A bill calling for a two-word change to an existing law regulating rentals had both sides debating Thursday whether the change would help or hurt renters.
The Senate Business and Labor Standing Committee voted to pass out HB250, which would prohibit counties, towns and cities from controlling fees charged to renters of private residential property.
The bill's sponsor, Rep. Greg Hughes, R-Draper, said market forces can work to keep fee amounts low and property owners should be able to recoup through fees their costs of completing background checks on prospective tenants.
Salt Lake City bans such application fees. Midvale and Salt Lake County have $25 fees.
Jill Riddle of the Salt Lake City Housing Authority said many people getting low-income vouchers sometimes have to apply at several places before finding a unit. "Having to pay an application fee just to have their application processed would be a huge hardship for these people," she said. Tim Funk, housing director for the Crossroads Urban Center, said the two-word law change, would have a big impact.
"It's not just that (pair of words). It's 80,000 renters in this state who are paying 50 percent or more of their income for rent, so this is a real big deal. And 34 percent of the state are renters, so it's one out of three, so whatever you do here today will have a long-term influence," Funk said. Paul Smith, executive director of the Utah Apartment Association, was among those supporting the bill. A criminal who applies to 15 landlords results in all 15 landlords incurring the background-check costs, he said.
"That is an undue burden on the landlords that they can't pass on to the applicants. They must pass it on to their other tenants. There's an apartment community in Salt Lake City that spent last year $25,000 on background checks . . . ," he said.
"Really, while low-income advocates oppose this, it really helps lower-income people to have this be allowed because it allows landlords to charge the cost not to the low-income people, not to the current tenants, but to the applicants."
Chris Kyler of the Utah Association of Realtors said background checks can lead to lower rents and work to protect existing renters. Steve Erickson of Utah Issues said the bill should clearly state that it refers to rental application fees or perhaps cap the number of fees a landlord could accept for a unit at any given time.
Sen. Sheldon Killpack, R-Syracuse, said passing out the bill would not be interpreted as targeting the poor and working poor. "This industry should have the ability to control their losses, because overall it keeps prices in check for everyone across the spectrum," he said.
Other legislators were concerned about how involved the state should be on the matter.
Sen. Ed Mayne, D-West Valley, said counties and cities are better able to respond to their problems than the Legislature. "I'm sorry, but I think we are taking a cheap shot at those in low income, in poverty, that have a major problem," he added.
Other lawmakers said the bill could be amended when it goes before the full Senate.
The committee's chairman, Sen. Scott Jenkins, R-Plain City, suggested that while market forces will ultimately control fee levels, he favors disclosure of fee amounts early "so that everybody knows on the front end."