Washington Gov. Bob Ferguson signs law capping annual rent increases at 10%; legislation exempts new construction for first 12 years, public housing, owner-occupied small complexes

May 8, 2025 (Washington State Standard) –

Gov. Bob Ferguson , podium, makes remarks during a bill signing event on May 7, 2025 , where he signed a law that will cap rent increases for many residential tenants across Washington at 10% or less annually. (Photo by Jake Goldstein-Street / Washington State Standard)

SEATTLE — Washington landlords can no longer raise rents by more than 10% per year under landmark legislation Gov. Bob Ferguson signed into law Wednesday.

Effective immediately, House Bill 1217 caps residential rent hikes during a 12-month period at 7% plus inflation, or 10%, whichever is lower. The limit will last 15 years. The bill also restricts manufactured home rent increases to 5% with no expiration date.

“I’m confident that this legislation is going to work for everybody in our state,” Ferguson said Wednesday at Blake House, the first affordable high-rise apartment building constructed in Seattle in half a century, which opened in 2023. “Too many folks are getting priced out, and we can’t have that, right? That’s not an option.”

Rent increases are also prohibited for the first year of a tenancy under the new law. But when a renter moves in, landlords can set the initial rate however they please.

New construction is not subject to the cap for its first 12 years. Public housing authorities, low-income developments, and duplexes, triplexes and fourplexes in which the owner lives in one of the units are also exempt.

Rent hike notices are now required 90 days before they go into effect, up from 60 days under previous law.

If a landlord raises rent above the cap without an exemption, the renter must give the landlord a chance to fix the error or can terminate their lease with 20 days’ notice. A tenant or the state attorney general can bring litigation to enforce compliance with the new law. The attorney general can recover up to $7,500 per violation.

Democrats believe the limit will give renters greater predictability in one of the most expensive states to live in, while Republicans think it will chill development and force landlords to sell their properties because they can’t keep up with maintenance costs and property taxes.

Last month, Rep. Sam Low , R- Lake Stevens , argued the policy is “going to be devastating for our housing providers, and we need housing providers to be a part of the solution in the housing crisis that we have.”

Sean Flynn , the executive director of the Rental Housing Association of Washington , said “today is a tragedy for the industry and for tenants across the state,” adding that the law will lead to higher prices, less supply and worse quality housing. 

The association is exploring a legal challenge. 

Flynn also took issue with the emergency clause allowing the bill to go into effect immediately, since the state Department of Commerce hasn’t reported its required calculation showing the maximum allowable rent increase with inflation. The law states Commerce must report that number on June 1 .

The legislation was part of a suite of bills Ferguson signed Wednesday, aiming to clear obstacles to construction, increase homeownership opportunities, pave the way for redevelopment of commercial property into residential and provide a modicum of tax relief. 

Other bills focused on promoting housing development around transit stops and allowing for more lot splitting remain to be signed.

It was a long road to the governor’s desk for the uber-controversial rent cap proposal.

After clearing the House, the Senate raised the cap from an initial 7% to 10% plus inflation in a dramatic floor vote, to the dismay of progressive Democrats . The two chambers then negotiated to come up with the compromise that eventually passed on the final day of the legislative session, but not before a procedural fiasco delayed the final votes.

“Today, we put common sense guardrails on our rental housing market so that hard working families and older adults don’t get unchecked excessive rent increases,” said bill sponsor Sen. Emily Alvarado , D- Seattle . “This law is a good beginning. It’s long overdue, and it’s urgently needed.”

Ferguson declined to say if he would’ve preferred the initial 7% cap.

The legislation was a top priority for Democrats after a similar bill stalled in the Senate last year.

Behind the scenes, Ferguson’s staff worked with lawmakers for months to get the bill across the finish line. But the governor himself declined to confirm support publicly until last week.

Other newly signed housing laws

Parking

Advocates believe one of the biggest impediments to housing construction in Washington is local parking requirements that drive up costs and take up valuable space.

Now, cities and counties won’t be able to mandate more than one spot for every two units under Senate Bill 5184, also signed Wednesday. They also can’t require builders to include more than one space per single-family home. 

As for commercial space, jurisdictions can’t force developers to build more than two parking spots per 1,000 square feet.

And no parking minimum requirements are allowed for existing buildings being changed from nonresidential to residential, homes under 1,200 square feet, commercial spaces under 3,000 square feet, affordable housing, child care facilities or senior housing. 

The rules in Senate Bill 5184 don’t affect cities with under 30,000 residents.

The law, considered one of the strongest state-level efforts to relax parking requirements in the nation, goes into effect in late July.  

Condo construction

House Bill 1403 looks to reduce liability risks for developers of condominiums, which can serve as a path into homeownership for first-time buyers.

Builders have shied away from condo construction in the past out of fear of litigation due to the state’s liability laws, seen by some as overly protective of consumers. 

The bill passed the Legislature with near-unanimous bipartisan support.