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Council OKs rental registration program in post-midnight vote

Monday, June 10, 2013 by Michael Kanin

Shortly after midnight Friday, Austin City Council members tentatively approved a limited rental registration program and – as its sponsors became careful to point out in response to stakeholder concerns – a list of bad-actor landlords for the City of Austin. Staff will work out the details surrounding each concept and return for Council approval in 90 days.


The items, brought separately by Council Members Bill Spelman and Kathie Tovo, seek to turn proactive attention to the issue of serious, frequent city code violators. Spelman’s plan would be to register landlords across the city who violate code more than once in a calendar year. Tovo’s idea would register every landlord in three troubled neighborhoods as part of a pilot program that would produce workable data about the issue.


Predictably, both measures come with a price tag. Although no one is exactly sure how much it will cost, landlords on each registry would pay fees associated with random code inspections.


Spelman’s measure passed unanimously. Spelman and Mayor Lee Leffingwell voted against the Tovo plan. Spelman was deeply concerned with the potential costs of universal – albeit targeted – registration.


He presented a spreadsheet to his colleagues. On it, Spelman laid out thought experiment projections that drew a startling bottom line: In a model that assumes one inspection per year, per property (an admittedly round figure, not likely to be reached in any scenario), Spelman found that costs would exceed $12 million and take up to 153 inspectors hitting five properties a day to achieve universal coverage.


Based on that same spreadsheet, he argued that a one-time violator registry would drop costs to just over $37,000. A two-time violator approach would cost the city only $8,900.  “An inspection costs about $65,” he said, but the Fort Worth program costs apartment owners approximately $10 per unit. “That means that if we want this program to be self-funding, we’re going to have six-and-a-half times the cost relative to the money that’s coming in,” Spelman said.


A $10-per-unit fee to inspect 40,000 units – the rough figure associated with the Tovo plan — he continued, would earn the city $400,000 but cost $2.6 million for the inspections. “That means we are not going to inspect all of these properties or we’re going to be taking $2.2 million out of the general fund to put into this program. I’m uncomfortable with both of those two options.”


Council Member Chris Riley noted that Tovo’s effort could be more tailored, and he offered a friendly amendment that instructs City Manager Marc Ott to work with stakeholders as he puts an ordinance that would implement Tovo’s plan together.


“I do think there are many questions that are to be resolved,” Riley offered. “Probably the principal one is the one that Council Member Spelman focused on, and that is the cost – both to the property owners and to the city as a whole – and there are a number of other questions as well: Could the program be structured to ensure that those costs are borne principally by repeat offenders and not by the good actors?”


Riley suggested that input from stakeholders as they move forward along the ordinance process would be very helpful with the final result. “These are very serious issues…and we all know that the problems in the areas that are targeted in (the Tovo plan) are long-standing issues that we have not managed to adequately address,” he added. “In light of all of that it’s worth pursuing this further to see if there is a way that this program could be designed to be an effective policy response…without imposing an undue cost on both the property owners, the tenants, and the city as a whole.”


If the Tovo program looked like that, admitted Spelman, he would likely vote for it. “If Council Member Riley is right – (and) I hope he is – I look forward to changing my mind and voting in favor of the subsequent ordinance.”


Still, any form of registry will undoubtedly meet with much opposition from the Austin Board of Realtors and the Austin Apartment Association – and even some tenants concerned with the prospect of escalating rents. However, some stakeholders seemed okay with a semantic change that could make the Spelman plan a list of bad actors instead of a ‘registry.’


Public comment Thursday evening also included a host of alternative suggestions – many of which were included in an exploratory direction given by Spelman to staff. It featured calls to re-focus code enforcement officials on strict compliance – a demand that would theoretically come with more teeth for the department.


Spelman’s resolution effectively instructs Code Compliance and city prosecutors to pursue full legal remedies, especially with repeat code offenders. He hopes to end what is reportedly the regular practice of legal settlements with code-violating landlords.

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