Washington enacts statewide rent cap on residential rentals

 

Washington Enacts Statewide Rent Cap on Residential Rentals

Washington state has officially implemented a statewide rent control law with the passage of House Bill 1217, signed by Governor Bob Ferguson on May 7, 2025. This landmark legislation introduces rent stabilization measures aimed at providing stronger housing security for tenants across the state.

Below is a summary of the laws. Frankly, while there is a lot of talk on this, I don't think the caps are absurd. 

Under the new law, annual rent increases for most residential properties are capped at the lesser of 7 percent plus inflation or a hard cap of 10 percent. 

Manufactured and mobile home rents are subject to a lower annual cap of 5 percent, with this provision having no expiration date. The statewide rent cap takes effect immediately and is scheduled to remain in place for 15 years.

Additionally, the law prohibits landlords from raising rents during the first 12 months of a new tenancy. 

EXEMPTIONS: 

Certain property types are exempt from the new law, including 

a. newly constructed properties for the first 12 years after completion, 

b. owner-occupied duplexes, triplexes, and fourplexes, as well as 

c. public housing authorities and designated low-income housing developments.

and more importantly, COMMERCIAL REAL ESTATE. 

NEW NOTICE REQUIREMENTS

The law also tightens notice requirements, mandating landlords provide at least 90 days' written notice before any rent increase, an increase from the prior 60-day rule.

TENANT RIGHTS UPON DEFAULT

If a landlord imposes an unlawful rent increase beyond the allowed cap and the property does not qualify for an exemption, tenants have the right to provide notice of the violation. 

They may also terminate the lease with 20 days' written notice without penalty and may pursue legal action, including damages of up to $7,500 per violation recoverable by the Attorney General.

Supporters of the legislation argue that these measures are necessary to prevent excessive rent hikes and protect tenants from housing instability, especially amid ongoing affordability challenges. Critics, however, contend that the rent cap could discourage new housing development and may reduce investment in property maintenance.

Washington now joins Oregon and California as one of only three U.S. states with statewide rent control measures, signaling a growing legislative trend to address housing affordability concerns.

BOTTOM LINE: This will be interesting to see if it effects development. I don't think a 10% max increase is that absurd (especially with all these ADUs coming into play that will increase inventory). 

I'd say there will be some sort term hit on overall demand for multi-family, but in the long term, I don't see this as that big of an issue. If you told LLs now that they could buy a place and increase rents 10% a year, most would be thrilled. 

For more information on Washington Commercial Real Estate Investing, considering contacting a Snohomish County Commercial Real Estate Broker or contact me at information below. 

Scott Weitz

Weitz Commercial

Scott@weitzcommercial.com

Text: 206-306-4034