After two years of trying rent stabilization bill heads to Washington State Governor for signature. Bill in part limits mobile home park rent increases to 5% with additional tenant protections. All other rental units capped at 7% with a cap at 10% with CPI.
Sounds like every LL will need to raise rents every year by the max 7%-10% every year to every tenant to ensure they donât fall behind. Even in year with 3%inflstion you increase at 7% to account for years when mkt moves & where home prices move > 7-10%. Seems like the legislature is trying to control part of the mkt (rents) without controlling the larger part which sales of existing homes and skyrocketing newly constructed homes.
Same in PA! Rent control bill is being pushed quickly through, aimed specifically at parks. 4% max annual increase.
âRent stabilizationâ = Euphemism / double-speak for ârent controlâ a prime driver of socialism/communism
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These are âFake Rent Controlâ ordinances.
7% plus CPI with a 10% Cap. I also see that you get a 10% increase upon lease change over.
While any form of Rent Control is not good, this form is not horrible.
I ran the numbers on the park Iâve owned the longest.
The 25 year average rent increase came out to 4%.
The problem with these rent control bills is they only punish the folks that never raised their rents.
I would love to raise my rents 7-10% every year in perpetuity. Unfortunately for all the Renters in the state that will become the standard raise as any landlord who doesnât raise to the maximum is a fool.
Hereâs a REAL Rent control ordinance. Real Rent Contol.pdf (779.1 KB)
.75% of CPI.
§ 152.07 RENT ADJUSTMENTS.
(A) Annual adjustment based on the CPI. On February 1 of each year, the rent may be increased to an amount equal to the rent in effect on January 31 of the prior year adjusted by 75% of the increase in the CPI. The increase in the CPI shall be equal to the percentage increase between the CPI last reported as of October 30 of the most recent year and the CPI last reported as of October 30 of the year prior to that year. However, the increase shall not exceed seven percent of existing rent. The increase shall be annually calculated by the rent administrator and posted by December 1 of each year. The amount of the increase shall be routed to the nearest one quarter of one percent. In the event that the CPI decreases, no increase or decrease shall be authorized pursuant to this section. It shall not be necessary for an owner to apply or submit an application for a CPI increase. Across-the-board rent increases allowed pursuant to this section may be accumulated and implemented by the owner at any future time but not in excess of 12 months after the date so permitted and subject to the maximum limitation on increases set forth in § 152.10.
Spot on. One state we own in is an adjusted CPI+1% âcapâ (can go higher for capex/other). Guess how much we raised the last 5 years? 7%, 8.5%, 6%, 5.5%âŠ. anyone doing any less is foolish! I donât mind the âcoverâ from the state personally
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I have been involved in this legislation here in Washington for last couple years. Last yearâs attempt faltered as many felt it was too confusing when tied to tightly to CPI. This legislation is less confusing and after some late inning concurrence meetings the final version passed both houses. What is interesting is that there was no modification of the MHP limit of 5% with no sunset clause. As a MHP owner and residential landlord I participated in round tables, press conferences and provided House testimony in favor of this legislation.
Our industry has been beset with too many bad actors whose unmitigated greed has put us in the crosshairs of legislative oversight.
How can they justify controlling MHCs differently than other rentals? Isnât that a form of discrimination? Isnât rent control discrimination against LLs? What other businesses get blanket price controls?
The 5% cap without a CPI adjustment is not right. However, you do receive a 10% immediate rent increase for new move-ins, which is a great benefit. Iâve seen Rent Control ordinances that are so strict that many park owners choose not to raise the rents, as going through all the hoops to get it approved is not worth the effort. IE it costs $2500/year in attorneyâs fees to get the increase approved, but you only net out an additional $1200 in gross annual rent.
I do not like any form of government control on the free market; itâs socialist.
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While itâs unfair, our system has implemented price controls throughout our economy.
Electric Utilities: Pacific Gas & Electric (PG&E)
Natural Gas Providers: Southern California Gas Company (SoCalGas)
Water Utilities: Most, if not all, water utilities are subject to some form of price regulation.
Telecommunications: AT&T
Cable TV: â In some local areas, there are still price limits for basic cable.
Rent-Controlled Housing: CA OR NY and now WA
Pharmaceuticals:
Airline Tickets: Some routes are subject to price controls. Think of a small town in Alaska.
Health Insurance: ObamaCare has price limits
During an Emergency, Many areas have emergency pricing limits. For instance, you canât charge a 1000% markup for toilet paper during COVID.
This is not a free market and it is certainly not socialism. This is our US Constitution, Bill of Rights and State Constitutions exercising the legislative authority to protect and safeguard the rights and well being of our citizens.
When we provide quintessential affordable housing to our most vulnerable of citizens and then we raise rents exponentially and repeatedly, (only to line our pockets and appease investors) tell our managers to issue a minimum number of citations to our residents monthly, not pay our water bills and have the water shut off all the while knowing our tenants cannot afford to move thier trailers, cannot find anyone to buy their trailers and have nowhere else to go⊠it is as Frank stated, âCustomers chained to a Waffle Hutâ. And yes⊠that comment came up in one of our roundtables (not by me).
This is not âwokeâ media or stupid liberal politicians at work. It is our US Constitution protecting our citizens rights and well being. Our failure as an industry is our inability to temper the greed of those private equity groups and individuals who created this situation. And we all know who they are in our marketsâŠ