Should a landlord be required to rent an apartment to the first “qualified” person to appear on his or her doorstep?
The city of Seattle seems to think so.
Its imposition of this obligation, however, is being challenged by the free market-oriented Pacific Legal Foundation, a watchdog organization that litigates nationwide for limited government, property rights, and individual rights.
On Aug. 9, 2016, Seattle amended its Open Housing Ordinance, requiring landlords to rent to “the first prospective occupant meeting all the screening criteria necessary for the approval of the application.”
The new rule, which took effect on Jan. 1, says it is an “unfair practice” for a landlord to choose among qualified tenants. It allows would-be renters to sue violators for damages, and authorizes government fines of up to $55,000 for multiple alleged violations.
The Pacific Legal Foundation argues that the amendment violates Article 1, section 16 of the Washington State Constitution, which says, “[n]o private property shall be taken … for public or private use without just compensation.”
The Washington Supreme Court has held that this protection includes the right to sell or lease property, on a nondiscriminatory basis, to a person of your choosing.
Relatedly, the Pacific Legal Foundation explains that the amendment interferes with the ability of landlords, particularly small business people, to earn a living.
Notably, the federal courts have found that the fundamental right to earn a living enjoys federal constitutional recognition.
In Toomer v. Witsell (1944), the U.S. Supreme Court held that the ability to pursue one’s profession or “common calling” is one of the limited number of foundational rights protected under the Privileges and Immunities Clause of the U.S. Constitution, Article IV, Section 2, Clause 1 (which provides that “[t]he citizens of each state shall be entitled to all privileges and immunities of citizens in the several states”).
And in United Building and Construction Trades Council v. Camden (1984), the Supreme Court stated that “the pursuit of a common calling is one of the most fundamental of those privileges protected by the clause.”
More recently, the U.S. Court of Appeals for the 5th Circuit, in St. Joseph Abbey v. Castille (2013), struck down a Louisiana state board’s rules banning casket sales by individuals who are not licensed funeral directors—a restriction that prevented a community of monks from making a living as casket makers.
The 5th Circuit affirmed a district court holding that those rules had no “rational basis,” and therefore violated the Due Process Clause of Section 1 of the Fourteenth Amendment (which prohibits “any state [from] depriv[ing] any person of life, liberty, or property, with due process of law”).
The free market-oriented Institute for Justice, which represented the monks in the Louisiana caskets case, actively challenges other laws and ordinances that threaten individuals’ right to earn a living—and, more broadly, are an affront to their property rights and their economic liberty.
The amended Seattle ordinance clearly undermines the constitutionally recognized right to earn a living and is economically counterproductive.
By arbitrarily requiring that a landlord accept the first proposed tenant, the amendment prevents property owners from using reasonable criteria to ensure that the units they own are leased to individuals who are likely to behave in a manner that does not undermine the value of the property they occupy.
In short, the amendment interferes with the ability of property owners to preserve the value of their holdings, which makes it harder for them to earn a living.
The ordinance will not only harm the property rights of existing real property owners, but it will discourage investment in and the construction of new housing units, to the detriment of the economy.
Potential lessees who have fewer choices of apartments and face higher rents, construction workers who are not hired, and general municipal development that lags are among the negative economic effects of such a policy.
What is to be done to discourage harmful economic ordinances, such as the latest Seattle enactment, which hurt the economy and run roughshod over individual economic liberties?
States can take a major step toward restoring the freedom of enterprise that is every American’s birthright by enacting model legislation called the Right to Earn a Living Act. The proposed law recognizes that the right of individuals to pursue a chosen business or profession, free from arbitrary or excessive government interference, is a fundamental civil right. The act provides substantive protection for those rights while at the same time preserving the ability of state regulatory agencies and local governments to protect the public through legitimate and proportionate health and safety regulations.
The act would require that any ordinance or rule that limits entry or competition in a business or profession ‘shall be limited to those demonstrably necessary and carefully tailored to fulfill legitimate public health, safety, or welfare objectives.’ That language contains three essential components: legitimate, necessary, and tailored. ‘Legitimate’ refers to traditional police powers such as the protection of health and safety. By contrast, economic protectionism—favoring some businesses over others—is not a legitimate object of government. ‘Necessary’ and ‘tailored’ refer to proportionality. Is a ban or monopoly necessary, or would free or regulated competition suffice? Is a particular rule properly applied to a specific profession, or is it largely unrelated to the products or services that are provided? …
After the law is enacted, agencies and local governments would have one year to review their regulations and bring them into compliance with the law. Anyone may petition a governmental entity to repeal or modify specific regulations, to which the entity must respond within 90 days.
Draft laws along the lines of the Right to Earn a Living Act serve to highlight the importance of preventing government from interfering with the economic freedoms of individual Americans—and, incidentally, from preventing economic growth and vitality.
State, federal, and municipal legislators should keep this in mind before they blithely—and blindly—enact new rules that ignore such freedoms. Seattle should take note and rescind the harmful amendment to its housing ordinance.