The subject proposed law is fraught with a multitude of perils for both landlords and tenants.
Landlords must remain profitable to remain housing providers. Higher operating costs will put upward pressure on rents. If rental supply contracts, tenants may face fewer nearby choices and longer commutes. New builds and new rental property investors will likely shun Tacoma because it simply is not worth even more regulation and risk in a city that was, in the not-too-distant past, viewed as the best of the tri-county Puget Sound areas to invest in rental housing.
The anonymity so many of us have dedicated time and funds to create becomes a thing of the past with the City of Tacoma's creation of a "public landlord information [in a searchable] database" detailing our holdings, ownership structure, and other information. If passed, asset protection and protecting your own privacy warrant a consultation with your attorney.
The phrase "inside and outside Tacoma" pertaining to the landlord database states no city, county, or state boundaries. It counts units owned, controlled, or managed by landlords and their affiliated companies, again, "inside and outside Tacoma," when determining whether a landlord qualifies as small or large. The proposal’s definition of "affiliated companies" extends beyond subsidiary LLCs to relationships involving ownership, management, and other forms of control. Detailed rules for collecting and posting database information would be developed by the City.
While we strongly recommend landlords exercise proper maintenance for safety, sanitation, and livability, we also know that some tenants' notification of issues can be slow or nonexistent. If there is a violation found, "a landlord shall be liable for penalties of not less than $500 and up to five times the monthly rent of the dwelling unit at issue. The Director shall assess the penalty based upon a penalty scale, to be adopted by rule, which considers the seriousness of the violation, the harm caused to the tenant, whether the violation was willful, and other factors as the Director may determine. Penalties shall be no less than those outlined in TMC 1.95 and 1.100. 2. The penalty required under this section shall be collected by the City and promptly transferred to the impacted tenant or tenants." A penalty for certain maintenance violations may be waived when the landlord remedies the problem promptly after receiving tenant notice and the violation has not caused "undue hardship" to the tenant. Those matters have yet to be fully defined. Read the full text of the law and review your maintenance reporting procedures.
Since this proposed law was introduced, REIA has fielded calls with concerns about potential harassment of themselves and their tenants outside of Tacoma in view of the amount of their otherwise private information made public, converting apartments to condominiums for resale, liquidating properties, and discussion of moving investment dollars outside of Tacoma, if not outside of Washington.
REIA strongly recommends you read the full text of the proposed law, cast your ballot if you live in the area, and share this page with your fellow landlords. Subject to the outcome of the election and any potential litigation, you'll have decisions to make that will likely involve your attorney and accountant, and will impact not only you, your time, and your financial future but also those in Tacoma who require rental housing.
Until the outcome and direct effects are known and analyzed by you and your legal and financial teams, we recommend no new rental housing dollars be invested in the City of Tacoma.
Source: City of Tacoma Initiative Measure No. 1 Full Text, opens in a new tab or window.