A sign advertising an apartment for rent on Forest Avenue in Portland, where the City Council has capped the application fee landlords can charge prospective tenants. (Portland Phoenix/Colin Ellis)
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In a compromise move, the Portland City Council agreed to limit rental fees for apartments in the city rather than agreeing to an outright ban.

The decision came toward the end of a marathon meeting that began Aug. 3 and lasted until after 1 a.m. Aug. 4.

The decision limits fees to $30 for screening prospective renters, often for background and credit history checks. It does not require landlords to charge these fees.

Councilors struggled with the issue and heard from several individuals who spoke against the fees during a public hearing.

Cheryl Harkins, who said she is disabled and an advocate for Homeless Voices for Justice, said it’s nearly impossible to save money when a person is homeless, so the fees are just an added barrier to housing.

Harkins, who said she was homeless and lived in a car for a period, challenged councilors to imagine they were in a situation where they were homeless and had somehow managed to save exactly the amount of money needed for a security deposit – only to find there’s an additional fee just to apply, which often is much higher than $30.

“The word crushing can’t even describe how it feels to get that close and then hit another roadblock,” Harkins said. “This is segregational and discriminatory.”

Harkins said landlords make enough money through “extremely high rents,” so limiting their opportunities to collect more via application fees “isn’t a solution, but it’s the beginning to getting inside.”

Several other individuals said the fees are even harder on lower-income people since very rarely is a person applying for just one apartment. Katie McGovern, of Pine Tree Legal, said lower-income applicants often have to apply for several apartments before a landlord accepts them. She said one recent client spent $500 on application fees alone and said it is money these individuals often can’t spare.

“Banning the fees won’t solve the (housing) crisis,” McGovern said, “but it will remove a barrier.”

Councilor Spencer Thibodeau called application fees “abhorrent” and they often prevent applicants from finding housing.

The proposal to limit fees to $30 came from work done by the Rental Housing Advisory Committee, which includes tenants and landlords. Regan Sweeney, a co-chair of that committee, told the council this was the first major issue taken up by RHAC, and it took several meetings before the panel had a recommendation.

He also said the recommendation was not unanimous. “I’m not here to advocate against my own committee’s recommendation,” Sweeney said. “But this wasn’t as cut and dry as it seems.”

The council passed the proposal as an emergency order, meaning it took effect immediately. According to a press release from the city, the ordinance “prohibits landlords from advertising, accepting applications, and collecting application fees for a rental unit unless that unit is available or will become available in a reasonable timeframe, although the landlord and applicant can mutually agree to put the applicant on a waiting list.”

To advertise a rental, a landlord must immediately disclose the criteria he or she is using to screen applicants and the cost of the background screening.

Additionally, landlords who do charge these fees will have to provide receipts that explicitly state how the fee was applied. Applicants must also receive a copy of the screening results, and unused portions of the application fee must be returned to the applicant. 

Councilor Jill Duson, who chairs the council Housing Committee, said the measure was intended to be a compromise, particularly for landlords with just a single building, who she said should do background checks on apartment applicants.

“There’s a cost to that, but it shouldn’t be prohibitive,” Duson said.

Mary Davis, the city Housing and Community Development director, told the council a survey by the Southern Maine Landlord Association indicated most landlords do not charge application fees.

A representative of Avesta Housing, which provides affordable housing throughout southern Maine and parts of New Hampshire, later told the Phoenix Avesta does not charge application fees.

The Portland Housing Authority did not respond to an interview request.

After going back and forth on the fee limit versus a ban, councilors ultimately voted unanimously for the $30 limit, with Councilor Kim Cook absent at the moment.