Thurston County Tenants Facing Rent Increases as Governor's Rent Protections Expire

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One thing you can say about Claudia Arends' apartment is that it's close to The Evergreen State College, where she graduated with a master's degree in environmental science in 2019.

That's about the only good thing she has to say about it.

"The place is crumbling," said Arends, who has lived with her 14-year-old daughter at the Deer Run Apartments in west Olympia for the past three years.

When they moved in, the sink was leaking and lifted out of the countertop, and the bathroom continues to leak whenever it rains. The bathroom fan and a bedroom outlet are completely broken.

A rusted heater randomly turns on and off. The floors are warped and hilly such that no furniture sits flat.

As a child, Arends was hit by a car, and the incident left her with permanent brain injury which causes her senses to be extra heightened. Certain noises, especially ongoing machine noise, can trigger seizures and paralysis, causing her muscles to suddenly give out. She said her condition has worsened and she has been hospitalized several times since living at Deer Run.

Then, on July 1, she received a notice that her rent was going up $200 a month.

Arends is one of thousands of tenants in Thurston County facing steep rent hikes after Gov. Jay Inslee's prohibition on rent increases lapsed on June 30. (Under the governor's "bridge" proclamation, landlords are still barred from evicting tenants who are behind on rent until Sept. 30.)

Unlike Oregon and California, Washington state has no cap on rent increases and municipalities are prohibited by state law from enacting their own forms of rent control or stabilization.

"Tenants are seen as cash cows"

Curtis Bidwell, who owns Deer Run Apartments, disputed the $200 figure, saying tenants' rents are going up by between $25-$175. Bidwell cited increased costs for insurance, plywood, and property taxes, which he said went up by 24 percent in 2020.

He also blamed the governor's eviction moratorium and new renter protection laws passed by the state legislature for rent increases, and said he is selling two properties and moving his money to a different state that "still cares about the constitution."

"When I know that the governor or the legislature is not going to let me terminate [a tenancy], that creates more risk," Bidwell said. "And that risk has to be bourne by the rest of the renters."

In response to Arends' specific allegations about maintenance issues, Bidwell said that her unit got a new cabinet, countertop, and sink shortly after she reported the issues. He also described her as reclusive and difficult to work with.

"There are certain people who will never be happy," Bidwell said.

Arends is indeed not happy; nor is she convinced that maintenance costs are driving her rent increase.

"Tenants are seen as cash cows," Arends said. "I'm making the property owner wealthy. I'm improving his credit. I'm improving his station while mine goes down."

Arends had already been struggling to make ends meet since last February, when the academic research job she had lined up in another state was rescinded due to pandemic budget cuts.

Since that setback, her problems escalated. She tried to access unemployment, but was denied. That left her and her daughter to live on her Social Security Disability and Temporary Assistance for Needy Families (TANF) benefits, sometimes referred to as welfare. Together, the two amount to about $1,000 of income per month.

Arends has a Section 8 voucher, which means she pays 30 percent of her income to rent, and the housing authority pays the rest, up to a federally determined "fair market value." That will insulate her from this particular rent increase, but most tenants at Deer Run do not have vouchers.

Goodbye to Rent Control

Following 15 months of de-facto rent control in Washington state, some landlords are eager to raise rents quickly and significantly out of fear that the governor or legislature will act again to curtail increases, according to Lance Benson, who owns a property management company based in Thurston County.

"Overall the homeowners are a little bit worried that they're going to be told how much they can raise or that they can't raise at all," Benson said.

The majority of owners of the nearly 2,000 properties in Thurston County managed by Prime Locations are choosing to increase rents now that the governor's prohibition has been lifted, according to President Zach Kosturos,

He estimated the average increase is between $100 and $150.

"Expenses have continued to increase over the last 15 months, while rents have not," Kosturos wrote in an email to The Olympian. He said the market value of some units have appreciated as much as $500 during the time that rent increases were prohibited.

'Low-income' housing not excluded from rent hikes

Even at government-subsidized buildings such as the Boardwalk Senior Affordable Apartments in downtown Olympia, some residents are seeing increases in the hundreds of dollars.

Vag Mayi, 77, a retired mental health therapist, has lived at the building for 13 years. She loves the downtown location near the farmer's market and restaurants, and she enjoys spending her mornings drinking Starbucks coffee and walking around Capitol Lake.

She recently got notice that her rent is going up from $755 to $1,128. Because Mayi has a Section 8 voucher, she won't pay more out of pocket. But most of the residents at the 280-unit building do not have vouchers.

While many residents know that the Boardwalk is "low-income housing," few are aware of the complex details and regulations governing what that actually means, said Mayi, who is on the board of directors of Thurston County Housing Authority. When they moved in, some thought that it meant rents wouldn't go up. That is not the case.

Boardwalk was built in 1999 with close to $18 million in federal subsidies, according to the state Housing Finance Commission. Under the program's rules, the building's owners cannot raise rents above a federally designated threshold for 30 years following construction. That period will end in 2029.

Fairfield Residential, a real estate company that owns more than 900 apartment complexes in the U.S., purchased the building in 2020 for $32 million, according to Assessor's Office records. Fairfield did not respond to a request for comment for this story.

The rent threshold for Low-income Housing Tax Credit buildings depends on unit size and Area Median Income in each county. For Boardwalk, that means a one-bedroom apartment is capped at $1,015 and a two-bedroom at $1,218, according to numbers provided by the state Housing Finance Commission, which oversees the distribution of low-income housing tax credits in Washington.

However, federal regulations allow Boardwalk to charge Mayi more than the federal maximum rents established by Low-Income Housing Tax Credit program because she has a Section 8 voucher and won't be paying the full amount.

Rising rents eat up scarce federal voucher dollars

While it won't affect her directly, the housing authority has a finite pool of money from which to fund section 8 vouchers.

"It keeps us from serving new people," said Karen McVea, rental assistance director at Housing Authority of Thurston County, of perpetually rising rents. "The more we spend in rent for existing tenants, the fewer and fewer we can serve over time."

The housing authority currently serves 1,940 households through section 8 vouchers.

The result, McVea said, is a "downward spiral": Despite rising need and additional contracts being awarded by the federal government, the number of tenants served with section 8 vouchers in Thurston County has actually gone down by about 100 people over the last decade.

Part of the reason for that is Congress never fully funded voucher programs to begin with, let alone kept pace with rising rent costs.

Arends, the Deer Run resident, notices the same trend with programs like TANF: Even if her benefits were to increase — which is rare — the money would go straight to her landlord.

"I can't build anything for myself because I'm just a funnel that cash goes through from the state into his pocket," Arends said. "Low-income housing doesn't solve that problem."

One Boardwalk resident in her 80s, who agreed to talk to The Olympian on condition of anonymity, recently got notice that her rent was set go up by about $60, to $1,050.

Still, the other options on the private market are mostly worse or more expensive. At least at Boardwalk, the utilities are included, she said.

Like Mayi, she appreciates the building and its proximity to the waterfront and the senior center.

But her margins are incredibly tight — she makes less than $1,300 from Social Security, and a little more from her husband's pension, and that has to cover medical costs, too. She's got a hip replacement coming up, and that's going to be expensive. To keep grocery costs low, she uses the Food Bank.

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