Title
Rent Stabilization Legislation & Existing Rental Housing Code Briefing
Recommended Action
Committee Recommendation:
Not referred to the committee.
City Manager Recommendation:
Receive a briefing on 2025 Washington State legislative session updates to landlord-tenant laws and discuss next steps.
Report
Issue:
Whether to receive a briefing on 2025 Washington State legislative session updates to landlord-tenant laws and discuss next steps.
Staff Contact:
Christa Lenssen, Senior Housing Program Specialist, Community Planning and Economic Development, 360.570.3762
Presenter(s):
Christa Lenssen, Senior Housing Program Specialist, Community Planning and Economic Development
Background and Analysis:
Background on development of Olympia’s tenant protection policies
In 2018, the Olympia City Council began exploring tenant protection policies implemented in other cities, such as relocation assistance; increased notice for rent increases; rental licensing and inspection; and other proposals in response to the 2017 Assessment of Fair Housing (AFH). The 2017 AFH raised concerns regarding the number of cost-burdened renting households and drew attention to the fact that people who rent are often the most vulnerable community members.
In late 2019, tenants and tenant advocates held a rally at City Council and presented a proposed ordinance to cap deposits, move-in costs, and pet deposits, as well as to allow tenants to pay these fees and last month’s rent in installments. In March 2020, the Land Use & Environment Committee (LUEC) held a community meeting to learn more about challenges and potential solutions with renters and landlords.
Around this same time, several workplans were underway to review housing needs and challenges, to prioritize actions to increase housing access and stability, to include Thurston County 5-Year Homeless Crisis Response Plan; Olympia’s One Community Plan; a regional Housing Needs Assessment and Olympia’s Housing Action Plan. Many of these plans include actions to help stabilize renting households. These workplans all included significant public outreach, consultation with subject matter experts, and local data analysis. The data highlighted the needs and challenges faced by community members, particularly low-income renters and marginalized communities most at risk of homelessness.
The City Council directed staff to pursue tenant protection policies in order to further the goals of the workplans cited and address housing challenges. In 2021, the City Council allocated funding for a consultant to assist in developing an outreach and engagement plan to solicit feedback from renters and landlords about which policies to help prioritize policies with the greatest impact.
Through one-on-one stakeholder interviews, focus groups (with renters, renter advocates, local landlords and larger property management companies) and community surveys; staff learned about challenges faced by renters, gathered insights from landlords about potential unintended consequences of policies, and gauged level of support from stakeholders for various policy options.
Over 430 community members submitted input via community surveys in early 2022. Public engagement echoed findings from previous input and analysis that informed the development of the above workplans including high housing costs; difficulty accessing housing due to high cost of entry; income requirements and low vacancy rates; fears of displacement (to homelessness, to worse housing conditions, out of geographic area); health/safety concerns; lack of accountability for noncompliance with codes/regulations and resources to help tenants enforce their rights.
The City Council enacted an ordinance in August 2022 to limit move-in fees and increase the notice period for rent increases; followed by ordinances in November 2023 to establish a rental registry program and in April 2024 to create relocation assistance requirements, limits to fees, and additional protections for tenants.
2025 Updates to Washington State Landlord-Tenant Laws
The 2025 legislative session resulted in several changes to Revised Code of Washington (RCW) 59.18 (the Residential Landlord-Tenant Act or RLTA) and RCW 59.20 (the Manufactured/Mobile Home Landlord Tenant Act or MHLTA) were adopted. The RLTA covers tenancies in rented apartments and homes, while the MHLTA covers tenancies where the tenant owns their home and rents lot space in a manufactured home community.
House Bill (HB) 1217, commonly referred to as the rent stabilization bill, provided the most significant changes to these RCWs. The City Council requested staff review HB 1217 to identify impacts to Olympia’s Rental Housing Code and any conflicting language between the policies. Staff has completed analysis of HB 1217 and Olympia’s current Rental Housing Code, in consultation with the City’s legal department. The legislation does not include any language that necessitates amending Olympia’s code, but Council may wish to amend the current code considering these changes to statewide law.
HB 1217 changes to the RLTA
HB 1217 sets limits on how much rent can increase in a year. Before the passage of this legislation, there were no limits on how much rent could increase and jurisdictions were prohibited from regulating the amount of rent or rent increases that could take place. Under HB 1217, landlords may not increase rent by more than 7% plus the consumer price index up to a maximum of 10% during a 12-month period. These rent stabilization measures expire in July 2040. There are some exempted properties from these rent stabilization measures:
• Newly constructed rental units (the first certificate of occupancy was issued 12 or less years before the date of the notice of the rent increase)
• Affordable rental units where rents are set by contract (such as properties owned by public housing authorities, nonprofit organizations, and properties receiving Low-Income Housing Tax Credits
• Units that are shared with the property owner as their primary residence (includes room rentals, ADUs/DADUs, duplexes, triplexes and fourplexes)
Landlords must now also provide 90 days’ notice before increasing rent. Previously 60 days’ notice was required under state law. The legislation also provided a template rent increase notice that landlords must use when increasing rent. Landlords may not increase rent during the first 12 months of the tenancy. Landlords may not charge more than a 5% difference in monthly rent for lengths of varying time periods (for example, a higher rate for month-to-month leases). The legislation also requires the Washington State Department of Commerce to create an online landlord resource center, with information about the landlord mitigation program and other resources. On this same resource page, the Department of Commerce will calculate and publish the amount that rents may increase annually. The maximum annual rent increase percentage allowed, through December 31, 2025, is 10.0%.
Current Olympia Rental Housing Code
Olympia Municipal Code (OMC) currently requires landlords to provide 120 days’ notice for rent increases over 5% and for rent increases that total 7% or more within a 12-month period. The OMC requires 180 days’ notice of rent increases of 10% or greater. If a tenant receives a rent increase of 7% or more within a 12-month period, they can request relocation assistance from the landlord to move. The City Council’s intent when adopting these measures was to mitigate significant rent increases by allowing tenants more time to plan and resources to relocate.
Options for consideration
1. The City Council takes no action to revise the City’s Rental Housing Code, keeping the current code substantially the same.
This provides the most protective measures for tenants, as longer notice periods than the state requirements apply, and tenants would still be able to request economic displacement relocation assistance from their landlord if their rent is increased by 7% or greater.
Maintaining economic displacement relocation assistance thresholds may serve as further incentive to keep rent increases below the 7% threshold, even though the state allows for 7-10% annual increases. However, keeping the City’s code the same could create confusion with the updated state requirements.
If the City Council chooses this option, staff recommends adding to the code clarifying language about the amount that rent may increase with a reference to the state law and providing education to ensure understanding of the City’s and State’s requirements.
2. A second option is for the City Council to remove code sections entirely and defer to state law. The City’s rent increase notification requirements and economic displacement assistance could be removed from the code.
This option is anticipated to result in a small reduction in staff time for enforcement and reduce confusion in differentiating state and local requirements. Housing and code enforcement staff spend a limited amount of time enforcing the Rental Housing Code. Housing staff resolved a total of five rent increase notice violations in 2024 and 2025, adding up to approximately 15 hours of staff time to enforce the code.
Renters in properties exempted from the State law could still face significant rent increases (beyond 10%) and renters in properties that are subject to the rent stabilization caps could still face rent increases up to 10% annually. Renters would have less time to plan for these increases if notice periods were reduced to the state’s required 90-day timeframe and would not be able to access relocation assistance to support moving to a new unit.
Staff Recommendation
3. A third option is for the City Council to adopt OMC that balances the two previous options. This option would simplify and streamline current requirements to be in closer alignment with state law.
Examples could include:
• Requiring 120 days’ notice for all rent increases; and
• Requiring relocation assistance when rent is increased by more than 10% annually to mitigate when exempted properties implement significant increases; or
• Requiring relocation assistance when rent is increased by more than the allowed 7%+CPI up to 10% threshold, so that tenants can request relocation assistance as an additional remedy when their landlord wrongfully increases their rent by more than the amounts allowed; or
• Maintaining the current relocation assistance requirements to allow renters greater security and options to relocate if their rent is increased by 7% or more annually.
Extending the rent increase notification period beyond the state’s requirement of 90 days would provide additional time for renters to plan, particularly if they live in an exempted property and are facing a rent increase of more than 10%. This would change Olympia’s current 120- and 180-day notice periods for different rent increase amounts to one required 120-day notice period for all increases. Olympia can adapt the same rent increase template language in the updated state law to reflect this longer time period.
Currently under Olympia’s code, renters have the option to request relocation assistance from their landlord if their rent is increased by 7% or more annually. They can also choose to stay and pay the increased rent amount. Maintaining some form of relocation assistance when rents are increased would provide greater security for renters that they will not be displaced due to a significant rent increase. Landlords will continue to factor the possibility of relocation assistance payments into their decision-making process when increasing rents.
HB 1217 changes to the MHLTA
Under the MHLTA, tenants own their home but rent a lot space in a manufactured/mobile home community. HB 1217 sets limits on how much rent for the lot space can increase in a year. Under HB 1217, landlords may not increase rent by more than 5% during a 12-month period.
Before passage of this legislation, there were no limits on how much lot rents could increase, and jurisdictions were prohibited from regulating the amount of rents or increases that could take place. The rent stabilization provision in the MHLTA has no expiration date, like the requirements under the RLTA. Like the changes to the RLTA, HB 1217 prohibits landlords from increasing rent within the first 12 months of the tenancy and provides a model rent increase form that landlords are required to use.
HB 1217 also caps move-in fees and security deposits to one month’s worth of rent. If a tenant brings a pet, that amount is increased to two months’ worth of rent. Late fees are also capped by the legislation, using the following schedule:
• First month rent is due: late fees may not exceed 2% percent of the tenant's total monthly rent
• Second consecutive month rent is past due: late fees may not exceed 3% of the tenant’s total monthly rent
• Third consecutive month and all subsequent consecutive months that rent is past due: late fees may not exceed 5% of the tenant’s monthly rent
Manufactured Home policies proposed in Olympia
Staff proposed a set of manufactured home policies that the City could pursue, which were based on feedback from manufactured homeowners; existing Olympia Rental Housing Code protections for residential tenants (tenancies covered by the RLTA) and direction from the Land Use & Environment Committee received at their November 2024 meeting.
Staff brought these proposed policies to a community meeting with manufactured homeowners in February 2025 for feedback. Staff presented these proposed policies to Council at a March 2025 study session and Council directed staff to wait until after the legislative session to reassess.
Staff proposed policies concerning manufactured homeowners:
• Enacting relocation assistance for rent increases of 7% or more
• Requiring 6 months’ notice for rent increases of 7% or more
• Adopting similar language to Olympia Rental Housing Code regarding required information in rent increase notices
• Requiring landlords to provide a tenant rights information document when a new lease is signed or renewed
• Revising Olympia’s zoning code so that existing manufactured home communities may not be redeveloped to a different use.
Many of these proposed policies were based on manufactured home community resident feedback regarding steep rent increases, lack of transparency and communication with property owners when rent increases, and fear of displacement.
Staff Recommendation
Considering that state law has limited annual rent increases at a lower threshold than staff’s proposals and that the City’s intent was to mitigate the impacts of rent increases on residents, staff recommends that the City does not pursue policies to provide longer rent increase notice timeframes or economic displacement relocation assistance. The state’s new required rent increase notice form also addresses many of the same items as staff’s previously proposed policies.
Staff recommends exploring alternatives to requiring landlords to provide a tenant rights information document when a new lease is signed or renewed. This proposed policy was based on protections enacted in the City’s Rental Housing Code for tenants who rent apartments and homes (tenancies covered under the RLTA, rather than the MHLTA). The current information document required by the Rental Housing Code addresses protections provided by the code for tenants. If the City does not enact local policy protections for manufactured homeowners, considering resident concerns were largely addressed by HB 1217, there is no need to educate residents about their legal rights under City code.
Staff developed a resource document with programs and information to distribute at community meetings for manufactured homeowners held in September 2024 and February 2025. This information could be updated and posted on the City’s webpage as an alternative to requiring that landlords provide this information. The City could also consider mailing this resource information to residents annually or posting a flyer on community billboards so that residents are aware of community resources and legal referrals. The City could also consider providing resources and referral information so residents can become more aware of their rights under HB 1217.
The only remaining policy action that was not taken at the state level is to address displacement risks due to redevelopment. Staff could continue to explore addressing policies to mitigate potential displacement due to redevelopment of manufactured home communities.
This policy action was prioritized in the recent anti-displacement study conducted in connection with the Comprehensive Plan update and received the most support from manufactured homeowners who were surveyed on policy proposals at a community meeting in February 2025.
When a manufactured homeowner is forced to relocate, it can be very difficult (if not impossible) to relocate their home and may be cost prohibitive. Recent cost estimates obtained from a community partner indicate rates to relocate a home are between $20,000 to $30,000. Some relocation assistance may be available through the state to residents of parks that close, but that amount ranges from $11,000 (for a single wide) to $17,000 (for a double or multi-section home). As a result, residents lose not only their housing, but the value of their investment if they are not able to relocate their home elsewhere.
Currently, only two communities in Olympia are zoned under the Manufactured Home Park designation, which limits redevelopment of communities to other commercial and residential uses that are permissible under other zoning types. This puts the majority of existing manufactured home park residents at higher risk for displacement due to potential redevelopment of their community. Staff have held preliminary conversations internally and there are concerns regarding staffing capacity to undertake rezoning efforts, concerns around downzoning, enabling affordable housing developments under the density allowances, substandard infrastructure issues, and climate risks associated with this type of development over time.
Next Steps
Staff is requesting direction on the Council’s preferred approach to updating the current Olympia Rental Housing Code to align with HB 1217 and/or whether Council would like to refer to a committee for further discussion. Staff can draft proposed amendments to the Rental Housing Code, as directed by the City Council.
Staff is also seeking direction on manufactured home community preservation and anti-displacement options; and whether Council would like staff to explore manufactured home park zoning amendments and/or receive a briefing on this specific topic at a future Council or Council committee session.
Climate Analysis:
This action is expected to have no significant impact on greenhouse gas emissions. Preventing economic displacement of renters due to rising rents may reduce commutes and trips needed to move to other housing options. Preserving existing housing may have a long-term reduction on greenhouse gas emissions by eliminating need for replacement of housing units. Most manufactured home communities in Olympia are located along major transit corridors where residents have access to public transit. Preserving these housing units from commercial redevelopment will preserve housing that is already accessible to transit routes.
Equity Analysis:
Tenant protection policies most significantly impact marginalized populations such as BIPOC households and low-income households. BIPOC households are more likely to rent and less likely to own their homes than white households in Olympia. According to HUD CHAS data (retrieved from Department of Commerce), 50% of white households in Olympia rent, while 61% of BIPOC households and 73% of Hispanic/Latinx households rent. According to ACS data (retrieved from the Thurston County Assessment of Fair Housing), about 82% of Olympia households with a single mother rent rather than own their homes.
As indicated in the Assessment of Fair Housing, income disparities contribute to difficulty in paying for housing and limit housing choice. Economic disparities and lack of intergenerational wealth have contributed to income gaps between BIPOC and white households. According to HUD CHAS data, 24% of households of color in Olympia and 22% of Hispanic/Latinx households in Olympia earn less than 30% of Area Median Income, while 15% of white households earn less than 30% of Area Median Income. According to 2020 ACS data (retrieved from the Assessment of Fair Housing), a person with a disability earned on average $26,075, compared to $37,168 earned by a person without a disability. Just over 33% of single mother households in Olympia had income below the federal poverty level, compared to 11% of the total population. Changes to the City’s tenant protections will impact lower-income households and protected classes, as BIPOC, people with disabilities and single parents with children are more likely to rent and have less income to pay for housing.
Households in mobile homes are over twice as likely to live in poverty (DeLuca, Stefanie, and Eva Rosen 2022, 348) and manufactured housing is the largest source of unsubsidized affordable housing in the country (Consumer Financial Protection Bureau, ‘Manufactured Housing Finance: New Insights from the Home Mortgage Disclosure Act Data’). Adults over age 65 are more likely to live in a manufactured home than the general population, according to the Thurston County Housing Needs Assessment. About 12 percent of seniors countywide live in manufactured housing or mobile homes compared to nine percent for the county population as a whole. Nearly 17% of adults over age 65 in Olympia have income below the federal poverty level, which is about 1.5% higher than the general adult population. Staff was not able to locate the racial demographics of Olympia residents who live in manufactured homes. Enacting zoning protections that increase housing stability and reduce risk of displacement will benefit lower-income households and older adults, who are more likely to live in manufactured housing.
There is limited data on landlord demographics. City of Olympia surveys include demographic data, but not all respondents provide demographic information and there is a limited sample size. Approximately 71% of landlords who completed the landlord survey (part of the Olympia rental housing code update in 2022) identified as white, which is similar to the general population of Olympia overall. Landlords are burdened by additional requirements or restrictions put in place by the City.
Neighborhood/Community Interests (if known):
Potential changes to Olympia Municipal Code’s Rental Housing Code (OMC 5.82) are a topic of significant interest to renters and rental housing owners/operators within the city and around Thurston County. Council began exploring tenant protections in 2018 and initiated an extensive community engagement process between 2020 and 2022 to explore various policy options. Over 430 community members participated in a 2022 Engage Olympia survey for renters, landlords, and interested third parties. Over half of Olympia’s residents are renters, so the majority of residents will be impacted by any policy changes. Manufactured home community residents have expressed significant interest and have engaged with city staff by attending community meetings, providing input via phone calls and emails. Residents were particularly interested in zoning protections to prevent displacement due to redevelopment when surveyed by City staff.
Financial Impact:
Additional costs are not anticipated at this time.
Options:
1. Receive a briefing on legislative updates to landlord-tenant law and discuss next steps.
2. Do not receive a briefing on legislative updates to landlord-tenant law and discuss next steps.
3. Take other action.
Attachments:
House Bill 1217
Olympia Municipal Code 5.82 - Olympia Rental Housing Code
Washington State Department of Commerce Landlord Resource webpage
Presentation