Rental Hous. Ass'n v. City of Seattle

Decision Date21 March 2022
Docket Number82469-4-I
Citation506 P.3d 669
Parties RENTAL HOUSING ASSOCIATION; Elena Bruk; Scott Dolfay; CJD Investments, LLC; Zella Apartments, LLC, Appellants, v. CITY OF SEATTLE, Respondents.
CourtWashington Court of Appeals

PUBLISHED OPINION

Andrus, A.C.J.

¶1 In early 2020, the Seattle City Council passed three ordinances: one limiting a landlord's ability to evict a tenant for nonpayment of rent during three winter months, one prohibiting a landlord from evicting a tenant for nonpayment of rent for six months after the end of the COVID-19 civil emergency, and one requiring the landlord to accept installment payments of unpaid rent for a certain period of time after the end of the civil emergency. The Rental Housing Association of Washington (RHAWA) and several landlords challenge the constitutionality of these ordinances.

¶2 On summary judgment, the trial court concluded that a provision banning the accrual of interest on unpaid rent during the civil emergency and for one year thereafter was preempted by state law. It upheld the remaining provisions of the three challenged ordinances.

¶3 We conclude that the ordinance prohibiting a landlord from evicting a tenant for nonpayment of rent for six months after the end of the civil emergency, without affording the landlord the opportunity to challenge a tenant's self-certification of a financial hardship, violates the landlord's right to procedural due process. We otherwise affirm.

FACTUAL BACKGROUND

¶4 In February 2020, the Seattle City Council enacted Ordinance 126041, now codified as SMC 22.205.080, precluding certain evictions during the winter months ("winter eviction ban"). The winter eviction ban provides:

[I]t is a defense to eviction if:
A. The eviction would result in the tenant having to vacate the housing unit at any time between December 1 and March 1; and
B. The tenant household is a moderate-income household as defined in Section 23.84A.016;1 and
C. The housing unit that the tenant would have to vacate is owned by a person who owns more than four rental housing units in The City of Seattle. For purposes of this subsection 22.205.080.C, "owns" includes having an ownership interest in the housing units.

SMC 22.205.080(A)-(C). The stated goal of the ordinance is to "protect the public health, safety, and welfare by reducing the number of individuals and families entering into homelessness during the wintertime" and to lower "the number of people at higher risk of developing exposure-related conditions."

¶5 In March 2020, the COVID-19 pandemic began. Governor Jay Inslee and Seattle's then Mayor Jenny Durkan issued emergency declarations banning residential rental evictions. Shortly thereafter, the City Council passed Ordinance 126368 codifying the mayor's COVID-19 eviction ban. SMC 22.205.100 provides:

A. Subject to the requirements of subsection 22.205.100.B, it is a defense to eviction if the tenant fails to pay rent due during the civil emergency proclaimed by Mayor Durkan on March 3, 2020, [that] the tenant has suffered a financial hardship during the civil emergency proclaimed by Mayor Durkan on March 3, 2020, and the reason for terminating the tenancy is:
1. The tenant fails to comply with a 14-day notice to pay rent or vacate pursuant to RCW 59.12.030(3) for rent due during the civil emergency proclaimed by Mayor Durkan on March 3, 2020; or
2. The tenant habitually fails to pay rent resulting in four or more pay-or-vacate notices in a 12-month period ....
B. The tenant may invoke the defense provided in subsection 22.205.100.A only if the tenant submits a declaration or self-certification asserting the tenant has suffered a financial hardship and was therefore unable to pay rent during the civil emergency proclaimed by Mayor Durkan on March 3, 2020.

Mayor Durkan extended the civil emergency and eviction moratorium to January 15, 2022.2 After taking office in January 2022, the newly elected mayor, Bruce Harrell, extended the moratorium to February 14, 2022,3 then again to February 28, 2022.4 This provision precluded residential evictions in Seattle if tenants could establish they suffered a financial hardship as a result of the pandemic. The Landlords do not challenge this eviction restriction.

¶6 The City Council, however, took the eviction ban a step further. Recognizing that the "economic impacts from the COVID-19 emergency are likely to last much longer than the civil emergency itself," on May 4, 2020, the City Council enacted Ordinance 126075, extending the eviction ban for an additional six months after the mayor lifts the eviction moratorium ("six-month eviction ban extension"). Ordinance 126075, codified as SMC 22.205.090, is similar but not identical, to SMC 22.205.100. It provides:

A. Subject to the requirements of subsection 22.205.090.B, it is a defense to eviction if the eviction would result in the tenant having to vacate the housing unit within six months after the termination of the Mayor's eviction moratorium, and if the reason for terminating the tenancy is:
1. The tenant fails to comply with a 14-day notice to pay rent or vacate pursuant to RCW 59.12.030(3) for rent due during, or within six months after the termination of, the Mayor's residential eviction moratorium; or
2. The tenant habitually fails to pay rent resulting in four or more pay-or-vacate notices in a 12-month period ....
B. The tenant may invoke the defense provided in subsection 22.205.090.A only if the tenant has submitted a declaration or self-certification asserting the tenant has suffered a financial hardship and is therefore unable to pay rent.

Notably, the six-month eviction ban extension drops the requirement that the tenant prove they suffered a financial hardship during the COVID-19 civil emergency. While the tenant must submit a "self-certification" to assert a financial hardship, there is no provision requiring the tenant to actually prove the existence of such a hardship, as there appears to be under SMC 22.205.100.

¶7 Then, on May 11, 2020, the City Council enacted Ordinance 126081, the "payment plan ordinance."5 It provides:

A. A tenant who fails to pay rent when due during, or within six months after the termination of, the civil emergency proclaimed by Mayor Durkan on March 3, 2020, may elect to pay such overdue rent in installments. The tenant shall pay one month or less of overdue rent in three consecutive, equal monthly installments. The tenant shall pay over one month and up to two months of overdue rent in five consecutive, equal monthly payments. The tenant shall pay over two months of overdue rent in six consecutive, equal monthly payments. Any remainder from an uneven division of payments will be part of the last payment. The tenant may propose an alternative payment schedule, which, if the landlord agrees to it, shall be described in writing and signed by the tenant and landlord and deemed an amendment to any existing rental agreement.
B. No late fee, interest, or other charge due to late payment of rent shall accrue during, or within one year after the termination of, the civil emergency proclaimed by Mayor Durkan on March 3, 2020.
....
E. Failure of the owner to accept payment under the installment schedule provided in subsection 2.A of this ordinance is a defense to eviction.

Ord. 126081 sec. 2. The City Council stated that the purpose of both the six-month eviction ban extension and this payment plan requirement is to reduce financial instability and the risk of homelessness among tenants in Seattle as a result of COVID-19.

¶8 In September 2020, RHAWA and several Seattle landlords brought suit challenging the constitutionality of these ordinances. On cross-motions for summary judgment, the trial court largely upheld the ordinances, but ruled that state law preempts the payment plan ordinance's ban on the accrual of interest on unpaid rent during and for a year after the civil emergency. The Landlords appealed and the City cross-appealed the invalidation of the interest accrual ban.

ANALYSIS

¶9 We review a summary judgment order de novo and perform the same inquiry as the trial court. Borton & Sons, Inc. v. Burbank Props., LLC, 196 Wash.2d 199, 205, 471 P.3d 871 (2020). Constitutional questions are issues of law and are also reviewed de novo. City of Redmond v. Moore, 151 Wash.2d 664, 668, 91 P.3d 875 (2004).

¶10 The Landlords present facial constitutional challenges to the ordinances. In facial challenges, we consider only if the ordinances’ language violates the constitution and not whether the ordinance would be constitutional "as applied" to the facts of a particular case. JJR Inc. v. City of Seattle, 126 Wash.2d 1, 3-4, 891 P.2d 720 (1995). We reject a facial claim "if there are any circumstances where the [challenged law] can constitutionally be applied." Wash. State Republican Party v. Wash. State Pub. Disclosure Comm'n, 141 Wash.2d 245, 282 n.14, 4 P.3d 808 (2000).

A. Preemption

¶11 The Landlords first argue that the ordinances conflict with and are therefore preempted by state law. The trial court ruled that state law only preempts the payment plan ordinance's ban on interest accruing on unpaid rent due during and within one year of the termination of the mayor's civil emergency proclamation. We agree with the trial court and conclude that the remaining...

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