Moratorium on rent-bidding sites gets challenged in court

Earlier this year, the Council passed a one-year moratorium on sites such as Rentberry and Biddwell that allow landlords to conduct auctions for their rental properties.  Today, the conservative Pacific Legal Foundation filed a lawsuit in U.S. District Court challenging that moratorium.

The Pacific Legal Foundation has challenged several of the City Council’s progressive policy legislative efforts recently, including suing — and winning at the trial court level — over the city’s “First in Time” tenant-protection ordinance. Their newest lawsuit is on behalf of Rentberry and a local landlord who wishes to use online bidding platforms to rent his property.

The heart of their case is the contention that the bidding web sites, and the people who use them, are exercising their right to free speech as protected by the First Amendment, which cannot be infringed unless in service to a higher government interest. The Council’s moratorium ordinance provides no findings, no does it assert any specific evidence, directly connecting the ban with a specific government interest. Quite the opposite: the ordinance states, “it is uncertain whether and how these services impact Seattle’s rental housing market,” and “the benefits and drawbacks of such services to landlords and tenants have not been studied in Seattle.” It does say, “the City of Seattle is committed to ensuring equitable access to rental housing, and platforms that require use of a computer and internet in order to access rental housing may hinder the ability for certain communities to meaningfully identify and obtain needed housing.” That’s well short of a definitive finding, however.

The lawsuit tries to make a big deal about all of the other ways that Rentberry assists with communication between landlords and tenants, and argues that the online-auction component is an integral part of their system and “inextricably intertwined.”  That’s comically untrue, and the argument will fall apart when the city’s lawyers get a chance to take it on. It’s also not clear why they brought that up at all, when the far stronger legal arguments are the ones that already carried the day in the First in Time ordinance lawsuit: that choosing a tenant is a landlord’s fundamental property right that can’t be “taken” without due process, and that the ordinance generally violates protections on commercial speech. Particularly given that the primary reason the Council articulated in its deliberations for banning rent-bidding was that it probably violated the First in Time ordinance, it seems like an easy layup to just follow the same legal framework.

This afternoon, Council member Teresa Mosqueda, the sponsor of the ordinance, said via a written statement:

“I do not believe there are any “free speech” violations associated with this legislation. Landlords still retain the right to post rental listings on whatever sites they choose. Rather, this law is a means to identify how the process of bidding rents through these platforms comports with our Fair Housing laws. Our city is working with landlords and consumers as we study this issue in anticipation of revisiting the moratorium next year – with more information and data to inform any long-term regulation.”

A spokesperson for the City Attorney’s Office was more succinct, simply saying, “Once we’ve received the complaint, we’ll review it and determine our next steps.”

 

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