The Policy Shift in Washington State: What Rent Caps and Regulation Really Mean for Our Industry 7/11/25
By Greg Frick, Partner at HFO Investment Real Estate
We’ve said it before, and we’ll say it again: the multifamily housing industry is one of the most important economic engines in the Pacific Northwest—but too often, we’re treated like a problem instead of part of the solution.
That’s why I sat down recently with Carter Nelson, Director of Government Affairs at the Washington Multifamily Housing Association, to talk about what actually happened during this year’s legislative session—and more importantly, what it means moving forward. [See 2-minute clip here]
Three Big Priorities That Faced an Uphill Battle
Carter and her team walked into Olympia this session with a few clear objectives:
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Stop rent control in any form
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Fix the eviction process delays, especially in King County
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Push for statewide preemption to eliminate patchwork regulations
While the rent control bill did pass, it’s worth noting how much ground was gained through relentless advocacy. The original version was far more restrictive. Through strategic negotiation, the final version was moderated in several key areas.
What Passed: The Fine Print on Rent Control
The bill (EHB 1217) now imposes a 7% plus CPI cap, capped at 10% total. It’s not ideal, but it’s more reasonable than what was originally proposed.
A few other highlights:
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Notice requirements for rent increases were pulled back from 180 days to 90—still long, but manageable.
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The new construction exemption was set at 12 years, which is below what Oregon and California offer and may affect our competitive standing.
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LIHTC properties were exempted, thanks to existing federal oversight and rate limitations.
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A 5% lease parity cap was introduced, preventing operators from charging more than 5% extra for month-to-month leases vs. fixed-term leases.
Carter pointed out that the final proposal could potentially backfire. Many housing providers are now eliminating flexible lease terms, which ironically reduces tenant choice—an unintended consequence we may be hearing more about in the years to come.
What Didn’t Pass—but Might Return
One item that didn’t make it through was the bill targeting algorithmic rent pricing tools. But it’s worth keeping an eye on this—Seattle is already taking up the issue locally, and national pressure around RealPage and other systems is mounting.
The Fight for Preemption Isn’t Over
One of the most frustrating things we discussed was the resistance to preemption. Lawmakers in cities like Seattle were largely unwilling to compromise on local control—even when patchwork laws lead to confusion, higher costs, and operational inefficiency for everyone involved.
But we know this isn’t sustainable. The pressure on affordable housing providers is mounting. We’re already seeing nonprofits and mission-driven landlords quietly exiting the market because the math no longer pencils out.
When those providers depart, idealists don’t take their place. They’re replaced by vacancy and a tighter market for renters.
What You Can Do
Carter said something that really resonated: “We’re as strong as the membership we represent.”
If you own property in Washington—or anywhere in the Pacific Northwest—you need to get involved. Call your rep. Join WMFHA. Show up. Because if this year showed us anything, it’s that if you’re not at the table, you’re on the menu.
Frick’s Final Word
We’ve always believed in being proactive, not reactive. That’s why we bring these conversations to you, so you’re not caught off guard by the changes coming down the pipeline.
The goal isn’t just to push back. It’s to educate, participate, and protect the future of quality rental housing in our region.
Ultimately, our role extends beyond merely selling real estate. We’re helping build communities, and that starts with smart policy.
▶️ Watch the full interview with Carter Nelson now on our YouTube Channel.
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