Rent caps close to becoming law in Washington state, despite divisions among Democrats

A controversial bill limiting how much landlords can raise their tenants' rent each year is on the cusp of becoming the law of the land in Washington, after clearing the state Senate by a vote of 29 to 20 Thursday.

It's unclear how the House will decide on the measure that passed, but the Senate's vote put divisions among Democrats, who control the majority of the Legislature, on full display.

The proposal's main backer, Sen. Emily Alvarado (D-West Seattle) said the bill is critical to help Washington renters to stay housed, but that she's disappointed with the version passed out of the Senate.

"It provides fewer protections and less market coverage than I had hoped," Alvarado said after the vote. "But the fact remains it's the first time we've passed rent stabilization off the Senate floor."

That's because before approving the bill, a bipartisan group of lawmakers narrowly made some major changes.

The bill has progressed through most of this year's legislative session with a 7% cap on annual rent hikes intact. But Sen. Sharon Shewmake (D-Bellingham) put forward an amendment increasing that cap to 10% plus inflation, citing concerns about how rent-limiting policies have impacted the rental housing market in places like San Francisco.

"After looking through the data and research, I have come to the conclusion that 7% is risky," Shewmake said.

Shortly before the Senate vote on Thursday, the chamber just barely adopted the amendment to raise the cap, with a handful of Democrats joining Republicans to do so. The amendment was approved 25-24, drawing sighs of disbelief and headshakes of frustration from the bill's main Senate sponsors and supporters, including Alvarado.

The chamber also narrowly adopted a change proposed by another Democrat, Sen. Marko Liias (Everett), that would exempt single-family homes that are not owned by a corporation from the rent hike limits. That amendment also passed 25-24.

The rent cap policy has been hotly debated in Olympia all session long, garnering support from low-income housing advocates, some landlords, and renters.

Several landlords, the housing industry, and builders fiercely oppose the legislation, saying it would hurt the state's efforts to boost housing supply and make rental housing harder to find. That argument has resonated with some Democrats – including Sen. Annette Cleveland (Vancouver) – as well as Republicans who have remained opposed to the measure.

"This bill in front of us is not a solution – in fact it risks making things worse," Cleveland said, ahead of Thursday's vote. "These policies simply don't work as intended, no matter how much we would like them to."

Cleveland was among a handful of Democrats who blocked the bill in committee last year.

Still, the proposal has advanced farther than ever before this year. Rent limits have been called a top priority by Democratic leadership.

As the Senate considered the bill on the floor, some members of the House watched from the wings.

The legislation now heads back to the House for consideration.

It's unclear how the changes made in the Senate could affect the bill's chances at becoming law. The House could accept the changes or decide to instead negotiate a final version in a conference committee.

There will be plenty for lawmakers to discuss after Senators made other changes through the committee process in recent weeks. The Senate-approved version of the bill would not apply the rent caps to new buildings for the first 15 years they operate. It would also end the rent-capping policy in 2040, and the state would be required to study the impact of the policy in 10 years if it becomes law.

The bill includes an emergency clause, which means it will become law immediately if it is approved by the Legislature and signed by the governor.