FAYETTEVILLE, Ark. — An ordinance passed by the Fayetteville City Council in October that would cap so-called "junk fees" for renters is now set to go into effect two months later than planned over fear that it is in violation of state law.
The ordinance, approved on Oct. 15 and originally set to take effect on Jan. 13, 2025, capped background check and application fees at $40 per property and ensured that a refund be issued if a background check isn't run.
City Attorney Kit Williams asked the council to repeal the ordinance during a Dec. 17 meeting after discovering that it may be in violation of state law.
During the meeting, multiple council members said that they didn't want to have to repeal the ordinance, but didn't want to be in violation of Arkansas law either.
Council member Teresa Turk moved to amend the ordinance, pushing the effective date back to March 31, 2025, citing a need to give the city attorney and council members more time to find a better solution to the issue.
Turk also expressed interest in getting legal opinion from Arkansas Attorney General Tim Griffin.
"We don't want to rush this, especially with the potential of legal issues," Council member D'Andre Jones said.
The council voted 7-0 to amend the ordinance and push back the start date.
Background
The ordinance was first proposed by council member Sarah Moore amid the city's tackling of a housing crisis, which was formally declared in April 2024.
Moore said the ordinance would give people certainty that there would be transparency during the application process. She said the ordinance was formed after thorough surveys filled out by residents.
The council member said that it was potentially a first-of-its-kind legislation in Arkansas and that other cities could look to Fayetteville as a leader in taking on housing affordability issues.
The ordinance passed 5-2 with one council member absent. However, less than a month before it was set to take effect, a legal concern led the city attorney to ask council members to repeal the ordinance.
Fayetteville City Attorney Kit Williams shared with 5NEWS that the ordinance is potentially in violation of state law, something that he hadn't noticed before the ordinance's passage.
"The ordinance that was passed, unfortunately, in violation, I believe, of a state law that says we cannot have any control over the amount someone pays for a service," Williams said.
Williams explained that if a tenant is required to pay money to the managing company of an apartment complex to review their rental application, they are paying for the service of reviewing the application.
"Almost certainly, we cannot do that," Williams said. "And therefore, we need to repeal the ordinance that was trying to put limits on what could be charged for this rental application fee."
Williams said the issue was discovered after another attorney referred him to the statute. This discovery was after the ordinance had already passed.
"I try to work hard and research everything correctly, but I'm not perfect, and so when somebody pointed me to a statute, I'm not going to pretend it's not there," Williams said. "I read it, and I was convinced, and so was my senior assistant city attorney that we had to repeal this ordinance."
Ahead of the Dec. 17 meeting where council members were expected to vote on the repeal, 5NEWS spoke to Moore about the legislation's possibly short life and what comes next in trying to solve the city's housing crisis.
"City Attorney Kit Williams, his interpretation is that he is perceiving that this application and background check fee is a service. And so that's where we have a difference of opinions. I have talked with seven different attorneys since that memo came out on Thursday, and they're split about half and half," Moore said.
Moore said that she thinks the city council should slow down and take a closer look to this situation before jumping to a repeal.
"This isn't going into effect until January 13. There's still another city council meeting," Moore said. "Also, this is being walked on to an agenda at our full council. That means that there haven't been the appropriate levels of public information that this has gotten out there. We have students that have gone home for the holidays. All the people that were a part of staying and doing the work for months and months, staying up till 1 a.m. to do public comment, potentially haven't even heard that this is occurring.
Moore added that, out of respect for people that could be impacted by this, it would be inappropriate to vote for the repeal on Dec. 17.
"It's not necessary at this time that we have a lot of other tools and available avenues to really explore this more fully, and we can make a decision into the future on that," Moore said.
While Moore remains optimistic, Williams said he thinks there isn't much that can be done.
"We just cannot do this beyond our power. There already was another precise preemption statute that we looked at that says you cannot control the amount of rent charge. This was not controlling the amount of rent charge, but then this other statute is the one that was much broader and said we can't control the cost of any service being charged," Williams said.
Moore said that regardless of what the council decides on Tuesday, there is still more work to be done.
"We have a lot of work to do. But, I mean, I'm hopeful. I am seeing folks from all walks of life that are willing to give their expertise, their knowledge, and volunteer to come forward and look for solutions. That makes me incredibly hopeful. I know that we have the solutions readily available to us. I see us having the will to look to put those forward."
Billy Cook, an organizer with Arkansas Renters United, told 5NEWS that he was blindsided by the announcement of a possible repeal of the ordinance.
"The public did not hear about this proposed change until yesterday. So we're about 24 hours after the fact, and I'm frustrated," Cook said. "I know a lot of members of Renters United are frustrated, because when we got this passed in October, people stayed up until nearly one in the morning to speak in favor of passing this ordinance at city council, because it meant so much to them. So now the idea that, you know, we weren't fully made abreast of all of the Arkansas statute is frustrating, because everyone thought that this was going to pass and be legally defensible at the time."
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