Restrictions could be placed on Boise rental application fees. Here’s where it stands
Andrew Scoggin and his wife, Elizabeth, own about 40 rental properties in Boise, mostly affordable housing apartments, single-family homes and some commercial spaces.
In the 30 years the Scoggins have acted as landlords, they have not charged application fees. And about seven years ago, they stopped doing background checks on potential tenants.
“In that time, I’ve never had a forced eviction,” Scoggin told the Boise City Council on Tuesday. “I’ve never had any destruction of property. We’ve never had any difficulty with the people we’ve rented to.”
Scoggin, who is also the Albertsons Cos.’ executive vice president of human resources, labor relations, public relations and government affairs, was one of 23 people who told council members that they favor an proposal by Councilwoman Lisa Sánchez to cap rental application fees at $30. Sanchez would also require landlords to disclose application criteria and would ban application fees for any tenant moving to another unit owned by the same property owner.
After nearly 90 minutes of testimony before an audience of about 300 people, the council voted unanimously to have Sánchez’s proposal drawn up into an ordinance and schedule it for a first reading at its Nov. 19 meeting.
The ordinance could get passed through to a second reading or amended. It would have to go through three readings to be adopted by the council.
Not all of the 32 people who testified supported the ordinance. Several property owners told the council that they spend more than $30 to run credit and background checks and that it isn’t fair for them to pay more than they’re able to charge.
“Everyone runs their business differently, and I don’t think the city has the right to tell people how to run their business,” said Bonnie Krupp, who manages a small number of rentals.
Krupp said it typically costs small landlords $35 to run checks on potential tenants, although large companies pay less. The proposed ordinance doesn’t take into account the time it takes landlords to process applications, verify employment and other details, she said.
“I think that’s ludicrous,” she said.
But Rachele Klein, who owns a small house near the Boise State University campus and manages a second house near BSU owned by her parents, said her renters have shared stories of how they spent hundreds of dollars in rental application fees and still didn’t find a place to rent.
“We have never charged a rental fee,” Klein said. “We consider it a cost of doing business.”
Kathy Corless said she doesn’t charge an application fee and has potential renters give her a copy of their credit reports furnished free of charge by Credit Karma. She said she uses the state of Idaho’s free online service that shows arrests and criminal convictions.
However, Corless said she’s concerned about a portion of the proposed ordinance would make a second landlord violation a criminal misdemeanor. The first violation would be an infraction that carries a $100 fine.
“Being in this business, you’re giving ownership of an asset of $300,000 or half-a-million dollars to people you don’t know,” Corless said. “And that’s a lot of risk.”
Melissa Sharone, president of First Rate Property Management in Boise, said she uses some of the fees her company collects from rental applications to pay her employees. Sharone, who did not say what her company charges, said it makes $1 of profit per application.
Later, Sánchez said application fees from renters should not be used to subsidize a company’s workers.
“I don’t think that’s something that landlords and property owners should be doing, which is relying on that money to pay their employees and put our most vulnerable people in that position and making them responsible for that,” Sánchez said.
Council President Pro Tem Elaine Clegg questioned whether $30 per person was too high a fee. Councilman T.J. Thomson wondered whether it was high enough. There was also discussion on whether the fee should be increased over time.
Clegg suggested putting the ordinance into place and giving it a trial run.
“With many of these ordinances, we’ve put a six-month review on it so we can collect experiences from anyone,” Clegg said. “Whether you’re a landlord or a renter or a property management company, we can review it to see if it’s working.”
This story was originally published October 29, 2019 at 10:58 PM.
