Seattle “First in Time” Ordinance Eliminates Freedom to Choose; Sparks Yim v City of Seattle

Effective January 1, 2017, landlords in Seattle must now follow the city’s process for screening tenants. Landlords retain freedom to set minimum standards but must disclose these standards and rent to the first tenant who meets them.

How it Works

Landlords must post their screening criteria in their office or on their website ad, or must hand the criteria to each prospective tenant who receives a print application. The tenant then puts their name on the application and hands it back to the landlord blank. This saves their place in line. The landlord must note the time at which the blank application was received.

The ordinance reads, “Lack of a material omission in the application by a prospective occupant will not render the application incomplete.” So the blank application is neither “incomplete” nor “complete,” it is “pending.”

The landlord must then provide the tenant with a letter restating all the information that is still needed (e.g., must provide a second blank application). The tenant then has 72 hours to provide the information.

The landlord is obligated to screen tenants in chronological order. Choosing the most qualified applicant will be considered unlawful. The first application with a complete application meeting the published minimum standards must be offered the apartment.

Each tenant receiving an offer must also be given at least 48 hours to decide if they want the apartment.

The total process length is at least five days under the law. If a tenant requires a reasonable accommodation, they can hold their place in line and have more time.

Failure to comply with this ordinance can lead to civil lawsuits, jury trial damages, and municipal fines of up to $55,000.

Why Tenant Advocates Say this is Necessary

Tenant advocates know that Section 8 tenants are often skipped over. First, landlords usually don’t like dealing with Section 8 administrators. These administrators impose delays and costs that don’t exist with a “market rate” tenant.  Second, Section 8 applicants often have “housing barriers” like bad credit, criminal records, and eviction history that make them less well qualified than “market rate” tenants. These two factors combined make Section 8 a flawed program requiring reform.

Rather than address Section 8’s flaws, tenant advocates have taken a political path. They have based their support of the new ordinance on so-called “findings” of a phenomenon called “implicit bias.” They claimed successfully that each of us harbors a racist id inside. “First in time” eliminates racism by eliminating thought, they claimed.

In fact, we don’t harbor racist ids. A CNN report on implicit bias was misreported, and other studies have shown that psychology lab findings carry over little if at all into real world behavior.

What Landlords Are Doing in Response

The ordinance was adopted last summer, took effect January 1, and on March 9 drew a lawsuit. Pacific Legal Foundation has filed Yim v City of Seattle.

Chong and MariLyn Yim, Kelly Lyles, and CNA Apartments LLC are plaintiffs. The lawsuit alleges that non-discriminatory tenant selection is essential to small landlords, and that denial of this freedom constitutes abrogation of property rights. Furthermore, the delays constitute undue hardship.
If Seattle law is anything like Massachusetts law, these plaintiffs will lose their case. Massachusetts case law establishes that however awful Section 8 administrators may be, landlords have to accept whatever the administrators demand.

Why Seattle is Surprising

Seattle is home to the Landlord Liaison Project, an innovative and economically efficient approach to homelessness. The Landlord Liaison Project recognizes the risk landlords take and specifically insures landlords to eliminate the perception of risk in rental applications. It eliminates housing barriers like bad credit, criminal record, and eviction history.

By including landlords as part of the solution, the Landlord Liaison Project has become a true win-win-win for tenants, landlords, and the City of Seattle.

The Trouble with Section 8

Seattle should have partnered with landlords a second time to fix Section 8. Section 8 is an economically effective program with precise targeting and real social benefits. But it is still flawed. In addition to its mishandling of housing barriers, there are three other issues that are not fixed with Seattle’s ordinance.

First, administrators are not held accountable. In Massachusetts, at least, it is not uncommon to experience month-long delays and unreturned emails and phone calls. Tenants and landlords should have absolute right to transfer their business to another administrator and bring market forces to bear on these organizations.

Second, the bureaucracy is outdated. Rental applications must still be on paper. Extensive, secret math is required to determine if the rent level is fair and if the tenant’s voucher will work with any given apartment. Landlord and tenants have to take time off work to chase down admins and complete all requirements. All of this should be online with full disclosure of process in advance.

Third, inspections are unpredictable and slow. An apartment might pass with one administrator after having just failed with another. It takes at least a week to get an inspection or reinspection; in some cases it takes a month. Some inspectors will not work when a unit is occupied. Many will cite cosmetic reasons unrelated to safety. Inspections should be standardized, and if the landlord has a certificate of occupancy from within the last year, the certificate of occupancy should stand without additional inspection.

Everything possible should be done to make a tenant with Section 8 as appealing to private landlords as a market tenant. The problem isn’t landlord bias, it’s Section 8’s non-market requirements. And contrary to what local and state officials think, Section 8 is fixable. We created it, we can fix it.

In the meantime, we will keep you posted as we learn more about this Seattle case.

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