In an effort to limit predatory homebuying practices, the Seattle City Council Tuesday passed a bill adding new requirements on anyone trying to convince homeowners to sell their homes that haven’t been listed for sale.
The bill, introduced by Mayor Bruce Harrell as a piece of a broader suite of housing-related legislation moving through city government, is a sort of Miranda rights for homeowners being solicited by house flippers.
Would-be buyers must offer owners an independent appraisal, as well as information about how to obtain an up-to-date valuation on their home, legal advice and a real estate agent. The seller could also back out of any deal within 10 days. The bill grants sellers the right to sue the buyer in civil court.
Violators would be subject to fines up to $10,000.
The goal is to make it harder for buyers to take advantage of homeowners who may be in a desperate financial situation and who may accept a low-ball offer on their most valuable asset.
“For far too long, these practices have targeted our senior, low-income, and Black and Brown homeowners, pushing them out of their communities and robbing them of opportunities to build generational wealth,” Harrell said Tuesday.
It’s unclear how pervasive the issue is. Most Seattle homeowners have likely had flyers left on their door at some point, though that is not necessarily a predatory practice.
Spokesperson for Harrell, Callie Craighead, said they’ve only collected anecdotal stories, particularly from Black homeowners. Now that the bill has passed, however, the city should be able to collect better records.
Stories of solicitations were particularly frequent in the aftermath of the 2008 housing crisis, when homeowners fell behind on their payments and those with enough capital saw a chance to snap up homes for cheap.
Some Seattle residents raised concerns in the early days of the pandemic that the pattern would repeat itself, particularly at the expense of the remaining Black community in the city’s Central District – so-called disaster gentrification.
The council passed the bill just as it gets ready to take on several pieces of significant and complicated housing legislation.
Starting Wednesday, members will begin considering amendments to the city’s zoning code and long-term comprehensive plan. When passed, the laws will allow new density in primarily residential neighborhoods and establish new “neighborhood centers” scattered around Seattle, where apartments will be allowed near business districts.
Additionally, the council is deliberating on a rewrite of the city’s tax exemption for those who develop affordable, multifamily housing. The law in consideration would allow larger year-over-year rent increases by property owners in an effort to incentivize more participation in the program.
