Fixing Problem Properties Print
News/Features - Feature Stories
Tuesday, 13 July 2004 18:00
As Rock Island and Davenport both undertake the issue of rental-property inspections, it will be worth following to see how similar – and different – their programs end up being. The issue is important because rental inspections are a major way a city can help maintain and even improve its housing stock. A bi-state group representing landlords is working with both municipalities, trying to create a system that rewards good landlords and goes after problem properties.

Davenport is looking to revamp its 19-year-old inspection program, while its neighbor across the river is trying to set up its first one. Both city councils could be taking action in August. At this point, it looks like Rock Island is most likely to come up with a program that matches the landlords’ agenda.

Because renters fear retaliation, often they won’t report their landlords for code violations in a complaint-based system. And while there are plenty of conscientious landlords, there are also many who don’t invest in or maintain their properties, content to draw income from rent. For these reasons, the condition of rental property is often an important neighborhood issue.

But inspections are also controversial, because they’re expensive and don’t address owner-occupied property. In addition, they have the potential to raise the cost of housing, because landlords will pass inspection and licensing fess on to their tenants.

Rock Island

Rental inspections were identified last year as a high priority by the Rock Island city council. Initially, the city council considered inspecting all its rental housing every two years, but it balked at the amount of staff – and hence money – that would take.

Since then, the city has looked at other rental-inspection programs, said Greg Champagne, director of the city’s Community & Economic Development department. Rock Island is now exploring a classification system, in which the frequency of a property’s inspections will be determined by how well it performs.

A similar model is currently in place in Bloomington, Illinois, Champagne said. In this formulation, properties with no violations are inspected less frequently – every three years in Bloomington – while those with minor violations are visited more often. Units with major violations would be inspected most frequently.

Inspection intervals are key components the city council must decide, because they have the greatest impact on the cost of a rental-inspection program.

City staff will present the council with various alternatives at a study session July 26, Champagne said, and council feedback will determine whether the staff starts writing ordinances.

The challenge in Rock Island is cost. The goal, Champagne said, is to “make it [the rental-inspection program] pay for itself.”

Presently, Rock Island uses Community Development Block Grant money ($163,272 in the current fiscal year) to pay for its complaint-driven inspection program. A May memo estimated the cost of inspecting most rental units every two years at $251,860 beyond the current program, which would require an annual inspection or licensing fee of just more than $50 per housing unit. Under that plan, Rock Island would need to hire three housing inspectors in addition to the two it already has.

The 2000 census estimated that Rock Island has 6,242 rental units, although it did not indicate how many rental properties within the city.

In addition to considering issues of cost, the city council has been listening to the Quad Cities Rental Property Association, a group representing roughly 500 Quad Cities landlords who own between 11,000 and 12,000 units of rental housing.

“We’re in support of rental-housing inspection programs,” said Mike Steen, president of the association. But he stressed that programs need to target problem landlords. “They really need to be concentrating on their bad properties … to focus in on the bad landlords.”

Steen thinks that Rock Island will craft a program that gives landlord financial incentives to properly maintain their properties – charging them less because they need to be inspected less frequently. “They truly have a grasp” of the issues, he said. “You’ll see a different program” from Davenport’s – one with features such as tenant accountability and financial benefits to good landlords.

Davenport

Mike Farris, program manager for Davenport’s Neighborhood Enforcement office, said the city has roughly 17,000 rental units at 6,500 properties. It employs 10 full-time inspectors, although they have other duties – such as nuisance abatement – beyond rental inspections. Farris said that licensing fees and fines generate more than $300,000 a year, but that doesn’t cover the cost of the program. Rental properties are inspected every two years in the city.

Landlords pay $30 annually for a single unit, $50 for two units, $65 for three, and $80 for four. Owners with five or more units pay $60 a year per building and $6 per unit.

Typical violations include electrical problems, missing or inoperative smoke detectors, and missing or torn screens, Farris said. Landlords are generally given 60 days to fix violations, and if they don’t they get fined $20 per item and have to pay $50 for a 30-day follow-up inspection.

Even though Davenport is looking to revise its rental-inspection program, the Quad Cities Rental Property Association is skeptical, Steen said. He said the problem with Davenport is that “they’re doing way too many inspections.”

He said his organization has been working with the city for the past six to eight months trying to implement less-frequent inspections and lower licensing fees for landlords who maintain their properties. There’s been progress on the frequency of inspections, but not fees.

The Quad Cities Rental Property Association also wants the city to hold tenants as well as landlords responsible for violations that are under their control – such as garbage. Right now, Steen said, if a tenant has bags of trash in the apartment, the landlord can be fined through the inspection process, but not the tenant. He said both should be fined if the violation isn’t fixed. The current system “gives a free pass to the occupant,” Steen said. His group has been pushing for tenant accountability for several years.

The tenant-responsibility aspect of inspections has fallen on deaf ears with the city, Steen said. He added that the perception of the city is that landlords are “trying to pass the buck.”

Farris said the city agrees that occupants need to be held responsible. “Where we disagree is who should hold that tenant accountable,” he said. “We’re only going to be there every two years.” He added that the city has altered its inspection reports to indicate to tenants the items for which they are primarily responsible.

Under a proposal being discussed among the city, neighborhood groups, and the Quad Cities Rental Property Association, the city would change its inspection schedule. Instead of all rental units being inspected every two years, those considered “excellent” – with no repairs needed and a maintenance program in place – would be inspected every four years (if in a building with 12 or more units) or six years (if in a building with fewer than 12 units). Units in poor shape would be inspected annually, Farris said. There is no tenant-accountability measure at this point.

This proposal could go before the Davenport City Council next month. “We’re trying to get it together for the second [council] cycle in August,” Farris said.

A sticking point for the property owners’ group is that Davenport, under the plan currently under discussion, doesn’t provide much of an incentive to landlords. The licensing fees would remain the same, no matter how frequently a property is inspected.

Although there is no financial benefit to being classified an “excellent” rental property, Farris said there is an incentive. Landlords “wouldn’t have to prepare [for an inspection] as often,” he said.

There will also be a financial incentive to stay off the “problem” list for annual inspections, Farris added, because landlords are charged extra for follow-up inspections.

Impact on Housing Stock

Farris thinks the possibility of less-frequent inspections can lead to improvements in housing quality. The city for the past 15 years has had a program in which one- and two-family rental properties can move from a two-year inspection cycle to a four-year system. The percentages of units falling into this consistently-in-compliance category has grown steadily, he said, with 48 percent of single-family rentals and 42 percent of two-family buildings now on the “excellent” list.

“Our inspectors have noticed they’re writing up fewer things,” Farris said. “We’ve got a feeling our housing quality has improved over the years.”

But Steen isn’t so sure. After 19 years of systemized inspections in Davenport and a complaint-driven system in Rock Island, “I wouldn’t say the housing is any better or any worse” in Davenport compared to Rock Island, he said. In Davenport, “we still have some major problems that need to be addressed” in terms of the condition of housing.

The key thing rental inspections miss – by definition – is owner-occupied property. Regularly checking apartments helps ensure that they’re up to code, but what about enforcing the housing and health codes with people who own their property?

Steen thinks that’s a separate issue that needs to be addressed in all of the Quad Cities. After Rock Island and Davenport tackle the issue of rental inspections, they need to take a hard look at the owner-occupied properties, he said. “There’s no easy fix on that,” Steen said, but the cities should try to “allocate their assets to focus in on the problem properties.”