In the Sustainability and Renters’ Rights Committee on Friday, Council Members Sara Nelson, Debra Juarez, and Andrew Lewis passed an amendment watering down Council Member Kshama Sawant’s legislation to impose a $10 cap on late fees for renters who fail to pay on time. The amendment, proposed by Nelson, would allow landlords to charge a late fee of 1.5% of the tenant’s monthly rent up to $50.
Sawant told The Stranger she expects Nelson and Juarez to nickel-and-dime renters, but it's especially egregious that Lewis, a self-described “labor” Democrat, would make even small concessions to landlords at the expense of renters. She said Lewis’s “betrayal,” especially with his seat up for re-election, should be a wake up call for working people–that is, unless he changes his mind.
Sawant said she’s giving Lewis “one more chance to redeem himself in the eyes of working class people.” When the amended bill goes to the full council for a final vote on April 18, she will propose her own amendment to bring the late fee cap back to the original $10 proposal. Not only that, according to Council Member Tammy Morales's office, she's asked council central staff to write up the same amendment herself.
Lewis did not respond to requests for comment.
In fact, no council members responded to my request for comment on Sawant’s reversal amendment, which does not bode well for the vote next week. Nelson and the landlords she serves may get their way unless renters pressure Democrats to, as Sawant said, “do the right thing.”
Performing a Spine Transplant on Your City Council Member
To help pressure her Democratic colleagues, Sawant and her office have sent emails and texts to supporters in the hopes of encouraging renters to contact their council members and to show up for public comment during the April 18 meeting.
She also aims to “expose” council Democrats for their “betrayals” of renters and working people. In a phone call with The Stranger, she noted that Lewis voted to end hazard pay… twice, voted “yes” on all the amendments to water-down the winter eviction moratorium, and joined the council majority in ending the pandemic eviction moratorium when there was not enough assistance to go around. He also gutted his own policy to guarantee a minimum wage to gig workers, and he has yet to propose legislation to fix it as he promised. Finally, he voted against increasing the JumpStart payroll tax to fill a huge budget hole, a move that the council’s progressive bloc supported.
Sawant’s office credited her attempts to shine a light on Lewis’s bad votes for inspiring more than 250 renters to email the council. One tenant wrote, “I am especially disappointed that [Lewis] joined conservative Democrats and sold out. The state doesn't need another representative who only pays lip service to workers. Buck up, Lewis. Get on the right team with your constituents, before you have none.”
$30 Fees Give Renters the Power to Pull $1,700 Out of Their Asses
To be fair, Sawant said that even Nelson’s proposal, however much it serves as a virtue-signal to the landlord lobby, would amount to a huge victory for renters.
Landlords shakedown tenants with all sorts of bullshit fees. Edmund Witter, the senior managing attorney at the Housing Justice Project (HJP), said late fees suck renters into a “debt vortex.” A tenant falls behind, then the landlord slaps them with a fee, and they fall even more behind. The cycle could continue to the point of an eviction.
HJP has worked with renters who got charged $25 a day or even 15% of their monthly rent. In extreme cases, sometimes late fees come out to more than what the tenant owed in the first place. Any regulation on that behavior helps.
Still, Sawant, Witter, and tenant advocates believe $10 is already a compromise. They think landlords should not be able to charge late fees at all. However, Nelson argued that tenants need late fees to incentivize them to pay rent on time, as though keeping a roof over your head isn’t incentive enough.
And it's not just one snot-nosed blogger who disagrees with Nelson. The data stands against the incentive hypothesis, too.
According to research nonprofit Urban Institute, 86% of tenants with “mom-and-pop” landlords paid their full rent by the end of the month in January 2020, and 74% paid in full and on time. Throughout the two-year long pandemic-era eviction moratorium, when landlords were not charging late fees, renters still seemed pretty motivated to pay on time. In fact, a slightly higher percentage of these tenants paid their landlords on time from March 2020 to March 2022. The only time that rate dipped below pre-pandemic levels occurred in July 2021, when 73% paid on time; and in September 2021, when 74% paid on time. And now that landlords can issue late fees, not much has changed.
Nelson Supports $10 Cap… If Your Rent Is Under $700
Nelson also argued that the late fee cap should exist on what she called a “progressive” “sliding scale.”
For the average one-bedroom apartment in Seattle, which rents at $1,900 a month, Nelson’s rule would allow landlords to charge late fees of up to $28.50. Only tenants renting below $700 a month, a price that does not exist in market-rate renters in Seattle, would enjoy a $10 late fee cap.
“Why should renters staying in a 20-year-old studio apartment pay the same amount as somebody who's living in a new one-bedroom?” Nelson asked.
Here’s why: The cost of the apartment does not make the cost of sending a fucking late-notice email any greater for the landlord. And it’s absurd to cite an already egregious practice to justify making it more egregious for others–it’s not unfair like taxes, where the state requires poor people to pay a higher share of their incomes than rich people for services we all use. It’s unfair because the whole practice is unfair in the first place, so it makes sense to set a flat limit to potentially reduce the amount of money landlords can make with this strategy.
Nelson is also worried that without her sliding scale, landlords will increase rents for all tenants in an attempt to offset losses from late payments.
Landlords claim that late rent means they pay their mortgage late as well. However, lenders typically give homeowners a 15-day grace period before possibly charging a late fee in the neighborhood of 4% to 5% of the monthly payment. Among late renters who eventually pay in full, the majority pay before the 13th of the month, according to data collected by the Urban Institute over the last three years.
Also, if a tenant does not pay on time, then capping late fees does not change a landlord’s ability to evict for nonpayment–they just can’t suck as much money out of the tenant on their way out the door. And besides, any of the fee amounts currently under consideration wouldn’t help a struggling landlord to pay off the mortgage on their excess property anyway.
Other Landlord Loyalists
Juarez supported Nelson’s amendment. In her remarks in the Friday committee, she rattled off late fee caps in other jurisdictions. Auburn and Burien have a cap of $10 while Redmond and unincorporated King County have a 1.5% rule. She didn’t tease out why one was better than the other, she just called Nelson’s amendment “common sense” and “fair.”
Advocates on Sawant’s side pushed back on the fairness argument, which rests on the false assumption that landlords and tenants are in equal financial positions. A $28.50 late fee means more to a worker who fell behind on rent than to someone who owns more property than they can live in.
Lewis also supported Nelson’s amendment because he did not want to put the City in the “position where we are periodically having discussions about what we reset the certain number to.”
That argument did not land with Sawant. She argued that flat numbers need adjustments as the cost of living goes up when it comes to wages, not when it comes to punishment for the poor.
Sawant did have one strong ally in Morales.
“Tenants shouldn't have to pay for an investor's obligation to maintain their investments,” Morales said in her remarks. “I have to say, the fact that we even talked about housing in this way–as somebody's investment, as somebody's business that they're running–is part of the problem here in my mind. If housing is a human right, we shouldn’t be commodifying it.”
Since no one wants to go out on a limb and say they support Sawant’s amendment, here’s what the tea leaves say.
Nelson, Juarez, and Council Member Alex Pedersen will likely vote “no” on Sawant’s amendment. Nelson and Juarez supported the change to begin with, and Pedersen would never piss off the landlord lobby (well, he did once, but I don’t think he meant to). Morales is the certainly on board with Sawant's amendment, or her amendment to do the same thing, or an amendment the co-sponsor together.
That leaves four in the middle: Council Members Teresa Mosqueda, Lisa Herbold, Dan Strauss and, of course, Lewis. Only three have to join Sawant and Morales to restore the $10 cap.
Voting history may suggest that Mosqueda would side with Sawant. She showed loyalty to renters in the past, taking an unpopular vote with Sawant to extend the COVID-19 eviction moratorium. Herbold also voted “yes” on that extension, but she did try to water it down first. But, hey, she isn’t running for re-election, so she doesn’t have to worry about pissing off the all-powerful landlord lobby.
As for Lewis and Strauss, this vote could be a defining moment in their pursuit of re-election. Will they do as Sawant fears and “signal to landlords that they will do their bidding,” or will they take the side of renters? Certainly they’ll get an earful from both sides ahead of the vote Tuesday afternoon.