Rising regulatory requirements, escalating operating costs, and new state housing laws are creating financial pressures for landlords and property managers that ultimately affect tenants across the rental market, says property manager Kelly Clark.

Clark is the founder of Rockstar Real Estate LLC, a Spokane-based property management and real estate company headquartered at 6718 N. Pittsburg. The company provides residential property management services for 110 units and works with real estate investors, Clark says.

Clark, also a real estate agent and investor, says one of the most significant challenges facing housing providers is the increasing amount of time required to remove tenants who stop paying rent.

"When a tenant stops paying, the mortgage, taxes, insurance, and maintenance costs don't stop," Clark says. "The landlord continues carrying those expenses while the legal process moves forward."

When multiple tenants don't pay rent, the costs multiply exponentially, Clark explains.

City of Spokane regulations are adding administrative requirements that extend the timeline before an eviction can proceed, Clark says. In cases moving forward, she says landlords are required to contact nonprofit- or government-affiliated eviction prevention programs before continuing the process. Many of these organizations work directly with tenants rather than landlords. 

The requirements can effectively create additional waiting periods before landlords can regain possession of a property, potentially resulting in months of lost revenue, Clark adds.

The ordinance mandates a prefiling residential eviction prevention program operational as of June 1. The ordinance language specifies that the program's goal is to facilitate dispute resolution through the application of rental assistance funds. The program also is available for tenancies in mobile and manufactured homes, according to the Spokane Municipal Code. 

The ordinance is intended to "prevent homelessness, restore landlord-tenant relationships, and ensure safe and healthy rental housing in Spokane," according to the city's website.

At the same time, property owners are facing increased maintenance and operating costs, Clark contends. Labor expenses, material costs, and insurance premiums have all increased, while tariffs and supply chain issues also are adding to expenses.

"Every additional cost eventually has to be absorbed somewhere," Clark says.

The headwinds are compounded by the passage of House Bill 1217, a statewide rent stabilization law that went into effect in May 2025, limiting annual rent increases for most residential properties to 7% plus inflation, or 10%, whichever is lower. It also requires 90 days' notice for rent increases, creates a resource center, limits certain fees and deposits, establishes lease parity requirements, and authorizes enforcement by the Washington Attorney General's Office, according to the bill. Manufactured and mobile home lot rent increases are now capped at 5% annually. 

Supporters of HB 1217 say the legislation protects renters from excessive rent increases and provides greater housing stability. Opponents assert that the law discourages housing investment and could reduce the number of rental units available in the market, says Clark.

"The cumulative effect of increased regulation and financial risk is causing many landlords to tighten tenant screening standards," she contends.

Enhanced tenant screening standards for many property owners include requiring higher credit scores, stronger rental histories, and greater income qualifications before approving applications, says Clark. Stricter screening standards can unintentionally create barriers for renters who already struggle to qualify for housing, she notes.

"The risk profile has changed," Clark says. "Landlords have to be more careful because the financial consequences of a bad tenancy have become much larger."

She says she's expecting to see some investors choose to sell rental properties rather than continue operating under the current regulatory environment. 

"When housing providers leave the market, there are fewer homes available to rent," Clark says. "Basic supply and demand still applies."

Property management companies are also feeling the impact, she says. Many of the new requirements generate additional administrative work. Additionally, when a tenant stops paying rent, property owners and management companies both experience income losses, while still spending time and resources managing the property.

"The work doesn't stop just because the rent does," Clark says.

State regulators are beginning to enforce provisions of HB 1217, such as in the case of one of the first rent cap enforcement actions involving Wild Rose RV Park LLC, in Spokane County. According to the Washington State Office of the Attorney General, the RV park allegedly violated Washington state's new rent stabilization requirements for manufactured and mobile home communities, by trying to increase the rent for 29 tenants by nearly 17% after the law was already in effect.

In turn, Wild Rose RV Park was notified of 29 violations, each carrying a potential fine of $7,500 if the park didn't come into compliance, explains Mike Faulk, deputy communications director at the Washington State Attorney General's Office. 

Property owners ultimately paid less than $500 in total fees. The remaining $217,500 in total penalties from the 29 violations were suspended after the park complied with a consent decree filed April 2 in Spokane County Superior Court, says Faulk. The case is an early example of the Attorney General's willingness to enforce the law's provisions, he says. HB 1217 specifically grants the Attorney General authority to investigate violations and pursue enforcement actions against noncompliant housing providers, according to the Attorney General's website.

Despite headwinds, landlords are generally in support of fair housing standards and reasonable consumer protections, Clark contends, adding that she's concerned about the potential for the latest regulations to create unintended consequences. Those consequences, she says, can include higher operating costs for landlords, stricter screening criteria for tenants, reduced investment in rental housing in the market, and higher rents for the tenants impacting affordability.

"The goal is affordable housing," Clark says. "But when the cost and risk of providing housing continue to rise, those costs don't disappear. They eventually affect everyone involved."