Rental application fee bill lines the pockets of landlords, while renters get screwed

A bill has been introduced in the Idaho House that would trash local control and overrule sensible regulations barring excessive rental application fees in place in Boise.

The bill has yet to receive a hearing in the House Business Committee. We hope it doesn’t.

But don’t count on it. This bill has been introduced two years running, backed by landlords and property managers. Expect them to keep lobbying hard for it.

Boise’s rules, enacted in 2019 at the urging of Council Member Lisa Sanchez, are working well to protect prospective renters from abuses. They limit the amount of a rental fee to $30, require documentation of how a rental fee is used and requires that landlords have a unit available to rent within 30 days of accepting a fee.

Each of these rules was crafted to address actual abuses that occurred to some degree at that time: charging excessive fees, using them for reasons other than screening applicants and collecting application fees even if a landlord had no unit available to rent.

There is no obvious problem with the rules. The only impetus to change them comes from the Idaho Apartment Association, which represents landlords and property managers in Idaho. Their interest is obvious: If they can charge higher fees, they can put more money in their pockets.

There has been no serious movement by the Legislature to address abuses by landlords and property managers, despite many of their constituents suffering obvious harm — for example, a defunct company operating in Meridian and Rexburg was alleged to have misappropriated hundreds of tenants’ security deposits before filing bankruptcy. But those tenants don’t have a lobbyist.

The Idaho Apartment Association does have a lobbyist in the Capitol — a member of former U.S. Rep. Raul Labrador’s firm — so naturally, there is a bill to look after its interests.

This is the second year the Apartment Association has pursued legislation to preempt Boise’s regulations. The exact same bill — same to the word — was introduced last year by Rep. Greg Ferch, R-Boise, who told the Idaho Press in 2020 that he had worked for 24 years as a property manager. This is the kind of legislative corruption that is common in Idaho, and it’s obviously a bad look.

So this year the bill has been handed off to Rep. Joe Palmer, R-Meridian, who introduced it in the House Business Committee this week.

Ferch and Palmer had the same talking points when pitching the bill: Idaho bars local municipalities from employing rent control, but banning regulation of application fees was simply left out in an oversight. It’s a simple bill to clean up state code, they each claimed a year apart.

The legislation should not be allowed to advance further, and if it does it should be voted down.

Many Republicans in the Legislature like to claim they are in favor of local control, though in issue after issue they seem comfortable with imposing top-down regulations on cities. The idea of federalism is that there should be various, competing levels of government from the national to the local with different powers, and that powers should be more local as a default.

But too often, when Idaho Republicans speak of federalism, what they mean is that all powers properly belong to the state legislature.

Last year, Ferch argued his bill should be passed because it would prevent a patchwork of local regulations.

What’s wrong with a patchwork of local regulations?

Ada County saw a population boom of nearly 30% in the last decade. Rural Clark County lost 15% of its population during the same period.

The obvious reason for regulations in the rental market is to prevent abusive practices. It makes sense for some of these regulations to be the same in all places, such as requiring landlords to maintain rentals that are structurally sound and habitable. But abusive overcollection of fees is much more likely in a very tight rental market like Boise’s than in an area like Dubois.

Because problems facing the rental markets in Boise and Dubois are vastly different, it stands to reason the regulations would be quite different, as well.

And if the voters in Boise didn’t like these rules, they could have booted the candidate — Sanchez — who pushed them. Instead, she easily won reelection in November.

This is a case of local control working.

State lawmakers should simply keep their noses out of it, and let the elected officials closest to the problem — and most directly accountable to those that face it — do their jobs.