Just about every Connecticut town has seen peeling paint and broken windows in blighted neighborhoods, prompting a growing number of local governments to consider ordinances to address the problem.
In New Britain, an anti-blight ordinance take aims at rental housing. Starting in 2013, landlords will be required to pay an annual registration fee of $150 for each apartment unit they own. The law applies only to absentee landlords — those who don’t live in the rental property they own.
But before any payments are made, the city will have to fend off a legal challenge. A lawsuit, filed this month, makes two separate claims. First, it charges constitutional violations because the fees unfairly target a specific class of property owners. Second, it claims the fees violate a state law that require all local ordinances to have a legitimate government purpose.
On the second point, attorney Daniel A. Silver, who filed suit on behalf of 84 landlords in the city, claims there is no indication that the fee revenues, which add up to $450 for a three-family house and $30,000 for a complex of 200 units, would be used to pay for a necessary city service, such as health and safety inspections of apartments.
“There are no inspections attached to the registrations,” said Silver, of Silver & Silver in New Britain. “All the city is going to do is take your name, rank and serial number and give you a license.” The plaintiffs have publically questioned whether the fees are, in reality, part of a ruse to help the city pay down its deficit, a charge city officials deny.
Politics aside, it’s the constitutional implications that have caught the attention of some land use attorneys. The New Britain ordinance raises equal protection concerns because it requires registration only for absentee landlords. In a city of about 73,000 residents, owners of about 3,400 apartment units would have to pay the fee. About 12,000 other units — mostly located in old houses — are owner-occupied and exempt.
If the fees were collected on all 3,400 eligible units, the city would take in $510,000 annually.
“At first blush, I do have concerns about the new fee,” said Lawrence Sgrignari, a municipal law and litigation attorney with Gesmonde, Pietrosimine & Sgrignari in Hamden. “It appears to be arbitrary both as to the amount and the target group. Also, if it does not contain an appeal mechanism, it certainly raises due process concerns.”
Sgrignari said he’s noticing a trend where financially strapped towns are looking to use fees to raise to raise revenue. “If those fees are not rationally related to the expenses incurred for the service, more litigation of this type is likely,” he said.
New Britain city officials, including Corporation Counsel John King, acknowledge that the city is working to close a $4 million budget gap, even though it has been dramatically reduced since Mayor Tim O’Brien took office a year ago.
But the ordinance is not about deficit reduction, King said. “The ordinance has a legitimate purpose. It’s within the police powers of the municipality under state law to enact ordinances to protect the safety and well-being of the residents,” King said. He added that the fee revenues would be used, in part, to hire a second housing inspector for the city.
The lawsuit was filed behalf of The Connecticut Property Owners Alliance and the owners of four larger apartment complexes. It’s the second suit to be filed in recent years against a city that tried to impose licensing fees for apartment buildings.
In 2005, New Haven aldermen passed an ordinance whose stated purpose was to protect “the safety, health and welfare of its residents and to eliminate housing blight.” Landlords are required pay $75 for a two-year license for each structure with up to three apartments and $150 for buildings with up to 10 units. The fees increase from there, up to $375 for buildings with more than 20 apartments.
The Greater New Haven Property Owners Association filed a lawsuit against the city. At trial, the plaintiffs argued that the ordinance violated state housing law because it required licenses for rental properties even though no such license is specifically mentioned in state statutes. A trial court ruled in the city’s favor in 2008. The decision was affirmed on appeal.
New Britain officials said they modeled their law on New Haven’s. The key distinction in New Britain is that the licenses are required only of absentee landlords. King said that’s because most blight problems involve apartment buildings that are not owner occupied.
He plans to counter any claims of discrimination directly. “Our response will be that we were targeting that group that has created these problems,” he said. “So it’s a legitimate use of the city’s police powers under state law.”
The landlords are seeking an injunction to stop the fees from being collected. A hearing is set for Dec. 3 in New Britain Superior Court.
Janis Small, the attorney who represents Wallingford, said many communities throughout the state are struggling to find ways to control blight. “It’s an interesting approach,” she said of the New Britain ordinance. If the city can show a good record of why it limited the registration requirement to absentee landlords, Small said, “it should survive an attack.”•