The Killeen City Council continued — and tabled — its discussion Tuesday night of a proposed multifamily rental inspection program that was officially presented last week.
If approved in the fiscal year 2022 budget, the $800,000 measure would enable the department of Development Services to hire two more building inspectors, two dedicated police officers, and two fire inspection officers in order to conduct external and internal inspections of apartments that are “unsafe” or “problematic.”
The program was met with varying levels of approval from council members, with nearly every council member speaking to several perceived issues with the program.
Council members last week said that the program was “a potential invasion of privacy,” "underdeveloped,” and appeared to discriminate against low-income renters.
One issue that the council and apartment representatives took with the program was its fee schedule. If approved, the program would require that all apartment owners pay an annual registration fee based on the amount of units in a lot. Every year, apartment owners would be required to pay anywhere from $175 for a four unit complex, to several thousand for a large, 300+ unit. This comes on top of a $10 inspection fee for at least 25% of total units in a complex, as well as a $50 reinspection fee per failed unit.
Amber Franklin, who is a regional property manager for Graystar, spoke against the measure at Tuesday night's meeting, calling it “unaffordable,” while citing property tax and utility rate increases over the past five years.
“Investors are no longer going to invest in a city that does not look business friendly,” she said.
Killeen Executive Director of Finance Jon Locke was unable to present his updated presentation on the program, as the council gave its initial thoughts on the program before passing a motion of direction to hire more code enforcement officers and to continue investigating into the creation of a rental inspection program in collaboration with local shareholders.
“I think we should sit down with some of our stakeholders,” Segarra said. “If we can come to some manner of commonality, we can come up with something good.”
Councilman Rick Williams agreed, citing a need to address what Executive Director of Development Services Tony McIlwain had described as “blight,” but stated that it was necessary to rethink the city’s direction regarding the program.
“Let’s call a spade a spade; we’re having this discussion because we have a problem,” Williams said. “I don’t know that investing $800,000 is the best and most efficient way to go.”
“I understand the intent of the program and appreciate the proactive recommendation from city staff,” Councilman Michael Boyd said, but also stated that "the city should not be in the business of doing this multifamily inspection right now.”
Councilman Ken Wilkerson continued his thread from the last council workshop, as he mentioned the need for a broader, less targeted program that would handle issues currently faced by R-1 and R-2 housing as well as large rental properties.
“Whatever we come up with, we need to make sure that it’s broad enough to address the overall concerns,” Wilkerson said.
Ultimately, the program was sidestepped through a motion of direction from Mayor Pro Tem Debbie Nash-King to hire four building inspectors, and to reach out to the local Apartment Association, as well as other property owners, to create a non-intrusive program to address blight, among other issues.
The Apartment Association of Central Texas spoke out against the proposed program, calling it “discriminatory” and a “one size fits all” program.
The Director of Operations and Broker for Isbell Rentals Lisa-Marie McGaughney gave the following prepared statement that had been written by the Texas Apartment Association and the Apartment Association of Central Texas:
"The Apartment Association of Central Texas represents 211 members who own or manage 13,603 rental units in Killeen and 15,614 units in surrounding communities.
The proposed fee structure disproportionately penalizes small property owners. For example, the owner of a four-plex would pay a registration fee of $43.75 per unit, while the owner of a 300-unit apartment community would pay $3.33 per unit.
While we support efforts to combat nuisance properties and help ensure that rental properties are in compliance with health and safety codes, a one size fits all approach requiring rental registration and inspections is not the most efficient or effective way to achieve this goal.
There are also serious concerns about the process that would be needed to get resident permission and scheduling interior inspections of rental units, as well as concerns about invasion of their privacy. We also do not understand the rationale of targeting privately owned multifamily properties while disregarding any issues there may be regarding the condition of government-owned housing.
Perhaps the greatest concern, however, is that city staff has not done any outreach to our industry to express any concerns about housing conditions or see what can be done on a voluntary basis to address any issues.
We would welcome the discussion on this proposal and ways that our association can work with the city to educate owners about health and safety issues, while not adversely affecting housing affordability. We would also appreciate a copy of the nexus study that the city used to develop its proposed fee schedule as well as a timeline for the adoption of this proposal."