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House subcommittee turns down bill preventing regulation of rental fees

An Idaho House subcommittee sided with renters and their advocates on two pieces of legislation this week.

On Tuesday, a portion of the House Judiciary, Rules & Administration Committee met to hear two bills related to property management. The first, from Rep. Caroline Nilsson Troy, R-Genesee, requires property managers to hold rental deposits from tenants in a separate bank account. The other bill, from Rep. Greg Ferch, R-Boise, would prevent localities from regulating deposits and fees.

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After a hearing on both bills, the subcommittee voted to send Troy’s bill to the full committee and pass it to the House Floor. The members also voted 4-2 to table Ferch’s bill on the table in committee instead of giving it a nod of approval.

Bill would end Boise’s application fee cap

HB 45 from Ferch would have halted the City of Boise’s 2019 ordinance capping rental application fees to $30. The ordinance also says if a unit has an applicant and a deposit placed, it can’t be advertised to take applications. It also prevents property managers from charging application fees for renters to move from one unit to another within a complex.

Boise is the only city currently in Idaho with an ordinance this bill would impact.

Ferch, a landlord himself, said he brought this legislation because he wants to stop the possibility of landlords navigating a range of different application fee rules in different jurisdictions. He said any conversation about application fees should happen at the state level, not city by city.

“I’m concerned with a potential for a patchwork of city ordinances that we would create the very kind of model and the very type of regulatory burden that is driving people out of other states and causing Idaho to have a shortage of the very housing that some of these ordinances and intending to protect,” he said.

Several property managers and the Idaho Apartment Association testified in support of the bill. They argued it adds an additional burden on property managers and makes it more difficult to do business. On the other side, Boise City Council President Pro Tem Lisa Sanchez and a few others testified about the difficulty in finding housing and how property managers regularly collect high fees and potential tenants often have to apply multiple times to find an apartment.

Not enough support

Ferch’s arguments did not sway the majority of committee members. Rep. Colin Nash, D-Boise, said the bill responds to the future threat of a problem to property managers instead of the growing housing crisis in Idaho.

“I just want to speak to the fact that you’re owning properties in multiple jurisdictions, that’s privilege,” Nash said. “That’s not a burden to deal with different fees to tenants or different levels of property taxes. We don’t require uniformity in property taxes because different communities have different needs.”

Rep. Paul Amador, R-Coeur D’Alene, didn’t necessarily oppose the idea, but he thought it needed to be part of a larger discussion about protecting renters. He described his own experience with trying to find an apartment in Boise during the session and how landlords were requiring application fees from him before he could see the apartment.

“Until we put some pressure into that arena, I’m worried we won’t see that bigger package and we won’t be forced to the table to figure out the necessary elements,” he said. “…This bill is part of that solution, but it needs to be part of a bigger solution.”

Deposit protections head to full committee

Troy’s bill requiring separate bank accounts for rental deposits got a much warmer reception. With no objections, it was recommended to go to the full committee to be passed to the House floor.

Troy and her co-sponsor, Rep. John Gannon, D-Boise, said the bill would give renters recourse to retrieve their deposits in case of bankruptcy from a property management company or financial mismanagement.

“What’s happening is that some of these property managers are commingling the money,” Gannon said. “They’re just putting it in their operating account and they use it to pay bills, which works just fine unless they get into financial trouble, and if they get into financial trouble they either file bankruptcy or just disappear.”

Testimony on the bill was all supportive, including from a Latah County property manager. There was also a lot of discussion about a 2018 legal case involving Meridian-based property management company Paradigm Property Solutions LLC. According to a suit filed against the company and its owner Ronald Jacques, the owner used security deposits and rental payments for his personal use and left tenants and business partners high and dry.

Margaret Carmel - BoiseDev senior reporter
Margaret Carmel is a BoiseDev reporter focused on the City of Boise, housing, homelessness and growth. Contact her at [email protected] or by phone at (757)705-8066.

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