Oppose SB 5222—Rent Control Legislation

Lakewood Chamber of Commerce
Board of Directors Policy Position
Oppose SB 5222—Rent Control Legislation
January 28, 2025


Senate Bill 5222 proposes a 7% cap on annual rent increases and additional requirements aimed at addressing housing affordability. While the goal of providing relief to renters is important, this legislation will have unintended consequences that exacerbate Washington’s housing crisis rather than resolve it.

Key Concerns:

1. Reduces Housing Supply and Discourages Development:
Rent control policies, like those proposed in SB 5222, create significant disincentives for developers and investors to build new housing. Even with exemptions for new construction, the looming threat of rent control policies deters investment in long-term housing projects. Washington’s housing crisis stems from a lack of supply, and policies that discourage development will only make this problem worse.

2. Drives Out Small-Scale Landlords:
Small-scale landlords, who often provide more affordable rental options, may find it financially unsustainable to operate under a rigid rent cap. Rising costs for maintenance, property taxes, insurance, and utilities make it difficult for landlords to keep up, especially when capped rent increases fail to account for inflation or regional variations. The result could be a consolidation of rental properties into the hands of larger corporate landlords, reducing competition and flexibility.

3. Fails to Address the Root Cause of the Housing Crisis:
Washington’s housing crisis is driven by an inadequate supply of housing units to meet the growing demand. Rent control does nothing to incentivize new construction, and it may even accelerate the deterioration of existing housing stock as landlords face reduced revenue to fund maintenance and repairs. Real solutions must focus on increasing the availability of housing through streamlined permitting, zoning reform, and incentivizing private development.

4. Creates Market Distortions and Unintended Consequences:
Rent control introduces uncertainty into the housing market, which can lead to unintended outcomes such as:
* Developers choosing to build condominiums or commercial properties instead of rental housing.
* Property owners converting rental units into short-term vacation rentals or other non-regulated uses.
* Reduced mobility for renters, as rent-controlled units become scarce, discouraging residents from moving and exacerbating housing shortages.

5. Ignores Alternative Solutions:
Rather than imposing rent control, lawmakers should explore targeted programs to assist renters in need, such as rent assistance vouchers or direct subsidies for low-income households. These approaches address affordability without disrupting the free market or discouraging housing investment.

6. Economic Uncertainty for Landlords and Developers:
The unpredictability of future regulations, even with temporary exemptions for new construction, creates hesitation among developers and landlords. Stable, predictable policies are essential for encouraging the private sector to invest in much-needed housing projects.

Recommendations:
* Reject SB 5222: Rent control policies have been shown in other markets to reduce housing availability, hurt small landlords, and lead to unintended economic consequences.
* Focus on Increasing Housing Supply: Lawmakers should prioritize zoning reform, streamlining permitting processes, and providing incentives for private developers to build affordable housing.
* Invest in Rent Assistance Programs: Targeted support for renters facing financial challenges is a more effective and equitable way to address housing affordability without disrupting the rental market.
* Promote Public-Private Partnerships: Collaboration between government, nonprofits, and private developers can help address housing shortages through creative and sustainable solutions.

Conclusion:
Senate Bill 5222 may be well-intentioned, but it fails to address the root causes of Washington’s housing crisis and will ultimately exacerbate the problem by discouraging development and driving out small landlords. Instead of imposing harmful rent caps, lawmakers should focus on policies that increase housing supply, promote economic growth, and provide targeted assistance to renters in need. We urge legislators to oppose SB 5222 and pursue solutions that will truly make housing more accessible and affordable for all Washingtonians.