Wednesday, January 27, 2010

Allentown's Tax on the Poor

When Allentown's city fathers (and one mother) adopted Mayor Ed Pawlowski's "no tax increase" budget, they found another source of revenue, deciding to raise the annual rental inspection fee from $16 to a whopping $75 per unit. Naturally, landlords will be tempted to raise rents to cover this modest, 468%, increase. For beleaguered residents, this is in addition to climbing PPL rates. Even HUD units will be inspected.

Scott Armstrong, who delighted everyone yesterday by complaining about a fellow civic activist, is no less circumspect in condemning this increase.

"That means every landlord must raise the rent of every unit in order to cover the expense of the higher fees. In effect, Ed Pawlowski's unit fee increase is a tax on Allentown's poor. When Ed rode into town as an advocate for low income housing, people took him at his word that he was sincere. Time and experience have proven he wasn't."

At $75 per unit fee, the Queen City's 22,000 units will produce revenue of $1,650,000. The cost of the program, even with additional staff, is just $1,093,701. So the City will generate around $550 thousand by squeezing the people who can least afford it.
Clarification: Blogger Michael Molovinsky has noted that the fee being increased from $16 to $75 is NOT the annual rental inspection fee, but the "City Rental Unit Registration/License Fee," an annula fee that is charged independent of any inspection.

18 comments:

Anonymous said...

Having the landlords pay their fair share of the expense to send rental inspectors is just good old common sense.

Should the homeowners have to pay higher property taxes to subsidize the out of town landlords? I don't think so, and I don't think the taxpayers of Allentown would agree with that.

Everyone should pay their fair share.

You're wrong again, Bernie. And, why don't you find your own material instead of posting Scott Armstrong's work?

Anonymous said...

Bernie,
Thank you for writing about this horrific plan by Allentown City Fathers. Think of Seniors in high rises where over-worked managers try to keep all costs down to accommodate their residents' tight and very small budgets. Now these Apt complexes too will be taxed @ $75.00 for each unit! For a large nonprofit
residential setting that equates to thousands of dollars from those
the most vulnerable.

Anonymous said...

Goodbye poor? Including you Bernie.

That's how to turn a city around.

Anonymous said...

I remember an instance where another community was charging a unit tax that resulted in more revenue than was necessary to cover the cost of the inspections. Landlords organized and sued the municipality say that the cost of the unit tax should reflect the cost of inspections, not exceed it. The landlords won a sizeable judgement and the municipality adjusted the tax. I think it was West Chester, PA.

This may have some legal legs. I do think the landlords should be charged the cost of the inspection, which clearly they weren't under the lower rate. My guess is that it balances out around $55, not $75.

Anonymous said...

As a member of the Rental Inspection’s Committee I recall that the ordinance was carefully written so that inspection fees were to cover only the cost of the inspection program. This program was designed to improve the safety and standards of Allentown’s rental units, it was not intended to be a cash cow for any administration.

Scott Armstrong

Anonymous said...

"This program was designed to improve the safety and standards of Allentown’s rental units, it was not intended to be a cash cow for any administration."

Then in all likelihood, a couple of landlords could jointly file suit to point this out. The administration would have to justify the revenue being related to the expenses.

michael molovinsky said...

anon 9:12, this is an annual license fee per unit under the rental inspection law, but not an inspection fee. the 20,000 plus units are not inspected every year, that would be impossible. the projected goal is inspection once every five years, which under the new fee's, using your reasoning, would equate to $375 per inspection.

Anonymous said...

Bernie -

This issue has nothing to do with anyone paying "their fair share".

When the Rental Inspection law was passed, there was discussion that the fees charged should be equivalent to the costs of administering the program. This means it should not be a revenue raiser. There might even have been language in the ordinance which stated this.

Pawlowski keeps going back to the well on this. He had previously raised the fee, saying it was necessary to pay for hiring more inspectors. Of course, the promised new inspectors either weren't hired or used for other purposes (such as Pawlowski's revenue-raising home inspections on the sale of non-rental properties).

Pawlowski is scrambling for cash because he's run the city financially into the ground. The landlords are an easy target. The only way this abuse stops is if the landlords send a letter to their tenants explaining why their rents are increasing. Then the tenants need to go to City Hall and demand that Council lowers the fee.

I think the Mayor (and Council) know that many of the people renting aren't involved in the political process, other than to blindly pull the Democrat lever at election time.

Once again, it is the "Progressives" who are gouging the poor, and all the advocacy groups (i.e. CACLV) who are in bed with the Mayor remain silent.

Looking To Escape said...

Pawlowski is scrambling for cash because he's run the city financially into the ground. The landlords are an easy target. The only way this abuse stops is if the landlords send a letter to their tenants explaining why their rents are increasing. Then the tenants need to go to City Hall and demand that Council lowers the fee.



There is no reason on this earth Allentown homeowners have to subsidize landlords who are in the rental business to make a profit. They do not rent out of the goodness of their hearts.
.
The so called poor do create costs and there is no reason to shelter them from every expense.

Anonymous said...

Looking to Escape said:

"There is no reason on this earth Allentown homeowners have to subsidize landlords who are in the rental business to make a profit. They do not rent out of the goodness of their hearts.

The so called poor do create costs and there is no reason to shelter them from every expense."

***************

This has nothing to do with "subsidizing landlords". This has to do with fairness under the law. Pawlowski's past abuse (raising fees in excess of costs) of using the rental law as some sort of cash cow led to the creation of the home inspection law - another revenue-raiser aimed at ALL homeowners.

If you have a problem with the rental units, raise the minimum square footage allowed and agressively pursue de-conversions, beginning with PROBLEM properties (those properties which are creating quality-of-life complaints).

And if you want to change the rental situation in Allentown, stop voting Democrat. Pawlowski and his cronies (government- subsidized non profits) have done more to promote low-income housing than anyone else over the last eight years. WAKE UP!

Anonymous said...

You mean to tell me HUD or ACCESS won't cover this extra fee for those mooching of the govt.?

Anonymous said...

Both Ed and his mentor Roy Afflerbach have a history of raising “fees” to generate cash for the general fund. Trash and water fees have gone up dramatically in recent years and the resulting surpluses from these accounts have been used to cover deficits in the general fund. Meanwhile Ed runs around saying he hasn’t raised taxes. The truth is clear enough, this administration has used fee increases in lieu of tax hikes.

Scott Armstrong

Anonymous said...

Anon 11:59 said:

You mean to tell me HUD or ACCESS won't cover this extra fee for those mooching of the govt.?

****************

So the answer to "those mooching off the govt." is raise "fees" so that government can pay even more?

Only in a "Progressive" wonderland like Allentown does that make sense. Are you sure you're not Ed?

Jeff Pooley said...

Just a small point of fact that doesn't change the issues involved. The license fee (not an inspection fee) was $35 last year, not $16--the fee from two years ago.

Jeff Pooley said...

I must say too that I think it's a bit of faux populism to call this a "tax on the poor." It may be objectionable for other reasons raised here in the comments, but it's just not true to say that the fee will be inevitably passed on to renters. The rental market isn't determined by landlord cost. In the medium run landlord cost matters, but the short-term rent market is set by supply, and by renters' willingness (and ability) to pay. You couldn't take a market-rate apartment and slap $75 onto the rent and expect the place to fill...

Bernie O'Hare said...

Jeff,

This cost will eventually be passed on to the tenant. It has changed the renatl market by making apartments more expensive to the landlords, who will quickly pass this cost along. It is a tax on the poor. It does not become any the less so bc it comes from Pawlowski. Pointing this out is not faux populism, but reality.

I notice that the word "populism" is being used more and more these days, especially on a national level. It is being used to explain away the success in Mass. and elsewhere.

Of course, the other word being used is elitism.

Jeff Pooley said...

"Populism" and "elitism" are abused and exploited words--but that's another conversation

Anonymous said...

Some people here believe that because we are out if town landlords we should pay more than our fare share. Well I am a multi-unit property owner and I do pay more. I pay more taxes than the average homeowner pays in PA (well over $20,000 per year).

Some here are also confused about these fees and amounts payable. Other than taxes there are two fees associated with rental units. The first is a City of Allentown Business License Fee of $35.00 per year. This fee is to be able to do Business in the City of Allentown, it has not changed. The second is the City of Allentown Bureau of Building Standards & Safety City Rental Unit Registration / License Fee. This fee is for the purposes of inspecting the rental unit to insure safety and habitability. This is the fee that was increased from $11.00 (not $16) to $75.00 per unit. An increase of more than 581%

This ridiculous inspection fee would be ok if I was paying for something that was a legitimate expense. I have yet to have any of my rental units inspected and have been paying this fee since 2003, over seven years now. Every year I inquire about an actual inspection of my properties, the answer is always the same, “we are backlogged with inspections”. That has been my experience with this rip-off fee and now they collect $75.00 per unit to do nothing!