Discretion and Discrimination In Seattle

A variety of state and federal laws prohibit discrimination in property rentals, but that wasn’t good enough for Seattle. As long as there was discretion, there was the possibility of discrimination, and so they enacted a law to prevent implicit bias by requiring landlords to rent to the “first qualified” potential tenant.

The goal is to ensure prospective renters are treated equally, according to Councilmember Lisa Herbold, who championed the policy. When landlords pick one renter among multiple qualified applicants, their own biases — conscious or unconscious — may come into play, she says.

There are questions, even after a tenant meets the basic “qualifications” for renting, such as credit rating, ability to pay* and prior landlord recommendations. Prior criminal history cannot be a question, though, as Seattle has forbidden landlords from running a rap sheet. Chief among them is that landlords lose any discretion for intangible qualifications, from a tenant with a bad attitude to one whose personal hygiene could present a problem for other tenants.

The libertarian law firm, Pacific Legal Foundation, is challenging the law.

If government can strip you of choice just because unconscious bias might influence that choice, its power would have no bounds. But that is precisely what Seattle is doing to its landlords. In Yim v. City of Seattle, PLF is challenging an anti-discrimination law that prohibits landlords from choosing their own tenants. Today, we filed our opening brief to ask the Court to invalidate this oppressive and brazen violation of fundamental rights.

Whether this constitutes an unconstitutional taking is unclear. But that this reflects a new level of regulatory creep is certain. At Volokh Conspiracy, Ilya Somin makes the case that this crosses the line.

It is surely true that landlords sometimes engage in subconscious discrimination. Indeed, the same is true of a wide range of people engaging in all kinds of transactions. It does not follow, however, that eliminating landlord choice is the right answer. Doing so is likely to harm tenants more than it benefits them. If landlords cannot rank potential tenants based on factors such as reliability, credit history, their treatment of previous rental properties, and so on, the predictable result is that they will either put fewer properties on the market to begin with, charge higher rent, increase security deposits, or some combination of these and other measures that make rental housing more costly. This likely to be particularly true of landlords who own properties in poor and minority neighborhoods, where landlords believe the risk of nonpayment or other problems is likely to be unusually high.

Will this regulation undermine the rental market in general, and for the poor and minorities in particular, if landlords believe they will be forced into renting to “undesirable” tenants? It’s hard to imagine that people with property to rent will let it lie fallow because of this regulation. They make money renting, and making money is why one becomes a landlord. Holding rentals off the market makes no sense, as they will produce no income.

Whether or not Seattle’s policy is illegal, it potentially sets a dangerous precedent. If the state can impose severe restrictions on liberty and property rights in order to curb subconscious bias, there would be few meaningful limits to its power. Very few if any types of decisions are completely free of cognitive errors of this type. They can occur in almost any economic or social transaction.

And this lies at the core of the opposition to this deep regulatory incursion, that it’s one more step into governmental micromanagement of individual freedom. There will certainly be instances where the “first come, first rent” regulation results in problems, particularly for small buildings where getting along with one’s neighbors is at a premium.

There is no magic to landlords’ assumptions about who will be a better tenant than someone else. And many landlords don’t really care, as this is how they manage their rentals already. But the question of whether this new intrusion into individual discretion, property rights, personal choices, will lead to ever-deeper regulation of people’s discretion to “curb subconscious bias” is a serious one.

Renting apartments is a business, like any other. Businesses are subject to regulation. You may believe they shouldn’t be, but they are. The law allows it and that’s really not a subject for serious debate. However, regulating business for implicit bias, as opposed to discrimination, is a very different animal. Since implicit bias, itself a controversial concept, can’t be detected per se (because it’s implicit, see?), the only means of combating it is to prohibit discretion at all.

And if individual discretion becomes a legitimate subject of business regulation, with the solution being to prohibit all individual discretion, the consequences could be bizarre. And even though this comes as a business regulation, regulation tends to transfer over to the personal realm eventually, as demonstrated by Title IX’s impact.

Is the “first come” rule for Seattle rentals the end of the world? In that instance, probably not. But regulatory creep has happened over and over, and individual discretion is a core aspect of individual freedom, even when it comes to how one chooses to conduct one’s business.

Is the potential benefit of ending implicit bias worth losing the ability to make business choices based on one’s personal discretion? Perhaps. But will this prove to be the acceptable baby step that leads inexorably to the next one, and the one after that, which ends up socially engineering our every choice? That’s the question that should be considered now, as it will be too late once personal discretion has been lost to good intentions.

*The law prohibits discrimination based on the source of rental payments.

The Seattle City Council approved an ordinance Monday banning discrimination by landlords against renters with alternative sources of income, such as Social Security benefits, veteran’s benefits, unemployment insurance, child-support payments and other assistance programs.

21 thoughts on “Discretion and Discrimination In Seattle

  1. B. McLeod

    Landlords need enough flexibility to be able to select for tenants who: 1) pay the rent; and 2) don’t tear the place apart. As long as regulations allow that, they are workable. When regulations don’t allow that, residential rental properties will shortly decline to marginally habitable or outright uninhabitable/abandoned status, and those landlords who can will find something else to invest in.

        1. SHG Post author

          Maybe the two of you should form an act, like Martin and Lewis, and take it on the road. I’m sure it would be yuge.

  2. Matthew S Wideman

    As a landlord and an attorney I am torn about this issue. On one hand I would be calling my local state Representative and conspiring with my local business group to get this changed. This law is very very Orwellian. On the other hand I would enjoy the money made as landlords scramble to find the grey area in the law and to adapt their policies accordingly.

    1. SHG Post author

      The law relies heavily on landlord cooperation and compliance, and should be fairly easily gamed. But what about the next law?

      1. Matthew S Wideman

        This is law is similar to many anti-income descrimination ordinances in many cities. This seems like the definition of over regulation. I do like how the ordinance makes an exception for battered women, which I don’t think is a protected class. So there will always be an suffering hierarchy in which the rules apply to almost every one.

        Yes SHG, the next law will require a SJW oath and guidelines that we never judge another person by anything other than an application. I never thought I would say this, but I am glad I live in a fly over state.

          1. albeed

            Have you seen what happens to roads with winter, salt and heavy traffic paved by good intentions but poorly constructed? You end up with sh*t, or at best a cow path for Nebraska bulls, but that is par for the course with many government actions.

        1. tim

          I don’t have a strong opinion one way or another on this law. But I am curious as you brought it up. Do you believe the lawmakers of “flyover” states are somehow immune to passing (what I assume you believe) silly or stupid laws?

          1. Matthew S Wideman

            The fly over states tend to be a few years behind the prevailing political winds of our sister states on the coast. So we tend to either skip these types of trends in law or have them happen a few years later. There is a lot of intertia in the way “we have always done things”. The MO Legislature seem less willing to interfere with property rights when they come into conflict with SJW ideals.

  3. Billy Bob

    There’s more than one way to skin a cat, and there’s more than one way to make money in real estate! Can U say Art of the Deal? Economics 101: When the supply of something becomes scarce, the price goes up! Real Estate is no different. There’s a fixed supply. If the [slumlord] keeps his properties off the market, there may be a method to the (apparent) madness. We don’t shed too many tears for the real estate folks who revel in unearned income while crying like babies. Not you Mr. President Trump, self-styled real estate magnate par excellence, author and showman.

    Keep your day job, Scott, and stay out of real estate. And keep real estate out of your blawg, forgodsake. Things must be slow in the courtrooms as we slide into year’s end. Happy New Year.

  4. wilbur

    This is what happens when you elect an ACORN community organizer as a city commissioner. The people have spoken, through their representatives.

    Remind me not to move to Seattle.

  5. MonitorsMost

    Seattle Person 1: Landlords say they need to implement a holistic screening method to find the best tenants.

    Seattle Person 2: Wait a second, thats what we say at the University of Washington Admissions when we want to consider race even though state law prohibits it.

    Seattle Person 1: We’ll show those racist landlords!

  6. Sonetka

    I live in Seattle and know a few people who own rental properties. Since the law passed, their method of finding new tenants has been to simply not advertise in the first place — rather, they get the word out through friends to tell friends of theirs who are looking for a rental. How this helps marginalized people who are unlikely to be anywhere in their friends’ networks is a question best left to the city council.

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