Summary of Commercial Rent Control Legislation

1. April 13, 2020
Herbold Uses Crisis to Impose Commercial Rent Control
Commercial Rent Control is Unnecessary and Once Established Sets a Bad precedent
Legislation just proposed by Seattle City Councilmember Lisa Herbold would impose
rent control on commercial properties during the COVID-19 emergency declared by
the Mayor. This is an idea that has been proposed in the past but unsuccessfully.
Unlike residential rent control, there is no state law that preempts the City from
imposing limits on rent. This proposal,
• Ignores current efforts between small businesses and property owners to
work together,
• Fails to put energy into getting cash benefits to hard hit businesses as part of
federal legislation including unemployment benefits,
• Would have the same affect on commercial office in the long run that
residential rent control would have, increasing risk and suppressing supply,
• Requires one group of local businesses people to act as a bank for another,
making loans without interest but all the risk.
Summary of Legislation
A small business is a business with a total of fifty or fewer employees per
establishment or premises.
During the Mayor’s COVID-19 emergency:
• A property owner cannot increase rent unless the increase was authorized in
a written lease in effect before the effective date of this ordinance;
• A property owner cannot renew a lease or enter into a new lease with the
small business if the new lease requires a rental payment that exceeds the
payment due under the expired lease.
For six months after the Mayor’s emergency is ended,
• If a small business failed to pay rent, the business can pay overdue rent in
installments during the six-month period.
• A written installment plan must be negotiated between the parties and the
small business cannot be charged more than 1/3 of the overdue rent in any
given month;
• And the small business has one year after the termination of the Mayor’s
emergency; and
• No late fees, interest, or other charges shall be paid by the small business for
a period of one year after the end of the emergency.
In a separate action, the City Council has imposed a 60 ban on evictions of
commercial tenants in effect until the end of May.