A bill ending Boise’s cap on rental application fees, or regulation on any fees at all, earned overwhelming support on its way to the House floor.
On Tuesday, the House Business Committee held a hearing on HB 442 brought by Rep. Joe Palmer, R-Meridian, that would include fees in the state’s ban on rent control. This would prevent cities, like the City of Boise, from instituting any regulations on rental application fees, late fees, renewal fees or any other charges related to renting a place to live statewide.
What is the history?
Currently, the City of Boise is the only city statewide with an ordinance regulating rental application fees. They are capped at $30 and the ordinance also requires landlords to only advertise available units and stop accepting applications once an apartment or home is rented to someone else. City Council Member Lisa Sanchez brought the proposal in 2019.
During the two-hour-long hearing, the bulk of the testimony came from those in opposition to the bill who argued Boise’s cap on rental application fees prevents landlords from profiting off of the shortage of housing by charging exorbitant fees from applicants with few choices. They said applicants, particularly low-income tenants, are particularly at risk due to the compounding cost of paying fees for multiple applications in order to find a place to live.
But, legislators were unmoved. They passed the bill to the House on party lines with 17 votes for and two against from Democrats Rep. Brook Green, D-Boise, and Rep. Steve Berch, D-Boise.
This bill is nearly identical to a piece of legislation proposed in 2021 by Rep. Greg Ferch, R-Boise, in the House Judiciary Committee where it died in committee on a single vote.
‘Boise’s law is not balanced’
Ferch, a landlord himself, told the committee that while he does not charge application fees for his properties, said the ordinance crosses a line by regulating the cost of services instead of the free market. He noted that services like Zillow already allow renters to pay a flat fee for a background check and apply to multiple properties, solving the problem Boise’s ordinance seeks to solve.
“It’s really pretty clear there are issues (with affordable housing),” Ferch said. “I’m just not convinced that setting and limiting one fee that is relatively a one time fee at $30 dollars instead of whatever market rate is, like $75 or $100 dollars, moves the dial on the general nature of affordable housing in this area.”
Leaders from the local chapter of the National Association of Residential Property Managers and the Executive Director of the Idaho Apartment Association also testified in favor of the bill. Paul Smith, the IAA executive director, said he wouldn’t be opposed to regulation on application fees at the statewide level, as long as they didn’t put a cap on prices. Instead, he suggested legislation requiring landlords to take applications one at a time or other requirements on the process.
“There are great solutions in many other places, but things have to be balanced and Boise’s law is not balanced,” Smith said.
Opponents say legislation protects bad actors
This wasn’t how others saw things.
Berch said even though the committee is focused on business, the group shouldn’t just discuss what is good for business owners. He said the legislators also have a duty to discuss what helps consumers, particularly in a tough housing market.
“Fair and reputable landlords the ones represented by the speakers who spoke here, they don’t need this bill,” Berch said. “This is a bill that only benefits the bad actors or the outliers as was mentioned earlier.”
Local real estate investor Michael Prentice also testified against the bill, despite that it would benefit him not to have a cap on fees. He said a few years ago he was considering purchasing a large apartment complex in Boise, but when he looked at the books he noted the landlord had a lot of income coming in from charging $190 application fees on apartments renting in the $800 range.
He said the city’s ordinance prevents landlords from profiting off of applicants in this way and pushing them closer to homelessness.
“If we don’t have application caps, you are going to have people who own large amounts of units get as many applications as they can and charge as much as they can,” Prentice told the committee. “It might be a market-driven situation, but we have a shortage of housing and we have people who are desperate for housing.”