Washington’s “Rent Control” Bill - 2025 Edition
After failing to pass last year, legislators in Washington State again introduced a rent stabilization bill. Among other restrictions, if passed, this bill would prohibit rent increases in the first twelve months of a tenancy, would require 180 days of notice for subsequent rent increases, and would cap each increase at seven percent during any twelve-month period. Critics like to brand this as “rent control” but without restrictions on rent adjustments during vacancy (appropriately called “vacancy control”) this is truly a stabilization. Under HB1217, a landlord could bring the rent up to market as soon as there was tenant turnover, which cannot be done with “rent controlled” units. Even if it did control increases during vacancy, at the current rate of 7%, it seems this is just high enough to be meaningless.
As a landlord, or as the Rental Housing Association wants us to call ourselves, a “housing provider”, for the last 20 years, I understand the mentality and the resistance. I’ve never been great about rent increases - I forget to do them for years, then I’ll raise them 10% and go back to forgetting again - but a rent stabilization bill would require landlords like me to be more consistent with increases since there would be limited opportunities to “catch up.”
From the tenant side, the rent is too damned high (truth - but also wages are too damned low, so let’s talk about unions sometime, OK?), and it’s very hard to endure a 20% raise in rent when your groceries and other basic expenses have also skyrocketed.
The question that I had kept coming back to, for peace of mind on both sides, is whether or not a seven percent cap would actually make a difference. The below are the questions that I had, and the answers I found.
Have rents even gone up 7% a year, on average?
Twenty-one years ago, the year I met my husband and we bought our first house, I lived in a one-bedroom apartment in Fremont. My rent was $650 per month. Out of curiosity, I checked Zillow and there happens to be an apartment for rent - same size, same configuration, same cabinets, but thankfully they’ve replaced the 70s brown shag carpet with cheap laminate flooring (it’s a step, albeit a small one) - in the building that I was living in. This apartment is listed for $1,950 per month, exactly three times the rent I paid 21 years ago. I checked out the other apartments I’d lived in - my $945/mo apartment from 2003 is now $2,250, and a studio apartment a block from the studio I paid $550/mo for in 2001 is $1,295.
Where it’s hard to say what happened each year since then, if rent had increased the same percentage each year, the highest would have been my $650/mo apartment, which only works out to a 5% annual increase. The other two would be a 4% increase each year, if done consistently. Now, if my two-bedroom apartment that I paid $945 for had dutifully raised the rent seven percent each year the total rent would be $4,186 — 86% higher than it currently is.
None of these are anomalies. They are all indicative of what happened in the larger Seattle market, and Washington in general, in the last two decades - rents went up and down, but on average the annual increase was less than 7% in almost every market (with the exception of studio apartments in Seattle, 2006-present). The year-over-year increases themselves, however, were all over the map, ranging from a decrease of 7% to an increase of 27% from the previous year. The worst run was 2014-2018 when the median rent increased 65%.
Graph shows increase in median rent across all unit sizes (0-4 bed) over the previous year. Raw data from: https://www.rentdata.org/states/washington/2025
The last five years haven’t been great - Seattle is up 22% over 2020 - and in the last ten-ish years, the median rent price in Seattle has doubled (so has the median home price). But that’s the same trend you’d see if you raised the rent 7% each year for 10 years — you’d be at 197% of the original rent.
What I would expect to see is the peaks and valleys level out if this bill passes. Instead of seeing a variation of -7% to 27%, we’d see something in the 0-7% range each year, depending on what the market can sustain. On the tenant side, it’s much easier to plan for your finances if they don’t change radically with little notice. On the landlord side, setting a reminder for 180 days before you want to increase rent is going to be the new normal.
How do landlords account for the rising costs of providing housing?
One of the main advantages of purchasing a house is that it stabilizes your housing cost. Your mortgage is comprised of principal, interest, taxes and insurance each month. In the absence of a refinance, the interest and principal portion of your payment will remain the same.
Taxes go up as your property values go up. To some extent, insurance rates do as well. If you were to purchase a house for $700k in Seattle today as a rental, your monthly payments would look like this (assuming 20% down, 7.25% interest, because it’s a rental):
$3,820 per month principal + interest
$449 per month property taxes
$235 per month insurance
Your total mortgage payment is $4,504/month in year one. Say, for the sake of argument, that you’re able to rent the house at break-even year one. You reserve 10% of each month of rent for maintenance and expenses (this is on the high side), and you raise the rent every year 7% because your taxes and insurance also go up 7% per year (also on the high side). Here’s what happens over time:
Rent assumes 7% per year increase. Mortgage assumes taxes and insurance each increase 7% per year, maintenance reserve of 10% of rent each month. Assumes mortgage paid off in year 30.
The chart above is why people buy rental property and hold it. The first few years may be painful, as you may be losing a little each month, but because the variable part of your mortgage payment (taxes and insurance) is relatively small compared to your over-all payment (15% in this instance) as rents go up, so do your profits.
The numbers used here were very conservative — when I look at the house I grew up in, since the year I was born, the tax assessed value has gone up only 5.9% per year (and we are taxed roughly 1% of the tax assessed value each year). I assumed 7% in the model above for both taxes and insurance, which peaked in 2021 and had only gone up an average of 4.9% per year in the 20 years prior. I also used a full 10% for maintenance and expenditures, when the rule of thumb is 5-10%.
Just as with the change in rents, some years insurance and taxes will change substantially, and some years they won’t change at all. The point, however, is that when looking at historical trends a 7% cap on rent raises in a 12-month period shouldn’t make it cost-prohibitive for a landlord to own and operate a rental property over time.
The bottom line - should landlords be scared? Should tenants be excited?
The answer seems to clearly be a “no” to both. Looking at historic rent data, there isn’t much evidence that this bill would change much. At best, I think it takes the fluctuations out of the market and evens out the rent increases. For landlords, you bought property as an investment because rents go up and your payments stay relatively flat by comparison. This won’t change that calculation in a material way. For tenants, the frustrating truth is that until wages keep pace (did I mention unions?) the rents are probably going to still be too damned high - the only real benefit is that they won’t jump massively with little notice.
