How Washington’s New Rent Control Law Could Make Housing Even Less Affordable

By Brian Side | Upside Properties | Seattle Real Estate Insights

Washington State has just passed new rent control legislation—House Bill 1217—in an effort to protect tenants from rising housing costs. With affordability concerns on the rise and demand for housing still outpacing supply, lawmakers are under pressure to deliver solutions. But while capping rent increases may sound like a quick fix, there’s more to this policy than meets the eye.

As a real estate professional and investor who’s seen multiple housing cycles play out across Seattle and the greater Puget Sound area, I’ve learned to look at housing issues through both a personal and economic lens. In this post, I’ll break down what the new law means, how it ties into the broader West Coast rent control movement, and what it could mean for availability, affordability, and future housing development.

The Problem Everyone Agrees On: Rent Is Too High

There’s no debate here. Across the board, renters are feeling the squeeze. In cities like Seattle, Bellevue, and Tacoma, monthly rents have nearly doubled over the past decade, according to data from Zillow and the U.S. Census Bureau. With interest rates remaining elevated and inflation impacting everything from groceries to gas, housing costs have become a top issue for Washington families.

Enter House Bill 1217, which limits rent increases to the lesser of 7% plus inflation or 10% per year. The goal: give renters predictability and a buffer against being priced out overnight.

But Does Capping Rent Solve the Problem—or Create New Ones?

While this legislation might offer short-term relief, history shows that rent control often leads to long-term supply issues. Here’s why:

• Developers scale back new construction when future rent revenue is uncertain.

• Landlords remove units from the market or convert them to owner-occupied housing or short-term rentals.

• Quality declines as property owners defer maintenance due to tighter margins.

This isn’t theoretical. We’ve seen it happen.

• In San Francisco, strict rent control policies led to a 15% reduction in available rentals as landlords exited the market or redeveloped their buildings.

• In New York, decades of price caps led to widespread disrepair and an uneven market where long-term tenants pay drastically different rents from new arrivals.

Now, with Washington joining California and Oregon in imposing rent caps, the West Coast as a whole may face a multi-year decline in rental housing investment—at a time when we need it most.

Supply and Demand: The Unavoidable Economics

The laws of supply and demand don’t bend for policy. In fact, when rents are capped but demand continues rising and new construction slows, the result is almost always the same:

• Tighter rental markets

• Longer waitlists

• Stricter screening standards

• Higher non-rent fees (like deposits or parking) to compensate

Washington’s own Department of Commerce estimates that the state needs over 1 million new homes in the next 20 years. Rent control may feel like an immediate win for tenants, but if it discourages new construction or drives investment elsewhere, it could make the availability and affordability crisis even worse.

Is There a Better Way Forward?

If the goal is to protect renters while increasing supply, there are smarter levers to pull:

• Zoning reform to allow more duplexes, triplexes, and small multifamily projects in residential zones.

• Tax credits and subsidies for affordable and workforce housing developments.

• Public-private partnerships that encourage innovation in construction and financing.

None of these options are politically easy—but they are proven to work.

What It Means for Investors, Landlords, and Renters

For property owners: Now is the time to revisit your strategy. Expect more regulation, especially in urban centers. It’s crucial to stay compliant, while also exploring upgrades or property repositioning strategies.

For renters: This new law may give you short-term protection, but watch for changes in availability. If your current place is rent-controlled, hold onto it—but don’t be surprised if it becomes harder to find similar units in the future.

For buyers and developers: Uncertainty around policy often leads to hesitation. But for those with a long-term view, this could be a time to secure undervalued properties, especially if the broader market overreacts.

Conclusion: Good Intentions, Risky Outcomes

Washington’s rent control legislation was born out of real need—but solutions that feel good today can sometimes cause damage tomorrow. Without expanding supply, controlling prices just reshuffles the scarcity—often to the detriment of the very people we’re trying to help.

To fix our housing crisis, we need bold thinking, faster permitting, smarter zoning, and collaboration across public and private sectors. That’s the kind of future we should be building—one that creates more housing for everyone, not just freezes the shortage in place.

If you have questions about how this policy might affect your property or investment strategy, feel free to reach out. Let’s talk about smart moves in a shifting market.