A bill to end any caps on rental application fees is cruising toward the Idaho Senate.
On Monday, the House of Representatives voted 54-14 in favor of HB 442, which includes rental fees of any type in the state’s ban on rent control. The legislation, brought by Rep. Joe Palmer, R-Meridian, and Rep. James Ruchti, D-Pocatello, would end the City of Boise’s $30 cap on rental application fees that has been in effect since 2019.
As of now, Boise is the only city in Idaho with an ordinance regulating rental application fees. This cap, brought by city council member Lisa Sanchez, came in response to pleas from renters for the city to address fees to apply for apartments. Renters’ advocates say these fees, which can exceed $50 per adult, can often rack up big bills for applicants who have to apply for multiple places to get approved for a place to live.
This legislation has always been opposed by the Idaho Apartment Association and the local chapter of the National Association of Residential Property Managers who say the majority of landlords handle the application fee process ethically and do not collect more application fees than they need to cover their costs.
Over a dozen lawmakers declared a conflict of interest during the debate because they own rental property.
Vast majority of debate against proposal
Nearly every legislator who rose to debate the bill on the House floor urged a no vote.
Boise Democrats argued this change would be especially harmful to low-income renters as housing costs have increased by double digits in Idaho’s capital over only a few years. They said this bill would open the door to landlords accepting more applications than they could possibly review, raking in profits from only advertising a unit.
“Think about this for a second,” Rep. John Gannon, D-Boise, said on the floor. “If you go to buy a car, does the car salesman say ‘Do you want to go look at that car? That’s 10 bucks.’ When you go and buy a house and you tell the realtor you’d like to look at this house, does the realtor say ‘That’s 50 bucks before you can go look at this house.’ In most of our business relationships, you don’t charge an application fee.”
It wasn’t just Democrats who objected. Rep. Ryan Kerby, R-New Plymouth, and Rep. Scott Syme, R-Caldwell, said they felt the bill would block local governments from protecting consumers from unscrupulous business practices.
“I don’t see a compelling reason from a capitalism standpoint to do this,” Kerby said. “It looks to me like it’s protecting the people that are asking for a whole lot of deposits or a whole bunch of applications. I don’t understand why we’re protecting those folks.”
Who backed the bill?
The only legislator aside from Palmer to debate the bill was Rep. Chad Christensen, who rose to debate twice. Both of his comments were short, but he said regulating rental application fees violated the Idaho Constitution.
“When the government mandates prices that is communism,” Christensen said. “I support this bill.”
Ruchti, the lone Democrat who voted for the legislation, told BoiseDev last week he signed on to the bill because he thought capping rental application fees didn’t provide meaningful, long-term relief to the housing crisis and it unfairly targeted all landlords, not just bad actors. He said the state should address the problem of abuses against renters and tenants struggling with high application fees should look to the courts for help.
“I think there’s a better way to do it,” he said, about capping rental fees. “If lawsuits were brought against bad actors, it sends a message not just against the people doing bad behavior but the business sector as a whole and they then check their own behaviors because they don’t want to get sued. That’s how you should solve these things.”