OCEANSIDE — A new, city-run pilot program will assist renters by covering housing application fees for prospective tenants.
Using in-lieu fees collected from housing developers, who opt to pay the fees instead of including affordable housing in their projects within Oceanside, the city will cover up to three application fees per 30 days for Oceanside renters searching for housing.
To relieve low-income renters, Mayor Esther Sanchez and Councilmember Eric Joyce proposed limiting rental application fees in March, which earned most of the council’s approval and prompted city staff to develop the pilot program to cover multiple application fees for local renters.
The City Council approved the pilot program in a 4-1 vote during the June 7 council meeting. Councilmember Peter Weiss was the only one to vote against covering tenant rental application fees, noting that he did not want the city to get involved in private landlord matters.
The program will pull $50,000 from its collected in-lieu fees fund, which currently has over $10 million.
The local housing market is tight and expensive, making it difficult for local renters to stay in Oceanside.
Approximately 41% of Oceanside’s housing market consists of rentals. Leilani Hines, the city’s housing and neighborhood services director, said that while a healthy city has a 5%-6% vacancy rate, Oceanside has only 2.6% of available homes.
According to Zillow.com, the median rent in Oceanside across all housing types is $3,300. For a one-bedroom apartment, the median cost is $2,395; a two-bedroom unit is $2,895.
In California, landlords can charge new tenants up to two months’ rent as a security deposit plus the first month’s rent. On top of those costs, landlords can charge up to $59.67 per person over 18 years old applying for a unit to cover the screening process, which obtains credit and background information for potential tenants through a third-party source that the landlord has to pay for such services.
With such a low vacancy rate, Oceanside renters often apply for three or more apartments and get charged each time without being reimbursed if they aren’t accepted.
Oceanside resident Judah Coker recently paid hundreds of dollars in search of a new home through this process.
“I was charged $40 or more for every application and had to apply to seven places before I found a unit,” Coker told the City Council.
Low-income renters often compete with those who can better afford the high unit costs. Approximately 74% of low-income renters pay more than 30% of their annual income on housing; about 44% spend more than 50%.
“Things like participating in soccer leagues, dance classes and recreational programs for kids may be off the table when paying 50% or more of your income toward rent,” Hines said. “These cost-burdened households are more apt to face housing instability…and find it difficult when competing with others, particularly when there is a very short supply of low cost housing.”
Although a bill was enacted earlier this year that allows landlords to use a reusable screening report of tenants to make things cheaper for both parties, the option is voluntary and not yet popular among landlords.
Staff suggested that a potential option for the City Council would be to make it mandatory for landlords to use the reusable screening reports on potential tenants. This option was supported by several residents and the San Diego Organizing Project. The multi-faith, nonprofit organization rallies behind racial, social and economic justice within the region’s communities.
“The reality is landlords are not utilizing that reusable screening report for whatever reason,” said Coker, also a San Diego Organizing Project member.
Melanie Woods, vice president of the California Apartment Association, said the organization opposed mandating landlords use reusable screening reports.
“The bottom line is mainstream credit screening companies do not have a secure platform for property owners to log into and share these credit screening reports,” Woods said.
According to the city staff report, Zillow and MyScreeningReport.com offer reusable tenant screening reports to be used unlimited times for 30 days at prices between $30 and $50, depending on the included information. Zillow’s tenant screening reports are free for landlords, and prospective tenants pay a $35 tenant screening and application fee, which allows them to apply to an unlimited number of participating rentals for 30 days.
Woods pointed out that neither of those websites is considered mainstream vendors used by the rental industry.
“Until they have a platform where it can be shared, it’s not a viable option for it to be mandated,” Woods said.
The City Council did not vote on whether or not to make the reusable tenant screening reports mandatory for landlords at the June 7 meeting, although it is an option that could be revisited later.
