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Sunday, May 24, 2020

Bellingham City Council resolution: unfair or essential?

A “For Rent” sign stands outside a house on North Garden Street in November 2018. On April 13, the Bellingham City Council unanimously passed a resolution calling for immediate relief of rent and mortgages for people financially impacted due to the COVID-19 pandemic. // Photo by Harrison Amelang.

The debate over Bellingham City Council’s rent and mortgage relief resolution continues

By Seth Stevens

This is a companion piece to a story published April 21, regarding the Bellingham City Council’s resolution calling for immediate rent and mortgage relief through November 1. Please read the piece here.

Rob Trickler, the president of the Washington Landlord Association and real estate lawyer, said a rent moratorium is the wrong way to help struggling Washington residents during the COVID-19 pandemic.

“To just say that everyone doesn’t have to pay rent, when there are people out there that are completely capable of paying rent, is going to cause a lot of damage that is avoidable,” Trickler said.

On April 13, the Bellingham City Council unanimously passed a resolution calling for immediate relief of rent and mortgages for people financially impacted due to the COVID-19 pandemic. 

Gov. Jay Inslee put into effect a rent moratorium that prevents any landlord from starting the eviction process on a tenant for non-payment until June 4. This move has sparked debate between economists, representatives, landlords and tenants about how to properly handle this situation.  

Of those who are against the Bellingham City Council’s resolution and Inslee’s moratorium, many landlords are high on the list. 

Trickler said that he is already seeing a significant drop in rent payments for many landlords throughout Washington. 

“My largest client, for example, has several thousand doors [units] in Snohomish County, and they had a 14% drop in rents collected in March versus what they collected in February … in April, the industry is expecting at least a full 25% drop.” 

When asked if he was worried about a potential drop in rental income, Bellingham City Councilmember and local landlord Daniel Hammill said, “I think it’s an issue of fairness and equity … my feelings or personal situation has no bearing on what is good legislation; it should be what’s good for the people.”

Beth Girma, a student at Western and member of the Young Democratic Socialists of America (YSDA) club on campus, has been one of many voices advocating for further forms of relief for those in our community. Girma expressed continued dissatisfaction with the current tenant-landlord dynamic that this pandemic has highlighted. 

“This should not only be the burden of the tenants, because this pandemic has placed the financial burden on the regular, working-class person who doesn’t own a lot of property, not the landlords,” Girma said. 

Gregg Colburn, an assistant professor of real estate in the University of Washington’s College of Built Environments, was also skeptical of the Bellingham City Council’s resolution. 

“It doesn’t necessarily take into account the complexity of the entire housing ecosystem,” Colburn said. 

Trickler said he understands that many people need financial assistance to meet their current rent and mortgage obligations, but worries about the long-term effects a rent moratorium could have on the already competitive rental market in Washington. 

“We have had such a dramatic underproduction of units in the last 10 years; we are millions and millions of units short of where we need to be, and these efforts are just going to make it worse,” he said.

Shawn Knabb, an associate professor at Western’s College of Business and Economics, explained that if people stop paying their rent, this could force many smaller landlords to stop paying their mortgages, which could, in turn, significantly reduce the amount of cash within the banking system, potentially creating a financial crisis. 

Trickler claims that the Bellingham City Council resolution and Inslee’s rent moratorium are inequitable. “I haven’t seen anything that offers any kind of relief for those landlords trying to pay mortgages,” Trickler said. Trickler recently had to purchase a new $1,000 hot water tank for one of his properties, and he worries about his ability to pay for it if he sees the drops in rental revenue that the industry is projecting for April and May. 

“The attorney general is on a witch-hunt for landlords,” he said.

Colburn, the University of Washington researcher who studies real estate, is in favor of relief for those that need it but, he said, a blanket rent moratorium or the cancellation of rent and mortgage payments may not be the most effective way to provide it. 

“What we need are financial resources in people’s bank accounts that they can use to pay their bills, and then we don’t have to worry about the systemic implications of people not paying their bills into the mortgage finance system.” 

Colburn believes the best way to provide this relief would be to use the same avenue that the CARE Act used when providing stimulus checks to millions of Americans, and suggests that those hoping to receive rent or mortgage assistance must look to the federal level. 

“The only institution in this country that has the financial heft to do this is the federal government,” he said. “And the reason they have that is because they have a printing press, and Washington [state] does not.” 

Bellingham landlord Rick Black describes himself as “not your normal landlord,” and prides himself on his close relationships with his tenants. 

Black, who has been a landlord for nearly 16 years, worries about the implications this resolution and the statewide rent moratorium are going to have on his tenant relationships. 

“The biggest downside to this [Bellingham City Council resolution] is that it just unintentionally drives another wedge between property owners like me –– small guys –– and their tenants,” he said. “ I’m providing a service and it’s a service people need and I’m not trying to gouge anyone at all. You know, I’m just trying to make ends meet. Not all landlords are bad.”

Black has not seen a drop in rental income for March, but is braced for rocky months ahead. “I spent the first 10 years as a landlord in the red,” he said. “So it’s definitely not the landlord making money at someone else’s expense, not by any means.”

Black and Trickler both emphasized the importance of communication between tenants who are experiencing financial hardships and their landlords, who may be able to offer options or relief while everyone waits for legislative consensus. 

Girma, the Western student working with the Young Democratic Socialists, helped coordinate an email writing campaign to the Bellingham City Council and various state and federal legislators, requesting some form of rent and mortgage relief, and said they are pleased that some officials are hearing their calls for help. 

Girma, who is frustrated with the lack of relief that Western students are receiving now that a majority of them are unemployed, has helped organize a page on Instagram called WWU Community Aid. According to the page’s bio, WWU Community Aid is, “a group to help advocate for students of color, queer students, and disabled students who need emergency financial help.”

According to Girma, WWU Community Aid Group has helped place thousands of dollars into the pockets of some of Western’s most vulnerable community members, thanks to the generosity of donors, many of whom have been college students. 

The Rent and Mortgage Cancellation Act of 2020, is a bill that was recently proposed at the federal level, to cancel all rent and mortgage payments, and would also provide a relief fund for landlords to help minimize lost rental income for up to a year. 

3 COMMENTS

  1. Small Housing providers can not afford this. They generally have day jobs and are counting on their rental properties as their retirement. There really is not profit on rentals in our state. And the laws that continually impact Housing Providers and promote Tenant “Freebees” is destroying our rental market. This is not a Landlord friendly State, this is why Investors are rapidly leaving and buying in friendly states, like Texas. Once again, our legislators have destroyed another small business and drove them out of our State! Just sad.

  2. There will always be a surplus of those willing to give away the the assets of others to benefit themselves.

  3. Thanks for representing various sides on this issue. One aspect of the rental/mortgage relief situation overlooked in these discussions and regulations is that landlords are also on the hook for property tax and insurance. I am the landlord of one residential house and 25% of the rental income goes to property tax and insurance. It would make sense that if cities plan to pass legislation of this sort that they should also include a provision for landlords to stop paying property tax.

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