Washington Owners Lose Case on Eviction Moratorium, File Appeal [8/10/26]
August 10, 2026
Aaron Kirk Douglas

Washington Owners Lose Case on Eviction Moratorium, File Appeal [8/10/26]

Federal judge rejects landlords’ COVID takings theory

NOTE: Since this story was originally published, RHAWA has appealed to the 9th Circuit and plans to appeal to the U.S. Supreme Court if necessary. 

U.S. District Judge Barbara Rothstein dismissed the RHAWA-backed Cedarland Homes LLC v. Ferguson class action on Aug. 5, rejecting an effort to obtain compensation for losses tied to Washington’s COVID-era eviction moratoriums. Filed in December 2025 against Gov. Bob Ferguson, the state and eight cities, the lawsuit argued that government effectively compelled owners to allow nonpaying tenants to remain in their properties. Plaintiffs relied heavily on the U.S. Supreme Court’s Cedar Point Nursery v. Hassid physical-takings theory and pointed to losses that exceeded the state’s mitigation program, including its $15,000 compensation cap. Rothstein concluded that landlord-tenant regulations such as the moratoriums generally do not constitute physical takings requiring compensation.[1]

Why it matters: The ruling narrows one potentially powerful constitutional route for recovering losses caused by rental regulation. Washington owners can still challenge laws on other grounds, but Cedarland signals that courts may be reluctant to treat restrictions imposed within an existing landlord-tenant relationship as the equivalent of a government occupation of private property.

Washington parking rules start changing in January 2027

Washington’s Parking Reform and Modernization Act limits parking mandates in covered cities and counties, including a maximum of 0.5 required parking space per multifamily dwelling unit. It also eliminates minimum parking requirements for several categories, including affordable housing, senior housing and residences smaller than 1,200 square feet. The law took effect July 27, 2025, but compliance is phased in. Jurisdictions with populations of 50,000 or more must implement the requirements by Jan. 27, 2027. Covered jurisdictions with populations between 30,000 and 50,000 have until July 27, 2028.[2]

Why it matters: Parking can consume enough land and construction dollars to determine whether an apartment project pencils. Developers with projects entering the entitlement pipeline should already be evaluating whether the new standards can improve unit yield, reduce structured parking costs or change what they are willing to pay for development sites.

Seattle rents grow even with 14,600 units under construction

Seattle is carrying roughly 14,600 apartments under construction, equal to about 3.6% of inventory, compared with only about 2,400 units, or 1% of inventory, in Portland. Despite that supply, Seattle asking rents increased 1% during the past year and effective rents increased 0.7%. Portland effective rents declined 0.3%. Seattle also added approximately 7,000 occupied units during the year as stronger population and employment growth helped absorb new supply.[3]

Why it matters: The numbers challenge the idea that a large development pipeline automatically means weak apartment performance. Seattle’s stronger demand is already offsetting its much larger supply burden. With construction slowing, the market could enter its next cycle from a stronger position than the pipeline numbers alone would suggest.

Back-to-back $150 million-plus sales put institutional capital back in view

Mesirow Financial purchased the 235-unit Island Square on Mercer Island from UDR for $157 million, or slightly more than $668,000 per unit, making it Puget Sound’s largest apartment sale of the year. Soon afterward, BentallGreenOak acquired the 238-unit Ballard Independent for $152 million. The back-to-back transactions follow several years in which higher interest rates and financing costs kept many institutional apartment buyers and sellers on the sidelines.[4][5]

Why it matters: Two transactions do not establish a trend, but they provide meaningful price discovery. Institutional buyers do not need to flood the market to influence expectations. A handful of major trades can begin establishing new benchmarks for cap rates, replacement-cost discounts and investor confidence.

Amazon joins financing stack for 67 affordable Seattle apartments

The Pointe at Thomas will replace nine apartments near Seattle’s Capitol Hill light rail station with 67 units restricted to households earning between 40% and 80% of area median income. The affordability restrictions will remain in place for 99 years. Amazon’s Housing Fund committed $6.7 million in low-cost capital, Seattle Credit Union is providing $11.4 million in construction financing and Washington state funding helped cover eligible planning and design expenses.[6]

Why it matters: The project demonstrates the increasingly complicated financing required to produce deeply affordable apartments in a high-cost market. It also shows the growing role major private employers can play as below-market lenders when conventional debt and public subsidies alone cannot make a project work.

Federal Laws and Policy

Bipartisan proposal would expand LIHTC carryback to five years
A bipartisan, bicameral proposal would extend the Low-Income Housing Tax Credit carryback period from one year to five years, allowing investors to apply credits against a longer history of federal tax liability. The House version, H.R. 9012, was introduced earlier this year, with a Senate companion following in August.[7]

Why it matters: A longer carryback could make LIHTC investments more valuable during economic downturns, when investors may have less current taxable income. Greater flexibility can support investor demand for credits, improve pricing and ultimately provide more equity for affordable housing projects.

Green New Deal for Public Housing returns to Congress
Rep. Alexandria Ocasio-Cortez, D-N.Y., Rep. Delia Ramirez, D-Ill., and Sen. Bernie Sanders, I-Vt., have reintroduced the Green New Deal for Public Housing Act. The legislation calls for major federal investment in public housing rehabilitation, weatherization, electrification, energy efficiency and resiliency, along with workforce development and labor provisions.[8]

Why it matters: The legislation faces an uncertain political path, but a program of this scale could influence construction labor demand, material costs, energy standards and the direction of future federal housing policy. Even proposals aimed primarily at public housing can have ripple effects throughout the larger development industry.

Sources

[1] Cedarland Homes LLC et al. v. Ferguson et al., U.S. District Court for the Western District of Washington. Federal case docket via Justia; Rental Housing Association of Washington, “A Tale of Two Lawsuits”. The Aug. 5 dismissal and court reasoning are based on the court-order writeup supplied for this roundup. The public docket index confirms the parties, removal and assignment to Judge Rothstein.

[2] Washington State Legislature, Engrossed Substitute Senate Bill 5184, Chapter 204, Laws of 2025; RCW 36.01.397.

[3] CoStar Analytics, Aug. 7, 2026, “Seattle pulls ahead of Portland on multifamily rent growth despite much larger construction pipeline”.

[4] CoStar News, Aug. 5, 2026, “This deal on upscale Mercer Island marks Seattle’s biggest apartment sale of the year”.

[5] Puget Sound Business Journal, Aug. 4, 2026, “Ballard apartment property trades for $152 million as sales perk up”.

[6] KOMO News, Aug. 5, 2026, “Amazon, Avril, Ferguson team up for housing as questions hang over WA’s business climate”.

[7] U.S. Government Publishing Office, H.R. 9012, Affordable Housing Credit Carryback Act; Rep. Mike Carey, Affordable Housing Credit Carryback Act announcement.

[8] Office of Rep. Alexandria Ocasio-Cortez, Aug. 6, 2026, “Ocasio-Cortez, Sanders, Ramirez Reintroduce the Green New Deal for Public Housing Act”.

 

HFO Investment Real Estate is the largest multifamily-only brokerage in the Pacific Northwest, with 12 brokers focused exclusively on apartment investment sales in Oregon and Washington. Call (503) 241-5541

 

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