After a year of policy review, the City of Tacoma has amended its ordinances to provide some landlords of affordable housing with significant relief from a number of onerous burdens imposed on landlords by the City’s “Landlord Fairness Code Initiative” (For the sake of clarity, we will refer to it as the Tenant Protection Code in this alert). The relief provided will be welcome news to landlords struggling to adjust rents to inflation and to evict tenants.
Effective January 1, 2026, dwelling units are exempt from the Tenant Protection Code if they are owned or managed by the Tacoma Housing Authority, or if they are owned by a “nonprofit entity” and are “deed-restricted affordable housing.” A nonprofit entity is defined as a 501(c)(3) entity or a limited partnership or limited liability company in which a 501(c)(3) entity or a housing authority is a general partner or managing member. The definition contained in the ordinance is the same as the definition in RCW 84.36.560, which provides the property tax exemption for nonprofit affordable housing. This helpfully aligns the exemption with the commonly used structures in Washington LIHTC deals.
Deed-restricted affordable housing is defined as real estate subject to restrictive covenant of at least 30 years with income targets no higher than 80% of area median income. This also aligns with the structure of Washington LIHTC deals.
This new exemption relieves qualifying units from all of the requirements of the Tenant Protection Code, including (i) prohibitions raising rents when there are health or safety violations, (ii) prohibitions on charging “unfair or excessive” fees, (iii) the requirement to pay relocation assistance when the rent is increased by more than 5%, (iv) prohibitions on evictions of households with students or teachers between September and June, and on evictions of anybody between November 15 and March 15, (v) prohibition on evicting persons because they are seniors, family members, military, first responders, health care providers or educators.
This new ordinance is a step towards reversing policies adopted by the city at the urging of tenant advocates. The city council has finally listened to the pleas of the housing providers stuck with huge economic vacancies, stagnant rents, and problem tenants. However, to take advantage of this new relief, a nonprofit entity must take affirmative action. For existing tenants, the exemption is only effective 30 days after the landlord notifies its tenants of the exemption in writing. For new tenancies put in place after January 1, 2026, the landlord must include information about the exemption in the rental agreement.
