Monday, January 22, 2018

Expanded rental inspections are a good thing

In cities across America the number of renters and the percentage of homeowners is dropping. In cities across America renters are strangled by rising rents which eat up way more than the recommended 30% of their income. At the same time there is an alarming lack of affordable housing because more and more housing agencies divest themselves of their public housing stock while the construction of new affordable units are not nearly making up for the losses.
Health impacts of  poorly maintained hosuing

In this context it is important to realize that about 50% of Baltimore's renters live in small buildings with one or two units leased directly from small time homeowners who are not always versed in what it takes to be a landlord and manage a quality rental unit. Some of these apartments or dwelling units are offered by slumlords who make their living from a glaring loophole in Baltimore's housing inspections which exempts properties from rental inspections if they have fewer than three units.

The Center For Community Progress, a national non-profit devoted to reduce urban blight caused from vacant, abandoned, and deteriorated properties, has identified the loophole in a report commissioned by the City which was published in March of last year. The Center has long discovered that code enforcement cannot only be complaint driven, reactive or limited to vacant houses, situations were collapse is imminent or where violations are so blatant that they can be seen from the outside, the conditions on which Baltimore's inspections are centered to date.
Blight is not limited to vacant properties. As a number of respondents noted, in many neighborhoods the problem of substandard rental properties and exploitative landlords is as or more serious than the vacant property problem. An effective blight elimination strategy calls for effective rental regulationstrategies. Such strategies are also likely to have a direct positive effect on the lives of many lower income Baltimore residents.
Center for Community Progress Report Cover
Now on Monday Councilman Bill Henry is introducing a bill aiming to improve the quality of small scale rental housing by responding to key recommendations included in the Community Progress report. Key recommendations included in the report and tracked in the bill include:
  • Amend local law to require licensing and regular inspection of 1 and 2 family rental properties. 
  • Develop a performance-based approach to rental licensing to incentivize responsible landlords, and focus City enforcement on problem landlords. The city should revise its licensing program to provide for performance measurement of landlords, similar to programs in Minneapolis and other cities, in order to both incentivize responsible landlord behavior and enable the city to focus enforcement resources on the minority of serious problem landlords.
  • Establish a dedicated rental housing compliance unit in the Department of Housing & Community Development.  
  • Create a database of city landlords to use to track performance, including code compliance, nuisance and criminal complaints, and tax compliance.
  • Work with local landlord associations, non-profits, and others to build a landlord support system, including training and technical assistance, and increased access to capital for improvements and upgrading. 
The proposed legislation gleans some of its components from Minneapolis, a city with a much stricter enforcement of housing codes including small rental structures. Taken from Minneapolis is an approach with carrots and sticks, i.e. penalties and incentives. A compliant landlord can advance from the basic bi-annual inspection to a three year cycle. A non-compliant landlord can slip into a annual inspection cycle. Persistently badly performing landlords can lose their rental license altogether, a step that Baltimore has hardly ever taken.
Municipal Inspections: Carrot and stick

One doesn't have to so far to see effective inspection of single unit and other small rental property. A nearby example is the City of Bowie which for years maintains an accurate database of all rental units within Bowie's limits and requires annual inspections of every unit. The inspector is a municipal employee and is not used for any other code enforcement activities. An initial inspection is as detailed as a home inspection conducted for a home purchase and ensures that all components of a property perform as required by codes or for offering all functions needed to provide a livable unit. Inspections discover non compliant smoke detectors, non functioning stove burners or leaky CO on furnaces as well as disconnected downspouts.

It is obvious, that government oversight over the basic qualities of the rental housing stock will reduce strive between landlords and tenants. No longer would tenants have to resort to withholding their rent payment as a weapon to achieve repairs of defective units, a strategy that often backfired when the landlords takes the tenant to rent-court, even though the law allows such withholding where a unit doesn't serve its intended purpose. Landlords who argue that a rigorous inspection system would reduce the amount of rental housing on the market are simply employing a scare tactic that is about as plausible as arguing that rigorous inspections of cars would reduce the number of cars for sale. Both, car and rental housing inspections result in a win-win by ensuring that basic safety and quality is maintained. It is only a question why it took so long before Baltimore even considers a rigorous inspection system.

The cost of the inspections should be covered by modest rental licensing fees and possibly, like in Bowie, modest annual inspection fees. While those fees will, no doubt, be rolled into rents, they are well worth the benefit of safer, less blighted housing.

Klaus Philipsen, FAIA

Baltimore SUN about the Bill Henry bill introduction
Baltimore SUN about rental inspections in Minneapolis 
Center for Community Progress: "Blight in Baltimore"

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