Seattle City Council Passes Bill Aiming To Prevent Evictions After Moratorium Is Lifted

By Becca Savransky, SeattlePI, Wednesday, May 6, 2020

Seattle City Council this week passed a bill offering more protections to prevent tenants unable to pay their rent from being evicted after the city and statewide eviction moratoriums are lifted.

The bill — passed in a 9-0 vote by the council — gives tenants a defense to use in eviction proceedings relating to not being able to pay rent for six months after Seattle’s moratorium on residential evictions is lifted. The moratorium is currently in effect through June 4. The bill is aimed at helping to keep the thousands of people impacted by the spread of the novel coronavirus safely housed.

“This legislation before us today can help people stay housed and that is the bottom line,” Council President M. Lorena González said during a council meeting.

The bill expands on the city’s just cause eviction ordinance, creating an addition tool a tenant can use in eviction court proceedings. The eviction defense applies to tenants who have been financially impacted by the pandemic and have therefore been unable to pay their rent.

“What we are doing is we are enhancing existing landlord and tenant laws to benefit tenants who are going to need additional time to get their feet grounded and to be able to continue to dig out of this economic crisis,” González said.

Under the bill, landlords can still take actions associated with evictions, but tenants can use this as a defense in court. Tenants will also still accrue debt and will be expected to pay the rent that is owed.

“Providing a defense to eviction for certain causes is necessary as an additional step to protect public health to support stable housing, decrease the likelihood that individuals and families will fall into homelessness, and decrease exposure while the COVID-19 emergency exists,” the legislation said.

Councilmember Andrew Lewis said rent relief continues to be a priority for the city, but there are hundreds of thousands of people across the state who are unemployed and need help during this crisis.

“As one of the two renters on the council, I think it’s critical that we extend protection to renters in this time to make sure that we can keep people inside, especially in a time of uncertainty, in addition to public health threats,” he said during a council meeting.

“We are in a period of immense and extreme uncertainty regarding how people are going to immediately make their rent and it puts a lot of Washingtonians in a position where, while they could ordinarily be able to pay their rent on time, it might take some folks a little bit more time to do it.”

During the council meeting, council members acknowledged this is just one piece of the relief people need due to the coronavirus outbreak. Rent assistance, along with more affordable housing, is still desperately needed in the city and across the county.

The novel coronavirus outbreak has led to thousands of people across the region losing their jobs. Without a steady income, workers have struggled to pay for rent and other basic expenses. More than half a million people across Washington have applied for unemployment benefits since the pandemic started.

In March, Seattle Mayor Jenny Durkan issued an emergency order to temporarily stop evictions in Seattle for residents, nonprofits and some small businesses. Gov. Jay Inslee shortly after issued a statewide moratorium on evictions for people who weren’t able to pay rent. In April, he extended the moratorium through June 4. But under the eviction moratorium, people will still accrue debt and are expected to pay the rent owed after the moratorium is lifted.

Several nonprofits have rental assistance programs in place to help people pay their rent and avoid eviction, but with a growing need, those programs have been overwhelmed.

United Way of King County last month launched an expanded rental assistance program with a $5 million investment to help people behind on their April rent. Within days, the program had thousands more applications than it had the funds to serve.

Last week, Inslee announced he was extending the state’s stay-at-home order through May 31 and would continue with a phased approach to reopening the economy. The state’s plan means many people will likely be out of work for some time longer, as industries gradually reopen at limited capacities over the next several months.

Inslee has also warned if the state sees another jump in cases and hospitalization, restrictions could be put back into place. The most recent data from the Washington State Department of Health shows more than 15,000 confirmed cases of the virus

Housing Market Showing Signs of Trouble Because of Coronavirus Pandemic

America’s housing market is showing the first signs of trouble because of the coronavirus pandemic.

By Jacob Passy, Market Watch

March started out as a strong month for the U.S. housing market — but by the second half of the month, the first indications that the coronavirus pandemic would weigh on home-selling activity began to emerge, according to a new report from Realtor.com.

In the weeks ending March 21 and March 28, the number of newly-listed properties fell by 13.1% and 34% respectively when compared with the same period a year ago, Realtor.com found. This is an indication that home sellers may be holding off on listing their properties right now.

The pace of home-price growth also slowed notably in the latter half of the month, according to the report. Home list prices were only up 3.3% year-over-year for the week ending March 21, and 2.5% for the following week. This represented the slowest pace of listing price growth since Realtor.com started tracking this data in 2013.

“Our inventory and listing data can provide some early insight into how housing markets may be impacted by COVID-19, but the situation and reactions to it are still rapidly evolving,” Realtor.com chief economist Danielle Hale wrote in the report.

“The U.S. housing market had a good start to the year. Despite still-limited homes for sale, buyers were buying and builders were building,” she wrote. “The pandemic and virus-fighting measures appear to be disrupting that initial momentum as both buyers and sellers adopt a more cautious posture.”

Real-estate firms have taken steps to brace for the impact of the coronavirus pandemic. So-called iBuyers including Zillow US:ZG and Redfin US:RDFN that purchase homes from sellers and then sell them for a profit had wound down their home-buying operations in anticipation of an economic downturn. Real-estate brokers, incuding Redfin and Re/Max US:RMAX , had also shifted toward virtual home tours as open houses became verboten in the wake of social-distancing recommendations.

And other recent reports have shown additional signs of a slowdown in the housing market. LendingTree US:TREE released an analysis of Google US:GOOG search data analyzing the popularity of the search term “homes for sale” across the country’s 50 largest metro areas. Searches for “homes for sale” have fallen across all 50 cities in the study from their peak levels in 2020 thus far.

LendingTree estimated that these Google searches could drop some 63% compared with last year if the impact of the COVID-19 outbreak remains substantial for the next two months. A drop in web searches could presage a decline in home sales.

Another sign that home sales will slump this spring: Mortgage applications. The volume of mortgage applications for loans used to purchase homes was down 24% compared with a year ago for the week ending March 27, according to data from the Mortgage Bankers Association. That’s in spite of mortgage rates being near historic lows. Comparatively, the volume of refinance applications was 168% higher than a year ago.

Before the coronavirus pandemic flared up, the U.S. housing market was on relatively solid footing. While the number of homes for sale remained low — constraining sales activity to an extent — demand among buyers was still quite high. Low mortgage rates had fueled an early start to the spring home-buying season, with homes selling four days faster in March when compared with 2019 levels, Realtor.com found.

The jump in jobless claims has stoked concerns of a repeat of the Great Recession and the foreclosure crisis that preceded it. But housing economists argue that this is unlikely to be the case.

“While housing led the recession in 2008-2009, this time it may be poised to bring us out of it,” Mark Fleming, chief economist for title insurance company First American Financial Corporation US:FAF , wrote in a report this week.

Unlike in the 2000s, the housing market in the U.S. is not overbuilt, Fleming argued, making it less likely that a large swath of vacant properties will crater the home values for homeowners. Rising home values and stricter lending standards have also meant that homeowners are sitting on historically high amounts of home equity.

“The housing market will not go unscathed, as consumer confidence and a strong labor market are essential in the decision to purchase a home,” Fleming wrote. “Yet, this time, housing is a casualty of a public health crisis turned economic, not the cause of an economic crisis.”

Rent Is Too High In U.S. Cities

The rent is just too darn high in these U.S. cities

By Adriana Belmonte,Yahoo Money

The cost of rent in the U.S., particularly in certain metro areas, is too darn high.

Nearly half of U.S. rental households are spending more than the recommended 30% of their income on rent, according to a report from Apartment List. (The national rate went from 49.5% in 2017 to 49.7% in 2018.)

And according to Apartment List, “in 19 of the nation’s 25 largest metros, a household earning the median renter income would be cost-burdened by the median rent. Of the 100 largest metros, the median renter would be burdened in 64 metros.”

Among the biggest metros in the U.S., Miami has the highest cost burden rate at 62.7% — this means that 62.7% of its renters are spending more than the recommended 30% on rent. Not far behind is New Orleans at 60.1% The two largest metros in the U.S. by population, New York and Los Angeles, are at 52.2% and 56.9% respectively. Given their size, NYC and LA house the highest number of cost-burdened individuals.

“Certainly, the worst offenders — places like Los Angeles, Boston, San Diego, Miami — these are places where it’s not always easy to build as many houses as you’d like, but also their economies have been very strong, so the increases in rental [costs] become an unfortunate byproduct of that,” Igor Popov, chief economist at Apartment List, told Yahoo Finance.

By state, Florida has the highest cost burden rate at 56.5%. Other high cost-burdened states include New York, New Jersey, California, Colorado, Louisiana, and Connecticut — notably places along the coasts.

“We’re seeing that especially coastal cities — where adding new housing is difficult but economies are booming — those are the places where affordability issues are stacking up the most,” Popov said. “With that said, it is a national problem so even cities that aren’t necessarily in the housing affordability debate every day still have a lot of renters who are struggling.”

Because of high rents in many of these cities, residents often turn to surrounding areas to reside for more financially feasible places to live. This is the case of Riverside, Calif., a city near Los Angeles, where the median rent accounts for approximately 36% of a person’s income.

“Riverside is actually seeing a lot of people who are migrating from the LA metro in search of more affordable options, but that demand is, in turn, driving up the price there as well,” Popov said.

‘I guess we went in the wrong direction’

Supply and demand wasn’t the only factor that affected the increase in rent-burdened households last year. Rental increases also outpaced wage growth in 2018, the first time since 2011.

“There’s a lot of factors for why that might be but on a very macro level, I think this economic expansion has been one that hasn’t [benefited] low-income households very well,” Popov said. “That shift was a bit surprising especially given that … we’ve seen a lot of high-income renters flooding in the rental market. In some ways, they’ve been padding the stats, so to speak, because they’ve come in and they’ve typically been able to afford their rentals, so they’ve made it look like things are getting better but this year, I guess we went in the wrong direction.”

From 2017 to 2018, there were nearly 300,000 more cost-burdened rental households throughout the U.S., which Popov described as “a big change in the number of people that have gone from being able to afford their housing to technically living in a place that they’re unable to afford.”

“You risk them moving away and that could both affect the economy and the economic diversity of a city when the renters move away, and you risk not being able to attract talent to grow the economy, and you risk not having basically that next generation being able to come and move to the city to keep it vibrant,” Popov said. “I think of this on a city-by-city basis and on that level, there are a lot of markets where maybe the flag isn’t being raised for the first time — maybe it’s been raised for a while.”

Seattle Now Most Expensive Renter City, Outside California, Census Data Shows

July 30, 2019 at 6:00 am

By Gene Balk

Seattle Times Columnist

Seattle rents are on the rise again, after a brief respite. And that shouldn’t come as much of a surprise, because that’s what rents do around here — they go up, and they go up fast.

At the start of the decade, Seattle ranked just outside the Top 10 among big U.S. cities for the cost of rent and utilities. Now, we’re fourth. In fact, Seattle has become the nation’s most expensive big city for renters outside of California.

According to survey data from the U.S. Census Bureau, the median rent and utilities paid in the city of Seattle hit $1,555 in 2017, across all sizes and types of rental units. Among the 50 most populous U.S. cities, the only three where renters pay more are San Jose, San Francisco and San Diego.

The median rent is the midway point — half of all renters pay more, and half pay less.

The last time I wrote about this date, which was in 2014,, it was to report that Seattle had broken onto the list of Top 10 most expensive big cities for renters for the first time. That seemed like a big deal at the time, but it turns out, that was only the beginning of our ascent up the rankings.

Since then, we’ve knocked off a bunch of high-price cities, climbing past Los Angeles, Washington, D.C., and even New York. Then, last year, we leapfrogged Boston to hit fourth place behind those three absurdly expensive Golden State locales. Can you imagine how high rents would be here if it didn’t drizzle for nine straight months a year?

And Seattle actually ranks ahead of San Diego as the third most-expensive city for renters if you only look at the costs for one-bedroom units, with a median of $1,455.

There are a lot of ways to measure rental costs, and the census data is very different from those reports that just look at market-rate apartments. The census data is based on surveys, and it presents a current snapshot of renters across the spectrum — from tenants in luxury units to those in older-stock housing, who are paying significantly less than market rate. It includes people in affordable and subsidized housing, and even people who get a break in their rent in exchange for doing work around the building.

In some cities, it also includes people living in rent-controlled and rent-stabilized apartments — not in Seattle, of course, since we don’t have any of those. But New York, for example, has more than 1 million such units, and San Francisco also has a substantial number. That’s part of the reason the census data for those two city’s median rents is lower than you might think.

Bringing rent control to Seattle is one of the signature issues for City Councilmember Kshama Sawant.

The census data represents what’s called “gross rent.” That means that the cost of utilities, if they are not covered by the landlord, are included in the dollar amount. This allows for a better comparison of the rental costs between units where the tenants have to pay the utilities separately and those where the utilities are folded into the rent.

In Seattle, at the start of the decade, the median rent and utilities was just $990. The increase of $565 by 2017 ranks second among the 50 largest cities, only behind San Jose, where the costs went up by $738.

Seattle also ranks second if you look at the increase in rents as a percent change — our 57% jump in rental costs since 2010 ranks just behind Denver’s 59%.

Rent and utilities have gone up in every big city, which isn’t surprising. But there are places it’s been much gentler for renters than in Seattle. In both Detroit and New Orleans, the increases have been less than 10% since the start of the decade. Virginia Beach, Memphis and Milwaukee are only a bit above 10%.

Many Seattle tenants have certainly been slapped with severe rent hikes, which has contributed to the city’s fast-rising median. But there’s another factor that’s probably more significant: We’ve had an unprecedented apartment construction boom that’s added thousands of high-priced new luxury units to our housing stock. Seattle has a higher precentage of new-construction apartments than any other big U.S. city.

Of course, rents wouldn’t be going up so fast in Seattle if incomes weren’t leading the way. The new class of renters in Seattle are higher income, and they can afford to pay more.

The Census Bureau also produces data that compares median rents and utilities with income, and it illustrates how the two have kept pace with each other. In 2017, the median rent in Seattle ate up 29% of household income. That’s basically unchanged from where it was in 2010.

And while rents are a lot lower in Miami or Detroit, for example, so are incomes. The median rent in those cities is nearly 40% of household income.

But that’s small consolation if you’re among the folks who don’t work in tech or some other high-paying industry, and you’re trying to make ends meet in Seattle. Census data shows that in nearly one out of five rental units in the city, at least half of the household income goes just to paying the rent and utilities.

Speaking At YGB Conference

Speaking At YGB Conference U.W. Law School

I was a panelist at the YGB Conference at U.W. Law School on Saturday, February 23rd. I was afforded the opportunity to speak with a group of high school students regarding my educational journey and career path and to have lunch with them. Their curiosity and intelligence made me very hopeful about the future.

Speaking In Small and Solo Practice Class

Once again I was afforded the opportunity to speak in the Small and Solo Practice Class at the University of Washington School of Law, my alma mater.  Interactivity and questions are on the upswing and this is welcome, because it means that students are increasingly engaged. The dynamic nature of the legal profession and the need for adaptability are frequent topics of discussion.

U.S. Mortgage Applications Down

U.S. mortgage applications fell last week as home borrowing costs rose to their highest levels in more than seven years. The Market Composite index, which measures the volume of mortgage loan applications, fell 1.7% on a seasonally adjusted basis for the week ending October 5, according to a release from the Mortgage Bankers Association. Lower demand for mortgage refinances hampered mortgage lending, with refinance volume down 3% last week.

The Housing Market Is Slowing Down And That’s A Bad Sign For The Economy

By Amanda Fung

Yahoo Finance

A number of key reports on housing data released in recent days are on a downward trend. Both existing and new home sales in the U.S. were down in June, and their previous month’s results were revised lowered. The lackluster sales data caused homebuilder confidence to plummet to its lowest level in 10 months Wednesday.

“The housing market has been losing momentum for several months,” said Stifel Chief Economist Lindsey Piegza, referring to a slump in housing starts, building permits, and sales during the second quarter. “Housing is a solid gauge of the overall health of the economy; weakness in housing raises a large red flag regarding the sustainability of domestic growth heading into the second half of the year.”

The U.S. Commerce Department said the sale of new U.S. single-family homes in June fell 5.3% to a seasonally adjusted rate of 631,000 — an eight-month low — and the previous month’s results were revised lower. While new home sales only account for 10% of the market, the latest existing home sales results weren’t any better.

Existing home sales fell for the third straight month in June. Existing home sales slipped 0.6% to a seasonally adjusted annual rate of 5.38 million units last month, down 2.2% from June 2017, according to the National Association of Realtors (NAR). May’s sales pace was revised down to 5.41 million units from 5.43 million units.

“Existing home sales help drive other sectors of the economy including consumer confidence and spending, as well as construction and lending activity,” Piegza said.

“Chronically low inventory is choking sales,” said Jonathan Miller, president and CEO of Miller Samuel Inc., a real estate appraisal firm, adding that higher-cost housing markets such as New York City and San Francisco are seeing a slowdown in sales more so because of homebuyers’ uncertainty over the Trump administration’s federal tax reform.

Inventory levels have fallen for three consecutive years and for eight of the past 10 years, according to Lawrence Yun, NAR’s chief economist. At the current sales pace, it would take 4.3 months to exhaust the total inventory of homes for sale; six months is considered a balanced market.

“Throw in rising mortgage rates… that isn’t helpful in terms of sales activity,” Miller said. While the rate increases are currently nominal for Americans living paycheck to paycheck, it’s enough to sway a person’s decision to make that home purchase. On Thursday, the average rate on a 30-year, fixed-rate mortgage rose to 4.54% from 4.52%, a week earlier, according to mortgage buyer Freddie Mac, adding that long-term loan rates have been running at their highest levels in seven years.

“Affordability pressures are increasingly a concern in many markets, as the combination of continuous price gains and higher mortgage rates appear to be giving more prospective buyers a pause,” said Freddie Mac Chief Economist Sam Khater in a press statement.

The slow sales activity is particularly perplexing because spring tends to be the busiest time of year since it’s known as buying season. Moreover, the economy has been humming along: The U.S. economy grew by an annualized rate of 4.1% in the second quarter — the fastest growth since the third quarter of 2014. 

The housing affordability crisis

The problem is wage growth. When you adjust for inflation, wages haven’t risen in a decade, experts note. As the lack of inventory drives home prices up, affordability becomes an issue. Wages aren’t keeping pace and consumers are priced out of markets by 6%-8% — depending on which home price index you look at, in terms of home values and wages, according to Piegza.

Median home prices in the U.S. have increased annually for 76 straight months (a little over 6.3 years), according to the NAR. In June, the median price of an existing home was $276,900, up 5.2% from the same time last year.

But experts expect prices to follow other housing data. “Home prices are the kaboose of the train,” Miller said. “You’ll’ see prices soften this year.”

We may already be seeing signs of prices leveling off. Standard & Poor’s said that its S&P CoreLogic Case-Shiller national home price index posted a 6.4% annual gain in April, down from 6.5% from a month earlier. May results will be released July 31. Meanwhile, the FHFA House Price Index rose 0.2% in May, one-tenth of a percentage point less than expected, according to Bloomberg.

“While we’re not seeing the rug pulled out of the housing market, there are clear signs and a reason for caution,” Piegza said.

 

U.S. Housing Market Headed For Worst Slowdown In Years

by Prashant Gopal and Shobhana Chandra

Bloomberg

They were fed up with Seattle’s home bidding wars. They were only in their late 20s but had already lost two battles and were ready to renew with their landlord. Then, in May, their agent called.

Suddenly, Redfin’s Shoshana Godwin told the couple, sellers were getting jumpy, even here in the hottest of markets. Homes that should have vanished in days were sitting on the market for weeks. There was a three-bedroom fixer-upper just north of the city going for $550,000, down from more than $600,000. They made the leap in early June and had closed by the end of the month, for list price.

The U.S. housing market — particularly in cutthroat areas like Seattle, Silicon Valley and Austin, Texas — appears to be headed for the broadest slowdown in years. Buyers are getting squeezed by rising mortgage rates and by prices climbing about twice as fast as incomes, and there’s only so far they can stretch.

“This could be the very beginning of a turning point,” said Robert Shiller, a Nobel Prize-winning economist who is famed for warning of the dot-com and housing bubbles, in an interview. He stressed that he isn’t ready to make that call yet.

The Data

A slew of figures released over the past three days gives ample evidence of at least a cooling. 

Existing-home sales dropped in June for a third straight month. Purchases of new homes are at their slowest pace in eight months. Inventory, which plunged for years, has begun to grow again as buyers move to the sidelines, sapping the fuel for surging home values. Prices for existing homes climbed 6.4 percent in May, the smallest year-over-year gain since early 2017, and have gained the least over three months since 2012, according to the Federal Housing Finance Agency.

“Home prices are plateauing,” said Ed Stansfield, chief property economist at Capital Economics Ltd. in London. “People are saying: Let’s just bide our time, there’s no great rush. If we wait six or nine months we’re not going to lose out on getting a foot on the ladder.” That means “we’re now looking at a period in which prices move more or less sideways, or increase no more quickly than growth in incomes, over the next few years.”

Stansfield projects a 5 percent gain this year and a 3 percent increase in 2019. That compares with 10.7 percent in 2005, shortly before the crash.

Supply Lines

Some of the most expensive markets, where sales are falling under the weight of prices, are now seeing substantial increases in supply, according to Redfin Corp. In San Jose, California, inventory was up 12 percent in June from a year earlier. It rose 24 percent in Seattle and 32 percent in Portland, Oregon. Those big jumps are from low numbers, so the housing crunch is still a serious problem.

“Inventory has increased quite a bit,” Godwin, the Seattle agent, said. “We’re seeing less competition.”

Dustin Miller, an agent with Windermere Realty Trust in Portland, said he’s trying to manage sellers’ expectations, something he hasn’t had to do since the end of the last housing boom. One customer, a baby boomer moving to a new home across the state, expected to have buyers fighting over her house. She got one bid, below her asking price.

“Buyers want to shop and take some time, as opposed to having to rush and throw offers in,” Miller said. “It’s the market correcting itself. At some point, you hit a peak of momentum, and then things level off.”

This new wariness was noticeable in the latest consumer-sentiment data from the University of Michigan. In its preliminary July survey, 65 percent of Americans said it’s a good time to buy a home, the lowest since 2008, when the economy was still in recession.

Still, market watchers note that the housing sector has strong support from a healthy labor market and steady economic growth, which indicates a stabilizing trend for home prices rather than anything close to the experience of the crisis, when property values plunged.

“The rate of home sales, new and existing, has probably peaked,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “But it’s not going to roll over. It will gently decline.”

New Record

S&P CoreLogic Case-Shiller data hint at the softening. The 20-city index of property values rose 6.6 percent in the 12 months ending in April. After seasonal adjustments, the gauge posted its smallest monthly increase in 10 months, with New York, San Francisco and Washington reporting declines.

Homeownership still remains out of reach for many Americans, especially for first-time and younger buyers. For existing homes, the median price climbed in June to a record $276,900, while properties typically stayed on the market for 26 days, unchanged from the prior three months, according to the National Association of Realtors.

“Affordability is becoming a major headache for homebuyers,” said Lawrence Yun, the association’s chief economist. “You are seeing home sales rising in Alabama, where things are affordable. But in places like California, people aren’t buying.”

In addition, “no one knows how far and how fast” borrowing costs may rise as the Federal Reserve raises interest rates, Stansfield said. Lenders and borrowers alike are less likely to let credit spiral out of control than in 2005 and 2006. And with financing tighter and wage gains in check, “there’s not much scope for prices to continue to increase sustainably” at recent rates, he said.

The cooling, in turn, could curb housing starts, “because builders tend to only build what they think they can confidently sell,” Stansfield said. At the same time, he said, “it will decrease the risk of a bust.”

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