Vandergrift holds off spike in rental licensing fee, seeks comments on proposal

Vandergrift will hold off on quadrupling the borough’s rental licensing fee after landlords and real estate representatives warned doing so would harm renters and homeowners while potentially costing the borough in legal costs.

Council voted unanimously Monday night to table a proposed ordinance that would have increased the annual cost for landlords to register their units from $50 to $200.

The $50 fee has been in place for at least a decade but has never been collected on the borough’s 1,200 rental units.

Council President Tom Holmes said the ordinance would be reviewed by the council’s general government committee and asked that anyone with concerns and input send them in writing to the borough secretary for council to consider.

That was essentially what Sylvia Maxwell, president of the Greater Allegheny-Kiski Area Board of Realtors, called for in her remarks to council, as she said the proposal had been brought to the brink of approval without meaningful discussion from those most affected — landlords and tenants.

“This is not how good policy is made,” said Maxwell, also representing the Pennsylvania Association of Realtors. “Instead of rushing to approve a legally questionable and financially risky ordinance, we urge the council to pause, step back and engage with the community. Let’s bring landlords, tenants and real estate professionals to this table to discuss solutions that are fair, legal and effective.”

Holmes could not say when the issue might come back before council for a decision.

“We have some work to do on this,” he said.

Rob Iseman of Allegheny Township, who has about 20 rental properties in Vandergrift, was among the landlords who raised concerns about the proposed increase to council Monday night.

“I take pride in providing a lot of quality, affordable housing here in the community,” he said.

Iseman said his tenants include a retired woman on a fixed income and a schoolteacher who works with mentally handicapped children.

“Myself and many local landlords, we operate on very thin margins,” he said. Increasing the fee could leave them no choice but to raise rents, “which could displace our seniors, people on fixed incomes, different individuals who have disabilities, families that are already struggling right now.”

If landlords face a sudden and extreme increase in fees, they’ll have no choice but to pass it on to their tenants, said Shannon Doerr, past president of the Greater Allegheny-Kiski Area Board of Realtors.

“In a town where many of the renters are seniors on fixed incomes, families living paycheck-to-paycheck and individuals receiving disability benefits, although it might seem like a small rent increase, it can mean the difference to them between staying housed and being displaced,” she said.

Based on the association’s research, Vandergrift’s proposed increase would make the borough’s rental licensing fee the highest in the region, which she said would hurt its growth. She cited Kittanning Borough, which charges $75 for the first unit and then $10 for each additional; Manor Township, $10 per unit; and Apollo, $50 per unit.

“Right now, this town should be working to attract responsible landlords and investors who will maintain and improve their properties. Instead, this excessive fee can send the opposite message completely, that Vandergrift is not landlord friendly. Then, investors that I work with will be taking their business elsewhere, leading to more vacant properties and neglected homes,” she said.

“In turn, with more people leaving, more vacant properties, more distressed properties, even the homeowners are going to be affected because their property values are going to go down,” she said. “Instead of imposing unreasonable costs, we could look at proven models that cities have implemented that incentivize compliance, they offer education, they promote long-term investment in our community.

“We have real-life examples we know about from across the entire country and within the state that we can look at and implement here.”

Maxwell raised legal concerns the borough could be facing.

Holmes previously said funding code enforcement was one reason for the increase. Maxwell said that would make it a “backdoor tax” and subject to challenge in court.

“Municipalities do not have the authority to impose new taxes without proper legislative approval,” she said. “This exact issue has been challenged in court, and the precedent is clear.”

An attempt to impose a $65-per-unit rental registration fee in Pittsburgh was struck down in court, Maxwell said. Judges ruled the fee was too high for the services provided, and it was lowered to $16.

“If Pittsburgh’s fee was deemed excessive at $65, there is strong legal basis to challenge a $200-per-unit charge in Vandergrift. Even the $50 current fee may be ruled too high,” she said. “At this rate, Vandergrift is on track to face the same legal challenge, and it is highly likely this proposal would not hold up under scrutiny.”

Doerr and Iseman encouraged Vandergrift to look at enforcing the $50 fee it already has but has not collected.

“Before drastically increasing those costs, why not just simply implement the policy that already exists?” Doerr said. “This alone could generate significant revenue and address some of the problems that we’re having.”

Not collecting the fee has cost the borough about $60,000 a year, and $600,000 over the past 10 years — money Iseman said should have been in the community.

“We’re looking for working together and coming up with a fair solution that treats everyone equally throughout the municipality, and not just the tenants and the landlords,” he said.