Case Document 71-1 Filed 05/07/20 Page 1 of 11

EXHIBIT A

Case 2:18-cv-00736-JCC Document 71-1 Filed 05/07/20 Page 2 of 11

THE HONORABLE JOHN C. COUGHENOUR

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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YIM, et al.,
Plaintiffs,

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No. 2:18-cv-736-JCC
BRIEF OF GRE DOWNTOWNER LLC AS
AMICUS CURIAE IN SUPPORT OF
PLAINTIFFS’ MOTION FOR SUMMARY
JUDGMENT AND IN OPPOSITION TO
DEFENDANT’S CROSS-MOTION FOR
SUMMARY JUDGMENT

v.

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CITY OF SEATTLE,
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Defendant.
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CONTENTS

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Page
I. INTRODUCTION ...........…………………………………………………2
II.STATEMENT OF FACTS..........................................................................2

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III. ARGUMENT ............................................................................................7
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A.

The Ordinance Inhibits a Landlord’s Ability to Provide Safe and
Affordable Housing for Low-Income Individuals Living in Downtown
Seattle and Is Unduly Oppressive and Irrational.. ............................ 7

B.

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The Ordinance Violates the First Amendment and Is Vague and
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Unworkable.
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IV. CONCLUSION....................................................................................... 8

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 Case 2:18-cv-00736-JCC Document 71-1 Filed 05/07/20 Page 3 of 11

I.

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INTRODUCTION

Amicus curiae GRE Downtowner LLC (“GRE”)1 appreciates the Court’s permission to
submit an amicus brief in this matter and the opportunity to share information with the Court about
its experience owning and operating a federally assisted housing project in downtown Seattle for
the last six and one-half years. As detailed below, its experience since the City of Seattle’s Fair
Chance Housing Ordinance, SMC 14.09 (the “Ordinance”) went into effect has been drastically
different than its experience during the prior years.

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II.

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The Addison on Fourth (“the Addison”) is an apartment building located in Seattle’s
Chinatown-International District. Built in 1911 as a hotel, the building was closed in the early
1960s and then reopened in 1969 as housing for low-income residents. In 2012, GRE purchased
the property for $12 million. It invested $27 million more in major renovations to convert the
property to 254 apartment homes, 2 artist lofts, and musician studios. GRE’s goal with the
renovations was to maintain the historic character of the building, while bringing the systems and
finishes up to current code and standards.3

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STATEMENT OF FACTS

Although the acquisition and renovations were financed primarily with tax exempt bonds
issued by the Washington State Housing Finance Commission, the project is federally subsidized.
Provided the project continues to comply with certain requirements of the Internal Revenue Code,
interest on the bonds will remain exempt from federal income tax. The requirements include limits
on the income of apartment residents and limits on the amount of rent that can be charged for an
apartment.

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Simultaneously with the filing of its motion for leave to submit an amicus curiae brief, GRE filed a Corporate
Disclosure Statement as required by LCR 7.1.
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25 of the apartment homes are reserved for tenants with disabilities.
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The renovation project qualified for federal historic and solar energy tax credits.

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Compliance with substantially identical restrictions on income levels and maximum rent

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amounts allows the project also to qualify for federal low-income housing tax credits. The Addison

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currently provides housing for Seattle residents earning up to 60 percent of the area’s median

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income ($45,600 for one person). The monthly rent for a studio apartment is capped at $1,162,

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while the maximum monthly rent for a one-bedroom unit is $1,245. The income and rent limits

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are tied to the Area Median Income calculations set by the U.S. Housing and Urban Development

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(“HUD”) for the Seattle-Bellevue, WA HUD Metro Fair Market Rent Area. Rental payments for

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many of the apartments are subsidized with federal Housing Choice Vouchers (formerly Section

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8) and other rental assistance programs.

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When the renovations were completed, the Addison re-opened in November 2013 under

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the management of American Management Services Northwest LLC (“American”), a third-party

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manager. American served as manager of the property until mid-May 2019, when GRE

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Management LLC (“GRE Management”) took over. 4 GRE Management is affiliated with

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Goodman Real Estate, Inc., a privately held real estate investment company that specializes in

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multifamily, retail and commercial real estate and has been headquartered in Seattle for 30 years.

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The goal of the Addison’s owner and management teams is, and always has been, to provide safe,

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clean, comfortable, stable, and affordable housing for the Addison’s residents.

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During the first years after the Addison’s reopening, that goal was met. New and long-

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term residents were happy with the renovations and respectful of the rules for occupancy. The

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project was economically viable and a going concern.

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But six months into 2018, there was a noticeable change. Uncertain whether the Ordinance,

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which went into effect in February 2018, applied to the Addison at all or in part, 5 management

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When GRE bought the property, the building was called The Downtowner. GRE renamed it The Addison on
Fourth. During the renovations, GRE’s management team worked closely with tenants to keep as many of them in
place as possible. The building officially re-opened in November 2013 when the City issued a new Certificate of
Occupancy.
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As discussed further below, the Ordinance does not define the term “federally assisted housing,” which is found in
SMC 14.09.115.B.

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Telephone 206.624.0900

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elected to abide by the new prohibition against obtaining criminal background information for

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existing and prospective new tenants.

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individual’s eligibility to become a tenant, management had in place an application process that

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included a criminal background check by a reporting agency.6 If the applicant had a history of

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criminal convictions, the agency would look at the type of crime and length of time since the crime

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was committed and determine whether the applicant satisfied pre-established criteria (which were

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tied to an assessment as to whether the criminal conduct indicated a demonstrable risk to resident

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safety and/or property). Then, without including any underlying information about the criminal

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history, the reporting agency would notify management whether an applicant was “approved” (i.e.,

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passed the screening process), should be “declined” (did not pass the screening process), or might

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be “approved with conditions” (such as an increased deposit). The procedure was intended to

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eliminate bias, but also allowed some protection of the landlord.7 With the discontinuation of that

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procedure, living conditions at the Addison declined precipitously.

Before that change in procedure, to determine an

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Over the past two years, the number of 911 calls from the Addison has more than doubled.

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Fights are breaking out in the lobby of the building; used needles, trash, and feces are left in

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stairways and hallways; fire alarms are being set off repeatedly in the middle of the night. In

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response, the Addison’s management has installed cameras in the hallways on every floor and in

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other public areas, upgraded door hardware, installed a controlled access system for the elevator,

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given residents fobs that allow them access only to their floor, and replaced the main lobby door.

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It has hired additional janitors and armed security guards. These new security measures have

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Alternatively, if the applicant was a referral from the Seattle Housing Authority, the applicant was pre-screened by
the agency pursuant to a memorandum of understanding between the agency and the Addison’s management. That
agreement between the agency and the Addison’s management has been discontinued, however, and the agency now
screens only for lifetime sex offender registration and conviction of manufacturing or producing methamphetamines
on the premises of federally assisted housing.
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Cf. U.S. HUD Office of General Counsel Application of Fair Housing Act Standards to the Use of Criminal
Records by Providers of Housing and Real-Estate Related Transactions (April 4, 2016), available at
https://www.hud.gov/sites/documents/HUD_OGCGUIDAPPFHASTANDARD.PDF (acknowledging that a housing
provider’s use of criminal history to deny housing to particular prospective tenants may not constitute unlawful
intentional discrimination if necessary to achieve a substantial, legitimate, nondiscriminatory interest of the landlord,
such as protecting property and the safety of other residents).

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STOEL RIVES LLP

106326470.3 0069411- 00041

ATTORNEYS
600 University Street, Suite 3600, Seattle, WA 98101
Telephone 206.624.0900

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greatly increased operating costs, yet problems remain rampant and the Addison’s annual

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insurance deductible has climbed from $5,000 to $100,000.

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Building managers started to keep a growing list of individuals banned from the building

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for starting fights or damaging property. A staff member was assaulted. Employees are afraid to

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work alone, so they now work in teams. Turnover is 400 percent.

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In November 2019, a resident who had been living at the Addison for six months stabbed

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his guest in the chest during an argument. It was only after the resident was arrested that building

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managers learned the resident had several outstanding arrest warrants. Other residents have sold

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drugs out of their apartments. Over 500 people have lived in the Addison over the past two years,

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but management finds out about a resident’s criminal past only when the police arrive and arrest

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someone on the premises.

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Evictions have tripled in the past two years, but that, too, has not solved the problems.

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While it would seem a simple matter to evict a problem tenant who is endangering others,

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damaging property, and violating the lease agreement, the process can take several months. Costs

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associated with a single eviction can easily climb to $4,000, not including lost rents and the

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expense of refurbishing a trashed apartment. In the last 12 months alone, the Addison has had to

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pursue judicial evictions of tenants in 42 of its apartments. That is more than 16 percent of the

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apartments in the building. Thirty of the 42 evictions were for behavioral issues: a stabbing;

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allowing drug dealers to take over the apartment; bringing trespassers into the building;

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harassing/assaulting staff; being aggressive with neighbors; damaging the building; and

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prostitution.

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All the problems are leading longtime residents to move out. One example is “A,” an

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African American woman just reaching retirement age. She has lived at the Addison since 2004,

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when it was the Downtowner. She was thrilled with the changes made after GRE’s acquisition

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and renovations. Her apartment was completed updated, and the lobby was modernized and

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decorated with plants, art, sofas, armchairs, and a television. She felt safe. That is no longer the
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ATTORNEYS
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Telephone 206.624.0900

 Case 2:18-cv-00736-JCC Document 71-1 Filed 05/07/20 Page 7 of 11

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case and she is planning to leave soon. “B” is a 70-year-old man who works in housekeeping at

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T-Mobile Park. A former counselor for homeless veterans, he has lived at the Addison for five

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years and has seen the changes. He says he doesn’t know the people who live on his floor anymore

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because the turnover is so high. In his view, the “good people” are leaving. Online reviews show

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the Addison’s reputation for being a safe, clean, and comfortable place to live has suffered greatly.

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Tenant turnover has averaged 50 percent during each of the last two years.

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It is telling to examine comparative metrics for the periods two years before and two years
after the Ordinance went into effect:
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Negative social media reviews increased 186 percent

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The average occupancy declined over 5 percent

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The average monthly number of evictions climbed from 1.48 to 3.96 (168 percent)

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The average monthly evictions expense climbed from $1,442 to $2,983 (107 percent)

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The average monthly total security costs climbed from $2,350 to $9,581 (308 percent)

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The average monthly non-recurring capital expenditures climbed from $4,573 to

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$15,704 (243 percent)
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The project has moved from cash flow positive to cash flow negative – a drop of over
400 percent

Over the same four-year period, average monthly rents increased only three percent per
year, or about $30. This is a rent-controlled project and expenses must be managed in relationship
to the rents. The expenses are out of control because of the Ordinance and the project is rapidly
becoming unsustainable.

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III.

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ARGUMENT

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A.
The Ordinance Inhibits a Landlord’s Ability to Provide Safe and Affordable
Housing for Low-Income Individuals Living in Downtown Seattle and Is Unduly Oppressive
and Irrational.

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The City of Seattle is refusing to let private landlords screen applicants for criminal history

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to ensure that new tenants will not threaten the health, safety, or right to peaceful enjoyment of the

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community by other tenants or threaten physical damage to property. That refusal is imposing an

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unduly oppressive and irrational burden on Seattle landlords and thereby violating the substantive

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due process rights of those landlords. See authorities cited in Plaintiffs’ motion for summary

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judgment (Dkt. No. 23) at 17-21, Plaintiffs’ opposition to the City’s cross motion and reply (Dkt.

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No. 48) at 27-30, and Plaintiffs’ supplemental brief (Dkt. No. 66) at 1-8; see also Amicus Brief of

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the National Apartment Association (Dkt. No. 39-1) at 12-18.

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B.

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The Ordinance’s ban on inquiring about an individual’s criminal background violates the

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free speech protections of the First Amendment. See authorities cited in Plaintiffs’ motion for

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summary judgment (Dkt. No. 23) at 5-17 and Plaintiffs’ opposition to the City’s cross motion and

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reply (Dkt. No. 48) at 2-22.

The Ordinance Violates the First Amendment and Is Vague and Unworkable.

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The Ordinance also is unconstitutionally vague because it lacks specific information

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regarding the core conduct that is supposed to be prohibited. See Brief of the National Consumer

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Reporting Association as Amicus Curiae (Dkt. No. 44-1) at 10-16. And it lacks specific

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information as to the parties to whom it is to be applied. It says it “does not apply to an adverse

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action taken by landlords of federally assisted housing subject to regulations that require denial of

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tenancy,” SMC 14.09.115.B, but it contains no definition of “landlords of federally assisted

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housing,” see id.; see also SMC 14.09.010. Is the exemption applicable when a landlord owns an

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apartment building that is financed with tax exempt bonds? When the landlord was granted federal

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historic and solar energy tax credits? When the project qualifies for federal low-income housing

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tax credits? When rental payments made by tenants are subsidized with federal Housing Choice
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Vouchers? When most tenants in the building, but not all, receive subsidies from federal Housing

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Choice Vouchers or other rental assistance programs? Is the exemption applicable only when the

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landlord receives a Housing Choice Voucher for a specific tenant, and with respect to the apartment

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occupied or to be occupied by that tenant? Or is the exemption applicable only when a public

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housing authority is the landlord?

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The Ordinance not only is vague, it also is unworkable. The City is taking the position that

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the Ordinance’s exemption for “providers of federally-assisted housing” is “limited to their

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decisions to deny tenancy (or take other ‘adverse actions’) where federal regulations require that

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decision,” but providers of federally-assisted housing “remain subject to the Ordinance’s other

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requirements.” See City of Seattle’s Combined Opp’n to Pls.’ Mot. for Summ. J and Cross Mot.

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for Summ. J. (Dkt. No. 48) at 15-16. In other words, landlords of federally assisted housing may

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deny tenancies to individuals convicted of manufacturing or producing methamphetamines on the

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premises of federally assisted housing, but these landlords are not allowed to make any inquiries

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(on their own or through third party reporting agencies) that would elicit information telling them

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whether individuals had ever been convicted of that crime. Obviously, a landlord cannot reject a

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prospective tenant on this ground if the landlord does not know of the conviction.
IV.

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CONCLUSION

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The Addison is in serious jeopardy. The five on-site managers are not social

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workers. They are persons trying to meet GRE’s goal of providing safe, clean, comfortable, stable,

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and affordable housing for low-income Seattle residents. The Ordinance is unlawfully hindering

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achievement of that goal.

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GRE respectfully urges the Court to grant Plaintiffs’ motion for summary judgment and
deny the City of Seattle’s cross motion for summary judgment.

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 Case 2:18-cv-00736-JCC Document 71-1 Filed 05/07/20 Page 10 of 11

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DATED: May 7, 2020.
STOEL RIVES LLP

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s/ Jill D. Bowman
Jill D. Bowman, WSBA No. 11754
jill.bowman@stoel.com

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STOEL RIVES LLP
600 University Street, Suite 3600
Seattle, WA 98101
Telephone: 206.624.0900
Facsimile: 206.386.7500

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Attorneys for GRE Downtowner LLC

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600 University Street, Suite 3600, Seattle, WA 98101
Telephone 206.624.0900

 Case 2:18-cv-00736-JCC Document 71-1 Filed 05/07/20 Page 11 of 11

CERTIFICATE OF SERVICE

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I certify that on this day I electronically filed this document with the Clerk of the Court
using the CM/ECF system which will send notification of such filing to:
Brian T. Hodges
Ethan W. Blevins
Pacific Legal Foundation
255 South King Street, Ste. 800
Seattle, WA 98104
425-576-0484
bth@pacificlegal.org
eblevins@pacificlegal.org
Attorneys for Plaintiffs

Melissa R. Lee
Robert S. Chang
Ronald A. Peterson Law Clinic
1112 E. Columbia St.
Seattle, WA 98122
206-398-4394
leeme@seattleu.edu
changro@seattleu.edu
Attorneys for Amici Curiae Fred T. Korematsu
Center for Law and Equality and ACLU-WA

Hillary Madsen
Kimberlee L. Gunning
Nicholas Brian Allen
Columbia Legal Services
101 Yesler Way, Ste. 300
Seattle, WA 98104-2552
206-464-0838
hillary.madsen@columbialegal.org
kim.gunning@columbialegal.org
nick.allen@columbialegal.org
Attorneys for Amici Curiae Pioneer Human
Services and Tenants Union of Washington

Michael J. Saltz
Jacobsen, Russell, Saltz, Nassim & De La
Torre, LLP
1880 Century Park East, Suite 900 Los
Angeles, CA 90067 msaltz@jrsnd.com
310-446-9900
and Jeffrey E. Bilanko
Carroll, Biddle, & Bilanko, PLLC 801
2nd Avenue, Suite 800
Seattle, WA 98104
206-489-5549
jbilanko@cbblegal.com
Attorneys for Amicus Curiae NCRA

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Eric Dunn
National Housing Law Project
919 E. Main Street, Ste. 610
Richmond, VA 23219
415-546-7000 ext. 3102
edunn@nhlp.org
Attorney for Amici Curiae National Housing
Law Project and Sargent Shriver National
Center on Poverty Law

Douglas E. Smith Littler
Mendelson, P.C.
600 University Street, Suite 3200
Seattle, WA 98101-3122
206-623-3300
desmith@littler.com
Attorneys for Amici Curiae CDIA/NAPBS

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Dated May 7, 2020.

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s/ Karrie Fielder
Legal Assistant

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STOEL RIVES LLP

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ATTORNEYS
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Telephone 206.624.0900