Holiday Gift or Lump of Coal for Landlords?

On December 9, 2025, the Tacoma City Council passed Ordinance 29086, an extensive amendment to the Landlord Fairness Code Initiative (LFCI) and the Rental Housing Code. Promoted as a way to protect tenants while easing pressure on small housing providers, the ordinance introduces several significant changes scheduled to take effect January 1, 2026.

For Tacoma landlords; especially mom-and-pop owners already navigating long moratoria, strict just-cause restrictions, and rising compliance costs, the biggest question is whether these amendments offer meaningful relief or simply a reshuffling of existing burdens. Whether this ordinance ends up being a holiday gift or a lump of coal remains to be seen.

What is clear, however, is that landlords must understand the revisions immediately. Below is a detailed advisory breaking down the most important changes and what they mean for your rental business in 2026.

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Key Changes in Ordinance 29086

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1. Rent Increases Now Require 180 Days’ Notice

Tacoma has officially extended the required notice period for any rent increase from 120 days to 180 days.

What this means for landlords:

• Your rent-increase timeline is now six months.
• If you plan to raise rent in July, you must give notice in January.
• Failure to meet the timeline risks rendering your increase unenforceable and triggering downstream issues, including tenant defenses.
• This notice must comply with both RCW 59.12.040 and Tacoma’s service requirements.

Planning annual rent reviews earlier and incorporating this timeline into your property-management calendar is a smart move.

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2. Late Fees Capped at 1.5% of Monthly Rent

The previous $75 per-month cap is gone. In its place:

• Landlords may charge up to 1.5% of monthly rent as a late fee.
• No additional fees may be charged for issuing notices, preparing legal documents, or “administrative costs.”
• Late fees may not be deducted from the security deposit.
• Landlords must give quarterly written notices showing the balance of any late fees.

Example:

If rent is $2,000, the maximum late fee is $30 per month.

The earlier landlords reflect these changes in their lease agreement and accounting practices the better.

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3. New Structure for Rent Increase Relocation Assistance

Under the amended code, tenants faced with a rent increase of 5% or more may request relocation assistance.

Assistance amounts are now tiered:

• 5%–7.49% increase: 2 months’ rent
• 7.5%–9.99% increase: 2.5 months’ rent
• 10% or more: 3 months’ rent

Important new rule: Tenant repayment

If the tenant requests assistance but ultimately does not move, they must repay the relocation assistance. This prevents misuse while preserving tenant protections for those who genuinely need to relocate.

Exemptions:

Landlords do not owe relocation assistance if:

• They own four or fewer units in Tacoma and live on-site (SFH + ADU configuration),
• The tenant has lived in the unit less than six months, or
• The landlord is temporarily renting their primary residence during active-duty service.

For investors and small landlords, these exemptions can materially affect risk exposure.

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4. Changes to the Cold-Weather Eviction Defense

Tacoma tightened and narrowed this defense:

New dates:

Cold-weather eviction protections now apply November 15 through March 15 (previously Nov 1 – Apr 1).

New eligibility conditions:

The defense applies only if:

1. The household income is at or below 120% AMI, and
2. The landlord owns more than four rental units in Tacoma.

Implications:

• Landlords with four or fewer Tacoma units are no longer subject to the cold-weather defense.
• Medium and large landlords must continue factoring this window into their compliance timeline.
• Service of a notice is not prohibited, but enforcement is limited within this period.

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5. School-Year Eviction Defense Preserved, but Exceptions Expanded

The school-year moratorium still protects households with:

• A child or student,
• A guardian or custodian, or
• An educator.

However, new exceptions now apply, including:

• Waste, nuisance, or illegal activity
• Owner move-in
• Sale of the home
• Uninhabitable or condemned dwellings
• Sexual harassment by tenant
• New owner-occupant exception for SFH/ADU properties

If the landlord lives on the lot, whether in the main home or the ADU, the school-year and cold-weather defenses do not apply.

This is a major shift for small owner-occupants who have been effectively locked out of the eviction process during the academic calendar.

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6. Exemptions for Affordable Housing Providers

A new section in the code exempts:

• The Tacoma Housing Authority, and
• Certain nonprofit owners of deed-restricted affordable housing

These exemptions apply 30 days after written notice is provided to tenants and must be disclosed in all rental agreements entered after January 1, 2026.

For a nonprofit or deed-restricted provider, this exemption does not apply.

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7. Updated Penalties and Hardship Considerations

Landlords who violate the LFCI face:

• Penalties ranging from $500 up to five times monthly rent,
• Automatic treble relocation assistance damages for failure to pay required relocation assistance,
• Possible injunctive orders, attorney’s fees, and tenant damages.

However, the ordinance now allows landlords to seek exemptions based on undue and significant economic hardship, with detailed criteria, including unpaid rent, carrying costs, owner illness, accidents, job loss, or family circumstances.

For many small landlords, the hardship provision may become a crucial tool.

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Is This a Win for Landlords?

The ordinance strikes a middle position:

• Small landlords benefit from meaningful carve-outs; especially the cold-weather exemption and owner-occupant protections.
• Larger landlords face expanded compliance requirements and narrower enforcement windows.
• All landlords must update their lease agreements, notice forms, and compliance processes before January 1, 2026.

Whether this ultimately becomes a “gift” depends on your portfolio size, your tenant population, and how proactively you adapt to the new code.

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Legal Information Disclaimer

This article provides general information only and does not constitute legal advice. No attorney-client relationship is formed by reading this material. For guidance regarding your specific situation, consult qualified legal counsel.