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Bellingham’s Initiative 1, a minimum wage increase and Initiative 2, rent control, have passed and will be certified next month

About the Author
Mark Harmsworth
Director, Small Business Center

Bellingham Initiative 1, sponsored by a political action committee ‘Community First Bellingham’, labor groups and local activists has passed with 58% of the vote. For many service industries, such as restaurants, retail and hospitality services, profit margins are as low as 3%. Minimum wage mandates wipe out that profit and can put a business into negative fiscal territory.

The passage of Initiative 1, unfortunately, will place Bellingham at a competitive disadvantage to other local jurisdictions that did not increase the minimum wage.

Additionally, Bellingham Initiative 2 has passed at 62% of the vote. The initiative will effectively function as rent control, increasing housing unaffordability by further constricting housing supply while contributing to homelessness.

Both economic theory and real-world results unequivocally show that laws which artificially control rents disincentivize housing providers from creating and retaining an affordable housing supply, driving low-income renters to the financial brink and pushing more people into homelessness.

While the Initiative acknowledges Bellingham’s low vacancy rate, the measure would worsen the vacancy rate problem by disincentivizing the creation of new rental housing.

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