AUGUSTA — Landlords packed Augusta City Center and slammed a proposed new rental inspection ordinance they said will force them to increase rents paid by tenants and discourage investment in housing in the city at a time when it is a huge need.

The proposed ordinance would require annual inspections of rental units and a yearly fee of up to $100 per unit.

Mayor Mark O’Brien said the ordinance was drafted by city staff in response to ongoing concerns about unsafe rental housing in the city, much of which is never inspected to ensure it is safe for tenants and any fire or ambulance personnel who may need to enter the property in an emergency.

So many people, most of them landlords, property managers and building owners, came to speak against the ordinance at Thursday’s council meeting that an overflow room was needed. After filling council chambers, another 20 or so people could only take part in the meeting from a separate room, equipped with a television and microphone, at Augusta City Center.

Most expressed concern with the financial impact the $100-per-unit annual fee would have on them, and many noted landlords are likely to pass that — and other additional costs of complying with the ordinance — on to their tenants.

“It’s going to go right straight to the tenants,” Ryan Keller, an Augusta resident and landlord, said of the additional cost. “As a landlord I don’t really care, my tenants are going to pay it, not me. Everybody in here is the same way. And the tenants are the most vulnerable people in this equation. Because typically they don’t have the means to buy a house. The tenants I have — I like to keep their rents as low as I can. Let’s not burden the tenants and actually accomplish something with this.”

Keller said the city’s code officers have done a good job cleaning up parts of the city that needed it, and the city should specifically go after landlords with poorly maintained properties, rather than taking a “shotgun” approach impacting all landlords. He suggested the city track complaints from tenants and when a complaint is made about a building, send code officers to that building.

Matt Nazar, city services director, said the initial licensing fee would be $100 per unit, per year, but for properties that are found to comply with the city’s ordinance standards, there would be a 35% credit, so in future years the fee would be $65 per unit.

He said the ordinance is needed to allow city officials to inspect buildings to ensure they are safe. He said city staff have increasingly encountered unsafe living conditions when they enter many rental properties in the city, including units with no smoke detectors, unmaintained means of egress, illegal and dangerous electrical work, unsafe decks and stairs and units in unpermitted, unsafe basements and attics not meant to be living spaces.

He said the licensing fees are needed to pay for the additional code enforcement staff needed to oversee the licensing and inspection program.

No members of the public spoke in favor of the ordinance. Many spoke against it.

Several said many code violations and safety problems at rental properties are created by tenants.

Waterville attorney Dan Bernier, representing the local landlord’s group Capital Area Housing Association, said the ordinance creates a tax on one select group of property owners, landlords, to pay for the cost of hiring more code enforcement officers, because that’s politically easier than increasing taxes on all taxpayers. He said the timing of that proposed new tax on landlords, as the city and state are in the midst of a housing shortage crisis, sends the wrong message.

“We’re in the middle of a housing crisis, the biggest thing we need is a greater supply of housing,” Bernier said. “This is going to discourage investment, rather than encourage it. At a time Augusta, like most communities in Maine, needs more investment in housing.”

The proposal comes as officials in Waterville are considering a similar policy. Following strong opposition by tenants and landlords in the area, Waterville councilors this week loosened the proposed restrictions in that city by advancing a policy that calls for landlords to voluntarily register rental units instead of requiring them to and penalizing those who do not.

At-Large Councilor Courtney Gary-Allen expressed nervousness about the Augusta ordinance provisions granting code enforcement officers the right to enter rental units at any reasonable time.

“That raises significant concerns for me, I don’t feel comfortable with the idea the code enforcement officer could come to my house at any time, any reasonable time, and inspect my home,” she said. “I don’t believe the government should have that much power over citizens. It makes me super nervous. I grew up on Sand Hill, I grew up in places you’re talking about. I know the level of unsafe conditions that many folks in our community are living in, and it’s heartbreaking and terrible. I just don’t know that this is the solution.”

Nazar said code enforcement officers would schedule inspections ahead of time, not just show up at someone’s door and expect to enter. And he said if both a landlord and tenant refuse to allow a code officer in, the city would need to go to court to get a warrant to be able to enter.

The ordinance, as proposed, would apply to hotels in addition to apartments and has drawn opposition from the hospitality industry as well. Nate Cloutier, director of government affairs for HospitalityMaine, a trade group which represents hotels and restaurants in Maine, said in testimony he submitted to the city that the proposal would impose a burdensome new tax. He said innkeepers already work with officials to ensure they are meeting all local and state health and safety codes. He said the $100 per unit fee would deter development and diverts funds hotels might otherwise reinvest in property improvements and energy upgrades.

O’Brien said Thursday was the council’s second look at the proposal and speculated that a newspaper article about the proposal had generated attention on it. He said the proposal has not yet been placed on a council business agenda and, if and when it is, two readings of the ordinance would be required to take place at council business meetings, which include opportunities for the public to comment.

Some councilors, while agreeing action needs to be taken to improve the safety of rental housing, said the city should involve landlords in the process and review the proposal again, in light of the opposition to it.

“I think it’s a little too complex and difficult to work through, given the velocity needed to work through those life and safety issues,” said Ward 4 Councilor Eric Lind. “My experience is when there is a proposed solution that’s faced with a lot of resistance, then the wrong approach was taken. And obviously there is quite a bit of resistance.”

A majority of city councilors, at the end of the nearly four-hour meeting, agreed to form a task force to look into the issue further.

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