Landlords question fee change

SALEM – Landlords Geoff Goll and David Halverstadt questioned the need for an increase to the annual housing occupancy fee charged by the city for rental units, speaking out against the proposal Wednesday night.

“Have you asked the law director if this is subject to a referendum?” Goll asked.

The Rules & Ordinances Committee of city council hosted the meeting regarding the increase from $15 per year per unit to $30 per year per unit. A first reading of the ordinance had already been held by city council last week.

In answer to Goll, committee chair Councilman Rick Drummond said he had not asked that question. Then the question about a referendum was thrown back at Goll since he’s an attorney. He told them it was subject to referendum, meaning the people could challenge the action on the ballot.

He didn’t say, though, whether he intended to seek a referendum.

After the meeting, Councilwoman Cyndi Baronzzi Dickey said she talked with Goll and he explained to her a referendum issue is dependent on whether the legislation in question is done as an emergency.

At the beginning of the meeting, Drummond said that would be one of the amendments made to the ordinance at a council meeting, to add the emergency clause, which would mean the ordinance could take effect immediately instead of waiting 30 days after passage to take effect.

It had been explained previously that the desire was to have the fee in place before the end of the year so the invoices for the 2014 fee could reflect the increase. Also proposed was an increase from $30 to $60 for nonpayment of the fee, an increase from $50 to $100 for the penalty for failing to allow an inspection and an increase from $100 to $200 for each subsequent violation.

Drummond said they’ll be amending the ordinance to include an increase in the fee for boarding houses from $15 to $30 per year, but without a per room fee tacked on. He said he saw no difference in what an inspector has to do if he’s looking at a five-room house rented to one family or a five-room house with rooms rented to several individuals – it’s still a five-room house.

The committee won’t be asking for an increase to the fee for an appeal, which costs $50, saying an increase could deter people from exercising their right to appeal.

Drummond said he’ll ask the mayor whether it’s really necessary to have the increase in place by the end of the year,. He urged people to contact their council representatives or the mayor’s office on their thoughts. The issue may come up at the next council meeting.

Both Goll and Halverstadt brought up the issue that was raised by landlords previously when a fee increase was discussed in September 2012, that the housing department serves all the residents, but the landlords and tenants are the ones being charged the fee for the service.

They said then that it wasn’t fair and they reiterated those feelings.

“The city is providing a service to all its citizens to provide a housing department,” Goll said.

He pointed out the city provides police protection, fire protection, streets and parks and none of the users of those services are required to pay a fee. Dickey argued that a fee is charged to users of the utility department, but he said that money’s not from the general fund.

He also talked about the more than $1 million carryover or surplus the city was expected to have at the end of this year in the general fund and the fact that the general fund has already been paying for the increase to personnel in the housing department. A second part-time inspector was put on earlier this year, brought back from a layoff in 2009.

Goll questioned the amount of the increase, noting that if the city determined 90 percent of the work in the housing department involved rental units, why were they increasing the fee by 100 percent? He said the increase will affect the people who can least afford it, the tenants.

Halverstadt said his problem with the fee is that he’s already paying property taxes and income taxes and he’s being forced to pay a fee for services already being paid for with taxes.

“Why am I being punished as a second-rate citizen and being charged twice?” he asked.

Drummond had explained that the department logged its activity for nine months and determined that 90 percent of the work involved the non-owner occupied housing, or rental units, which is why they felt the increase was justified to put the cost to ensure inspections get done on the people who are benefitting the most – the landlords and tenants.

Whether the cost gets passed on to the tenants will be up to the landlords alone, he said. He attempted to turn around their argument about the fee going on the least able to pay, asking the landlords present if they planned to pass the cost onto their tenants.

The committee did receive support for the fee increase from some landlords, with Scott and Lisa Cahill both voicing their support and agreeing with the need for housing inspections. Council members also received a letter of support from former Salem resident George Henshaw, who still owns rental properties in the city.

Mayor John Berlin said council could change the frequency of housing inspections if they wanted from every year to every two years or three years, but said that could be a disservice to the general public and the tenants and landlords.

He said he’s starting to track the number of calls and time spent by the police department and fire department at rental properties, saying he’s read that most cities say a disproportionate amount of their fire and police calls have to do with rentals. He said he’s figuring out how much of the general fund is spent related to rental units.

When asked what direction he planned to go with that information, he explained that other cities do a sliding fee scale, with fees for units causing the most problems going up and the fees for quality units going down.