Thursday, October 24, 2013

Goodbye Business-license Fees, Hello Good Landlords! - Council Member Hal Miller


In my most recent post to the Municipal Council blog, I raised the issue of business-license fees and asked about the merits of eliminating them (that is, making business licenses complimentary) and charging business owners for regulatory expenses (required for the business license) and nonregulatory expenses instead.  I also urged that municipal government provide subsidy to owners for such expenses at the discretion of an Administration-appointed/Council-approved review board.
Here I raise a related possibility for consideration.  Its purview is the residential rental/lease business, which has a major presence in Provo—from a rented room in an owner-occupied house to leased apartments in a sprawling complex.  The municipal government has a general-welfare interest in assuring that such places of living conduce to the health and safety of those who pay to live in them and those who live near them.  That is the primary reason for its imposition of regulatory and nonregulatory expenses.
Many municipalities use tit-for-tat incentives to motivate those who own residential rental/lease businesses.  One example is a Good Landlord policy.  It offers to discount business-license fees as long as the owner meets municipality-established standards, including safety, health, parking, towing, landscaping, or crime-prevention (such as background checks).  In other words, a Good Landlord policy rewards business owners for maintaining features of their properties that the municipal government values.
Were business licenses to become complimentary, there would be no incentive to reduce the cost of application or renewal.  Instead, it may be possible to provide incentive by a reduction of regulatory expenses or a combination of regulatory and nonregulatory expenses.  For example, the business owner who qualifies as a Good Landlord might receive a discounted cost of health-and-safety inspections as well as the nonregulatory expenses for the emergency services of the police and fire departments.  To do so would require that, first, business owners bear those expenses (they presently do not) and, second, that equitable and transparent standards define the Good Landlord.
The potential benefits that might accrue from the adoption and implementation of such a policy include reduced crime and calls for emergency services.  An additional potential benefit is the amelioration of parking violations (and the affiliated complications of towing) and illegal renters—conditions that continue to vex Provo residents.  The cost of administering a Good Landlord program under the scenario sketched here would fold into the regulatory expenses of doing business—with the real prospect of reducing those expenses by being a Good Landlord.

Hal Miller
Member, Provo City Municipal Council
September 2013