Spokane’s Cooling Ordinance Returns with Teeth. A July 15 Vote Could Change How Washington Landlords Operate [6/30/26]

This HFO Research market intelligence report compiled and edited by Aaron Kirk Douglas

Washington’s most immediate policy story this week is in Spokane, and it is moving fast.

The Spokane City Council revived its right-to-cooling ordinance after June amendments narrowed the original proposal. The original version would have required landlords to cool tenant bedrooms to 80 degrees or below by 2031. The amended version now defines adequate cooling as sufficient to avoid health risks to tenants, with landlords required to provide it within 24 hours of a written notice from a renter. If a landlord fails to act, tenants gain the right to install a cooling device at landlord expense or to deduct up to $500 from rent for self-installed cooling. A vote is scheduled for July 15.

The debate is familiar in its structure. Supporters point to the 20 people who reportedly died from heat exposure during the 2021 Pacific Northwest heat dome and argue that cooling is a basic habitability requirement. Opponents argue that the cost of retrofitting older buildings, particularly those without adequate electrical infrastructure, will raise rents and push affordable units off the market. Both arguments contain real truth.

What makes this vote worth watching beyond Spokane is its potential as a policy template. Washington has already enacted SB 6200, which prohibits landlords from preventing tenants from installing portable air conditioning units. The Spokane proposal goes further by requiring landlords to act within a defined timeframe or face tenant remedies. If it passes, it is likely to surface in other Washington cities, particularly as summer temperatures become a recurring policy focal point. Owners of older apartment buildings in Spokane and elsewhere in Washington should begin assessing electrical panel capacity and cooling infrastructure before any ordinance takes effect.

Middle-income stress is not an abstract concern in this region.

A Brookings Institution report published last week found that approximately 42% of middle-income residents in the Vancouver-Portland metro cannot afford basic necessities, including housing and groceries. The same study found 42% of Seattle-Tacoma-Bellevue residents face the same constraint. The report defines middle-income households as those earning between $31,435 and $160,319. Among middle earners, 42% of Black, 49% of Asian American, and 61% of Latino or Hispanic households face the same pressure.

These numbers are relevant for owners of workforce housing on both sides of the Columbia. Financial fragility at the middle-income tier tends to show up in late payments, higher move-out rates when leases expire, and tenant reluctance to absorb rent increases. Owners should treat this data as a leading indicator for portfolio performance in the workforce segment, not just a headline.

The federal story this week is the biggest national housing development in two decades, and it still has not become law.

Congress passed the 21st Century ROAD to Housing Act with overwhelming bipartisan margins, 85-5 in the Senate on June 22 and 358-32 in the House on June 23. The legislation represents the most significant federal housing package in approximately 20 years.

Key provisions with Washington relevance include streamlined environmental review for infill housing projects, which could reduce permitting timelines in dense urban markets such as Seattle, Bellevue and Spokane. A new grant program would fund pre-approved design books for housing, reducing the number of individual project approvals needed to meet code. The bill raises FHA multifamily loan limits to better support affordable housing development and modernizes manufactured housing rules, potentially cutting per-unit costs by $5,000 to $10,000 by eliminating the permanent chassis requirement. It also creates financial incentives for local governments that permit housing above the national median rate, a provision with direct implications for jurisdictions in the Puget Sound region that have lagged on housing production.

President Trump canceled a planned signing ceremony on June 25, saying he would not sign the bill until Congress passes the “SAVE America Act,” a voter ID bill that has stalled in the Senate. House Speaker Mike Johnson announced Sunday he would send the bill to Trump on Monday. Because the bill passed both chambers with veto-proof margins in the Senate and near-veto-proof margins in the House, it could become law without the president’s signature if he declines to act within 10 days. Washington investors and developers should understand these provisions now, regardless of the timing of enactment.

A study from Portland, Maine, provides the clearest academic case yet against unfunded inclusionary zoning.

Portland, Maine, commissioned its own study of its inclusionary zoning ordinance and received confirmation of what critics had argued for years. Under the original IZ 1.0 rules, 40 projects triggered the policy, resulting in 2,065 approved units and 1,436 completed. After the city tightened requirements in 2020, requiring 25% of units to be affordable at 80% of area median income, only 18 projects triggered the policy. Completed units fell to 167. The project delivery rate dropped from above 80% to below 10% over the past five years. Regulatory cost per market-rate unit rose from roughly $11,111 to $60,667. After receiving the report, Portland’s Housing and Economic Development Committee deferred action for at least six months.

This is Portland, Maine, not Portland, Oregon. But the mechanism is the same. Washington jurisdictions that are considering inclusionary zoning or that are debating the scope of existing affordability mandates should study these numbers carefully. The funded inclusionary zoning model Oregon enacted this year through SB 1521, which requires jurisdictions to fully offset developer costs through fee waivers, tax abatements, or direct payments, offers a template for how to pursue affordability goals without collapsing the production pipeline. The Maine data confirms that the alternative, an unfunded mandate, reliably produces fewer homes and fewer affordable units than no mandate at all. As HFO reported earlier this month, Portland, Oregon’s experiment has had similar results to Portland, Maine.

National market context: the recovery is underway, but it is not uniform.

Lument’s Spring 2026 National Multifamily Market Report, prepared with CoStar data (available to subscribers) and analysis by Beacon Economics, finds the national market in a gradual stabilization phase. New starts nationally declined roughly 30% from peak levels. Approximately 525,000 units were delivered nationally in 2025, down 9% from the prior year. National effective rent growth was essentially flat at 0.1%. Cap rates nationally averaged about 6.4% in Q4 2025. The Federal Housing Finance Agency raised 2026 agency lending caps for Fannie Mae and Freddie Mac to $88 billion each, up more than 20% from $73 billion in 2025, adding a combined $30 billion in market liquidity.

For Washington, the Pacific division data in the Lument report showed a Q4 2025 vacancy rate of approximately 5.1% for properties of 50 to 200 units. Seattle’s multifamily construction pipeline stood at approximately 17,089 units as of Q4 2025, a 23% decline from the prior year. The slowdown in starts is likely to create tighter supply conditions in 2027 and 2028, especially if demand from the Puget Sound tech sector remains stable. Owners and investors with a 24-to-36-month horizon should be watching that setup closely.

HFO Investment Real Estate is Oregon’s and SW Washington’s leading multifamily brokerage by transaction volume. Get email notices of our updates: Subscribe to the Oregon & SW Washington edition: linkedin.com/newsletters/hfo-multifamily-marketwatch