HOUSE BILL REPORT

HB 1812

BYRepresentatives Locke, Nelson and Wineberry

Authorizing counties, cities, and towns to require relocation for low-income tenants.

House Committe on Housing

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (6)

      Signed by Representatives Nutley, Chair; Leonard, Vice Chair; Winsley, Ranking Republican Member; Anderson, Rector and Todd.

Minority Report:  Do not pass.  (3)

      Signed by Representatives Ballard, Inslee and Padden.

House Staff:Kenny Pittman (786-7392)

AS REPORTED BY COMMITTEE ON HOUSING FEBRUARY 28, 1989

BACKGROUND:

Present statutes prohibit counties, cities, and towns, or other municipal corporations from imposing any tax or fee on the construction or improvement of buildings or the development of lands, unless specifically authorized.

The State Supreme Court has held that an ordinance that has as its primary purpose to provide a public benefit and not to regulate is a tax.  The Supreme Court has also held that a municipal corporation has no authority to levy taxes other than when expressly granted by statute.

Counties, cities, towns, or municipal corporations that require relocation assistance to tenants, in return for approval of development that reduces low income housing may also require expressed statutory authority.

SUMMARY:

SUBSTITUTE BILL:  The Landlord-Tenant Act is revised to require landlords to provide a 90 day notice and reasonable relocation assistance to low- income tenants upon the demolition, substantial rehabilitation, or change of use of residential property or upon filing of a condominium declaration.  No relocation assistance is required if landlords are required to, have provided, or will be required to provide relocation assistance to the same tenant due to another law.

Low-income tenants are defined as persons whose adjusted household income is at or below 80 percent of median income, adjusted for family size, in the county where the tenant resides.

Landlords are required to provide a three month advance notice to each tenant prior to the demolition, substantial rehabilitation, or change of use of residential property.  The landlord's relocation assistance to the low-income tenant is limited to two months rent.  The amount of the rent is determined as the rent being paid at the time of the three month advance notice to the tenant.  The landlord may provide relocation assistance through: a) a direct payment to the tenant; or b) by abating two months of the tenants rent.

A Tenant Relocation Assistance Account is created in the custody of the state treasurer's office.  Revenue from a variety of sources can be deposited into the account.  Expenditures from the account can only be used to pay reasonable tenant relocation costs for low-income tenants that are not covered by the landlord's contribution and relocation costs associated with the relocation of mobile homes of low-income persons.

The Department of Community Development and the appropriate local governing body must determine what are reasonable relocation costs.  The relocation assistance is based on reasonable tenant expenses taking into consideration: a) actual physical moving costs and expenses to move a tenant's possessions within a 50 mile radius of the affected dwelling; b) first and last month's rent and security deposits; c) utility connection costs and deposits; and d) the difference between the existing rent and utilities and the new rent and utilities for a one year period.

The governmental bodies are required to adopt policies, procedures, or regulations regarding relocation assistance.  This must include provisions for administrative hearings to resolve disputes, related to relocation assistance, between tenants and landlords within 30 days.

Tenants moving into a dwelling unit after proper notification by the landlord that tenants will have to move due to demolition, substantial rehabilitation, or change of use of residential property are not eligible for tenant relocation assistance.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The relocation assistance to low-income tenants is required on a statewide basis and not as a county option. Landlords are required to provide a 90 day notice and relocation assistance to the low-income tenants limited up to two months rent.  The amount of the rent is determined as the rent being paid at the time of the three month advance notice to the tenant.  The landlord may provide relocation assistance through: a) a direct payment to the tenant; or b) by abating two months of the tenants rent.

A Tenant Relocation Assistance Account is created in the custody of the state treasurer's office.  Revenue from a variety of sources can be deposited into the account.  Expenditures from the account can only be used to pay reasonable tenant relocation costs for low-income tenants that are not covered by the landlord's contribution and relocation costs associated with the relocation of mobile homes of low-income persons.

The Department of Community Development and the appropriate local governing body is required to determine what are reasonable relocation costs.

Appropriation:    $2.25 million from the general fund is deposited into the Tenant Relocation Assistance Account.  $2 million of the appropriation is for relocation costs not covered by landlord's contribution to relocate a mobile home.  $250,000 of the appropriation is for relocation costs not covered by a landlord's contribution to relocate a tenant in a residential rental unit (non-mobile home).

Fiscal Note:      Requested February 20, 1989.

House Committee ‑ Testified For:    Jane Noland, Seattle Council member; Bill Reams, King County Council member; Paul Barden, King County Council member; John O'Brien, Seattle Tenants Union; Bernie Viteck, Seattle Tenants Union; Arnold Livingston, Senior Citizens Lobby; Jim McDaniel, Tacoma Rescue Mission; Sharon Lee, Washington Low-Income Housing Congress; Mike Ryherd, Washington Low-Income Housing Congress; Paul Sikora, Downtown Seattle Association; John Jensen, Mobile Home Owners of America.

House Committee - Testified Against:      Charles Boe, Washington Mobile Park Owners Association; Theresa Bosler, Washington Mobile Park Owners Association; Rory Veal, West Venture Group; Jim Williams, Seattle Master Builders Association; Steve Harrier, mobile home park owner; Tom Sante, Building Owners and Managers Association; Dan McMonagle, Apartment Association of Seattle and King County; Andy Kollmer, Washington Association of Realtors; John Woodring, Washington Mobile Home Park Owners Association; Fred Brune, Washington Mobile Home Park Owners Association; Paul McWherter, Washington Mobile Home Park Owners Association; Denny Eliason, Sabey Corporation.

House Committee - Testimony For:    The loss of low-income housing through demolition or change of use is a major problem.  Many of the low-income tenants cannot afford to move without some type of financial assistance.  The developer has a responsibility to relocate the people they displace through their actions.  This bill is reasonable in its approach to this problem.

House Committee - Testimony Against:      This bill does not focus on the real problem.  The need for low-income housing is a problem, but it is a societal problem.  The actions by local governments have led to this problem not just the developer.  The bill would not place limits on the relocation to be provided.  The bill also does not provide incentives such as reduced building permit fees, or density bonuses to offset the requirement to pay relocation costs.