Washington Becomes Third State to Enact Statewide Rent Control

Washington joins California and Oregon in setting rent limits, fueling a national rent control movement.

Jordan B.
April 30, 2025

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Good morning. Washington just passed a statewide rent control law, joining a growing national movement reshaping the rental housing landscape.

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Rent Limits

Washington Becomes Third State to Enact Statewide Rent Control

Washington is poised to become the third US state to implement statewide rent control, with wide-ranging implications for developers, tenants, and policymakers.

What’s in the bill: Washington has become the third U.S. state to adopt statewide rent control, capping annual increases to 7% plus inflation or 10%, whichever is lower. Mobile home park residents who rent land will see increases capped at a flat 5%. The law applies only to lease renewals, not new tenants, and exempts buildings less than 12 years old.

Why supporters back it: Between 2001 and 2023, median rents in Washington rose 43% (adjusted for inflation), while renter incomes grew only 26%. Supporters say the cap offers tenants needed relief and predictability amid economic uncertainty.

Pushing back: Critics warn of a chilling effect on housing production. Developers may hesitate to build amid capped revenues and escalating costs, especially in a market already struggling with a chronic housing shortage.

National movement: Washington joins California and Oregon in setting statewide caps, though more than 300 U.S. cities already regulate rents locally. The state’s 1981 law banning local rent control remains unchanged.

➥ THE TAKEAWAY

Big picture: Rent control is winning public and political favor—but unless paired with serious efforts to boost supply, it risks solving one crisis while quietly fueling another.

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✍️ Editor’s Picks

Market reports: Search the largest database of CRE market reports from top brokerages and research companies, featuring the latest insights and data releases. (sponsored)
Migration trends: Domestic migration cooled significantly in 2024, but states like South Carolina, Idaho, and metro areas like Phoenix remain standout relocation hotspots.
New turf: The Washington Commanders and DC struck a $3B deal for a new domed stadium and major mixed-use development at the historic RFK site.
Red flags: The Fed warned of high asset prices and inflation-related vulnerabilities, highlighting risks in equities, real estate, and policy uncertainty.

🏘️ MULTIFAMILY

Apartment rebound: Apartment sales jumped 7% YoY to $30B in Q1, driven by strong single-asset deals and steady investor interest.
Permit trends: Six of the top ten markets for multifamily permitting are also leading in single-family construction, signaling strong overall housing demand across key Sun Belt cities.
Expanded access: Red Tail Multifamily opened Rancho Las Bolsas, a 55-unit affordable community integrated into a market-rate development in Temecula, CA.
Demand dip: U.S. rental vacancies rose to 7.1% in Q1 2025—the highest since 2018—driven by a post-pandemic construction boom and regional supply disparities.
Population growth: As San Francisco’s pandemic-era exodus ends, a surge of international residents is fueling new housing plans, including a sweeping rezoning push to accommodate 36k new units.
Closing the loop: Houston halted a tax break program that favored developers over low-income renters, shifting focus to stricter oversight and public benefit.

🏭 Industrial

Capex caution: Microsoft and Amazon are signaling potential pullbacks in AI infrastructure spending, raising investor concerns about slowing cloud growth and broader economic caution.
Data boom: Digital Realty is planning major data center expansions in Charlotte and Atlanta, with new campuses totaling up to 600 megawatts and backed by a $10B hyperscale fund.
Market reset: Philadelphia’s industrial market is cooling, with leasing and construction down sharply, even as value-add deals and smaller spaces gain traction.

🏬 RETAIL

AI push: US e-commerce companies spent an average of $400K on AI last year, but only 30% saw more than slight improvements to customer experience.
Speed wars: Amazon and Walmart are rapidly expanding their same-day delivery capabilities to outpace competitors and meet rising customer demands.
Fashion battle: Ralph Lauren outbid LVMH to buy its longtime Soho storefront at 109 Prince Street for $132M, securing its future at the prime retail location.

🏢 OFFICE

Efficiency focus: Despite record hiring and revenue, Google is keeping real estate expansion minimal, focusing its $75B in capex on AI and long-term efficiencies instead.
Money moves: Manhattan office towers captured NYC's biggest real estate loans in March, as multifamily, student housing, and affordable projects also locked in major financing deals.
Occupancy trends: US office vacancies climbed again in March, with Austin, Seattle, and Bay Area markets hit hardest, even as Manhattan and Orlando showed signs of recovery.
Office uptick: March 2025 data from Placer.ai shows nationwide office visits trending upward, helped by stricter RTO mandates, with NY and Miami leading the recovery.
Deep discount: Blackstone and DivcoWest acquired a vacant San Francisco office tower at a 70% discount, planning to transform it into a next-gen AI hub.

🏨 HOSPITALITY

Roosevelt revival: Investors have proposed a major redevelopment of NYC’s shuttered Roosevelt Hotel into a 1.3 MSF tower.
Portfolio consolidation: Driftwood Capital completed a $1.2B consolidation of 18 high-performing hotels across 10 states, backed by major financing and recent renovations.
Strategic buy: Marriott International is acquiring a majority stake in citizenM for $355M, adding the global lifestyle hotel brand’s 36-property portfolio to its growing select-service segment.

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📈 CHART OF THE DAY

According to the AFIRE International Investor Survey, investors remain heavily focused on multifamily and industrial assets, with plans to expand these holdings in 2025. Interest in retail and alternative sectors like data centers, senior housing, and storage is also growing.