Pittsburgh’s Rental Property Registry Proposal Faces Uncertain Future

May 6, 2015

The proposed bill would require landlords to register with and pay a fee to the city of Pittsburgh.
Credit Liz Reid / 90.5 WESA

It’s been nearly six months since Pittsburgh City Council introduced a bill that would require all rental property owners to register with and pay a fee to the city. A public hearing on the matter was held in early December, but the bill has continuously been held by council and has yet to come up for even a preliminary vote.

In that time, the municipality of Penn Hills passed a similar ordinance, which requires landlords to pay a $50 fee per unit and lays out rules for inspections and code enforcement. Rental property registry ordinances are also on the books in Philadelphia, Lebanon, Allentown, Erie and many other Pennsylvania cities.

But attorney Brad Dornish with ACRE of Pittsburgh, a consortium of real estate investors, said some of those ordinances might be illegal. He said if revenues from rental permits exceed the cost of administering a program, it amounts to a tax.

“The tax is unfairly targeted on only those people who are required to pay the fee, and it violates the Local Tax Enabling Act,” Dornish said.

The city of Pittsburgh’s proposed ordinance is based on a 2008 proposal that died a slow death in court over the course of two years. Dornish said his group helped modify the ordinance to make it revenue neutral, but it wasn’t until last year that the city officially took up the proposal again.

“The fee then was changed from what we had calculated to be a break-even point back in 2008 of $12 every other year to a fee of $60 per year,” Dornish said.

Actually, that number would be $65 per year, per unit, and critics have said it places too much of a burden on landlords and will eventually trickle down to tenants in the form of increased rent.

But that criticism isn’t what has been keeping the bill from being passed, according to City Councilman Daniel Lavelle, chair of the public safety committee.

He said the Pittsburgh Intergovernmental Cooperation Authority, the city’s financial overseers, isn’t on board with the plan.

“Until they’re satisfied, we can’t bring it back to the table, which is why we continue to hold it,” Lavelle said.

But Henry Sciortino, executive director of the ICA, said that’s not accurate.

“City Council has the right as the set of elected officials to introduced and act on whatever legislation they want. That is their legislative prerogative,” Sciortino said. “We do not, as an authority, get involved in that unless there are matters that are critical to the fiscal stability of the city.”

He said the reason the ICA asked the city to take the proposed $1.62 million in rental registry fees out of the budget is because the budget shouldn’t include “a wish list.”

“Until City Council enacts ordinances that specifically define revenue sources on any matter, we’re not going to include it in the budget, no matter what it is,” Sciortino said.

Sciortino said had City Council passed the legislation before the Dec. 19 meeting wherein the ICA approved the 2015 budget, they could have included that revenue stream. That same day, the Peduto administration released a statement lauding the open lines of communication between the ICA and the city, and saying the ICA would fund a fee-free pilot of the rental property registration program this year.

“That obviously hasn’t happened,” said mayoral spokesman Tim McNulty.

Sciortino said it hasn’t happened because the ICA in fact never agreed to fund a pilot program. He said they did agree to plug the $1.62 million budget hole that was created when the rental permit fee was taken out of the budget, money that was to be put toward debt service payments.

According to a Dec. 20 report from the Pittsburgh Post-Gazette, the administration said they’d take the same amount of money destined for debt service and put it toward enforcing property standards.

But as for the rental registry itself, it’s not clear what the future holds. Sciortino said the ICA has yet to receive a detailed proposal of what the costs and benefits of the program would be. McNulty said the city is still waiting on a green light from the ICA before moving forward with the proposal.

“The ICA as you know has not been entirely open with us over the months and years on what exactly it is they’re looking for,” McNulty said. “We’ve been entirely open on our side, with everything they wanted. We’ve given them hundreds and thousands of pages of documents supporting everything we’ve been doing with our budget. It’s hard to know really what they do want. But again, we really believe in this rental registration thing and we think it’s good for the neighborhoods, so we’ll keep pushing it.”

City Councilman Dan Gilman, an advocate of the program, maintained that the ICA is responsible for the lack of movement on the bill.

“Municipalities around Allegheny County are passing it, across Pennsylvania are passing it, across the country are passing it,” Gilman said. “To me, it’s an absolute shame that our oversight board is standing in the way of a program that residents want to protect homeowners and residents in the city of Pittsburgh.”

The bill is scheduled to come up for debate in Council’s committee meeting two weeks from today, but it’s anyone’s guess whether Council will actually discuss it and take a vote, or put it on hold again.