The Portland City Council voted Wednesday to approve a $60 fee on all rental units in the city. The city expects the fee to raise at least $3 million a year.

The fee passed 3 to 1, with Commissioner Amanda Fritz citing concerns about the number of new regulations on landlords as a reason for her no vote. She also questioned leveling a $60 fee on mobile homes as well as apartments.

Landlords argued against paying the annual fee, characterizing it as a regressive tax on housing.

The fee will provide an annual source of funding for the city’s Rental Services Office, a new division within the Portland Housing Bureau.

To date, the office has employed just a handful of staff and has relied heavily on short-term funding.  Mayor Ted Wheeler pledged to create the office during his 2015 campaign and directed the Housing Bureau to come up with a permanent source of funding for it in his budget this year.

The office helps answer questions about local housing law for tenants, landlords and the City Council. It also provides grants to groups like the Community Alliance of Tenants, which provides a renters’ rights hotline.

The fee will also help pay for a new rental registration program. The Housing Bureau wants to collect more detailed data to track changes in the market, such as rent increases and the number of apartments in the city for people with disabilities.

“This has been a commitment and a priority of mine since I took office,” Wheeler said. “Quality data is something that both landlords, developers, and tenant rights organizations have requested. This is the way we help fund the program to do that.”

Landlords have sharply criticized the fee, arguing that they will pass it onto tenants.

In public testimony last week, they noted that a $60 flat fee on every unit is expensive compared to similar rental registration programs in other cities, many of which charge a discounted rate for buildings with multiple units.

Portland’s fee is among the highest of 11 cities that the Portland Housing Bureau cited as having comparable programs. Testifying last week, Jessica Greenlee, a property manager who sits on the city’s Rental Services Commission, raised questions about the new office’s proposed budget.

“A third of the cost for the rental registration fee is being dedicated just to administrative and software costs. Right now there is not a line item in here for inspections, which is where the majority of rental registration fees typically go in other cities,” Greenlee said.

The Portland Housing Bureau has said the fee amounts to less than one-third of 1% the average rent in Portland.

An economic study commissioned by Multifamily NW, a landlord lobbying organization, concluded that the fee would likely be passed on to tenants, and will put the greatest pressure on low income renters — but the study also concluded that at $60, the impact would be “negligible.”

Editor’s note: This story has been updated to reflect how often landlords must pay the $60 fee.