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Home My WebLink About05-05-2015 PH1 FitzpatrickLomeli, Monique Subject: FW: City of San Luis Obispo Rental Housing Inspection Program Attachments: Rental Inspection Program - SLO AOR Concerns & Recommendations 041815.pdf From: Shannon Fitzpatrick [mailto:shannon(c ) mpgrealtyinc.com] Sent: Saturday, April 18, 2015 3:29 PM To: Marx, Jan; Ashbaugh, John; Christianson, Carlyn; Carpenter, Dan; Rivoire, Dan; Mejia, Anthony; Johnson, Derek; Hermann, Greg Cc: Greaham Updegrove Subject: City of San Luis Obispo Rental Housing Inspection Program Greetings Mayor, City Council and City Staff, I am writing to you as President of the San Luis Obispo Association of REALTORS& Attached to this e-mail you will find a list of concerns and recommendations our Local Government Relations Committee put together based on outreach to stakeholders, which was subsequently approved by the SLO Association Board of Directors. You will note this is different than the position paper that was presented to you in December of last year, prior to City staff being directed to draft an ordinance. While the San Luis Obispo Association of REALTORS® is still opposed to a Rental Housing Inspection Program, it has become clear that a majority of City Council is in favor of this Program. As a result, the attached document is intended to outline various areas of concern with the Program and recommendations of how to create an effective and efficient Program that is targeted toward properties with known code violations and /or complaints. I hope you will consider these items when reviewing the draft ordinance from Staff and request that you do NOT vote on this issue at the May 5th meeting. A Rental Housing Inspection Program will affect many people in our community and has been discussed various times during the last decade. Please delay any vote until stakeholders have had a chance to review the language of the ordinance and provide input. Thank you for your time and consideration on this issue. Respectfully, Shannon Fitzpatrick, REALTOR RECEIVED APR 20 0015 SL0 CITY CLERK COUNCIL MEETING: ` ITEM NO.: VA - n 00 SAN LUIS OBISPO L To: San Luis Obispo City Council and Concerned Citizens From: San Luis Obispo Association of REALTORSO RE: Proposed Rental Housing Inspection Program The following concerns and recommendations related to the proposed Rental Housing Inspection Program are the result of careful consideration and collaboration between the San Luis Obispo Association of REALTORSO and various community stakeholders, including but not limited to, City staff, City Council members, property managers, neighborhood groups and the general public. The SLO Association of REALTORSO request that City Council and City staff address these concerns and work with both the real estate community and other stakeholders to produce an ordinance that is effective and efficient. #1 — PROGRAM CAN'T BE UNILATERALLY ENFORCED Concern — The city does not currently have the ability to identify "all" rental properties and is not enforcing business license requirements. How will the city identify & notify all rental property owners that they must be licensed & a part of the Rental Inspection Program? Concern — In the likely event this Program is not or can not be fully enforced against all rental property owners, responsible owners who do license their rentals and comply with the Program will be inequitably "taxed" to pay for those owners who do not comply with City requirements. Creating an ordinance that can't be fairly enforced amongst all property owners is unfair to those who do pay fees. The fee structure is onerous for owners who maintain their properties in good condition and have never had complaints filed against their property. Recommendation: - City needs to review current process for licensing rental properties and determine how to identify, notify, and enforce business license requirements to create a level playing field by ensuring all rental properties are identified before an Inspection Program is enacted. #2 — SEPARATE "NEIGHBOR BEHAVIOR" FROM HEALTH & SAFETY ISSUES Concern — Neighbors will use Rental Inspection Program as an attempt to curb tenant behaviors. Concern - Chronic complainers, whether complaint is valid or not, could trigger additional inspection... will the vocal minority EVER be satisfied? Does the City have a mechanism to track the most chronic of complainants? Concern — There are already mechanisms in place to limit behavioral concerns, such as SNAP, the unruly gathering ordinance, high use occupancy, noise ordinance and more which neighborhood groups feel are not adequately enforced. Recommendation: City should consider adopting a more comprehensive "complaint form" that is required to be submitted in order to legitimize complaints. The form could include complainant's name & contact information, property address at issue, description of complaint, photo if possible, and steps neighbor has taken to resolve the issue with property owner. Online submission of complaints will allow the City to track the order in which complaints are received and the total number of complaints over a specific time period. #3 — COST OF HOUSING WILL INCREASE Concern — City staff has suggested annual inspection fees be imposed on all property owners when focus should be on properties with frequent complaints and suspected code violations only. Concern — Subjectivity of inspections could be substantial causing significant expenses to a property owner, increased rents for tenants, and a higher cost of housing for all. Concern — What will the appeal process be if an owner disagrees with the inspector's recommended corrections? A few items called out on one inspection could lead to City staff spending more effort back and forth with a property owner who may disagree with findings, thereby costing the City time and money far beyond what staff has projected. Recommendation: - Allow annual self - certification for all other owners who have not had a complaint filed against their property for a nominal fee; self - certification checklist could be submitted annually with business license renewal. (i.e. Sacramento charges $16 for this process, Santa Cruz charges $20) - Allow new properties entering the program to enroll in self certification program automatically. - Exempt or allow self - certification for properties managed by a licensed property manager unless complaint filed against that property. - Exempt properties that are 10 or fewer years old (City has suggested 5 years or fewer). - Waive re- inspection and fee for owners who provide documentation that supports they have corrected code violations identified during initial inspection (i.e. owner provides contractor invoice and certification that recommended work has been completed). #4 — COST TO CITY WILL BE TOO HIGH Concern — "Cost Recovery" fee structure seems unrealistic, as the City of Santa Cruz has operated their program at a loss of approximately $150,000 per year with less personnel than the four extra staff it was suggested be added to the Community Development Department. Concern — Cost to the City will be significant if City attempts to inspect every rental property over a 3 year cycle; the cost to hire additional staff, pay for pension and benefits to those staff, and general programmatic costs associated with the program will cause the city to use general funds and /or taxpayer money. Concern — Currently there are approximately 2,580 business licenses for Residential Rentals of an estimated 4,700 rental properties within the City. How does the City expect to communicate and enforce properties becoming licensed? How is the City educating property owners now to ensure all owners obtain a business license? What is the expected cost to communicate and enforce compliance of business licenses? Concern — How will the City maintain an accurate database of which properties are rentals and /or licensed with a constant turn-over of housing stock? Concern - City has recommended that a landlord change their lease to allow access by City inspectors upon notice to tenants. Will the City provide education and a draft lease clause to landlords or just assume this will happen? How does the city plan on educating landlords in this regard? Will the City assume liability for any missing and /or damaged items that are a result of inspections? Concern — How will the City address situations in which a landlord or tenant does not offer access and what will the process be for gaining entry? What will the time and expense associated with this look like? Concern — With current staff levels (4 code enforcement officers), the City is not able to "enforce" and address current complaints. City staff indicate that to simply address all current complaints adequately, additional staff is needed. To implement the Rental Housing Program, it is recommended 2 additional inspectors, an administrative support person, and a code enforcement supervisor be hired. How will it be possible for inspections of all property to reasonably take place while "enforcing" this ordinance and code violations without draining other Community Development resources? Recommendation: Remain focused on properties which have filed complaints or violations against them without attempting to tackle an ambitious 3 year inspection cycle of all rentals in the City, thereby reducing cost of Program and targeting properties with suspected issues. Work with all stakeholders to identify "problem" properties through a complaint form. Target these properties for inspection first in order to ensure the City is spending time and money effectively. Include performance standards that need to be met to ensure the Program is working and the cost of the Inspection Program is worthwhile. Additionally require a 1 -year and 3- year City Council review of the Program to verify performance standards are being met. Sincerely, Shannon Fitzpatrick, President San Luis Obispo Association of REALTORS®