The Idaho House of Representatives has handed large property owners and managers a significant victory that will come back to bite many hard-pressed residential renters.
House Bill 442, which passed on a 54-14 vote on Feb. 7, will allow landlords and property management companies to impose additional financial burdens on renters in cities where affordable rental properties are scarce and competition to secure them is fierce. The bill would prohibit cities from regulating rental application fees and security deposits.
The city of Boise has a $30 cap on fees for rental applications, which was brought about by property managers often charging excessive fees, just for applying for a rental. In a rental market like Boise, where property values and rents have risen dramatically and affordable units are hard to find, these fees work an extreme hardship on people of modest means.
Where many are competing for the same rental, each paying an excessive fee with no assurance of success, it can be a considerable source of revenue for a property manager. On the other hand, if renters need to apply for several units at the same time to have a chance of getting a place to live, and have to pay a sizable application fee for each, it can leave many out in the cold.
Testimony in the House Business Committee had been strongly against the bill. According to veteran Idaho Press reporter Betsy Russell: “Opponents, ranging from the city of Boise to the Association of Idaho Cities to citizens, renters, housing advocates and a major apartment-building owner, decried the proposal, saying Boise’s 2019 ordinance was aimed at large, out-of-state owners who were unnecessarily exploiting renters in an exceedingly tight housing market, charging as much as $190 per rental application even when considering numerous applicants for the same apartment.”
Security deposits are another problem area.
Local governments should have the ability to address abusive practices in their jurisdictions. Some Boise property managers look at security deposits as a “profit center”— a means to pay for normal wear and tear to a vacated rental unit, even though Idaho Code section 6-321 specifically prohibits the practice. This is a much-too-common occurrence.
After retiring from the Idaho Supreme Court, I worked with several refugee families who suffered this type of abuse. In one case, the property manager sued the family for $4,054.82 in alleged damage to the property, after applying the full $300 security deposit. The property manager obtained a default judgment, but we were able to get the entire award set aside in court proceedings. The attorney fee incurred for the litigation would have been well into the thousands, had my clients been paying for the representation. Legal redress for security deposit abuses is out of the question for most renters because of costly attorney fees.
Other types of abuses can occur with security deposits — excessive fees, failure to safeguard fee deposits, using excessive fees to discriminate against certain groups. Municipalities across the state should have the ability to address those abuses that happen within their respective jurisdictions. I’m not aware that cities have overreached in regulating security deposit issues, which raises the question as to the necessity of disabling their ability to adopt reasonable protections for renters.
Over the years, I have heard legislators complain about the heavy hand of the federal government. They assert that the best government is that which is closest to the people. Yet, the Legislature’s practice of overruling local governments in Idaho has grown over the years. Monied interests prefer to have the Idaho Legislature step in to prevent local governments from addressing abusive activities within their respective jurisdictions, rather than trying to work things out locally. We should allow the governmental units closest to the people to address issues like rental fees, deposits and the like based on the particular conditions in those jurisdictions, rather than imposing the state’s heavy hand, as House Bill 442 is designed to do.
House Bill 442 should be stopped in the Senate or, failing that, on the governor’s desk.