Landlords of the 77 boarding rooms that exist in Lansdale Borough could be getting a break on their license fees.
At present, the borough code enforcement department is looking into whether or not the $58 fee per boarding room is revenue neutral. Lansdale officials believe that fee for boarding rooms may be too high.
That fee is the same fee paid for apartment inspections. However, the fee covers the entire apartment, not each room, as it does with boarding rooms.
"If someone owns a boarding house, with 10 rooms in it, the fee would be $580 for a 10-room boarding house," said Councilman and Code Enforcement Committee Chairman Jack Hansen at Wednesday night's meeting. "Off the top of my head, that sounds high for an annual fee for inspection."
Director of Community Development John Ernst explained to the committee Wednesday night the history behind the $58 boarding room license fee.
In 1995, the fee for boarding room units was $16. That fee was per individual boarding room.
In 2007, the fee was raised to $100, based on Pottstown Borough's experiences.
"The license fee was based on a program similar to one in Pottstown, and some of fees were taken from experiences Pottsown had run into, based on how they were running their inspection process," Ernst said.
Hansen added that he was sitting on council when the fee was increased to $100. Council "found out quickly we were making a lot of money" when the fee was supposed to be revenue neutral, he said.
Early in 2008, that $100 fee was rescinded to $58, Ernst said.
"That $58 fee was based on a contract provided by Pennoni Associates, as their licensing fee per unit, to charge the borough to do an inspection," he said. "That $58 fee has been part of the fee schedule since 2008. It has not been lowered or raised."
Then, former Borough Manager Lee Mangan enters the picture. Ernst said that in March 2008, several landlords received a letter from Mangan indicating that the fee for boarding rooms was going to be maintaind at a level of $16 per unit.
"Several fee schedules after that have raised that boarding room/apartment fee to $58. Our most current fee schedule references the fee schedule of 2008, when it was initially adopted," Ernst said.
However, borough council never authorized or voted on such a change. The $58 fee remained on the fee schedule.
Fast forward to about a year ago when the codes department upgraded its software and computer systems.
"There was never any council action to make that official change (to $16). When we started doing paperwork and the new computer system started to reconcile apartments and fees, it didn't match our schedule because it always said $58," Ernst said. "This discrepancy started popping up and we started charging $58 to match our billing cycle and software. Suddenly, here we are."
While a solution is still being investigated, Ernst offered one potential solution: Treat boarding rooms collectively like an apartment.
"Look at three boarding rooms similar to a three-bedroom apartment, and that fee is $58. And for every increment of three rooms, it is similar to another apartment license," he said. "Someone with 12 boarding rooms ends up with four apartment licenses as oppose to 10 boarding room licenses."
Committee member Matt West said not all boarding houses are created equal; those who had more rooms were being charged more than those with a few rooms.
"Wouldn't a simple solution be to cap it? Ten or more units, this is the fee and that's it," he said. "Why not simplify it? What's the difference between a boarding room and an apartment? It seems rather complicated and convoluted to me."
Ernst said each boarding house property is inspected all at once, and that includes each boarding room and all common areas.
Property maintenance manager Andy Krauss told the committee a boarding room is usually 80 square feet and contains a bed, chair, dresser and TV. When he inspects apartments, like a duplex, for instance, he is inspecting two bathrooms, two kitchens, a basement, the hot water heater and heater.
Ernst also brought another important factor to the attention of the committee: there is a disconnect between landlords.
"Each landlord is different. You can walk into a unit and you wouldn't mind your mother staying there. Then, you could walk into a room and be back five, six times because they can't seem to get it right, clean, code compliant and accurate," he said. "It tends to balance itself out in the long run."
Krauss added that inspections could take five minutes or an hour. He said the department is flexible in working with landlords. Some landlords are great and their tenants are awful, and vice versa.
West believed that issue poses another problem. With the rate being applied to all boarding rooms regardless of a good landlord or bad landlord, the good landlords are paying for the bad ones.
"Why not create some disincentive for that landlord that says the first inspection is $10, and if we come back, it's $25 extra. A third time is $75 extra," he said.
Krauss said that kind of disincentive is in place: anything exceeding two inspections and the landlord is hit with a $58 re-inspection fee.
There is light at the end of the tunnel. The current Lansdale zoning code does not allow for any more boarding rooms to be developed in the borough.
"In a perfect world, they would be turned into apartmetns and converted, but that is not going to happen overnight," Ernst said. "These are the maximum number of boarding rooms we are dealing with."
Committee member Denton Burnell believed somewhere in the middle of $16 and $58 would be a more appropriate fee.
Boarding room owner Joe Parker attended the committee meeting, along with about seven others like him. Parker said he determined the borough was taking in around $200,000 a year between boarding room and apartment fees.
"Inspections are done every other year. The borogh was collecting $400,000 in inspecting a property once every other year. That's a lot of money," Parker said.
Parker said the solution of $58 for every three boarding rooms may not work, as some landlords have only one boarding room and would pay that $58 fee.
Hansen thanked the landlords for bringing the issue to the borough's attention.
"Until it didn't match in our billing system, we didn't know," he said. "I'm glad you brought it to our attention, so we can address it."
There is some good news for boarding room owners in the meantime: Bills are not due until the issue is resolved.
"No one is asking you to send money until it's resolved," Ernst said. "If necessary, refund checks will be paid."