LONG BEACH — For six years, real estate agent Richard Daskam has been paying a $200 annual business license fee.
At the same time, Keller Williams, his employer, must pay a license fee as well.
Daskam says the city’s double dipping on an already struggling profession and industry.
“The first problem is the majority of Realtors in Long Beach don’t even have business licenses, so they aren’t paying the fee,” he said. “And secondly, our brokerage already pays significant fees to the city, so we are getting hit especially hard.”
To address this, the Long Beach City Council on Tuesday requested that city management find out the cost to eliminate the per-agent business license fee and return with a recommendation within 30 days on enacting the change.
If passed, the measure would be similar to the city policy that was abandoned in 2002, which charged brokers a per-agent fee, similar to the per-employee fee that other businesses pay.
Currently, real estate agents are required to have a business license if they are doing any business within Long Beach city limits. The licenses, which cost the agents $200, must be renewed each year.
The new measure would come with a fee of $25 per employee that would be paid by the real estate broker employing the agent, in addition to regular business license fees.
Second District Councilwoman Suja Lowenthal, one of the sponsors of the measure, said it would likely impact the city financially, but
that the effect would be minimal because the fees would be easier to collect and compliance would most likely be “significantly better.”
“We, as a city, are financially strapped, but that doesn’t mean there isn’t an opportunity to offset a duplicate fee, and a fee that has increased through time,” she said. “I expect the city will take a hit, but it is still the best way to do business.”
Losing revenue is likely the last thing City Hall’s bean counters want, with Long Beach facing a projected three-year, $33.8 million deficit.
Lowenthal said the new fee system would replace much of the revenue lost by waiving the license fees with charges levied on the brokers — which, council members acknowledged, likely will be passed back to the agents.
She added that Long Beach is in the minority of cities that charge real estate agents directly.
“We are unlike a lot of other cities because we charge the individual Realtor,” Lowenthal said. “And on top of the individual Realtor being charged, the brokerage is also being charged. So it really seems like there is a double charge taking place. The better, more fair way to go about this is by charging the broker.”
However, 8th District Councilwoman Rae Gabelich questioned the idea of eliminating the license fee paid by real estate agents.
“I’ve only heard one side, and that’s from the Realtors,” Gabelich said during the council meeting. “Several years ago what came before us was a concern by the manicurists in town, the owners of hair salons. Those folks that make very little money, especially comparatively speaking, had to pay a $165 business license fee each and every year — yet we kept that on the books. I think there has to be equality across the board.”
During Tuesday’s meeting, 5th District Councilwoman Gerrie Schipske had proposed, but withdrew, an alternative that would have included a break for most independent contractors, including real estate agents.
Lowenthal agreed that other fee adjustments should be considered.
She said that if the council moves forward with this measure, it will need to look further into creating an “equal and fair system.”
“There is a whole host of individual license holders that, in time, we will need to look at,” she said. “We are starting to peel the layer of the onion back, so my hope is not to create inconsistent policies, but if there is a commonality amongst service providers, and a way we can set up a policy, that is something we will have an opportunity to look at, and something we should look at.”
Jamie Saltman, president of the Women’s Council of Realtors in California, said few agents would be against such a move.
“Requiring Realtors to pay such a large fee seems fairly unreasonable,” she said. “I would guess that most agents would really love to not have to pay a fee to the city, and just to the brokerage. And really, this couldn’t have come at a better time. Realtors are struggling and have been for a couple years.”
Want to go?
What: Long Beach City Council meeting
When: 5 p.m. Tuesday
Where: Council chamber, City Hall, 333 W. Ocean Blvd.
Watch it: The meeting can be viewed live on Charter Communications Channel 3, Verizon FiOS Channel 21 and online at www.longbeach.gov.