City Overreach? Necessary Change? Mandatory SFH rental inspections - Dallas, TX

[LurkingMustache]

Always interested in getting other Mustachian's thoughts on real estate issues.  I rent a home in Dallas, TX and was alerted to some large changes coming to the way the City of Dallas addresses SFH rentals.  It is being brought by the "Code Compliance Services - Office of Equity and Human Rights," which requires that every single-family home in the city be registered and pay an annual fee of ~$50.  Additionally, every home is required to go through an exterior and interior review.  This can be done annually at the city's discretion.

I received their PowerPoint and the images they showed were of dirty sinks not meeting minimum requirements - and then being cleaned (which makes me wonder, if they inspect a dirty house, and the tenant is there, wouldn't it be the tenant's mess?)

It reminds me of something you would have to do if you rented Section 8, but almost worse.  Interestingly, they do NOT have this same requirement for multi-dwelling unit (MDU) apartments or condo complexes.  Seems to me like a great way to make it more difficult for small time landlords to rent, while driving tenants that will lose housing to the mega-corp MDUs.

I can see the other side where it could help for dangerous living conditions, however it seems like egregious concerns could be taken care of within existing state and federal levels.  Part of me thinks this may come down to first-level views of government and their roles.  Are any other landlords seeing this in their cities?  I hadn't heard of it before and I've lived across Texas and a couple other states.  What do you think?  Would love to hear people's opinions.

[sammybiker]

Wow, that's scary. These changes are up for vote or are already happening?

I could understand Austin but I'm surprised to hear this happen in Dallas.

[ixtap]

State law does not cover egregious concerns in Texas, renters have minimal protections and little recourse.

At the same time, I looked into this. At $43/unit, they will not be inspecting every year, as it just doesn't make sense for the city. Chapter 27 doesn't seem particularly well thought out.

[Psychstache]

The city, particularly South Dallas, had a rash of very public stories and exposes on slumlords and horrid living conditions in rentals. Seems like reactionary legislation.

[LurkingMustache]

Wow, that's scary. These changes are up for vote or are already happening?

I could understand Austin but I'm surprised to hear this happen in Dallas.

Already happened.  I found out about it because of a post on Nextdoor - a landlord was complaining they had received a $695 citation, with a court date to see a judge, and if it wasn't solved within 30 days a $5,000 penalty.  Apparently the city is using water bills (utility name) vs. the name on file for the address, among scanning other things, to find SFH landlords that haven't registered. 

The story was that they sent a notice to the landlord, to the address that was being rented, and perhaps the tenant didn't let the landlord know.

But yes - it is already happening - apparently since mid 2018.  City claims they reviewed with landlords and had "informational sessions", but nobody had heard about them.  Now they are doing a roadshow for tenants to let them know about their rights in this new system.

Edit:  Agreed about it being scary though, crazy to see how quickly city legislation / changes can happen that have an immediate impact on you.  I've been rather stressed about it.

[LurkingMustache]

State law does not cover egregious concerns in Texas, renters have minimal protections and little recourse.

At the same time, I looked into this. At $43/unit, they will not be inspecting every year, as it just doesn't make sense for the city. Chapter 27 doesn't seem particularly well thought out.

From their FAQ it seems like they inspect once, and then CAN inspect up to once a year - but at a minimum once every five years.  It seems like complaints from tenants would drive more frequent inspections.  So don't make your tenant angry....

[YttriumNitrate]

Always interested in getting other Mustachian's thoughts on real estate issues.  I rent a home in Dallas, TX and was alerted to some large changes coming to the way the City of Dallas addresses SFH rentals.  It is being brought by the "Code Compliance Services - Office of Equity and Human Rights," which requires that every single-family home in the city be registered and pay an annual fee of ~$50.  Additionally, every home is required to go through an exterior and interior review.  This can be done annually at the city's discretion.

Damn, I wish my rental was in a town with such inexpensive inspections. For some comparison, West Lafayette, Indiana charges $1,000 for a permit to change a SFH into a rental, and don't even think of trying to rent a four bedroom house to four unrelated people. After that, it's $250 a year with annual inspections, but if you're not a slumlord (i.e., no violations) the fee and inspection only occurs on a biennial basis.

Edit: Here is the list of things they look for in the inspection, and I will admit this list was useful in preparing the house to be a rental (GFCIs, stairs that need handrails, etc.)
https://www.westlafayette.in.gov/egov/documents/1229110088_55023.pdf

[LurkingMustache]

Always interested in getting other Mustachian's thoughts on real estate issues.  I rent a home in Dallas, TX and was alerted to some large changes coming to the way the City of Dallas addresses SFH rentals.  It is being brought by the "Code Compliance Services - Office of Equity and Human Rights," which requires that every single-family home in the city be registered and pay an annual fee of ~$50.  Additionally, every home is required to go through an exterior and interior review.  This can be done annually at the city's discretion.

Damn, I wish my rental was in a town with such inexpensive inspections. For some comparison, West Lafayette, Indiana charges $1,000 for a permit to change a SFH into a rental, and don't even think of trying to rent a four bedroom house to four unrelated people. After that, it's $250 a year with annual inspections, but if you're not a slumlord (i.e., no violations) the fee and inspection only occurs on a biennial basis.

Lol.  Great perspective :)

[electriceagle]

My first thought is that some homeowners might want to create barriers to rentals or at least to low-end rentals in SFH-only neighborhoods. A law like this that doesn't include multifamily properties might not really be intended to help tenants.

My second thought is that these sorts of laws are subject to various lawsuits: https://www.curbed.com/2018/12/6/18129672/seattle-apartment-lawsuit-rental-inspection

[AMandM]

In my city, to rent a SFH you have to have a licence that costs $100/year. It's issued after an inspection and I believe the inspection happens every year when you apply for the renewal licence. The checklist is similar to the posted one, though less detailed.

[Another Reader]

In Tempe Arizona, the city operates like an HOA for rentals.  The code enforcement people drive by and send the owners weed notices.  Presumably if the exterior of the rental is not maintained, you could get a paint or fence notice.  This has the absurd result that two identical houses with similar weed issues are treated differently.  The owner-occupied house is not cited, while the rental is.

This approach is typical of the bipolar attitude cities have about rentals.  On the one hand, they acknowledge the shortage of rentals and the need to provide rental housing.  On the other, all the City Council members get complaints about neighboring rentals from voters.  The voters win out.  Cities would prefer to meet their obligation to build adequate rental units by building multi story high density projects and not encouraging single family rentals.  Many people want or need a single family house for their family and lifestyle, but can't or don't want to buy.  Eventually they will be shut out as landlords sell and rental prices rise in response to increased demand.