September 21, 2020

Andre and Erika Cherry moved to Seattle to start their life together. They spent years saving to buy their first home: a small two-bedroom bungalow built in 1916. The house needed significant work—new ceilings, new plumbing, new wiring, and actual stairs to reach the second floor—but it was what they could afford.

In May 2019, the Cherrys were all set to begin their renovations and submitted their application for a building permit. That’s when Seattle’s “Mandatory Housing Affordability” ordinance (MHA) turned their dream into a nightmare.

This wildly misnamed law, passed after the Cherrys closed on their home, subjects owners in certain residential neighborhoods to expensive new regulations and fees when they apply for building permits. In the Cherrys’ case, these fees totaled $11,000. Why? According to the city, they were renovating their home too much—creating a “new structure.” But the Cherrys bought a two-story single-family home, and their renovations would result in . . . a two-story single-family home.

Nevertheless, Seattle refused to issue them a renovation permit unless they paid the exorbitant fee or converted their single-family home into multifamily housing—and then rented out part of their home under yet more regulations.

MHA was controversial when enacted and remains controversial today. Seattle already had one of the most complex regulatory regimes for housing in the nation, making adding and renovating housing very expensive—and exacerbating the very housing affordability crisis Seattle then claimed to address with MHA. Instead, MHA simply adds more cost and complexity to Seattle’s code.

Local governments often impose permit requirements on property owners that go well beyond what is reasonable to protect public health and safety interests. These requirements become opportunities to coerce people into giving up their rights and paying out thousands of dollars in fees. The U.S. Supreme Court has recognized that this power gives rise to the threat of “out-and-out . . . extortion.” That is what Seattle was doing to the Cherrys—until IJ got involved.

The Cherrys cannot afford the city’s costly demands, and they should not have to pay thousands in additional fees just to make their home safe and consistent with modern standards. In July of this year, IJ sent a letter to the city demanding it end this renovation extortion, and we brought widespread attention to the city’s demands with a front-page story in The Seattle Times. In August, Seattle backed down and approved the Cherrys’ building permit without charging them exorbitant MHA fees.

Seattle may have escaped an IJ lawsuit this time, but the city can rest assured that we will be watching closely to make sure no other homeowners are subjected to the same abusive fees.

Paul Avelar is managing attorney of IJ’s Arizona office.

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