(The Center Square) – Spokane is considering whether to extend residential rental protections to commercial properties, a move that could lead to legal battles and potentially fines for owners of vacant properties.
The City Council has passed two rental protection measures in the past few months, first extending the notice period for rent increases and then legislating tenants' right to air conditioning. Now, one council member wants to define and regulate commercial property.
City Councilman Zach Zappone sent two draft ordinances to several stakeholders yesterday to ask for their input. The first is similar to a previous ordinance, extending the notice period before rent increases, but this time it applies to commercial properties.
“[It] “We define commercial leases by square footage, monthly base rent, whether they are located within a nearby retail zone (Garland, Monroe, South Perry, etc.) and the total monthly base rent plus additional monthly rent,” Zappone said in an email. “…The goal here is to exclude large corporations.”
The draft notes that Spokane is home to about 10,000 businesses with an average of 10 or fewer employees, and that rapid rent increases amid limited vacancy rates are driving many of them out of business.
Similar to recent housing ordinances, the draft bill would set a minimum notice period of 120 days for rent increases of 3% or less, and expand it to 180 days for increases of more than 3%.
Gordon Hester, president and CEO of local property management company Kymur Hagood, said in an email that because landlord-tenant law is different from commercial contract law, the ordinance “would be in direct violation of the contract law that applies to leases negotiated in good faith between two entities.”
“It's a lot riskier for me to sign a lease with a tenant under these caps,” Hester told The Center Square in a call. “The higher the risk, the higher the cost, so it means higher rent payments up front.”
Hester called it another example of the city of Spokane stifling business and development. Construction costs, operational costs, security costs, taxes and other related fees have all skyrocketed in recent years, putting increasing strain on property owners, he said.
“I would say, 'Go back to the city and put a cap on everything that goes on in the city. Limit all expenses to 3 percent, including fire and utilities,'” Hester said. “If you want to limit increases to my renters, have that same courage. You control the city's expenses more than I do my expenses.”
Shea Blackwell, legislative aide to City Councilman Michael Cathcart, provided the explanation.
“It is still in the early stages of drafting and the legal department has not yet completed its review so Mr Cathcart will be seeking it,” Blackwell said in a message to The Centre Square. “The item has not yet been circulated to council, however a working draft has been circulated to community groups. [the Downtown Spokane Partnership]Cathcart serves on the organization's board of directors and policy committee.”
Another of Zappone's proposed ordinances would establish a foreclosure and vacant commercial property registry program and charge owners $350 per year for each vacant lot.
The ordinance further states, “Bailiffs may also initiate the registration process. Registration fees, to be paid by the City, may be charged against the property and it may be seized.”
The new program includes an enforcement section, making owners responsible for registering annually, paying fines for each property annually and maintaining the premises regularly.
“[The ordinance adds] “Minimum property maintenance requirements to ensure there are no weeds, dead plants, trash, junk, graffiti, etc.,” Zappone said in an email. “You will also be required to secure water points and secure your property from unauthorized persons.”