Business usurps public purpose in Residential Rental Application Fee Ordinance

If you are a resident of Grand Rapids working hard to make ends meet and you feel like the system is rigged against you, you need not look any further than the current draft of the Residential Rental Application Fee Ordinance to validate your suspicion.  

Recently, I was invited to a meeting coordinated by Grand Rapids Homes for All (GRHFA), a local affordable housing advocacy group with GRHFA and the Interim City Manager, Eric DeLong. The topic of discussion: The Residential Rental Application Fee Ordinance Proposal. For those who may be unfamiliar with this ordinance, its purpose is to prevent predatory collection of application fees and the charging of exorbitant application fees when looking for an apartment in the City of Grand Rapids. A predatory collection of application fees is when there is no apartment available but the landlord does not communicate that information to an application, but instead allows them to pay and application fee knowing there is nothing available, thus profiting off of the applicant. An exorbitant fee is the charging of extremely high application fees that are well above the cost of the credit and back ground check (i.e. if the credit/background check cost $20 and the landlord charges an $60 application fee) thus profiting off of the application fee.  The Residential Rental Application Ordinance is supposed to prevent this among other things.

In preparation for the meeting I reviewed a memorandum dated November 14, 2017 to Greg Sundstrom (former Grand Rapids City Manager) from Jessica L. Wood, former Director of Municipal Legal Affairs for the City of Grand Rapids. The intent of the memorandum was to highlight the “salient features” of the draft ordinance. The ordinance was attached to the memorandum for review. I reviewed the memorandum and the attached ordinance and was relatively pleased with the attempt. As a Policy Analyst working to affirmatively further public good I have grown accustomed to the art of concessions in matters of policy. So, while I had a couple of issues with the ordinance, I thought the overall spirit of the intent of the ordinance was captured.  The ordinance called for:

• The landlord to disclose the criteria being used to judge the rental application

• The application fees must not exceed the cost of the screening cost

• If an application is rejected, the landlord would have to notify the applicant of the reason for denial and provide the name of any screening agency used with 14 days

• If an application is rejected for a reason not listed in the written criteria, the entire application fee must be returned

These points represented a good start in the process of drafting an ordinance that was consistent with the will of the community.

Then a couple days later I got an email from GRHFA. The email attached the old RA ordinance and the new RA ordinance. “Oh wow,” I thought. There is another Residential Rental Application ordinance proposal? It turns out, what I saw was THE OLD ORDINANCE PROPOSAL.

The new RA ordinance was also introduced in memorandum form. This memo was dated June 5, 2018. The memorandum was from Eric DeLong, to Eric DeLong and it expressed intent to set a public hearing on the RA ordinance. Except this ordinance was not like the first. It was stripped of the important consumer protections articulated in the first ordinance. According to the memorandum, since the original ordinance was drafted a “working group” has met with the Housing Commission and the Rental Property Owners Association (RPOA). It appears that this working group has decided that what YOU need is not protection against exorbitant application fees, nor protection against predatory application fees. They decided that YOU need “credit repair.” They decided that YOU need the Housing Commission to expand its Rental Assistance Center. They decided that YOU need to “avoid duplication of requests and control costs,” huh? Don’t feel inadequate if that confuses you….. we are all confused by this.  

The specific changes in the new ordinance include:

• No requirement for the landlord to disclose the criteria used to judge the rental application

• No requirement that the landlord notify the applicant with the reason for rejection

In short, the new ordinance strips the landlord of any accountability and leaves it up to the prospective tenant to find out the true cost of completing the application.  Which is most a near impossible feat in that they would be essentially asking the person that has potentially violated the law to turn states (or city’s) evidence against themselves.

Furthermore, under the new ordinance if a landlord is found in violation of the newly proposed ordinance there is…… and get this…..NO FINE!! Now, if they violate it twice (or the first repeat offense) there is a whopping $50 fine and the second repeat offense is a $100 fine.

It is important that we stay civically engaged. This is an example of how injustice quietly and swiftly creeps into our municipal code of ordinances. Tomorrow night at 7:00 p.m. this ordinance will be discussed at the Grand Rapids City Commission meeting. Please come out and express your thoughts on this ordinance or any other issue you would like your commission to know about.  If you would like to review both ordinance proposals prior to the meeting please email me at [email protected] and I will send you a copy of both ordinances.  Don’t forget prior to every commission meeting we meet up at Linc Up for Dinner and conversations prior to the meeting. We also provide transportation to the Commission meeting. This week’s Linc Up pre-commission dinner speakers will be none other than Grand Rapids Home for All.