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Pittsburgh passes new rental permit requirements while fighting to enact old ordinance in court

Katie Blackley
90.5 WESA

Update on Sept. 27, 2023: Pittsburgh City Council unanimously approved a plan to set new requirements for rental properties yesterday. The new rules include routine inspections and a requirement that landlords provide contact information to the city in case of problems.

Fees associated with the new requirements are expected to be set during council's upcoming budget negotiations. City officials say they hope to enforce the new requirements beginning early next year, though local property owners are likely to challenge the new rules in court before then.

Original story published Sept. 21, 2023: Pittsburgh officials are gearing up for a fourth attempt at creating a citywide registry for rental properties. City Council preliminarily approved a new framework for a registry Wednesday, even as the city continues a legal fight on behalf of a previous approach that’s been held up in court.

City officials say the registry will help protect renters from absentee landlords or out-of-town corporations. They argue that provisions of the bill, which require regular inspections of each unit and a point of contact to field complaints about the property, will mean renters are less likely to live in poor conditions.

“[Renters] deserve basic protections to ensure when they rent a property that it is safe for them to live there,” said Mayor Ed Gainey spokesperson Maria Montaño. “Safety is our number-one priority.”

City officials also say the registry would help determine how many rental units there are in the city.

“We know that half the population are renters,” Councilor Deb Gross said during a discussion about the registry at council's Wednesday standing committee meeting. “[But] we don’t really know how many apartments are out there.”

Under the legislation council discussed Wednesday, the city would launch a systematic inspection program, and establish new rental registration and permitting requirements. There would be penalties for landlords who do not comply.

Landlords would be required to apply for a rental permit annually, and rental units would be subjected to city inspection every three years. Units must meet standards set in the International Property Maintenance Code. If the inspection turns up concerns — such as insufficient heating and plumbing or structural issues — the landlord will be sent a notice with listed corrective actions.

According to David Green, the city’s interim director of the Department of Permits Licenses and Inspections, fees would be set during upcoming budget talks. But penalties for noncompliance are set in the legislation at $500 per unit per month.

In a second bill advanced by council Wednesday, the city would require rental registry compliance in order for tenants to receive parking permits.

The bills are up for a final vote next week. Should they pass, as appears likely, Green estimated that the program would get underway in early 2024. He said the city would need time to alert landlords to the new requirements, and prepare the department for a wave of inspections.

Once the program takes effect, every rental unit in the city will be subject to the inspection requirement. But whether PLI’s two dozen inspectors can handle the avalanche of initial inspections was a topic of concern for Councilor Anthony Coghill.

“It’s hard to imagine,” Coghill said, adding that his constituents already often complain about delays from the PLI. “I’m concerned about your workload.”

Green said the city plans to move the enforcement of weed and debris code violations to the Department of Public Works, freeing up PLI to focus on rental inspections.

“There will, I presume, be a learning curve both for us as well as applicants,” Green said. “But it is not drastically different than other licenses and registrations that we already review.”

'We’re winning the war'

As Pittsburgh’s already-aging housing stock has grown older, multiple mayoral administrations have attempted to set up a rental unit registry. But each time the city has tried to do so, landlord groups have taken them to court. And they have so far been successful at blocking the requirements.

The fight dates back to 2008, when former Mayor Luke Ravenstahl signed the first rental registration ordinance. The Apartment Association of Metropolitan Pittsburgh filed a successful lawsuit to oppose it the following year.

A similar legal battle ensue after council passed a 2015 version of the registry. A judge then ruled the $65 per unit fee (for buildings of up to 10 units with the per-unit fee decreasing beyond that) was too high.

When the city passed a third registry program — this one with lower fees — in 2021, the same groups filed suit: the Apartment Association of Metropolitan Pittsburgh and the Landlord Service Bureau.

Craig Kostelac, the CEO of the Landlord Service Bureau, has been around for each of these attempts. His group argues the fees associated with the rental registry impose an unfair tax on landlords that violates the city’s Home Rule Charter. He argues the registry is a cash grab by the city, not an effort to protect renters.

He also dismissed the city’s argument that it needs a registry to track down property owners, arguing that tax records can be used to find them.

As for the city’s latest legislation, Kostelac expects to sue the city again if the ordinance takes effect.

“Every ordinance that they pass that is anti-property owner, we will sue them,” Kostelac said. “We’re winning the war.”

'Any challenge to this would be frivolous'

The pending program lays out less stringent requirements when compared to the city's last effort to impose a registry. The 2021 ordinance required inspections for lead, and for out-of-town landlords or LLCs — private business entities often created to hold property — to designate a local agent to represent the owner. Contact information for that agent would be publicly accessible.

Those requirements are changed in the new version of the registry. Landlords still must apply for a permit and submit to routine inspections, but not for lead. A contact person must still be registered with the city, but that information won’t be made available to the public.

The new legislation also drops earlier requirements that landlords attend a training academy.

City Solicitor Krysia Kubiak said the new changes are designed to help the city avoid more courtroom setbacks. Landlord groups have argued the requirement to hire a local agent was discriminatory and could force a landlord to become an employer.

But Kubiak said landlords don’t have to hire anyone in order to be a local representative.

“It is completely up to the landlord, so it could possibly even be a tenant,” Kubiak said.

She said that while the registry requirements might impose new responsibilities, “I certainly don’t believe it’s an undue burden on landlords [and] whatever inconvenience should be trumped by our health and safety goals.”

The two bills that advanced in council Wednesday were introduced in 2022 to regulate short-term rental properties such as Airbnb's. Councilor Bobby Wilson proposed to add the short-term rentals to the registry council had created in 2021.

That move came after a 2022 Easter shooting on the North Side, which lies in Wilson's district. Two minors were killed and eight others injured at an Airbnb after a house party turned violent. Police reportedly struggled to make contact with the rental property owner, an out-of-state LLC.

But the bills have been stalled in committee for well over a year while Wilson fine-tuned language with the city’s law department. And then the state's Commonwealth Court ruled earlier this year that the city was “without authority to enact the [2021] rental ordinance in its present configuration,” because state law does not empower the city to launch “wide-ranging regulation of the residential landlord business.”

With the court having rejected the 2021 registry — which Wilson's short-term rental rules were meant to amend — he had to start from scratch.

He's done so in the new bill by applying the same registration requirements to both long-term rental dwellings and short-term vacation properties.

“It doesn't matter if you're going to rent for 24 hours or two years — they would all be included in the rental registry,” Wilson said.

Kubiak said the new plan “complies completely with the Commonwealth Court" ruling.

“This [new] bill is completely in compliance with the Commonwealth Court's rulings,” Kubiak said. “Any challenge to this would be frivolous.”

But even as the city crafts legislation to accommodate the court's decision, Kubiak is fighting to overturn that ruling. The city has appealed the decision to the state Supreme Court.

Kubiak said the city is holding out “hope that our original bill gets approved [so] that we can enforce that version.”

But the Landlord Services Bureau's Kostelac said he’s confident the courts will continue to take his side.

“They don’t have the law behind them,” he said.

Kiley Koscinski covers city government, policy and how Pittsburghers engage with city services. She also works as a fill-in host for All Things Considered. Kiley has previously served as a producer on The Confluence and Morning Edition.