This week, CADF filed a lawsuit against the City of Tacoma challenging its so-called “Landlord Fairness Code” (“LFC”), which imposes onerous—and unnecessary—regulations on its residential-rental sector. So burdensome, in fact, that Tacoma has already seen a precipitous decline in available housing. Current providers, meanwhile, are set to exit in droves. This is hardly surprising to anyone who subscribes to fundamental economic principles. If you make it more expensive to create a product—be it a home, a car, or a Big Mac—fewer people will want to do it, reducing quantity, and those who do will have to do it for cheaper, in turn reducing quality, too.
From a policy perspective, the LFC is an economic disaster in the making. It permits tenants in arrears or otherwise in breach of their lease a smorgasbord of legal “defenses” against eviction. At both the state and local levels there already exist troves of tenant-friendly regulations to ensure that unscrupulous housing providers—who of course exist, though not nearly in the numbers detractors proclaim—cannot evict tenants on false or flimsy pretenses. While the existing rules are far from perfect, overregulation is no solution to underregulation, whether real or perceived.
Beyond the LFC’s economic drawbacks stands an embarrassment of legal and constitutional defects. These start with its title. Under the Washington Constitution, the title of any law—be it passed via legislation or ballot initiative—must refer to all its contents. For example, a law entitled “Police Accountability Act” cannot regulate firefighters. Few such breaches are as clearcut in practice, however. The LFC’s full title was as follows:
Subject
Citizens’ Initiative Measure No. 1 concerns enacting rental requirements for landlords and rental rights for tenants.
Concise Description
This measure would require landlords to comply with health and safety laws before raising rent or evicting a tenant; set limits on certain rental fees; require landlords provide two notices to increase rent and offer relocation assistance when the increase is 5% or more; create a defense against certain student/schoolyear evictions, evictions between November 1 and April 1, and evictions against servicemembers, seniors, families and others with protected status under the measure; and provide penalties and enforcement mechanisms.
Question
Should this measure be enacted into law?
Notice the contrast between its “Subject” and “Concise Description.” The former nebulously refers to “rental requirements . . . and rental rights” while the latter touches on a host of subjects—health, safety, pecuniary—which share no rational unity. Yes, they all regulate the owner-tenant relationship. But within this general ambit, these “requirements” and “rights” touch upon such a wide array of subjects that no reasonable voter could discern—again, from its title—what the law will cover. Beyond the constitution, the LFC’s title also violated state law. Specifically, RCW 29A.72.050. Which, among other things, requires a ballot initiative’s title be “a true and impartial description of the measure’s essential contents” and must be thirty words or less. First, the LFC’s ballot title was obviously more than thirty words, and in any case “enacting rental requirements for landlords and rental rights for tenants” paints a far-from-impartial portrait.
Its violation of the “single-subject rule” (and its RCW parallel) is not the LFC’s sole original sin. There is also the slightly inconvenient truth that Tacoma’s municipal code already broadly regulates the owner-tenant relationship—in legal parlance it “occupies the field.” So broadly, in fact, that under the state constitution adding to or replacing any of its major elements can only be achieved via legislation and not ballot initiative. Notice just some of the overlaps between the longstanding Rental Housing Code and the recently enacted LFC:
The LFC’s constitutional shortcomings do not end there, however. There is also the “minor” issue of Washington’s Constitution’s (and a separate federal) Contract Clause, which forbids Olympia or any local jurisdiction from enacting laws that impair the obligation of contracts. Under federal courts’ reading of the Clause—which controls interpretation of the nearly identical Washington version—there is a carveout for certain bona fide emergencies—e.g., a bank’s mass foreclosure of homes amidst the Great Depression. But even the staunchest of LFC advocates must reasonably concede that the housing situation in Tacoma does not nearly rise to this level. Not even close. Yet as-written and already applied in unlawful detainer cases, the LFC directly contradicts contractual terms that all parties agreed upon, with full knowledge and in good faith.
But wait! There’s more! There is also the “teensy” matter of the state and federal constitutions’ Takings Clauses, each of which prohibits governments—federal, state, or local—from seizing private property (including cash) for public use (for private use is always prohibited) without providing its owners “just compensation”—typically fair market value. Yet this is precisely what the LFC does. It forces many owners to continue hosing erstwhile tenants far past the expiration or breach of their lease—a violation of what the Supreme Court recently reconfirmed is a fundamental right to exclude others from your property. And of course, there are the various caps the LFC imposes on what owners may charge tenants for various services and contingencies—which also under existing caselaw is functionally equivalent to the direct appropriation of property, here cash.
Government has at its disposal a wide array of tools to address any number of public-policy concerns. It can impose licensing requirements on professionals, levy a diversity of taxes (income, property, sales, etc.), and yes, it may even seize private property that stands in the way of a public use—provided it pays. Yet oftentimes—especially in the lattermost case—lawmakers and other officials will look for ways to achieve specific policy outcomes without suffering the electoral consequences of employing unpopular means, like raising taxes.
When it comes to rent controls, it is especially tempting to overburden owners. They are unfairly maligned to begin with and are never a large enough block to threaten an imposing officeholder’s incumbency. Yet this temptation is the precise purpose for constitutions. That is, to protect the fundamental rights (e.g., to ownership) of a minority of citizens from the outsized and often adversarial will of the majority. The Supreme Court has long held that the Takings Clause “was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Tacoma’s LFC stands in direct contradiction to this principle. CADF and the owners it represents (a group CADF hopes will grow as litigation proceeds) are prepared to fight it tooth and nail. Both the state and federal constitutions demand nothing less.
Alki,
Sam Spiegelman