HOUSE BILL REPORT

EHB 1387

BYRepresentatives Leonard, J. Williams, Nutley, Sanders, Wineberry, Anderson, Valle, May, Nelson, Basich, Todd, Lux, Unsoeld and Brekke

Providing for housing security deposits for qualified homeless persons.

House Committe on Housing

Majority Report:  Do pass.  (9)

      Signed by Representatives Nutley, Chair; Leonard, Vice Chair; Armstrong, Barnes, Padden, Sanders, Todd, J. Williams and Wineberry.

House Staff:Charlie Gavigan (786-7340)

Rereferred House Committee on Ways & Means/Appropriations

Majority Report:  Do pass with amendments.  (18)

      Signed by Representatives Locke, Chair; Belcher, Braddock, Bristow, Brough, Butterfield, Ebersole, Grant, Grimm, Hine, Peery, Sayan, Silver, H. Sommers, Spanel, Sprenkle, Wang and B. Williams.

Minority Report:  Do not pass.  (3)

      Signed by Representatives Fuhrman, McLean and Nealey.

House Staff:      Susan Kavanaugh (786-7136)

AS PASSED HOUSE FEBRUARY 11, 1988

BACKGROUND:

The Residential and Mobile Home Landlord-Tenant Acts permit the landlord to obtain a security deposit from the tenant for performance of the tenant's obligations under the rental agreement.  Some landlords also collect last month's rent in addition to the standard security deposit.

Some poor or temporarily homeless persons can afford the monthly rent payment, but they do not have the cash needed for the initial lump sum security deposit.

SUMMARY:

The Department of Community Development (department) is required to establish and maintain a rental security deposit guarantee program.  The department will provide grants and technical assistance to local governments and nonprofit corporations who operate emergency housing facilities or transitional housing programs.  The local government or nonprofit corporation must contribute 15% of the total amount needed for the security deposit.  The deposit includes last month's rent when it is a normal requirement of the landlord.

The local government or nonprofit corporation will assist homeless persons or families who are temporarily residing in an emergency shelter or transitional housing, or families who are otherwise without adequate shelter.

The landlord, the tenant, and the local government or nonprofit corporation enter into a three party contract where the tenant pays the deposit over time on a monthly basis, and the local government or nonprofit corporation guarantees that the landlord will receive the amount of the deposit.  The funds for the guarantee are provided by a grant from the department to the local government (which covers 85% of the needed amount).

The department is to establish rules regarding the eligibility of local governments and nonprofit corporations to receive grants and technical assistance, and the eligibility of tenants to participate in the programs.

Up to one hundred thousand dollars may be used from the Housing Trust Fund for the rental security deposit guarantee program.

EFFECT OF SENATE AMENDMENT(S):  Provisions are added to the bill that require the owner of a multi-family rental housing development, who has received subsidies from the Department of Housing and Urban Development or the Farmers Home Administration in return for renting a specified percentage of the rental units to low income persons, to give notice when the subsidy is to be terminated or prepaid by the owner.  The required notice period is 12 months.  The notice must be given to tenants, the local government and the Department of Community Development.

These provisions do not limit the owner's ability to terminate or prepay the subsidy, or otherwise act within the rules of the applicable federal assistance program.

Fiscal Note:      Available.

House Committee ‑ Testified For:    (Housing)  Sylvia McGee, Washington State Coalition for the Homeless; Tim Seth, Apartment Owners Association.

(Ways & Means/Appropriations)  Representative Busse Nutley; Phil Kaplan, Washington Poverty Law Advocates.

House Committee - Testified Against:      (Housing)  None Presented.

(Ways & Means/Appropriations)  None Presented.

House Committee - Testimony For:    (Housing)  It is very difficult for homeless and low income persons to come up with the security deposit, even though they can afford the monthly rent. This results in longer stays in shelters and motels.

(Ways & Means/Appropriations)  One of the biggest barriers to a family or individual ending a period of homelessness is the tremendous up-front cost.  Shelters state wide turn away many families and individuals every night.

House Committee - Testimony Against:      (Housing)  None Presented.

(Ways & Means/Appropriations)  None Presented.

VOTE ON FINAL PASSAGE:

      Yeas 86; Nays 7; Excused 5

Voting Nay: Representatives Betrozoff, Bumgarner, Ferguson, Fuhrman, Nealey, Padden and Winsley

Excused:    Representatives Allen, Baugher, Doty, Lewis and Rayburn