A for rent sign hangs outside a Portland building on Tuesday evening while voters are decide the fate of a proposed rent control ordinance. Portland restricted landlords' ability to charge rental application fees to prospective tenants in an August, 2020 city council meeting. Credit: Troy R. Bennett | BDN

PORTLAND, Maine — A new ordinance that regulates how much city landlords can charge for application fees doesn’t go far enough to protect low-income renters, say lawyers who work with and advocate for them.

The ordinance prohibits landlords from charging fees exceeding $30 to prospective tenants during the housing crisis, but stops short of outright banning the practice.

That fee is “still beyond the reach of many tenants in Portland,” said Katherine McGovern, a lawyer with Pine Tree Legal, an agency that works with low-income renters. The problem is amplified “when we know the supply of affordable units is so low and families must apply to multiple units before securing housing,” McGovern said.

The city’s Rental Housing Advisory Committee, which advises policies affecting landlords and tenants in the city, recommended banning the fees altogether.

The issue of rental application fees is symptomatic of the city’s broader housing crisis. As officials take steps to increase Portland’s affordable housing stock, including earmarks for 900 mixed-income units this year, housing advocates are criticizing the city for what they say are half-measures intended to address problems that hurt low-income people the most.

“Application fees decrease the availability of affordable housing to the city’s most vulnerable tenants,” Frank d’Alessandro, a lawyer with Maine Equal Justice, told the council. “While $30 might not seem like a lot of money, for someone who’s on a fixed income — or no income — $30 can be a huge amount of money.”

That’s especially true because it’s likely that person will have to apply for more than one unit before they secure a place, he said.

The language of the ordinance, which the city council narrowly passed Monday night, was built from an amendment by Councilor Jill Duson. It goes into effect immediately to help curtail the growing trend of landlords charging renters for miscellaneous “move-in” or “cleaning” fees.

City landlords now must disclose the criteria they use to screen applicants, and provide receipts and copies of any background checks they run on prospective tenants.

Duson said she was reluctant to ban application fees altogether.

“Landlords, particularly small landlords, should do a background check,” Duson said. “There’s a cost to that, but it shouldn’t be a prohibitive cost.”

But Councilor Tae Chong questioned whether it’s fair for that cost to be passed on to the renter.

“I see this as a cost of business that shouldn’t be incurred by the landlord, because they have value in trying to collect something that’s worth tens of thousands of dollars,” he said.

As rent costs skyrocket in Portland, application fees have hampered prospective renters’ ability to secure housing. Housing experts like McGovern, who also serves on the city’s Rental Housing Advisory Committee, expect the number of people displaced from housing for pandemic-related reasons to increase as eviction courts resume this week.

“The pandemic has profoundly deepened this crisis,” McGovern said. “Low- and moderate-income tenants are in a particularly perilous position right now.”

That’s because application fees disproportionately affect them and those who rely on assistance to pay their rent.

“People who are homeless have very limited resources,” d’Alessandro said. “And if they’re eligible for general assistance, they’re not going to have the money to pay an application fee.”

The city does not track the number of landlords who charge rental applications, but the practice is “widespread,” said Health and Human Services Director Aaron Geyer.