Denver hopes to require Landlords to obtain a license and register their rentals. They started doing this in 2019 with vacation homes and now want to do it for all rentals. Why? It's under the guise of protecting the public, but that's like requiring every adult to take a breathalyzer before getting into a car because 5% of the population may be drunk. https://www.9news.com/article/... Notice there will be an administrative fee and an inspection every four years. That means more City employees to administer the program, shuffle the papers, inspect the properties, enforce the rules, collect the fines ($1,000 per day for a violation), etc. Taxes will go up. Imagine a landlord with 100 rentals. Each rental would have to be registered and inspected once every four years. That will take a minimum of one hour of time per rental, adding 100 hours to that Landlord's workload every four years. Easy for a Landlord with 1-2 rentals but a larger Landlord or Property Manager will need to hire additional staff. Registration fees for the owner. The City will have to raise taxes to cover the administrative costs of the program. Large Landlords and Property Managers will have to hire more staff. This will all result in costs going up, which will be passed on to the end user.

I see them in my city, too. But what percent of all rentals are slums? I bet dollars to donuts it's less than 10% and probably closer to 5%. So the government wants to create an administrative monstrosity to deal with the few? And do you really believe those slumlords are going to register and start complying with new regulations when they don't even care about the current ones? You'll either drive them deeper underground or they'll spook, the property will be converted to something decent, and then we'll have more homeless and people on government subsidies. It will be as successful as the war on drugs, war on poverty, and war on homelessness.

"If you're doing the right thing then you have nothing to worry about" is a terrifying phrase.

Yes. The only people who should be concerned are slumlords who keep their properties in uninhabitable conditions. I go in and out of homes constantly that have unregistered rentals, and many of them are absolutely terrible the conditions slumlords allow their properties to be in. Many of them should be in jail instead of allowed to own property.

"The nine most terrifying words in the English language are: I'm from the Government, and I'm here to help." (R.R). Sorry but like every mandate the government slaps together, it becomes a slippery slope to more and more regulation and control. Meanwhile, we can't evict deadbeat tenants.

I think we too often see government changes through the narrow lens of our personal experience as landlords or real estate investors as opposed to the help it can provide others who aren't in that position of power. I'm sure the number of bad actors in this space is not large, but for those that are affected, a horrible living situation is a destabilizing force that can hamper your ability to get ahead. I've certainly worked my butt off for our investment properties in Denver and Colorado Springs, but I've also been lucky enough with my life circumstances to get the privilege to work my butt off for them. Not everyone is so lucky. And I'm fine paying a few hundred dollars every four years and taking a few hours out of my day every four years to let an inspector in my rental if it means more people will have some better living conditions.

I no longer own single family properties but when I did, about half of them were in cities that had some sort of inspection. Your assessment is correct that it appears mostly to be a revenue / power grab by the cities. It is easy for them to pick on property owners, because unless you happen to live in that city, you don't vote in that city. Also, you are more likely to protest taxes than the owner-occupant. You should be aware that there was a case tried in Cincinnati about 4 years ago that successfully challenged the single family rental property inspections. They used an argument similar to yours and won. Unfortunately, the ruling had a very narrow scope regarding a particular way the city violated the constitution that is not broadly applicable. Hopefully, more challenges will set a better precedent. I could not find reference to that case but found this that outlined the same arguments: https://pacificlegal.org/traut...

You're supporting my position."I go in and out of homes constantly that have unregistered rentals, and many of them are absolutely terrible the conditions slumlords allow their properties to be in." How is this possible when DC created a solution? LOL! They didn't solve anything. They created new hoops and fees that impact the people already doing the right thing. The bad actors ignore the new laws and little changes. I would love to see evidence that says otherwise. Zero problems? More like zero solutions.

@Nathan G. I get it. The program is not the most efficient and may make otherwise good landlords have to jump through hoops. Valid complaints. But these criticisms suppose that efficiency is the main goal. It's not. If there's a system that can somehow catch only the bad actors, I'm open to listening. But the way I see it, systems are messy, helping people is messy, and I'm okay doing my part even if it's not perfect. That's really where I fall on the question of government's role. The world is not always fair. We register our cars in part to help connect cars involved in crimes to the criminals. Other than speeding (a lot), I don't commit crimes in my car, yet I pay registration fees. I don't have kids, yet I pay property taxes that fund schools. I don't use I-90 in Wyoming, yet I pay federal taxes that help maintain it. I certainly hear the critiques of this program. They're valid. But for me, I'm willing to accept the inefficiencies and the small disruptions to my life because I think when weighing whether this program helps or hurts more, I think it helps more.

I used the quote against your allowing on the infringing of everyone driving to catch a very tiny amount drunk drivers. How about blood tests for everyone every 4 years to catch drug users? Swimming tests for everyone who owns a pool? After all, what's everyone giving up personal freedoms and privacy in exchange for a very tiny percentage of people being saved? As for every 4 years, what about every 3 years? Every 2 years? Annually? Monthly? At what point does government infringement get to be too much for you?

Again, you seem to support my position. We don't need to inspect 100% of the rentals when the vast majority are compliant. Government's role is to weed out the bad actors. You don't weed out criminals by treating everyone like criminals. There are a lot of cities with regulatory programs, but that doesn't prove success. Just like the war on drugs, poverty, and homelessness, these Landlord license programs are a dismal failure considering the amount of time and money spent. They could create a small office designed to collect reports, investigate, and enforce. Educate the public on how to report potential slumlords, collect the reports, investigate to find the bad actors, and then hammer them into compliance or shut them down. Meanwhile, the other 95% of Landlords and Property Managers could go about their business like the law-abiding citizens they are. I bet you'd see the same level of success and for 1/10th the cost. @James Carlson how will your compliance improve the situation for anyone? It won't, because you're already compliant. You're spending time and money to the government to show you're a good guy even though the government has no evidence that you're not a good guy. You're assumed guilty until you pay Ceasar, just like our founders intended. Meanwhile, resources are spent documenting your continued compliance while having little impact on the bad actors or those they harm. It's just my opinion. And, just like government regulation, there's never a shortage of opinions!

Does your City require Landlords to register rentals?

Kimberly Carver

Member since 2020 · 119 posts · 56 votes

5y

@Nathan G. Many towns in NJ do this. In the towns we rent we are registered, one has annual inspection and one has inspection before each turnover

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Alecia LovelessPro Member

Member since 2019 · 3k+ posts · 2k+ votes

5y

@Nathan G. I live in an area that consists of many small towns. There are no registrations and no inspections. We do have our share of run down properties and slum lords. Thdd ex bad neighborhoods make my properties more desirable.

1 Reply

Forrest Faulconer

Real Estate Agent · Oklahoma City, OK · Member since 2020 · 471 posts · 462 votes

5y

@Nathan G.

Exactly right at the end, they say they are helping the end user, but ultimately hurting them in the long run. Not to mention crushing smaller scale landlords!

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Nathan GesnerBusiness Member

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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

5y

Originally posted by @James Hamling:

@Nathan Gesner It seems to me that your central point of argument is not against regulation of rental units but for it to be focused, specific to locating "slum-lords", those bad-actors and to interject from there, and feeling that @Russell Brazil stance is one of a "gill-net" approach put in place regulatory action on ALL units to, achieve the same end goal, find the "slum-lords" and effective action.

So, seems to me you actually agree on most of it, just disagree on the "how" of it all. So my thoughts on finding how the victor of this all is, is how do we do your plan Nathan G.? How does a regulatory official find the slum-lords? It's not like the homes are color-coded, I have never seen cockroaches running all over the outside so how does an official find the slum-lords and know others are a-ok?

And going a step further, how do you feel about paying the higher tax's when the city looses a $17million dollar liability lawsuit because 3 people died in a slum-lord property the city official didn't find, and the family of the tenants sue saying since the city official's job is to find slum-lord properties like there Sherlock Homes, and didn't, and people died, it's the cities liability. Will you stand up and write a check in support? See that's the other part of the coin, city has to think of liability and getting sued in absolutely everything they do, and find ways to do things in a uniform way that dosn't loos the city millions on a regular basis to suites.

Look, I get it, I am not a fan of big government yet I also am a realist and know that our local government is run by human beings, regular every day people, most of which live in our cities with us, some may be on your street even. They are regular people doing a job, TRYING to do a job, one where no matter what they do someone is pist they didnt do the opposite, every single time, and there is a line of lawyers ready to sue them at the drop of a hat because they have "city money", and guess where that $ comes from, we the people.

So look, I get it, the oversight and regulation sucks, it's another thing to do, but how else do they do the job?

First off, thank you for keeping the discussion reasonable and not devolving into childish insults. Refreshing.

Second, when a city claims responsibility for the safe operation of every rental, then they are opening themselves up for greater liability, not less. If a kid drowns in a pool, is the City liable? What if a driver runs a red light? Here's a perfect example where Boston was sued by renters claiming the city failed to inspect properly: https://nypost.com/2018/08/31/...

Russell brought up DC as an example, and I think it's a pretty good one. Here's one article I found that says they found problems with just 11% of the rentals inspected: https://dc.curbed.com/2019/4/2...

So they try to regulate 100% of the people so they can catch 11% of the bad actors, which means they are wasting 89% of their time.

My solution? Educate the public on how to report a problem, just like we report crime to the police. Apartments are the biggest culprits so make them post signs in public areas educating tenants on how to report an issue. Public service announcements on radio and TV could educate the rest. Someone calls the hotline or reports the problem online and an investigation ensues. Bad actors are dealt with and the rest of society enjoys freedom like the innocent people they are. I'm pretty sure this would cost 1/10th what the current program does and be just as effective.

If these Cities were serious and effective, they would have numbers to back it up.

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Marc RiceBusiness Member

Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes

5y

@Nathan G.

You have to fill in basic information as a rental but no formal permit in Columbus. Good luck with your city rolling that out let alone enforcing not having a permit

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Nathan GesnerBusiness Member

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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

5y

Originally posted by @Marc Rice:

@Nathan G.

You have to fill in basic information as a rental but no formal permit in Columbus. Good luck with your city rolling that out let alone enforcing not having a permit

DC allegedly has over 300,000 rentals but only about 1/3 are registered from what I found.

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Daniel SmythPro Member

Rental Property Investor · Rockford, IL · Member since 2019 · 471 posts · 342 votes

5y

Rockford Illinois has had this in effect for a while.

just another self made government entity for revenue generation from taxation!

Pure and simple!

This began with registering businesses with alarm systems. Then everyone with an alarm must be registered and pay a fee.

As police come to an alarm, they need that registration number and check it's validation. There is a fine for not having a valid and unexpired registration number on the front door of your house.

I have refused!

I also do not register my rentals!

I don't recognize that anyone but the owner or his designee needs to know if those who live on my houses, life for free or pay me rent.

I don't share the private information to my city. I have alarm systems, but they are not tied to a company that calls the police or fire.

I have no issue with a tenant registering an alarm system. So far I have had no issue.

It's like speeding. We all do it, but only the most risky will do so and wave a flag so the police will notice you. And, it's my choice which mandates of government I decide to follow! Still not wearing a Covid-19 mask!

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Bill F.

Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes

5y

A fundamental truth about any policy proposal is that they involve tradeoffs.

Both sides have dug in their heels and with the implicit assumption that their position is 100% right and the other side is too thick to understand. Not surprising, since most people want to be right more than get closer to the truth and admitting that the other 'side' has a point violates commitment and consistency, which we all have hardwired into us, so par for the course of most interactions.

Their are multiple tradeoffs for each positions, but the big ones are:

Anti Registration: The rental stock will be more prone to having dangerous code violations, which in turn, on average will increase the rate of injury and death. How much? I have no idea, but it wouldn't be terrible hard to do a difference in difference study to see what, if any statically significant, difference if an exists.

Pro Registration: This will increase the prices of rentals when enacted as has been noted, both to account for the increased burden of dealing with the administration of the inspections and the fees/taxes associated with the program. Being pro registration is to be ok with raising rental rates, which will have an outsized impact on those seeking affordable housing, and in the most extreme cases will lead to more homelessness, whose population suffers violence and death due to exposure at exponential higher rates than the non homeless population. Again, to what degree will this occur, I have no idea, but it will happen.

Thus the real question is, which policy choice is the lesser of two evils.

A good mental model to look at these things is: "judge a policy not by its intent, but by its outcome".

My 2 cents

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Russell BrazilBusiness Member

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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

5y

Originally posted by @Nathan Gesner:

Originally posted by @Marc Rice:

@Nathan G.

You have to fill in basic information as a rental but no formal permit in Columbus. Good luck with your city rolling that out let alone enforcing not having a permit

DC allegedly has over 300,000 rentals but only about 1/3 are registered from what I found.

There is 322,000 housing units in DC in total for owner occupants, rentals, and 2nd homes (or 3rd, 4th 5th homes etc.)

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Alyssa Dyer

Rental Property Investor · Oklahoma City, OK · Member since 2017 · 1k+ posts · 694 votes

5y

@Nathan G. We have one city in Oklahoma City that does this, all the issues you outlined are present. Some management companies won’t service that area and quality of rentals is not great.

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Nick Rutkowski

Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes

5y

@Nathan G

I have rentals in two cities, one super liberal and one super conservative. Both cities require me to register my rentals

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Eric Bilderback

Real Estate Agent · Sisters, OR · Member since 2014 · 1k+ posts · 1k+ votes

5y

These government boards, committees etc are a symptom of the problem. When you have people or tenants in this case that have to pay 1/3-1/2 of what they make to live in a dumpy place it is easy to see why there is becoming more and more regulation. If I had to pay 40% of my paycheck to live in a place where my kids couldn't even get a decent education I can't see myself spending much energy worrying about the burdens on some guy or gals real estate portfolio. As paranoid conservative I then see this being exploited to the detriment of everyone except the exploiter.

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Nathan GesnerBusiness Member

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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

5y

Originally posted by @Bill F.:

A fundamental truth about any policy proposal is that they involve tradeoffs.

Well put. The truth is, I won't cry in my milk or sell off my properties if this happens. I'm just voicing my opinion that it's unlikely to resolve the problem and may actually result in new problems, much like the war on drugs, war on poverty, and war on homelessness have done. My concern is that inspections will start at once every four years with sensible requirements for smoke and CO2 detectors, then it will morph into every year, higher fees, more detailed inspections and requirements, etc.

Government will not solve this problem and it will continue expanding into your life and livelihood.

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Bill F.

Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes

5y

Originally posted by @Nathan Gesner:

Originally posted by @Bill F.:

A fundamental truth about any policy proposal is that they involve tradeoffs.

Well put. The truth is, I won't cry in my milk or sell off my properties if this happens. I'm just voicing my opinion that it's unlikely to resolve the problem and may actually result in new problems, much like the war on drugs, war on poverty, and war on homelessness have done. My concern is that inspections will start at once every four years with sensible requirements for smoke and CO2 detectors, then it will morph into every year, higher fees, more detailed inspections and requirements, etc.

Government will not solve this problem and it will continue expanding into your life and livelihood.

I mostly agree with you Nathan and was more commenting on the overall nature of contentious BP topics where two sides develop and talk past each other instead of seeing that they have much more in common than they do differences.

Looking at the idea of registering rentals, it clearly has a noble intent as has been demonstrated time and again. Those in favor, want to reduce avoidable human suffering inflicted by slumlords. An admirable ends without a doubt. However the likely outcomes are what give me pause. I'd be willing to bet that cities that have enacted these have had little to no impact on the slumlords and an outsized impact on those landlords who are already doing the right thing, in addition to the costs listed earlier. For one slumlords, 1. know they are slumlords and 2. have demonstrated that they don't care about habitability laws that already exists. Thus the odds of them registering their rentals seems vanishingly small so right their is a major flaw with the policy that can only be fixed with more investigatory power.

However the argument comes down to "These slumlords are a danger to society and we need to eliminate them" Again noble, but there is not proof that the cure is worse than the disease or demonstrate that enforcement of the current habitability laws will not solve the problem. Lest we forget that politicians seldom get re-elected on the platform of ' Hey I did a slightly better job enforcing the laws than the person before me.'. No, they get re elected by saying "I was instrumental in passing a new legislation that made tenants safer.' Incentives matter, and most ppl in gov pushing these laws directly benefit from passing new regulations.

Anyway, enough of my inane ramblings on a topic that has little to no bearing on my life.

1 Reply

David Bilandzija

Lender · Venice, CA · Member since 2021 · 189 posts · 132 votes

5y

Money grab indeed. When I owned an investment SFR in Peoria, AZ the city looked at whose name appeared on the water bill. If it didn't match the owners name a use license tax form would get mailed out.

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Scott M.

Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes

5y

SE Michigan here and yes, most cities require rental registration, certificate of occupancy, certificate of compliance, one (City of Detroit) even requires a lead clearance by a lead inspector. While some cities may have a similar process the pain of it is most are different. Time, requirements, costs all different. So staff/software needed to track all of this and make sure each property meets local standards. The fun really starts then they give you a list of items to repair, you do and when they come back to reinspect to make sure you did the items they listed they cite you for 4 other things...and then the process just rolls on.

It has been less then fun trying to manage this process during COVID as cities close and reopen. I got a ticket from one city saying we didn't get the home re inspected by X date but they city was closed for 4 months.

You are spot on that it only adds costs and complications.

Some cities are a must, meaning they will ticket you into oblivion if you don't and some do not enforce the rules so the owners can then decide on what risks they want to take.

1 Reply

Dick RosenPro Member

Property Manager · Gilbert, AZ · Member since 2009 · 1k+ posts · 451 votes

5y

@Nathan Gesner Maricopa County Arizona requires that landlords register their rental properties but the main thing I see with that is that if they live out of state they are forced to list the PM for contact if they undefined, minimal cost $10 I think, no inspections.

But Phoenix and most surrounding suburbs require a TPT license. License is one time cost and then we have to file a tax form on rent paid and pay a "Transaction Privilege Tax". It should be passed on to the tenants so there's no cost to the landlord and there are no inspections for any of this.

In Minnesota, several Cities required a license, renewed annually with a mandatory inspection. Cost came out about the same as Phoenix TPT except you really couldn't pass it on to the tenant.

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Debra Griffin

New to Real Estate · Detroit, MI · Member since 2021 · 1 post · 0 votes

5y

Yes

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James Hamling

Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes