Twilight Zoning in Bellingham: “Twenty-Three Years of Rental Licensing

Friday, June 10, 2011

“Twenty-Three Years of Rental Licensing — Observations”

The following is a letter to the citizens of Aurora, IL from Albert Dennis, Sgt-at-Arms of the American Association of Code Enforcement. The original can be found on the site of the City of Aurora, IL by clicking here.

"Rental licensing is one systematic tool used by municipalities for maintenance of income housing stock. The City of Aurora adopted its licensing program in 1982 during my second year of employment. Aurora’s population was 90,000 (currently 157,000). Aurora modeled its ordinance on ideas from programs used in Oak Park, Illinois (program begun in 1958); Cedar Rapids, Iowa; and Ann Arbor, Michigan, among others.

The initial ordinance pertained only to rental properties containing three or more units (1000 buildings). Inspections of rental properties prior to 1982 were complaint driven. City Fathers determined that approach was insufficient. The City Council passed the licensing ordinance over protests primarily from the local board of realtors.

Aurora has amended the ordinance over the years adding: All rental units in the downtown core (1990), rental condo units in complexes having at least fifty units in which at least fifty percent of the units are rental (1990), rental two-units (1995), rental portions of owner-occupied two-unit buildings (2003) and single-family rental units (2004).

Positive observations relating to twenty-three years of participation in rental licensing:

The lion’s share of complaints prior to adoption of rental licensing were from the thousand buildings containing three or more units. Today very few complaints originate from those buildings. The overall building maintenance is drastically improved. Many unsafe and ghastly living conditions have been eliminated from those multi-unit buildings. Property values have escalated in buildings that once appeared destined for demolition. Potential property buyers know the buildings have had regular minimum standard inspections.

Licensing gets us into all the units over time. Prior to licensing many tenants failed to complain about dreadful conditions for fear of landlord retribution. That was a much bigger issue in 1981 than now. Rental licensing has weeded out the old time, do nothing, rent collecting slumlords that infested the City of Aurora when I hired on in 1981. Regular inspections also aid in enforcing occupancy standards in rental properties.

Additionally, the registration process for new owners affords us the opportunity to educate them about code requirements and encourage them to attend the local landlord training school offered by the City of Aurora. Many landlords have improved their tenant screening practices as a result. Registration also provides an owner/agent database for easier contact should the need arise. Licensing can bring in some income depending on the fee schedule. Aurora’s rental license fees are low and do not cover the cost of the program.

Negative observations relating to twenty-three years of participation in rental licensing:

From my point of view the number one negative issue regarding rental licensing is the intrinsic bureaucracy that comes with it. Initially notifying and registering property owners is a major event. The better your database capabilities and relationship with your computer people the easier this task will be. Monitoring owner changes and registering the new owner must be done. Making inspection and re-inspection appointments is time consuming. You must have enough inspectors and support staff to operate the program.

Getting a licensing ordinance adopted can be difficult. Many municipal rental-licensing programs are started because of neighborhood activist initiation and support. Some have been blocked due to the town’s “old boy” network and connections with the council.

Initial inspections of poorly maintained buildings can be lengthy. I recall spending two or more hours in three and four unit buildings in 1982-85. Those inspections generated extensive violation notices and time-consuming follow-up inspections. Licensing also forces you to expend manpower on buildings that don’t really need it. In Aurora, this is offset by granting one or two-year waivers of fees and inspections on buildings found to be up to code. (Note: some municipal rental licensing program licensing periods are two, three, four or even five years, rather than annual, as in Aurora.)

Weighed together I believe the positives have outweighed the negatives in Aurora. Frankly, we had some deplorable rental buildings twenty-three years ago. Some still aren’t palaces, but they are much improved."

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The Rationale for Rental Licensing

There is the definitive experience of cities that have already adopted rental licensing and inspections in the face of exactly the same opposition as we saw in Bellingham over the last decade. Ultimately, each of these cities was proven correct in its resolve to move ahead to protect the safety and health of the renters. We already know that the city of Pasco, WA found that 15% of the units inspected under their program had serious life/safety issues. 10% had mold problems. A full 85% had problems of varying degrees. The city of Gresham, OR performed over 1600 inspections in 2009 and issued, as a result, over 4,000 citations. Lexington, KY performed inspections of units near the University of Kentucky and found that 50% had life/safety issues. Sacramento, CA began an inspection program during which one third of the units inspected had serious safety and health issues. The question why does anyone believe that the condition of rental housing here in Bellingham does not mirror that which is found in cities that have the statistics to show that time and time again the condition of rentals in our cities is problematic? All we have had to date from those who oppose licensing are broad statements by the landlords and their paladins that are completely and utterly unsubstantiated. The Zonemaven has searched in vain for the horror stories that these opponents of licensing and inspections have predicted. On the other hand, The Zonemaven did find over 100 cities that have licensing AND inspections without the catastrophic effect for the rental markets that the landlords would have you believe. (See this blog's sidebar at bottom left for list)

One Reason Illegal Rooming Houses Do Not Work

The limit for unrelated persons at a single family home rental is three residents. Leases are signed by three people who then invite additional renters to join them to lower per capita rental rates. The perverse effect is that rental rates tend to rise under these circumstances making it difficult for single families to rent single family homes. Some local rental agencies facilitate this practice.

"To say that a family is so equivalent to a ragtag collection of college roommates as to require identical treatment in zoning decisions defies the reality of the place of the family in American society, despite any changes that institution has undergone in recent years. Only the most cynical among us would say that the American family has devolved to the point of no greater importance or consideration in governmental decision making than a group of college roommates." (Stegeman v. City of Ann Arbor)

That being said, accommodation ought to be made for protected classes, especially non-traditional unions and group houses for the disabled. These classes are laid out in federal and Washington State law.