If you own a rental property in Olympia, Lacey, or Tumwater, this is probably the question on your mind right now: how much am I actually allowed to raise the rent this year? The answer changed dramatically in 2025, and a lot of rental owners are still working from old assumptions that could now land them in real legal trouble.
For the first time in state history, Washington has a statewide cap on how much you can raise rent. It is no longer up to you, the market, or what your lease says. There is a hard ceiling set by the state, it changes every year, and going over it carries financial penalties that can reach thousands of dollars per violation.
So let me give you the direct answer, then walk through exactly how it works. For 2026, the most a landlord can raise rent in Washington State on most residential properties is 9.683%. That number was set by the Washington State Department of Commerce and applies to rent increases taking effect between January 1 and December 31, 2026. Knowing how much a landlord can raise rent in Washington now comes down to understanding this cap, the exceptions to it, and the new notice rules that go along with it.
This is general information for rental owners, not legal advice. The law is new, enforcement is active, and a property manager or landlord-tenant attorney can confirm how it applies to your specific property.
What Changed: Washington Now Has Statewide Rent Control
On May 7, 2025, Governor Bob Ferguson signed House Bill 1217 into law, and it took effect immediately. With that signature, Washington became the third state in the country to adopt statewide rent control, joining Oregon and California.
This was a major shift. Before HB 1217, a Washington landlord could raise rent by any amount they wanted as long as they gave proper notice. A 15%, 20%, or even larger increase was legal. That era is over. The law now puts a firm annual ceiling on rent increases for most residential tenancies, and it applies not just to new leases but to tenancies that existed before the law passed.
The core rule is straightforward. After a tenant has lived in the unit for 12 months, you may raise the rent during any 12-month period by no more than the lower of these two figures:
- 7% plus the Consumer Price Index (CPI), or
- 10%
Whichever number is smaller is your ceiling. Because the law requires using the lower of the two, the practical maximum is capped at 10% even in high-inflation years.
What Is the Exact Rent Increase Cap for 2026?
Each year, the Washington State Department of Commerce calculates and publishes the maximum allowable rent increase. It bases the figure on the June 12-month change in the Consumer Price Index for the Seattle-Tacoma-Bellevue area, then announces the new number, typically in early July, for the following period.
Here is how the cap has moved:
| Year | Maximum Rent Increase | How It Was Set |
|---|---|---|
| 2025 (from May 7) | 10.000% | 7% + CPI exceeded 10%, so capped at 10% |
| 2026 | 9.683% | 7% + Seattle-area CPI came in below 10% |
For 2026, the 9.683% figure applies to increases that take effect between January 1 and December 31, 2026. If inflation drops further, the 2027 number could be lower. If it rises, the cap still cannot exceed 10%. The Department of Commerce hosts the official number on its Landlord Resource Center page, and that is the figure that governs, not an estimate or a number from an older article.
The Rules That Come With the Cap
The percentage ceiling is the headline, but HB 1217 came with several other rules that every rental owner in Thurston County needs to follow.
No rent increase in the first 12 months. You cannot raise the rent at all during the first year of a tenancy, regardless of whether the lease is month-to-month or a fixed term. This applies even if your costs go up. The freeze covers the entire first 12 months after the tenancy begins.
Only one increase per 12-month period. After the first year, you can raise rent once in any rolling 12-month window, and the total cannot exceed the cap. You cannot stack multiple smaller increases to get above the limit.
Notice went from 60 days to 90 days. Before HB 1217, a 60-day written notice was the standard for rent increases. The law extended that to 90 days. You now have to give tenants 90 days written notice before any rent increase takes effect. A notice with too little lead time is not valid.
Lease type parity. The law requires parity between lease types. A landlord cannot charge more than a 5% difference in rent based on whether a tenant chooses month-to-month versus a longer fixed term. You cannot use a steep month-to-month premium to push tenants into longer leases.
Real Numbers: What 9.683% Looks Like on an Olympia Rental
Percentages are easier to understand with actual dollars attached. Here is what the 2026 cap means in practice for typical rental homes in the Olympia area.
| Current Monthly Rent | Maximum 2026 Increase (9.683%) | New Maximum Rent |
|---|---|---|
| $1,600 | $154.93 | $1,754.93 |
| $1,900 | $183.98 | $2,083.98 |
| $2,200 | $213.03 | $2,413.03 |
| $2,500 | $242.08 | $2,742.08 |
So on a single-family home in Lacey renting at $1,900, the most you could raise it in 2026 is about $184, bringing it to roughly $2,084. If you were planning a larger jump to catch up to current market rates, the law does not allow it, no matter what comparable homes nearby are renting for.
How Do You Calculate a Compliant Rent Increase?
The calculation is simple once you know the steps, but each one matters because skipping any of them creates legal exposure.
- Check the length of the tenancy. If the tenant has lived in the unit for fewer than 12 months, you cannot raise the rent at all yet. Wait until the first year is complete.
- Look up the current state cap. For 2026 it is 9.683%. Always verify the current figure on the Department of Commerce site, since it changes annually.
- Confirm no increase in the past 12 months. The increase, combined with any other increase in the prior 12-month window, cannot exceed the cap.
- Apply the percentage. Multiply the current rent by the cap to find your maximum allowable increase.
- Give 90 days written notice. The notice has to reach the tenant at least 90 days before the new rent takes effect.
Following those five steps keeps you compliant. Missing any one of them can invalidate the increase or expose you to penalties.
Which Properties Are Exempt From the Cap?
Not every rental falls under the HB 1217 rent ceiling. The law carved out specific exemptions, and if your property qualifies, the percentage cap does not apply. The main exemptions are:
- New construction. Properties are exempt for 12 years from the date the certificate of occupancy was issued. This was intended to avoid discouraging new housing development.
- Owner-occupied situations. Certain arrangements where the owner shares the dwelling or specific small owner-occupied properties may be exempt.
- Nonprofit-owned housing. Properties owned by qualifying nonprofit organizations can fall outside the cap.
If you believe your property is exempt, do not just assume it and proceed. The law has specific requirements for claiming an exemption, and getting it wrong is treated the same as violating the cap. Confirm the exemption applies and document the basis for it.
There is also a separate, lower cap for manufactured and mobile home lot rents. Those are limited to a 5% increase in any 12-month period, reflecting the legislature’s view that tenants who own their home but rent the lot underneath are especially vulnerable to displacement. If you own manufactured home lots in Thurston County, that 5% limit is the one that applies to you.
What Happens If You Go Over the Cap?
This is where many landlords underestimate the seriousness of the new law.
The Washington State Attorney General has enforcement authority under HB 1217 and can impose civil penalties of up to $7,500 per violation against landlords who knowingly exceed the cap. That is per violation, not a single flat fine. A landlord who raises rent above the limit on several units, or repeatedly, can face penalties that add up quickly.
Beyond the financial penalty, a rent increase that violates the cap is not enforceable. If you issue a notice raising rent by 15% and a tenant challenges it, you do not collect that increase, and you may have to rescind and reissue a compliant notice, losing months in the process. The Attorney General’s office has also signaled that landlords should review any rent increase notices and renewal offers that took effect on or after May 7, 2025, and correct any that do not comply.
For a self-managing landlord who is not tracking these changes closely, the risk is real. The penalty for a single misstep can exceed an entire year of the rent increase you were trying to capture.
Does Local Law in Thurston County Add Anything?
Statewide, HB 1217 sets the floor of protection. Some cities have their own ordinances that are more restrictive, and where local law is stricter, the local rule wins.
Seattle and Tacoma both have additional local protections, including economic eviction rules where large rent increases can trigger relocation assistance obligations. For rental owners in Olympia, Lacey, Tumwater, Yelm, and the rest of Thurston County, the statewide HB 1217 framework is currently the governing standard, without the extra layers that Seattle and Tacoma landlords face. That said, local ordinances can change, so it is worth staying aware of any new rules adopted at the city or county level.
How This Changes Rental Investment Strategy in Olympia
The rent cap does not just affect a single increase. It changes the longer-term math of owning rental property in Washington.
Under the old rules, a landlord who kept rent below market for a good long-term tenant could catch up to market rate whenever that tenant left or with a larger increase. Now, with increases capped at under 10% per year and frozen entirely in year one, letting rent fall significantly below market becomes harder to recover from. A property that sits 20% under market cannot be brought up in a single year anymore.
This has a few practical implications for rental owners in the Olympia area:
- Setting the right initial rent matters more than ever. Since you cannot raise rent in the first 12 months and are capped after that, pricing a new tenancy accurately at the start is critical. Underpricing at move-in is now much costlier over time.
- Steady annual increases beat occasional large ones. Applying a reasonable increase each year, within the cap, keeps rent closer to market than skipping increases and trying to catch up later, which the law no longer permits.
- Tenant retention has more value. Turnover is the one point where you can reset rent to current market for a new tenant. But turnover also brings vacancy, leasing costs, and risk, so the decision is more nuanced than simply wanting a tenant to leave.
This is exactly the kind of strategic calculation where a property manager who tracks the cap, prices accurately, and applies compliant increases on schedule protects your long-term returns.
What Else Did HB 1217 Change Besides the Cap?
The rent ceiling gets the most attention, but the law touched several other areas that affect how you run a rental in Washington. These are easy to overlook because the headlines focused on the percentage.
The law also addressed move-in fees and deposits. It placed limits on certain fees a landlord can charge and tightened the rules around what can be collected at the start of a tenancy. If your lease or your standard move-in process includes various fees on top of the security deposit, those practices are worth reviewing against the current law.
It created the Landlord Resource Center, run by the Department of Commerce, which is where the annual rent cap is published and where landlords can find information about available programs and services. This is now the authoritative source for the yearly figure, so it is worth bookmarking rather than relying on secondhand numbers.
The law also gave tenants certain lease termination rights and built in Attorney General enforcement with real teeth. The takeaway for rental owners is that HB 1217 is not a single rule about rent. It is a broader rebalancing of the landlord-tenant relationship in Washington, and the rent cap is just the most visible piece.
Common Mistakes Landlords Are Making Under the New Law
Because the law is still relatively new, a predictable set of mistakes keeps coming up among self-managing landlords in Washington. Knowing them in advance is the easiest way to avoid them.
- Using last year’s cap number. The 2025 cap was 10%. The 2026 cap is 9.683%. A landlord who applies last year’s figure assumes they have more room than they actually do. Always pull the current number from the Department of Commerce.
- Raising rent in the first 12 months. Some landlords still believe a month-to-month tenancy can be increased anytime. The first-year freeze applies to every tenancy type, with no exception for month-to-month arrangements.
- Giving only 60 days notice. The old 60-day standard is gone. Notices now require 90 days, and a short notice makes the increase invalid.
- Stacking increases. Trying to apply two smaller increases within a 12-month period to exceed the cap is not permitted. The limit is measured across the rolling 12-month window.
- Assuming an exemption without documenting it. Believing a property qualifies as new construction or owner-occupied without confirming the specific requirements is treated the same as a violation if you are wrong.
- Charging a large month-to-month premium. The parity rule limits the rent difference between lease types to 5%. A steep month-to-month surcharge designed to push tenants toward long leases now runs afoul of the law.
Any one of these can turn a routine rent increase into a compliance problem, and with penalties reaching $7,500 per violation, the cost of a simple oversight is significant.
What Should Tenants Know About the Rent Cap?
Rental owners are not the only ones reading up on this. Tenants in Olympia, Lacey, and Tumwater are increasingly aware of their protections under HB 1217, and that awareness shapes how rent increases land.
A tenant who receives a notice raising their rent by more than the cap now has a clear basis to question it. They can point to the Department of Commerce figure, note the 90-day notice requirement, and check whether they have even been in the unit long enough for an increase to be legal. A landlord who issues a non-compliant increase is increasingly likely to have it challenged rather than quietly accepted.
For rental owners, this is another reason to get increases right the first time. The days of an oversized increase going unquestioned are over. Tenants have the information, the state has an enforcement mechanism, and a compliant, well-documented increase is the only kind worth issuing.
How a Property Manager Keeps You Compliant
Staying compliant with HB 1217 is not complicated, but it requires attention to detail that is easy to lose track of when you are managing a property alongside a full-time job or from out of state.
A professional property management company tracks the annual cap published by the Department of Commerce, calculates compliant increases, schedules them so they happen once per 12-month period, and serves the required 90-day notices correctly. Using software like AppFolio, the timing and documentation of every rent increase is recorded automatically, which matters if an increase is ever questioned.
A manager also knows the exemptions, the parity rules between lease types, and the local landscape, so your increases hold up and you are never the landlord who accidentally triggers a $7,500 penalty by working from last year’s number or an outdated notice template.
How MVP Property Pros Handles Rent Increases
MVP Property Pros has managed rental homes in Olympia, Lacey, Tumwater, Yelm, and DuPont since 2004, and we have guided our owners through every change Washington has made to its rental laws, including the arrival of statewide rent control under HB 1217.
For every property we manage, we track the current Department of Commerce rent cap, set initial rents accurately at market rate, apply compliant annual increases on schedule, and serve proper 90-day notices that meet current legal requirements. Our owners do not have to memorize percentages or track legislative changes. We handle the compliance so the rent stays as close to market as the law allows, without ever crossing the line into penalty territory.
If you own a rental home in the Olympia area and want to make sure your rent increases are both compliant and as strong as the law permits, call us at (360) 339-8539.
Conclusion
The answer to how much a landlord can raise rent in Washington State in 2026 is 9.683% on most residential properties, and that number comes with a set of rules that did not exist a couple of years ago. No increase in the first 12 months, only one increase per 12-month period, 90 days written notice, parity between lease types, and civil penalties up to $7,500 for knowingly going over the cap.
This is a permanent change to the rental market in Washington, in effect until at least 2040. The landlords who do well under it are the ones who price accurately from the start, apply steady compliant increases every year, and stay current with the cap as the Department of Commerce updates it each July.
For a deeper look at the broader rent increase rules and notice requirements, our other guides on Washington rent increase laws and Olympia notice periods pair directly with this one and are worth reading alongside it.
If you want help making sure your rental income stays compliant and competitive under the new law, MVP Property Pros is reachable at (360) 339-8539.