Monday, January 25, 2010

Landlords' Attorneys Lament Licensing of Rentals

The Zonemaven recently received a paper submitted to the City Council by a law firm claiming to represent a “number of landlords” , not further identified, in the City of Bellingham. For the sake of all the landlords and renters in Bellingham, let us wish that the number represented is few, for they would be ill-served. The points surfaced by the attorney(s) are a mishmash of oft repeated exaggerations regarding rental licensing. You can read the paper submitted by the law firm by clicking on the images at the left.

The initial lawyerly claim is that the licensing will “increase the cost of rentals” thus “decreasing affordable housing” and “create another unfunded layer of bureaucracy”. The Zonemaven is not amused by these canards and has stated so in the past. (Click here and here to read more.) It is difficult to imagine that a fee of $30-36 year to obtain a license (figures used to estimate total fees to the city per year) will, in any way, produce a crisis in rental costs. (Click here to read the estimates - see page 19) A fee at that level will bring in approximately $450,000, enough to fund an inspection program and hire additional code enforcement personnel. Even if the cost is passed directly to the renters, an additional $3 per month is insignificant, especially if one compares the money to the potential for avoiding a health or safety incident. Lest my readers forget, these are the same landlords who have, time and time again, raised their rents over the years, presumably for reasons having little to do with the health and safety of their tenants. Also not said is that the sharing of a house by 5, 6 or 7 people actually tends to push rents up. For example, seven individuals renting a single family home and who pay $300 per month, provide a gross income to the landlord of $2,100. How many large families needing affordable housing can match that rental? Likewise three renters in a small home, each paying $$350 would place that rental home out of reach of many small families of modest means.

Landlords whose properties are in good condition will see virtually no change in their expenses. For those landlords whose properties are in questionable condition, they may be facing costs associated with bringing their buildings to standards which ensure the health and safety of tenants. According to the landlords' claims that these problem landlords are very few in number, the overall monetary effect of the licensing program should be minimal. Landlords cannot, at one end, claim that the licensing program will cause significant rent increases overall, if, at the other end, the number of units affected will be small as they have posited all along, e.g., “There are only a small number of problem landlords, so why punish all the rest”.

The attorneys also opine that any inspection program is either ineffective because of existing statutes or unnecessary, also because of existing statutes. So, they pronounce inspections ineffective in that the landlord must have a 48 hour notice prior to an inspection which will give her the time to clean up. This is true and it is a desired outcome. Sorry to say though, the attorneys have missed the fact that many deficiencies such as furnace condition, gas leaks, structural problems, mold, substandard or dangerous plumbing or wiring cannot be cleared up in 48 hours. Inspections are aimed at much more serious issues than cleaning up the dead flies and mice (which, by the way, can spread the Hantavirus through their droppings and subsequent unprotected sweeping of the droppings actually bringing about an infection).

They state that inspections are unnecessary in that the tenant has the right to call for an inspection at any time. This is also true but places the tenant in the position of being an expert on furnaces, mold, structural integrity of homes, plumbing and wiring or of being sufficiently wise to divine that there is even a problem. Does anyone believe that more than a handful of the 8,500 Western students (more if you include WCC and BTC) who seek housing here each year even think about wiring or structural integrity?

The attorneys’ paper continues with the assertion that licensing will not substantially have an impact on the abatement of nuisances. They take you down the false path of nuisances “are not limited to tenants only.” This is true and it is also irrelevant. Abatement of nuisances is not the sole rationale for landlord licensing. Moreover, other pressures come to bear with respect to owner-occupied, family homes, town houses and condominiums where there is more likely to be adult supervision and self-regulation in order to preserve the property as a family investment and to respond to the concerns of neighbors over nuisance issues.

To raise the issue of current laws on evictions as an impediment to rental licensing is likewise disingenuous. There is no reason for which a well-crafted rental licensing code in Bellingham cannot take into account issues that may have to be coordinated with the Revised Code of Washington. Rentals, whose history is that of ill-behaved tenants, have one common denominator, i.e., the landlord. These are individuals who time after time either fail to screen their tenants or who set up a scofflaw atmosphere by not adhering themselves to current codes on safety, health and zoning. This “Wink. Wink. Nod. Nod.” environment becomes the breeding ground for nuisances. Couple this with weak or ineffective code enforcement on the part of the city and you have created a symbiotic relationship (city/landlord) that exacerbates the problem and makes life miserable for neighbors and well-behaved tenants alike. There is no need to suspend licenses of such rentals immediately. A point system based on violations over specified periods can give landlords sufficient time to mend their ways and work with the city and the neighbors to eliminate problem renters before they even sign a lease. License suspensions then can be effected the end of leases, thereby preventing bad landlords from further leasing a property.

If on the one hand, we have no more than a handful of bad landlords, as we are told by the landlords themselves, then a licensing law will have little fiscal impact and costs to all concerned will be minimal. If, on the other hand, a licensing law brings to light substantial indications of a rental market gone bad in the areas of health and safety, we will have exposed a serious vulnerability that must be corrected regardless of the cost. To do otherwise would be foolhardy and dangerous.

Penultimately, the attorney(s) argue that existing codes, zoning laws and criminal codes are sufficient to address all the issues. Obviously, they are not sufficient. Even current codes do not provide for inspection of rental units. The city has no idea about the current condition of rental units in Bellingham. Given the potential impact of rental conditions on the health and safety of the community, for rentals to remain the only unlicensed business in Bellingham is unconscionable.

Lastly, the paper declares that rentals are centralized around Western Washington University and therefore a licensing program should not be required throughout the city but only in certain affected areas. (I guess they forgot that they just railed against rental licensing in the previous two pages.) I doubt if any such code, limited to rentals in a certain gerrymandered geographic area within the city, would survive a court challenge. Moreover, students, who are not the only renters in town, tend to live all over the city. See the WWU produced map of the student population in Bellingham by clicking here. The attorneys also forgot about the thousands of other potential renters from Whatcom Community College and Bellingham Technical College. One would assume they would congregate near their own schools.

Alas, the discussion of rental licensing is not at its infancy, in spite of the attorneys' claim to the contrary. This marks the 6th year since the issue was surfaced and debated at the Cruise Terminal. (Click here to read about that) In the interim, one heard nary a peep from the landlords such was their concern about "bad egg" landlords and nuisance abatement. There is a 26 page study on the issue of rental licensing that was made available and discussed on 7 December 2009 during City Council afternoon committee and evening general meetings. (Click here to read that.) We can continue to talk the issue to death or we can act before a tragedy befalls us.


Anonymous said...

Landlords in the BUSINESS of renting out properties and their paid rationalizers (aka attorneys) Please stop huffing and puffing about their "rights" to destroy neighbourhoods and explain ONE very relevant factor:

What warrants treating the BUSINESS of renting out properties as different from ALL other businesses in town that are required to operate under licences

Smells like a top line case of discrimination to me.

The 'bad egg" the "good egg" the "affordable housing" the "existing law concepts are irrelevant to this question.


Anonymous said...

What are nuisance activities? How will rental licensing stop nuisances? If rental licensing will create a better infrastructure to stop nuisance activity, will homeowners be subject to the same infrastructure that regulates renter's nuisance activities? From what I heard at the panel discussion ya'll were concerned with health and safety, not nuisances, but from what I've read rental licensing is, in part, an effort to regulate nuisances.

Zonemaven said...

The prime reason for which I support rental licensing is for reasons of health and safety. Since there is not yet even a draft ordinance, the inclusion of control of nuisances is an arguable point.

The Bellingham Municipal Code defines Nuisances as:

... any act, condition, omission, thing, or use of property which does the following:

1. Annoys, injures, or endangers the safety, health, comfort, or repose of the public;

2. Offends public decency;

3. Unlawfully interferes with, obstructs, or renders dangerous for passage a waterway, public park, street, sidewalk, alley, or highway; or

4. In any way renders the public insecure in life or in the use of property.