“Twenty-Three Years of Rental Licensing — Observations”
- By Albert J. Dennis - 2005
- City of Aurora, Illinois
- Sgt-At-Arms, American Association of Code Enforcement
Rental licensing is one systematic tool used by municipalities for maintenance of income housing stock. The City of Aurora adopted its licensing program in 1982 during my second year of employment. Aurora’s population was 90,000 (currently 157,000). Aurora modeled its ordinance on ideas from programs used in Oak Park, Illinois (program begun in 1958); Cedar Rapids, Iowa; and Ann Arbor, Michigan, among others.
The initial ordinance pertained only to rental properties containing three or more units (1000 buildings). Inspections of rental properties prior to 1982 were complaint driven. City Fathers determined that approach was insufficient. The City Council passed the licensing ordinance over protests primarily from the local board of realtors.
Aurora has amended the ordinance over the years adding: All rental units in the downtown core (1990), rental condo units in complexes having at least fifty units in which at least fifty percent of the units are rental (1990), rental two-units (1995), rental portions of owner-occupied two-unit buildings (2003) and single-family rental units (2004).
Positive observations relating to twenty-three years of participation in rental licensing:
The lion’s share of complaints prior to adoption of rental licensing were from the thousand buildings containing three or more units. Today very few complaints originate from those buildings. The overall building maintenance is drastically improved. Many unsafe and ghastly living conditions have been eliminated from those multi-unit buildings. Property values have escalated in buildings that once appeared destined for demolition. Potential property buyers know the buildings have had regular minimum standard inspections.
Licensing gets us into all the units over time. Prior to licensing many tenants failed to complain about dreadful conditions for fear of landlord retribution. That was a much bigger issue in 1981 than now. Rental licensing has weeded out the old time, do nothing, rent collecting slumlords that infested the City of Aurora when I hired on in 1981. Regular inspections also aid in enforcing occupancy standards in rental properties.
Additionally, the registration process for new owners affords us the opportunity to educate them about code requirements and encourage them to attend the local landlord training school offered by the City of Aurora. Many landlords have improved their tenant screening practices as a result. Registration also provides an owner/agent database for easier contact should the need arise. Licensing can bring in some income depending on the fee schedule. Aurora’s rental license fees are low and do not cover the cost of the program.
Negative observations relating to twenty-three years of participation in rental licensing:
From my point of view the number one negative issue regarding rental licensing is the intrinsic bureaucracy that comes with it. Initially notifying and registering property owners is a major event. The better your database capabilities and relationship with your computer people the easier this task will be. Monitoring owner changes and registering the new owner must be done. Making inspection and re-inspection appointments is time consuming. You must have enough inspectors and support staff to operate the program.
Getting a licensing ordinance adopted can be difficult. Many municipal rental-licensing programs are started because of neighborhood activist initiation and support. Some have been blocked due to the town’s “old boy” network and connections with the council.
Initial inspections of poorly maintained buildings can be lengthy. I recall spending two or more hours in three and four unit buildings in 1982-85. Those inspections generated extensive violation notices and time-consuming follow-up inspections. Licensing also forces you to expend manpower on buildings that don’t really need it. In Aurora, this is offset by granting one or two-year waivers of fees and inspections on buildings found to be up to code. (Note: some municipal rental licensing program licensing periods are two, three, four or even five years, rather than annual, as in Aurora.)
Weighed together I believe the positives have outweighed the negatives in Aurora. Frankly, we had some deplorable rental buildings twenty-three years ago. Some still aren’t palaces, but they are much improved.