The Olympia City Council tackled the proposed rental housing registration and inspection program, which aims to improve housing quality, tenant protection, and education.
At the city council study session held Tuesday, Housing Program Specialist Christa Lenssen briefed the councilmembers on the proposed program, which one of the key features is the introduction of regular property inspections to ensure that basic health, safety, and environment standards are met.
"Many renters reported seeing steep rent increases over the last couple of years without seeing any significant improvements to the properties they are renting," Lenssen said, adding that the program would proactively address issues around rental housing.
The program would be operated on a five-year inspection cycle for different property types. Rental property owners are required to register annually and obtain a business license. Certified third-party inspectors would inspect the properties. The inspection will involve a safety, health, and energy efficiency checklist.
According to Lenssen, the program also aligns with the city's climate goals by enhancing the energy efficiency of a residence. She said residential energy use is currently the region's largest source of greenhouse emissions. Inspections will have added value in helping to meet climate program goals to establish a rental housing energy efficiency baseline.
Landlords would shoulder registration and inspection fees, with projected revenue based on compliance rates.
Lenssen presented a table that reflects the projected cost to property owners under the rental housing registration and inspection program. Likewise, tables were provided showing the expected revenues for the city at $30/unit and $35/unit rates.
Lenssen said the funds could be allocated towards education on landlord-tenant laws and legislative changes, incentives, and initiatives to protect tenants, such as relocation assistance.
While Lenssen maintained that the program's intention is not to penalize landlords but rather to work with them in safeguarding the housing stock, the staff made additional recommendations for consideration:
Councilmember Lisa Parshley raised concerns about the inspection aspect, asking if different inspections would be required for health and safety codes and energy efficiency. She is concerned about the extra cost that it could incur by having both of those inspections.
Lenssen said landlords would shoulder the energy audits, but the city would have some ability to pay for repairs through the Community Development Block Grant (CDBG) funds if the property qualifies as renting to lower-income tenants.
Lenssen added that the city intends to establish a certification process. Private inspectors would undergo training to be certified by the city, covering administrative procedures and checklist requirements.
Lenssen said they could also provide or refer them to other needed training or certification.
"That is something that we will continue to work on and talk with the Climate [program] staff, who are better suited to the kind of certifications that would be needed for that program," Lenssen said.
Addressing Councilmember Dontae Payne's inquiry about the low support from the landlords for the registry program, Lenssen noted that landlords expressed concerns about increased regulations which they say is an additional burden in terms of time and costs associated with the program.
Darian Lightfoot, director of Housing Homeless Response, connected the proposed registry program to the overarching objective of preventing homelessness, saying that it aims to stabilize rental rates and ensure people can maintain their housing situations.
Mayor Cheryl Selby expressed her reservations about the proposed program's effectiveness. She pointed out that a similar program had resulted in some landlords selling their properties due to increased regulations.
The mayor was worried that the new program could lead to a loss of housing stock, especially for small landlords. She said it would not achieve affordability and would do the opposite.
"What is the problem we are trying to solve here?" asked Selby, who admitted that she and her husband own some rental properties.
Selby described the proposed rental housing registry and inspection program as "aggressive, punitive, and does not support housing affordability."
"I would support a registry, if it's a service to landlords to help us navigate, to help us educate, help us work and have a community of landlords who can talk through problems with each other," Selby recounted telling Lenssen when they were discussing the program.
"I think we just dumped a whole bunch of regulations on the housing market,” said Selby.
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pheong
selby: comfy, in a nice house in a nice neighborhood, with some rentals to boot! Lucky her! maybe take a tour of some shithole tenancies and see what life is like for many as the rules protecting tenants in this state are weak. landlords raise the rents on month-to-months at will with little repercussion. repairs are made when landlords get around to it. few tenants know the rules about their abilities to force to have the work done. when they do, eviction. High time real protections and oversights were established. if only we could actually trust the city to spend and report honestly.
Wednesday, August 16, 2023 Report this
Honestyandrealityguy
Sort of like the stock market. Some landlords literally leverage everything to own and rent real estate. As the government watches eggs and gasoline increase, landlords too must keep up with inflation. Otherwise, they sell to new investors who pay more and they have to increase the rent to pay the new mortgage. Common sense. If rent goes too high, the tenant is free to move. The landlord still bares all the risk of loss.
Thursday, August 17, 2023 Report this
Larry Dzieza
I haven't drilled into this issue as far as I would like to yet, but I have a general problem with a program design that allows the inspected to choose their own inspectors.
The state law defines "Qualified inspector" include a long list of potential inspectors: "... a United States department of housing and urban development certified inspector; a Washington state licensed home inspector; an American society of home inspectors certified inspector; a private inspector certified by the national association of housing and redevelopment officials, the American association of code enforcement, or other comparable professional association as approved by the local municipality; a municipal code enforcement officer; a Washington licensed structural engineer; or a Washington licensed architect."
My experience with the regulated getting to choose their own inspector is that the tendency for maximizing self-interest becomes manifest in short order. The old saying is that the golden rule is "the ones who have the gold, gets to make the rules". Having the financial relationship between the landlord and the inspector is a problem waiting to happen. It won't take long for the real estate community to find the most compliant inspectors.
This results in the city having to regulate the quality of the certified inspectors, such as through random independent audits of the inspectors’ work, something the city is unlikely willing to do.
Some other cities simply hire staff to conduct the inspections who get paid by the city as employees -- employees with a clear mission and without conflict of interest.
Thursday, August 17, 2023 Report this
JnNwmn
The added costs of inspections and licenses will be paid by the renter.
Probably an extra $50 per month.
Thursday, August 17, 2023 Report this
BobJacobs
This is a very sad situation. The council proposal is a "solution in search of a problem". Very short on analysis, e.g., problem definition, data, analysis of alternative solutions, etc.
The most critical part of the proposal is the inspection program. But council seems ready to go forward without knowing what the inspection criteria are proposed to be. They literally don't know what they would be approving.
This proposal should be thoroughly reconsidered, starting from the beginning.
Bob Jacobs
Thursday, August 17, 2023 Report this
AugieH
"Mayor Cheryl Selby expressed her reservations about the proposed program's effectiveness. She pointed out that a similar program had resulted in some landlords selling their properties due to increased regulations."
Go to the link below to see the effect Mayor Selby refers to:
https://mynorthwest.com/3427627/seattle-loses-nearly-3000-rental-properties-in-less-than-a-year/
I own one rental property in West Oly, a single family home. Lenssen, make my day, sweetheart. If Olympia becomes like Seattle, I'll sell in a heartbeat and laugh all the way to the bank.
Thursday, August 17, 2023 Report this
BevBassett
I live right across the street from three rental houses owned by Dwayne the dentist who owns a couple dozen slum properties in Olympia. He paints his houses (and his own house on East Bay) black. He has some of the lowest rents in Olympia, so owing to the very short supply of lower priced rentals available, his houses stay occupied by renters. Many of Dwayne's tenants are very nice people and congenial pleasant neighbors, but not all.
The house at 1213 Marion has about 4 or 5 old vehicles parked there in states of major disrepair. One vehicle, a diesel pickup truck, constantly leaks both diesel fuel and motor oil onto the street. Whenever it rains, there's a wide oil slick that covers the whole street and flows downhill into Mission Creek at the San Francisco Street entrance to Mission Creek Nature Park. From there, the oil flows into Budd Bay at Squaxin Park. When its dry, the motor oil and diesel fuel are not as visible, but they are still present on Marion Street and pollute our environment with toxins. Multiple complaints have been made to the City of Olympia and to DOE, as well as to Dwayne the landlord, and nothing has been done for more than a year.
The house at 1217 Marion, which is downstream from the motor oil and diesel fuel, has put up an oil dam with an oil filter device in an effort to try to avoid coming into contact with these toxins; the City of Olympia is aware, DOE is aware, Dwayne is aware, but nothing has been done to stop the motor oil and diesel fuel contamination of the properties at and around 1213 and 1217 Marion. This has been tolerated by the landlord, the City and DOE. Naturally the renter at 1217 urgently wants to move and get away from this problem, but I live at 1218 right across the street and own my house and can't move.
I have heard that Dwayne is very slow to make basic repairs, yet he still charges a minimum rent of $1300 or more for houses of about 400 square feet or less. I have heard tenants complain of plumbing leaks that rotted out bathroom floors and leaked into the ground under the house. I have heard about windows with glass that was broken out and not replaced the entire time that people lived in those rentals. Shoddy appliances that do not work and Dwayne won't replace them. Nothing in these houses but electric baseboard heat which is so expensive to use in the uninsulated black houses that the people who live there are cold in winter. So what they do is burn anything they can find to burn in the fireplace at 1213 and pollute the air in winter.
The house at 1213 Marion has a dead tree in the front yard. This tree has been dead for over two years. Its about 60 to 75 feet high and was topped out at about 10 feet so there are multiple vertical trunks of this dead tree that put everyone around this house at risk for when the trunks finally do fall - which they will do in time. Dwayne has refused to cut down or even to trim back this tree which is a mortal danger to his tenants and to the neighbors in adjacent houses. Dwayne refuses to cut or even trim back this tree, and the City of Olympia allows this situation to continue ongoing. A life safety issue for everyone in the rentals and nearby.
I personally know some people who own rental housing in Olympia, and the people I know who own rentals maintain them conscientiously in good repair. These same people who own rentals fear that they would be further burdened by the additional expense of having some sort of regulatory oversight imposed on them by the City, and I can understand where they're coming from. I've watched the City in action regarding other issues and have found that just as with this plan for rental oversight/regulation, the City actually puts very little genuine thought and planning into anything they do.
So the bottom line here is that Dwayne is going to continue to be a slumlord and its unlikely that anything the City does will make the black houses better for tenants; yet, the good respectable landlords will be harassed and pestered and 'regulated'.
What I can't understand is why doesn't the City have a code of acceptable minimum standards of decency for rental housing that can be enforced when those basic standards are perpetually violated by the Dwaynes of Olympia?! Why do the good landlords who keep there properties in decent repair have to get involved? We know who the problem landlords and properties are already. Why not act to enforce those "basic health, safety and environment standards" that "Housing Program Specialist Christa Lenssen talks about without involving the people who are not creating the problems?
Thursday, August 17, 2023 Report this
Southsoundguy
Pheong, I’d encourage you to read Rcw 59.18. This state heavily favors tenants. Tenants have everything they need. It isn’t society’s responsibility to look out for every single tenant. The sense of entitlement is rich.
Thursday, August 17, 2023 Report this
Yeti1981
Mayor Selby's hesitation on this is correct. The program will have the opposite effect of what is intended. It will drive out small landlords, who are more flexible and willing to work with residents. And it will not deter corporate landlords from buying up more property and affordable housing more limited. This is literally how programs like this have worked everywhere they have been tried. And large corporate investors love it, because they have almost unlimited money to pay the fees that are required. So, while the intent is honorable (if it is truly to solve homelessness), the thinking is backward in reality. Selby's suggestions should be investigated and implemented so that tenants, landlords, and the city can all work together. You can't make housing more affordable by making it cost more.
Thursday, August 17, 2023 Report this
jimlazar
The City already has a building maintenance standard, called the International Property Management Code. It was adopted more than ten years ago. But you also have to ENFORCE a code for it to be meaningful, and the City is not doing that, as evidenced by Bev Bassett's comment above. The enforcement can come with fines, which help pay for the enforcement. But landlords who maintain their properties are not penalized as this proposal would do.
The City should shelve this process, and direct the staff to enforce the existing standards, and the adopt a fine schedule that will charge the scofflaw landlords for the costs of enforcement, but leave the quality landlords without additional charges.
I believe that this registration process, if implemented, will result in:
a) hundreds of rental units beintg withdrawn from the market;
b) higher rents to cover the costs of the program;
and
c) many of those rental units being sold to corporate investors, who have the lawyers to "do it right" and to "stand toe-to-toe" with the City when accused of doing it wrong. Corporate landlords charge 10% - 25% more than individual owner landlords, and keep rents "at market" more effectively, so more higher rents.
Markets work. Not perfectly, by any means, but they work. I'm an economist. It's my duty to believe this.
I owned three rental units in a recent millenium. The hassle of compliance was more than I wanted to manage, so I sold them off. I know that Bob Jacobs, Judy Bardin, and Walt Jorgensen all own rentals, and are considering either selling them or having them professionally managed. Either way, the current tenants will face higher rents or a need to move.
Somebody has to pay the costs of this program administration and the compliance costs. That someone is the renter.
In the case of energy efficiency, the investments do need to be recovered, but the utility bill savings will offset those costs. That should work out fine for everybody. But the admin costs of the registry will simply become additional costs that landlords recover from tenants.
The net income has to be there for the investor, or the rental property will cease to be a rental property. It's a lot of work to be a good landlord. Not everybody is up to the task. I sold my rentals years ago, and invested my retirement nest egg into boring mutual funds, because I wanted to devote my time to my career and my civic engagement.
This proposed program would simply hand over more of the rentals in our community to professional managers and corporate investors. People will pay more in rent.
Enforce the current law before adopting a new law.
Thursday, August 17, 2023 Report this
HarveysMom
I agree with Mayor Selby's remarks. I disagree with this proposal.
The proposal is quite a barrage of regulatory features to try to meet a wide, too wide, range of perceived problems in the rental housing markets, AND adding energy eficiency to the mix. Too much and too little at the same time, it won't improve or provide low income housing, which is the most significant issue of the housing market.
Thursday, August 17, 2023 Report this
sonshi
It's rarely discussed, but there are two types of landlords - small mom-and-pops and large multi-unit often corporate ownerships. **They are two very different beasts.** The former will be driven to sell with the continued push for regulation, costs, licensing. The latter can more easily distribute and shoulder these costs. As a small 'landlord' with one very nice, cheap, safe rental priced hundreds of dollars under 'fair market value' I can say there is no way it's going to be rented again after our current tenant leaves. I'm not alone, and regional data backs that up. The risk/benefit/cost/gain just isn't there anymore for the little guys.
Thursday, August 17, 2023 Report this
Pkt3154
This sounds like a knee jerk reaction by the City (with an eye to a new revenue stream and a little more control). As others have noted, a more comprehensive review and complete package of what this inspection/registration process would entail is needed. I am sure many landlords are facing inflationary costs and increased taxes and trying to pass that along. These are investment properties by an large. The most reliable way to reduce rent costs is to expand the pool of available rentals. Providing tax breaks or other incentives for landlords to increase the "missing middle" range of rentals would probably be more effective then adding a new layer of bureaucracy to the rental landscape.
Thursday, August 17, 2023 Report this
JulesJames
So a third party consultant backed by the power of a government mandate would then be deciding if I am going to install double paned windows for Olympia energy goals? Or replace the bannister with 4" gaps between the balusters with 3" gaps for Olympia's safety goals? Annual inspections? Someone mentioned this program will cost tenants $50 more a month. Wrong. Between the repair reserves needed and the overall loss of rental housing stock, it will be a re-set of pricing upwards of $200 a month. Slumlords suck. But the City of Olympia attacking every landlord as a slumlord sucks a whole bunch more.
Thursday, August 17, 2023 Report this
pauloly
(1) This will eliminate "slumlords" and cause landlords to improve their properties; and they will charge rent accordingly.(2) The costs of any inspections will be passed on to renters through rent increases.
(3) Evictions will go up, as landlords will not tolerate any tenant misbehavior in their renovated, expensive units.
(4) This will also cause many landlords to simply stop renting altogether and convert their units to condos.
If you want to gentrify Olympia and make it less affordable, this is the way to do it. What it won't do is give you high quality apartments at slumlord prices.
Friday, August 18, 2023 Report this