The Washington Rent Cap, for Investors: What HB 1217 Actually Says
Program and regulatory figures verified July 24, 2026. Details change; confirm your scenario with us.
More money gets lost to bad information about this one law than to any other rule in Washington investing. Here is what HB 1217 actually says, sourced to the statute, and what it does and doesn't do to a rental deal.
What is Washington's rent cap, and when did it start?
Governor Ferguson signed HB 1217 on May 7, 2025, and it took effect that day. It set a statewide ceiling on how much a landlord can raise rent during a tenancy, codified at RCW 59.18.700 and the sections that follow. Before that date Washington had no rent regulation at all, which is why every "Washington has no rent control" article written before mid-2025 now reads as stale. The law carries a sunset: the entire scheme expires July 1, 2040, unless the Legislature renews it.
How much can rent go up in Washington in 2026?
9.683% for calendar 2026. The Department of Commerce sets the number each year using a formula written into the statute: the lesser of 7% plus the prior year's CPI, or a hard 10% ceiling. For the partial 2025 window (May 7 through December 31) the computed figure ran above the ceiling, so the cap landed at 10.0%. Commerce recomputes and publishes the next year's cap every July, after the June CPI release. One rule sits on top of the percentage: no increase of any amount is allowed during a tenancy's first 12 months.
Cap figure as announced by the Department of Commerce for calendar 2026; this number resets every July, so confirm the current year's cap before serving any increase notice.
Are single-family rental homes exempt from the cap?
No, and this is the correction that matters most. A claim circulated widely through 2025 and 2026 landlord blogs that single-family homes not owned by corporations are exempt. That language was in an early Senate version; the enacted law is narrower. RCW 59.18.710 exempts an owner-occupied single-family residence (an owner living on site and renting out two or fewer units, bedrooms, or an ADU) and owner-occupied 2–4 unit buildings. A tenant-occupied single-family rental is fully capped. The owner-occupancy exemptions are also void when the owner is a REIT, a corporation, or an LLC with a corporate member, so entity structure can eliminate an exemption you thought you had. Read this one from the statute, not from a forum post; your Washington attorney confirms how it applies to your title.
Is new construction exempt from the Washington rent cap?
Yes, but on a clock. The exemption runs for 12 years from the first certificate of occupancy, measured from the certificate date and not from your purchase date. That distinction changes acquisition math: a building whose first certificate of occupancy issued in 2014 is aging out of its window mid-decade, while a 2021 build sits outside the cap into the 2030s. The landlord has to document the exemption in each increase notice, and a new ADU unit may carry its own separate 12-year window. Model the expiry into your hold period rather than assuming the exemption is permanent.
Notice, and can I still evict?
HB 1217 lengthened the statewide notice for a rent increase to 90 days. Seattle layers longer advance-notice requirements on top of the state rule, and those city numbers have shifted in recent years, so confirm the current Seattle figure before you serve notice. Ending a tenancy is a separate law: terminations need just cause under HB 1236, in force since 2021, with tiered notices (14-day pay-or-vacate for nonpayment, a 90-day path for an owner move-in or a sale). None of this is a scare; it's the operating manual, and the 90-day sale path matters when you plan an exit.
Can I raise the rent when a tenant moves out?
The cap governs increases during a tenancy. The statute's structure leaves re-rent pricing between tenancies uncapped, so a turnover is when a unit resets to market. The new tenancy then starts its own 12-month no-increase clock. That is our lender-side reading of RCW 59.18, and it is exactly the kind of question a Washington attorney should confirm against your specific leases before you build a strategy on it.
What the cap does (and doesn't) do to your loan
It does nothing to how a DSCR loan qualifies. Qualification uses the rent that exists today: the in-place lease or the appraiser's Form 1007 market figure, never projected rent growth. What the cap constrains is your multi-year pro forma. A value-add plan that assumed aggressive mid-tenancy increases needs a new timeline built to the capped trajectory (9.683% for 2026), with between-tenancy resets doing the catching up. We flag this in deal reviews because no other lender page connects the statute to the loan math. Enforcement, for completeness, runs through the Attorney General under the Consumer Protection Act; the specific penalty dollar figures floating online are secondary-sourced, so we leave them to your attorney rather than print a number we can't tie to the statute.
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Frequently asked questions
What is the maximum rent increase allowed in Washington in 2026?
9.683% for calendar 2026, set by the Department of Commerce under HB 1217; the formula is the lesser of 7% plus CPI or a hard 10% ceiling, recalculated every July after the June CPI release. No increase of any amount is allowed during a tenancy's first 12 months. Confirm the current year's figure, since it resets each summer.
Are single-family rental homes exempt from Washington's rent cap?
No. RCW 59.18.710 exempts owner-occupied single-family situations only (an owner living on site renting two or fewer units or an ADU), so a tenant-occupied single-family rental is fully capped. The broad exemption people cite was in a Senate draft, not the enacted law, and the owner-occupancy exemption is void if the owner is a REIT, corporation, or an LLC with a corporate member.
Is new construction exempt from the Washington rent cap?
Yes, for 12 years from the first certificate of occupancy, measured from the certificate date rather than your purchase date. A 2014-built rental is aging out of its window now; a 2021 build stays exempt into the 2030s. The landlord must document the exemption in each increase notice, so keep the certificate date in your file and model the expiry into your hold period.
How much notice does a Washington landlord need to give for a rent increase?
90 days statewide under HB 1217, with Seattle requiring longer advance notice that has changed in recent years (confirm the current city figure before serving). Ending a tenancy is governed separately by HB 1236's just-cause rules, in force since 2021, including a 90-day path for an owner move-in or a sale. Notice and just cause are two different clocks.
Can I raise the rent between tenants in Washington?
The cap limits increases during a tenancy; the statute's structure leaves re-rent pricing between tenancies uncapped, so a turnover resets the unit to market. The new tenancy then begins its own 12-month no-increase period. This is our lender-side reading of RCW 59.18, and a Washington attorney should confirm it against your leases before you rely on it.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content, not a loan commitment and not legal or tax advice. Washington's rent-cap figures, city and county STR rules, and tax figures change; verify current requirements with the city or county, your CPA, or a Washington real estate attorney before you buy. Loans are subject to buyer and property qualification.