relocation assistance following a massive rent hike due to loop holes created by state law” and that some property owners do this as a regular business practice. You may remember the story of the Lockhaven Apartments and the Prince of Wales. In 2014 and again in 2015, State Senators David Frockt (46th District) and then State Senator Jeanne Kohl-Welles (36th District) introduced legislation to disincentive for the practice of using rent increases to circumvent TRAO.
A number of landlords and their lobbyist testified against the bill, and it did not pass the State Legislature, so in response, Councilmember Licata worked to amend Seattle’s Tenant Relocation Assistance Ordinance (TRAO) to help tenants deprived of relocation assistance and 90 days’ notice to move that they would have otherwise received if their landlord followed TRAO instead of displacing them with a large rent increase. Specifically, the law prohibited rent increases for the purpose of avoiding the required Tenant Relocation Assistance process. If a landlord increases rent by 20 percent or more, which results in a tenant vacating a unit within 90 days, then applies for a permit to substantially rehabilitate the unit within 6 months, the owner can have their building permit denied until the owner pays the penalties. Penalties are $1,000 per day for each day from the date the violation began. The change Councilmember Licata made to the law has helped a lot of people, see this article from March, where under the new TRAO law, SDCI was able to require a landlord to pay $168,268 in relocation payments to 46 households that were living at 104 Pine St.
But somehow, and sadly, people who want to avoid their obligations seem to manage to find new loopholes as soon as you close one set of loopholes. The owner of this property that has displaced 20 Highland Park household with a 100% rent increase found yet another loophole in TRAO. From SDCI’s investigation we have learned that the property was purchased in January 2018 and the new owners, after the rent increase of nearly 100%, and after 20 tenant households vacated as a result of the rent increases, is now doing a rehabilitation that includes painting the exterior, painting interior units, tearing out carpeting and replacing some appliances. None of this work requires that the owner obtain a permit and it does not meet the definition of substantial rehabilitation (which requires work of $6000 or more per unit).
I am thankful that SDCI is continuing to investigate and will be requesting the owner sign a certification that the rent increase was not for the purpose of avoiding application of TRAO. If people are in touch with the displaced renters, please encourage them to contact me so that I can put them in touch with SDCI for purposes of this ongoing investigation.
lisa.herbold@seattle.gov is her e-mail address. Records show the 51-year-old complex was sold for $4.2 million in January to a Renton-based LLC led by a real-estate investor who also leads the corporation that holds an Everett building that the Daily Herald reported was the subject of discrimination accusations in 2015. The listing flyer for 900 SW Holden, meantime, noted that its rents were 30 to 40 percent below market level, and that more than 80 percent of its tenants were month-to-month.
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