Landlords Learn Licensing 101

Bill Santillo walked into City Hall with an open mind, ready to learn about a landlord licensing program he’d once staunchly opposed.

He was one of about ten landlords and real estate professionals to gather on Thursday afternoon in a meeting room on the second floor of City Hall for an update on how housing regulations and their enforcement are changing in New Haven.

The Livable City Initiative (LCI), the city department in charge of enforcing the housing and blight codes, hosted its second workshop for landlords this year to walk through the city’s newly revamped Residential Rental Business License system.

Santillo has been a landlord in New Haven for 54 years. He remembers when the license was first created in 2006: a new ordinance required local landlords to register their rental buildings with the city, pay a fee, and undergo an inspection at least once every three years.

The ordinance has been spottily enforced. Nearly two decades later, a majority of buildings in the city are not registered with the program. Recently appointed LCI Director Liam Brennan has prioritized increasing licensing compliance; the city has by now mailed licensing information to every multi-family building in the city, and has begun to issue fines to landlords who have not replied to a second notice.

Thursday evening’s workshop was intended to explain the licensing program to landlords, outline the department’s current enforcement effort, and demonstrate LCI’s newly adopted online system.

“The purpose” of the licensing system, said Marta Arroyo, who oversees the program, ​“is to make sure apartments are safe to be rented.”

Arroyo outlined how single-family homes, owner-occupied homes with up to two rented-out apartments, and buildings where 100 percent of the apartments are rented to federal Housing Choice Voucher tenants are exempt from the licensing program. In the latter two cases, however, the owners need to apply for an exemption.

When landlords apply for a license, the city sends a housing code inspector to the property in question within a month. 

If the building passes the inspection, a three-year license is issued. If it fails and violations are ongoing, the landlord can be subject to $100 daily fines per violation and will need to undergo a follow-up inspection. The license won’t be issued until a successful inspection is complete. (Licenses cannot be revoked under current city law once they are issued, according to Brennan.)

Hill Alder Kampton Singh, who is also a landlord, raised his hand. ​“When we receive a date of inspection, how flexible is that date?” he asked.

“If that date doesn’t work for you, you can certainly call us,” Arroyo said. LCI can accommodate ​“anything reasonable,” though the inspection can’t be delayed by months, she added.

Landlords who do not apply for a license or an exemption can be subject to fines of up to $2,000 per unit, according to a graduated scale based on how much time has passed since a second notice of non-compliance was issued.

The license itself costs $225.00 for a building’s first two units, plus $60 per additional unit.

Brennan told the room that LCI mails out notices about the licensing program to the owner’s mailing address registered in the Tax Assessor database, which he said is required by state law. LCI isn’t currently allowed to update that database — so ​“making sure your address is correct with the Tax Assessor is really important,” Brennan stressed. 

One way for landlords to ensure they are staying in touch with the city is to register through LCI’s new online system, Veoci, as LCI staffer Jared Rodriguez Cortez explained. While landlords can apply for licenses and exemptions on paper, the online system ensures that LCI has an electronic way of contacting property owners.

Finally, Brennan explained, landlords have the ability to challenge fines before a volunteer hearing officer.

Santillo, who owns about 30 local rental buildings through the company Eagle Properties Enterprises, said he attended the meeting in order to stay up-to-date on local regulations.

At the time of the licensing program’s creation, Santillo said, he opposed the new layer of regulation. Now, however, he believes that stricter housing code laws and enforcement generally benefit both tenants and landlords.

“I can remember 34 years ago, there were a lot of blighted properties,” Santillo said. But buildings throughout New Haven have become safer, cleaner, and more appealing over the last several decades, he said — which he argued has increased property values on a neighborhood and citywide scale.

So while he once grumbled about fees and regulations, he’s now more sympathetic to the city’s efforts.

He is concerned about how smaller, newer landlords will be able to navigate a new system with heightened fines.

“When I started being a landlord, there were not a lot of laws,” he recalled. ​“The fees have gotten steeper. It hurts the guy who’s just starting out.”

“I’m fortunate” now, he said, to have staff members with the time and expertise to fill out all the required paperwork. A more complex and expensive housing code compliance system favors larger landlords and developers, he noted.

“I definitely think complexity can be a problem,” said Brennan when asked about Santillo’s concerns after the meeting. ​“I do think we’re trying to simplify everything.”

As for the higher fees, Brennan said that they are necessary in order to ensure that the landlords with the most capital actually comply with the housing code; otherwise, large landlords can simply write off lower fees for unsafe housing conditions as ​“the cost of doing business,” he argued.

“We don’t want citations,” he said. ​“We just want compliance.”

Alder Singh, meanwhile, said that as a relatively small landlord, he voted for the higher fines because he believes it will create a more even playing field between businesses like his own and massive property owners.

“The megalandlords were abusing the program,” he said later. Higher fines were ​“the only way to get it enforced.”

“I’m not against it” as a landlord, he added, because ​“I follow the protocols and follow the rules.”