The Minneapolis City Council is proposing an ordinance that would prevent Minneapolis landlords from charging exorbitant application fees.

The proposed ordinance will regulate various aspects of rental applications, including fees. The council will discuss the proposal in a public hearing Oct. 13.

City Council member Gary Schiff, Ward 8, wrote the proposal and said the application fees are an impediment on efforts to provide more low-income housing in the city. This includes property near the University.

“Students and other low-income people are finding that if they try to find an apartment, they are being charged just for the application process,” he said.

The fee covers background and credit checks on applicants, said Jenny Dahms, leasing specialist at The Melrose apartments near campus.

The proposed ordinance would cap the application fee at $25 and would require property owners to tell applicants why their applications could be rejected before they apply.

Deborah Moran, director of industry services for the Minnesota Multi Housing Association, said the $25 application fee cap is not reasonable.

“Because we want to be in compliance with other ordinances, our members should be allowed to screen and to charge what the out-of-pocket costs to process the rental application is,” she said.

Moran said the background and credit checks vary in price because of the increased costs of out-of-state checks. She said the checks usually cost $37 to $57 per applicant.

Schiff said the ordinance would force property owners to put the background and credit-check fees into their operations costs.

Schiff said the proposed ordinance is also an attempt to prevent people from abusing the application fees.

“We want to make sure any other abuses are eliminated, including anecdotal reports that we have gotten that some landlords keep one vacancy in their building at all times, in order to collect application fees,” Schiff said. “They will make more money on fees than renting the room out.”

Moran said several members of the housing association have suggested one fee that gives each applicant a certified version of his or her records.

She said this would not work, because information included in background checks can change over a short time.

“I would assume it could only be about 48 or 78 hours old, because I could check out just great and then rob a bank,” she said.

Many apartment buildings near campus offer students special deals to eliminate the application costs. The Melrose, for example, will waive the fee if students tour and sign a lease in the same day, Dahms said.

Some students said they were unaware of the fees, or the fee at their apartment buildings had been waived during a special deal.

Meredith Dickinson, an advertising junior, said she was unsure whether she had paid an application fee for her Melrose apartment, but the fees are acceptable for apartment applications.

“They have to pay to process each application, and if they didn’t charge, anyone could apply,” she said.

Matcom Property Management Inc., which rents out property around the University, never charges students an application fee, said Cindy Chandler, Property Manager for the company.

“We have always thought that students had trouble coming up with extra cash, and because we do have a lot of properties in the University vicinity, it has always been our policy,” Chandler said.

Matcom does not perform credit or background checks on students, because students generally don’t have credit to begin with, Chandler said.

“Students usually have very limited credit and are coming out of their parents’ homes, or their dorms,” she said. “We feel like they need to start somewhere.”

The City Council will continue to work on the issue at next week’s public hearing.

“It’s one of those things we are going to have to work out and hopefully we can find happy ground,” Moran said.

If the proposed ordinance passes through committee meetings, the council will vote Oct. 22.