Bellingham’s New Rent Control Law, voted in 2023

Community First Bellingham Initiative #2, known as the Rental Relocation Assistance Program, passed in this most recent election.

I’m going to summarize key take-aways below, but if you’d like to read the ordinance as currently written, you can find the PDF here.

The ordinance addresses the rising rental prices in Bellingham, which, along with basically all other goods or services a human spends money, have outpaced wage growth.

Therefore, as of this new ordinance becoming law in late January, 2024, the following will be required:

Landlords must provide a 120-day notice (or longer, if specified in the rental agreement) before increasing rent *or associated housing costs by 8% or more over a 12-month period.

(*That “associated housing costs” means you can’t just tack on a “utility surcharge” and make the argument that it’s not technically rent.)

If a tenant receives such a notice, they can request a cash payment from the landlord equal to 3 months’ current rent, or the actual fair market rent, whichever is higher.

The landlord then has 31 days to make that payment.

When the tenant receives the payment, that then triggers a 5-month grace period for the renter to find new housing and get moved out.

(Yes, the tenant must keep paying rent during that 5 months. The old rent amount, mind you, not the new rent amount.)

Now, landlords, you do NOT want to miss a date or deadline in this law.

The City will have a formal process for tenants to file complaints, and those complaints will be reviewed and enforced by the City Attorney and judicial system.

Failure to comply to the letter of the law can result in legal action, fines, penalties, attorney’s fees, and double the amount of relocation assistance.

Read that very carefully and commit it to memory.

Landlord, if you finally decide to get your 2-bed, 1.5 bath apartment on Sehome Hill up to fair market value and you deliver a rental increase that exceeds 8%…

And on Day 44 after receving that notice, your tenant decides he’ll take the payment rather than stay on at the new rent…

You have 31 days EXACTLY to send over three times fair market rent — let’s call it $2K/month for that apartment, times three months, so $6K.

If you somehow don’t get that over on time, your tenant can then file for that payment to be doubled to $12,000, plus fines, actual damages, and attorney’s fees.

You obviously want to be very, very careful to avoid that.

LANDLORDS I strongly recommend you think carefully about THIS

I will be the first to say that if you are already at full, fair market rents with your lease amounts, then an 8% cap on annual increases is pretty reasonable and should be workable – my general feelings about rent controls notwithstanding.

But if you have a lease that is meaningfully below fair market rent, which many apartments in Bellingham still are…

Then be prepared and forewarned that, once this new law kicks in, in late January, 2024, you could be at that current amount +8% per year, and with that same tenant, for a long, long time.

And if you opt for the 3-month payout to turn that tenant over, the payment is not calculated off your low rent, but off full, fair market rent.

If that’s fine for you, great.

My point here is for you to think it through, do the quick math, consider the increases in your operating expenses, be informed and aware…

And in these next couple months before the new law kicks in, use your time and property management skills wisely.

A quick note to tenants

Tenants, you can infer from the info above what your basic rights are.

Remember, this ordinance is here to protect you from sudden, significant rent increases and to give you a fair chance to adjust or relocate if needed.

If you do get into a situation where you’ve received the 3-month relocation assistance payment, but you miss the 5-month grace period to get moved out…

You will have to start paying the increased rent and repay the relocation assistance.

So be very careful with that money, and if you do not have a Plan A, B, and C for getting moved out on time, then keep it safely tucked away, untouched, in your account.