Seven years ago, at the urging of neighbors fed up with loud parties and messy yards in Raleigh's college neighborhoods, the city devised a system to hold landlords responsible for the behavior of their tenants.
The PROP program (Probationary Rental Occupancy Permit) imposed fines on landlords if they or their tenants were cited too many times for late-night noise or code violations such as poorly kept yards, crumbling paint jobs and overgrown bushes.
A reasonable solution? Maybe for neighbors. But not for apartment and rental owners required to pay fees to maintain the system. And especially not for well-behaved owners who complained about having to pay even if they never committed any violations.
Last year, the apartment industry convinced the Republican-controlled state legislature to pass a bill gutting the city's ability to charge registration fees associated with the PROP system. The city used the fees to maintain a database of more than 70,000 rental units across the city.
But Raleigh officials haven't given up. With guidance from City Attorney Tom McCormick, they're finding ways to get around the limits and continue generating money to sustain the program.
In essence, the city has stepped up fines for repeat offenders and also added items to the list of eligible offenses, including prostitution, possessing or receiving stolen goods and larceny.
McCormick said owners who didn't like paying fees through the old system ought to appreciate the new approach.
"Their constant argument was that we're punishing innocent people by collecting this money - the bad people should be the ones who pay," McCormick said. "What we've tried to do is make it easier to be a bad person."
But that's not all. The city also has increased the fees for landlords who must go on probation after too many violations. Previously, a landlord would have to pay an application fee of $200, a first-year permit fee of $300 and a fee of $500 for each subsequent permit.
Now, landlords will have to pay $500 for an application fee and permit fees ranging from $1,000 to $10,000, depending on the number of dwelling units on their properties.
The city has to find new ways to drum up revenue because the state law put limits on registration fees that all landlords had to pay. The program previously brought in $1 million per year, but projections indicate that figure will decrease to $200,000 as a result of the state-mandated changes.
Ashley Glover, a senior housing inspector for the city, said the tougher penalties will cause landlords to take notice.
"It'll probably help," he said. "I see the apartment complexes pushing to get the bad tenants out, trying to replace them with better tenants. A lot of times, in their leases, they have subsections just for PROP (i.e. tenants can be evicted for offenses listed on the PROP violations list)."
City Councilman Thomas Crowder was one of the driving forces behind creating the PROP system in the mid-2000s. Crowder represents southwest Raleigh, which includes many neighborhoods around N.C. State University filled with student rental housing.
"I'm in full support of where we're heading," he said. "This has been a great program up until the legs were cut out from under it by the General Assembly. I think we saw outstanding progress."
McCormick noted the irony behind how the program is designed to work. If landlords behave the way they're supposed to, the stream of fines flowing into the city will dry up.
Currently, there are 11 properties on probationary status, with 10 resulting from inspections problems and one because of problems with police. If the city goes through with the proposed changes, the numbers could increase by 300 percent from inspections violations and 700 percent due to police-related problems.
