HomeMy WebLinkAboutc 12-16-2014 Council Agenda ReportDecember 16, 2014
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FROM: Derek Johnson, Community Development Director
Prepared By: Joseph Lease, Chief Building Official
SUBJECT: REVIEW OF RENTAL HOUSING INSPECTION PROGRAM OPTIONS
RECOMMENDATION:
1. Receive a presentation on Rental Housing Inspection Program policy options.
2. Provide direction to staff regarding initiation of an ordinance and specific options to pursue.
REPORT-IN-BRIEF
One aspect of the Council’s 2013-15 Neighborhood Wellness Major City Goal was to pursue the
creation of a Rental Housing Inspection Program (RHIP). Staff began by conducting extensive
research into programs in other cities throughout California. In all, twenty-five California cities and
counties with existing programs were identified and surveyed. In addition, several programs were
identified in major college towns outside of California. Each program was reviewed to identify
common “best practices” as well as unique approaches to implementing and managing a RHIP.
Of all of the agencies surveyed with existing programs, the City of San Luis Obispo and the City of
Los Angeles had the highest rates of rental units, at about 62 percent of available units, as reported
by the 2010 Census. The statewide average rental rate is 43 percent. The percentage of rental units
in the City has been trending upwards over the past three decades. Many long-term residents feel
that the integrity and livability of their neighborhoods are threatened by the increase in rentals and
the violations of housing and zoning codes associated with some of them. Community members,
including representatives from Residents for Quality Neighborhoods (RQN), have expressed
concern specifically about the condition of the City’s rental stock and the need for a more proactive
approach to enforcement of the City’s housing, zoning and property maintenance standards.
A consideration of existing City programs is necessary to determine how best to structure a RHIP in
order to avoid duplicative efforts, insure program efficiency and maximize existing resources to
promote Neighborhood Wellness. A summary and review of these programs is provided in this
report and includes reactive (complaint-based) code enforcement, proactive code enforcement
Neighborhood Services), Multi-family Fire Safety Inspections, Noise Party Enforcement, and
Neighborhood Parking Enforcement.
In reviewing RHIP’s in other cities, staff has identified a number of program options for Council
consideration and is seeking policy direction. Some of these program options are the primary
drivers of program costs such as the frequency or scope of inspections, while others relate more to
the desired program efficacy such as incentives and exemptions. A review of fee structures utilized
by programs in other cities is also provided, as well as sample fee estimates based on full cost
recovery.
Staff has conducted extensive community outreach with various stakeholder groups. A summary of
the results is included in the report.
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Other considerations in developing and implementing a program include the need to identify all
rental properties in the City; deciding on a mechanism to collect annual program fees; recruitment,
training and retention of staff; establishment of an abatement fund; and the creation and
implementation of an Administrative Hearing Board. Each of these will be reviewed in depth
should the Council chose to move forward with a program.
DISCUSSION
Background
One aspect of the Council’s 2013-15 Neighborhood Wellness Major City Goal is to pursue the
creation of a Rental Housing Inspection Program. This is an endeavor that has been undertaken on
at least two occasions in the past. In March 2005, the Council considered a Rental Property
Inspection Program, but elected to limit the program to state mandated fire safety inspections of
multifamily rental units (Attachments 1 & 2). Council again considered aspects of a program in
2009, but did not pursue expanding the existing fire safety inspection program (Attachments 3 & 4).
As properties are converted from owner-occupied to rental units a number of problems may
manifest that could impact the overall quality of life of the City’s neighborhoods and residents. A
systematic program of rental housing inspections can help stabilize and preserve neighborhoods by
addressing blight and substandard conditions related to rentals. The ultimate goals of such a
program would be the elimination of unsafe rental housing conditions, and the preservation and
improvement of safe, livable, and attractive neighborhoods.
The California Health & Safety Code, Sections 17920 and 17961 provide the legal authority for the
enforcement of the State Housing Law and the implementation of proactive programs such as a
rental housing inspection program. Health & Safety Code Section 17961 requires local building
departments or housing agencies to enforce the provisions of the State Housing Law pertaining to
the maintenance, sanitation, ventilation, use or occupancy of residential structures.
Health & Safety Code Section 17920 defines the term “enforcement” as follows:
e) “Enforcement” means diligent effort to secure compliance, including review of plans
and permit applications, response to complaints, citation of violations, and other legal
process. Except as otherwise provided in this part, “enforcement” may, but need not,
include inspections of existing buildings on which no complaint or permit application has
been filed, and effort to secure compliance as to these existing buildings.”
As noted in the last sentence, enforcement may include proactive inspections of existing buildings
where no complaint has been filed.
The development of a comprehensive rental housing inspection program for the City will require a
substantial investment of time and resources. Given the City’s budgetary limitations and need for
fiscal prudency, such a program should be designed so that it is fee supported without any
significant financial impact on the general fund. A myriad of options, considerations and impacts
need to be reviewed and analyzed in order to develop a program that meets the needs of the
community and achieves the desired outcomes encompassed in the goal of Neighborhood Wellness.
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Statistics
A significant portion of the housing units in the City of San Luis Obispo are rentals. Based on the
2010 Census, the City had 20,553 dwelling units and 61.8%, or approximately 12,700 of them were
rentals. In comparison, the statewide rental rate is about 43%. There are estimated to be 8,041
multifamily rental units and 4,659 single-family and/or duplex rental units. The proportion of rental
units has trended upward as shown in the chart below. It is estimated that approximately 1.5% of
the nearly 4% increase in the last ten years is due to new multifamily construction. The remaining
2.5% is attributable to the transition of owner-occupied units to rentals.1 Given the current growth
rate of rental units (.4% per year), the percentage of the housing stock that could be rentals by 2015
is 63-64%. The chart below depicts the growth in rental units based on U.S. Census data from the
last three decades.
Growth of Rental Units in the City of San Luis Obispo
In 2013, the Community Development Department recorded 814 code enforcement cases in
residential zones involving 1,449 separate violations at 698 separate addresses. Many of those
violations are for issues that commonly occur in rental units as noted in the chart below. Of
particular note, rental units in R1 and R2 zoning districts have a far greater violation occurrence rate
than in multifamily zones (i.e. 139 cases per thousand units as compared to 20 cases per thousand
units). The table below provides statistical data relating to code enforcement cases in residential
zones in 2013.
1 This estimate of the growth of rental units since the 2010 U.S. Census considered the straight-line growth trend less
newly constructed multifamily units to estimate the growth due to the transition of owner occupied units.
53%
44%
42%
38%
47%
56%
58%
62%
30%
35%
40%
45%
50%
55%
60%
65%
1980 1990 2000 2010
Owner Occupied
Rental
Trend
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Code Enforcement Violations/Cases in Residential Zones – 2013
Violation Type Number of Violations
Substandard Housing 281
Unpermitted Construction 126
Land Use/Zoning 88
Occupancy Violations/Illegal Conversions 73
Property Maintenance 850
Miscellaneous 31
Total 1449
Cases Number of Cases Violation rate per
1000 units
Total 814
Number/Percentage of Cases in R1 and R2
Zones
652 cases or 80% 139
Number/Percentage of Cases in R3 and R4
Zones
162 cases or 20% 20
Based on a statistical analysis by the City’s Finance and Information Technology’s GIS Division,
approximately 79% of the violations identified in residential zones in 2013 are attributable to rental
units. Anecdotal information from neighborhood groups and citizens that lodge complaints indicates
that there is a general belief that the actual number of violations occurring in the City’s
neighborhoods is exponentially higher than the number documented by reactive code enforcement
efforts. Also, staff has had numerous discussions with students and nonstudent tenants who relate
that they are reluctant to report code violations because of concerns of retaliation and difficulty in
finding alternate housing. Some students have reported living in housing that is in significant
disrepair, yet are unwilling to file a complaint. It is also not uncommon to receive complaints from
parents regarding the substandard nature of their student’s rental units. In addition, neighborhood
associations have told staff that they believe many violations are not reported by tenants, and that
illegal rental conversions are much more common than reported.
An example of this was recently brought to light by the administration of Cal Poly. They recently
purchased the formerly investor-owned properties at the southeast corner of Slack and Grand,
consisting of four separate single-family dwellings. They requested that CDD staff tour the
properties with them to see the conditions of these rental units. All four units had carefully
disguised garage conversions, unpermitted alterations and numerous unsafe and substandard
conditions and were formerly rented to Cal Poly students.
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Homes purchased by CalPoly at Slack and Grand
Existing Enforcement Programs in the City of San Luis Obispo
A consideration of existing City programs is necessary to determine how to structure a RHIP in
order to avoid duplicative efforts, insure program efficiency and maximize existing resources to
promote Neighborhood Wellness. Attachment 5 provides a summary of existing programs, which
include the Fire Department’s Multifamily Housing Inspection Program, reactive (complaint driven)
code enforcement, proactive code enforcement (Neighborhood Services), Noise Enforcement,
Business Tax and Business License Enforcement, and Weekend Residential Parking Enforcement.
The addition of a RHIP to the existing mix of programs may have impacts on other City functions.
Depending on how the program is structured and the mechanism for billing, fee collection and
delinquencies, some impacts on Finance will need to be considered as the program is developed.
Also, given that the overall code enforcement caseload could significantly increase with a RHIP,
consideration must be given to the impacts on the City Attorney’s Office. These considerations will
need to be explored in detail once the program is better defined.
Staffing for a RHIP should be considered as part of an overall review of code enforcement
programs within the Community Development Department. Currently, code enforcement functions
are performed by Neighborhood Services Specialists and Code Enforcement Officers. As part of a
RHIP, new positions for Rental Housing Inspectors could be created. However, a more common
career progression as found in other municipalities includes the following positions: Code
Enforcement Officer I, Code Enforcement Officer II, Senior Code Enforcement Officer, and Code
Enforcement Supervisor. With the addition to the existing staff of a number of inspectors and
support staff as part of a RHIP, a supervisory position will be necessary. It is recommended that the
Neighborhood Services Specialists (NSS) be reclassified to Code Enforcement Officer (CEO) I’s,
and that RHIP inspection staff be hired in as CEO I/II dependent on qualifications. This would
make all entry and journey level code enforcement positions assigned to programs within
Community Development interchangeable between programs and establish a career ladder leading
to better retention of trained staff, as turnover has been a problem, particularly in the NSS
classification. Also, it would allow the rotation of program assignments among available staff to
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promote job enrichment. Estimated staffing numbers are provided in the later section of this report
relating to program options.
Programs in Other Cities
Staff has conducted extensive research in regards to existing programs in other municipalities
throughout California. In all, 25 California cities and counties having existing programs were
identified and surveyed. In addition, several programs were identified in major college towns
outside of California. Each program was reviewed in an attempt to identify “best practices” as well
as unique approaches to implementing and managing a municipal RHIP. A listing of the cities
identified with programs in California is provided in Attachment 6.
The minimum standards for the maintenance of residential occupancies are contained in the State
Housing Law (Health & Safety Code Section 17920.3), which are derived from the Uniform
Housing Code (UHC). This standard is used by rental inspection programs throughout the State,
although some cities have adopted the International Property Maintenance Code, which is the
successor to the UHC. In addition, most jurisdictions also enforce local property maintenance
standards similar to those contained in SLOMC 17.17. Some cities have had programs since the
1980’s (Azusa, Santa Ana, and Pasadena), while roughly half of the programs surveyed have been
adopted within the last 10 years. A Case Study of the City of Azusa’s Rental Housing Inspection
Program is included as Attachment 13.
Of the cities in California identified in the survey, only Santa Cruz is similarly situated to San Luis
Obispo, in that it is a relatively small town with a relatively large student population. Santa Cruz
has a population of 62,864 and the 2013-14 student enrollment at UC Santa Cruz was 16,543. Santa
Cruz began their RHIP in 2010. San Luis Obispo, Santa Cruz, and other “college towns” nationwide
experience a number of unique problems and impacts. A 2013 survey conducted by the
International Town-Gown Association surveyed community members in these towns and identified
a number of issues facing these towns.2 These issues affecting the quality of life in college towns
are identified in the table below.
Factor Respondent
Percentage
House parties 35%
Late-night noise 33%
Underage drinking 30%
Intoxicated behavior (not otherwise listed) 29%
Housing affordability and availability 28%
Poorly maintained/unsightly properties 26%
Occupancy code/zoning violations 22%
Litter/trash 19%
Criminal activity perpetrated by non-
intoxicated individuals
19%
Criminal activity by intoxicated individuals 18%
Illegal parking 15%
2 Annual Survey Assessment – International Town-Gown Assessment 2014
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Illegal drug use 11%
Vandalism/property damage 10%
Diminished municipal emergency response
time
6%
Drunk driving 4%
Public urination 3%
Key Elements
There are a number of key elements associated with the various RHIPs identified. Each is discussed
below and includes a recommended best practice.
1. Scope of Inspection:
This variable relates to the extent of the inspections; whether they include inspections of the
interior of the units along with the exterior areas. The scope of inspections is a significant factor
in determining staffing levels and resultant program costs. For example, an average inspector
can complete approximately 12 exterior inspections per day, but only seven interior/exterior
inspections per day, when re-inspections are factored in.
The following table provides a summary of responses from the survey cities relating to the
scope of inspections for their programs:
Scope of Inspection Number of Cities
Exterior only 2
Interior and exterior 19
Exterior with interior under certain conditions
reasonable belief, complaint, blighted areas,
etc.)
3
No response 1
Recommended Best practice: Interior and exterior inspections
2. Frequency of Inspection
The frequency of inspection, or the inspection cycle, determines how often the units are
inspected, and like scope it is a significant driver in overall program costs. The average
inspection cycles of the cities surveyed was 2.75 years. The following table provides a summary
of inspection cycle frequencies:
Inspection Cycle Number of Cities
Annual 8
18 month 1
3 years 6
3.5 years 1
4 years 5
5 years 3
no response 1
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Of those cities reporting an annual inspection frequency most reported that they could not meet
this aggressive cycle time and/or were only inspecting a portion of all rental units and excluding
others through self-certification, exemptions or other criteria.
Recommended Best Practice: 3 year inspection cycle
3. Responsible Department:
The department assigned to administer the RHIP varied by city, however the program is
predominantly assigned to Community Development Departments.
Assigned Department Number of Cities
Community Development 16
Code Enforcement 4
Police 1
Fire 1
City Manager 1
Housing Dept. 1
Engineering/Building 1
Recommended Best practice: Program in the Community Dev. Dept.
4. Fees
Fees vary widely between jurisdictions, however the fees imposed cannot exceed the public
agency’s reasonable cost of service.3 Some cities permit a reduction or elimination of
inspection fees in future years for properties that pass the initial inspection and are eligible
for a Self-certification period. The range of fees from the cities surveyed are summarized
below:
Fee Type Fee Amount
First Inspection $0 - $272 per Single-family dwelling
0 - $337 + $24 per unit Multi-family
Re-inspections $0 - $335 per inspection
Penalties/Fines (noncompliance) Up to $1000 per violation
Recommended Best practice: Set base fees at full cost recovery level consistent with the
City’s adopted policies regarding fee recovery.4
3 See Prop 29 Section 1(e)(3). The City will need to perform a cost of service study in order to establish the inspection fees.
4 Development Review Programs - The following cost recovery policies apply to the development review programs, such as Building and Safety
building permits, structural plan checks, inspections). Cost recovery for these services should generally be very high. In most instances, the City's
cost recovery goal should be 100%. However, in charging high cost recovery levels, the City needs to clearly establish and articulate standards for its
performance in reviewing developer applications to ensure that there is “value for cost.” (2013-2015 Financial Plan Budget and Fiscal Policies Pg. H-
10)
Comparability With Other Communities - In setting user fees, the City will consider fees charged by other agencies in accordance with the
following criteria: 1. Surveying the comparability of the City's fees to other communities provides useful background information in setting fees for
several reasons: a. They reflect the "market" for these fees and can assist in assessing the reasonableness of San Luis Obispo’s fees.
b. If prudently analyzed, they can serve as a benchmark for how cost-effectively San Luis Obispo provides its services. (2013-2015 Financial Plan
Budget and Fiscal Policies Pg. H-11)
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5. Incentives and Disincentives
Cities try to promote the proper maintenance of rental properties by landlords by including
incentives that attempt to ease the regulatory burden on those landlords that maintain their
properties to the applicable standards. The most common incentives are reduced fees and
self-certifications options. Conversely, cities try to discourage poor maintenance by
providing disincentives such as high fines, or withholding the reconnection of utilities. The
following chart summarizes the incentive and disincentive options utilized by the survey
cities.
Incentives Disincentives
Self-certification after passing
initial inspection
High fines or reinspection fees.
A threshold for allowing self-
certification period.5
Withhold water, gas, and electric
utilities.
Training for landlords and tenants Abatement proceedings and legal
remedies.
Reduced fines for participation in
training
Recommended Best Practice: Establish rule that include a self-certification program,
high fines and re-inspection fees, and abatement proceeding and legal remedies.
6. Exemptions
Many cities provide exemptions from their inspection programs in certain circumstances
where other means of regulating the maintenance of units is available and effective, where
the city lacks regulatory authority, or where the likelihood of violations is minimized.
Common exemptions include:
Exemption Options
Owner-occupied units (or occupancy by an immediate family member)
Units in mobilehome parks
Newly constructed dwellings (typical 3-5 years exemption)
Publicly owned housing
Legal second dwelling units
Units governed by HOA’s
Recommended Best Practice: Exemptions for owner occupied units that are not rented
to other than immediate family members, units in mobile home parks and publicly
owned housing.
7. Implementation Strategies:
Cities may design implementation strategies for the start-up of a program to focus inspection
5 A standard can be established wherein a property would qualify for self-certification if the number of minor violations
identified through the first inspection was below a certain threshold (e.g. three).
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resources on “problem” properties or areas in order to get early positive results. Various
implementation strategies include:
Implementation Options
Random selection of rentals for inspection (lottery)
Prioritizing inspections by impacted neighborhoods
Prioritizing inspections by “problem properties” based on past violations
Windshield survey of neighborhood condition with objective scorecard
Police calls for service
Inspecting a percentage of a landlords properties in a given period
Recommended Best Practice: Prioritize by area based on the number of problem properties.
Community Outreach
Over the past year staff has been engaged in a public outreach effort with various stakeholders
including business, neighborhood and student groups and individuals, in order to gauge public
sentiment and to receive input and concerns about the development of a RHIP. Presentations were
made to business groups including the San Luis Obispo Association of Realtors (SLOAOR), the
Chamber of Commerce, and the Property Managers Association. In general, business groups are
opposed to any proactive program regulating rental housing and feel that the complaint based
enforcement as currently exists is adequate to address any problems associated with rental housing.
They were concerned about the added costs of such a program and generally felt that a proactive
program would be overly intrusive in rental business operations and might scare investors away
from the market. The Chamber of Commerce and SLOAOR have written responses their Boards’
concerns and opposition to such a program (Attachment 7 and 15 respectively).
Staff has completed a number of meetings and presentations with neighborhood associations and
community groups interested in the program including Residents for Quality Neighborhoods,
Monterey Heights Neighborhood Association, Alta Vista Neighborhood Association, the Student-
Community Liaison Committee, the Neighborhood Civility Working Group, CalPoly Transitional
Housing Program Committee, and CalPoly Associated Students (ASI). These groups are generally
supportive of a RHIP, except for the ASI Board, which didn’t clearly articulate support or
opposition. Some members of the neighborhood associations’ feel that their neighborhoods have
been in decline for some time due to the transition of owner-occupied units to rentals and the poor
maintenance and management of some rental properties. They believe that such a program is long
overdue and that complaint-based code enforcement is inadequate to address the festering and
growing problems. Several of the groups have submitted written positions on the subject
Attachments 15-16)
Notes from the various meetings are included as Attachments 8-12. These generally provide a list
of observations, questions or concerns that were raised by stakeholders.
If Council elects to move forward with a program, staff will continue the outreach effort to insure
community involvement at each phase of the project. Staff requests Council input and direction on
additional outreach methodologies and efforts that they would like to see utilized. For example,
should a committee of stakeholders be created to develop the ordinance?
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Planning Commission Input
The Planning Commission provided input to the rental inspection program indirectly through its
review of the Housing Element. Specifically, the Commission recommended striking existing
Program 1.6 (Enact a Rental Inspection Program to improve the condition of the City’s housing
stock) from the Housing Element draft. Concerns cited by the Planning Commission included:
The City has existing tools to address building safety issues and the Commission
doesn’t want to create overlapping bureaucracy and intrusive regulation; and
Once a program is created, it never goes away which means the City will incur on-
going staffing/pension costs.
The Commission acknowledged the Council has identified this effort as part of a major city goal
and also acknowledged that the recommended change to the Housing Element will not impact the
Council’s efforts to enact a program.
Possible Options for Implementation of a Rental Inspection Program
After considering the City’s existing code enforcement programs noted herein and the survey results
regarding RHIPs in other cities staff has developed the following two options for Council
consideration:
Option 1: Basic Program Create a RHIP for Single-family and duplex rental units,
and continue the Fire Department’s Multi-family
Inspection Program unchanged.
Option 2: Expanded Program Create a RHIP for Single-family and duplex rental units,
and expand the Fire Department’s Multi-family Inspection
Program to include interior inspections for housing,
building and zoning violations.
OPTION 1 – Basic Program
Option 1 would create a RHIP for residential buildings containing one or two dwelling units. It
would include a periodic inspection of the premises to determine compliance with all relevant codes
including the City’s building, housing, fire, zoning and property maintenance codes.
Option 1 would also leave the Fire Department’s existing Multifamily Housing Inspection program
unchanged. The City’s Fire Department currently conducts annual fire safety inspections of all
rental dwelling properties containing three or more rental units within a single building. There are
approximately 984 of these buildings with a total of about 8,041 rental units. These properties
include apartments, hotels, motels, bed & breakfast facilities, hostel facilities, senior facilities and
sorority and fraternity houses. These inspections are required by California Health & Safety Code,
Section 17921. The purpose of these inspections is to ensure the safety of these facilities from a
solely fire safety perspective in accordance with State requirements. A typical fire safety inspection
at this type of facility would include checking fire alarm systems, fire sprinkler systems, fire
extinguishers, common areas for fire hazards, exiting, and fire access issues. Inspectors do not
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examine the interior of all units. They typically spot check vacant units with the cooperation of the
owner or manager and conduct interior inspections if violations are suspected. Fees for this
program are currently collected at a cost recovery level.
Option 1 Program Costs and Estimated Fees
Estimated staffing and program costs are provided in the following two tables. The frequency of
inspections is the primary factor in determining needed staffing levels and resultant program costs.
Frequencies of one, three and five years were selected for the analysis because the survey results
from other cities were roughly evenly split around these ranges.
Staffing (FTE) – Single-family/Duplex Rentals Only
Frequency of
Inspections
Inspectors Supervisor Admin. Support Total FTE
1 year 4 1 2 7
3 years 2 1 1 4
5 years 1 1 .5 2.5
Program Costs - Single-family/Duplex Rentals Only1
Frequency of
Inspections
Staffing
Costs
Other
Operating
Expenses
Total Estimated Annual
Fee per Unit
Estimated
Capital Costs
for Start Up
1 year $670,215 $101,803 $772,018 $163 $350,000
3 years $398,112 $68,679 $466,791 $98 $200,000
5 years $262,061 $52,117 $314,178 $66 $125,000
1. Requires an initial capital investment of approximately $125,000 - $350,000 dependent on the frequency selected.
Pros and Cons
Pros
1. Limited in scope – focus limited to one and two family dwellings, thus a more
manageable and cost effective program.
2. Addresses the areas with the highest occurrence of violations and the areas of the most
concern to neighborhood associations (i.e. units within R1 and R2 zones).
3. Leaves the existing fire safety program unchanged.
4. Fair and reasonable costs for services provided.
Cons
1. Housing, building, zoning violations in multi-family buildings would only be handled on
a complaint basis or if observed during the annual Fire Safety Inspection.
2. Adds some nominal costs to rentals housing units since fees will likely be passed on to
tenants in the form of increased rents.
3. Owners of rental properties may be frustrated by the additional costs and regulation
associated with a proactive program.
OPTION 2 – Expanded Program
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Option 2 would create a RHIP for Single-family and duplex rental units, and expand the Fire
Department’s existing Multi-family Inspection Program to include interior inspections for housing,
building and zoning violations. This option would be a much more expansive program than Option
1 encompassing all 12,700 rental units in the City. Consequently, it is the more costly of the two
options. If this option is selected, several policy decisions would have to be considered, particularly
in light of the fact that the Fire Department is mandated to conduct the annual multi-family fire
safety inspections. These considerations include merging the various city inspection programs into a
consolidated and coordinated program that addresses all fire, building, zoning and other life safety
issues.
Option 2 Program Costs and Estimated Fees
Estimated staffing, program costs and fees are provided in the following two tables. The
frequency of inspections is the primary factor in determining needed staffing levels and
resultant program costs. Frequencies of one, three and five years were selected for the
analysis because the survey results from other cities were roughly evenly split around these
ranges.
Staffing (FTE) – All Rental Units
Frequency of
Inspections
Inspectors Supervisor Admin. Support Total FTE
1 year 8 1 3 12
3 years 3 1 2 6
5 years 2 1 1 4
Program Costs – All Rental Units1
Frequency of
Inspections
Staffing
Costs
Other
Operating
Expenses
Total Estimated
Annual Fee per
Unit2
Estimated
Capital Cost
for Start Up
1 year $1,177,600 $161,646 $1,339,246 TBD $425,000
3 years $567,918 $88,444 $656,362 TBD $300,000
5 years $398,112 $68,679 $466,791 TBD $200,000
1. Requires initial capital investment of approximately $200,000 - $425,000
2. Fees for multi-family units will need to be developed taking into the economies of scale inherent in such inspections and
would include a base fee for each property and a per unit fee for the multi-family units.
Pros and Cons
Pros
1. A unified scope for inspecting both single and multi-family units.
Cons
1. Potential difficulty coordinating the annual fire safety inspections (which the Fire Dept. is not
allowed to delegate) with other rental inspections.
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2. A much more expansive program encompassing all 12,700 units as opposed to Option 1,
which would be applicable to only 4,659.
3. Includes multifamily units where there is not currently a high rate of occurrence of violations,
thus potentially lowering the overall effectiveness of the program.
4. Adds some nominal costs to rentals housing units since fees will likely be passed on to
tenants in the form of increased rents.
5. Owners of rental properties may be frustrated by the additional costs and regulation
associated with a proactive program.
6. Could be perceived as overly aggressive.
NEXT STEPS
The following are the decision points for Council direction (* indicates the staff recommendation):
Yes No
Pursue a Rental Housing Inspection Program ordinance
SCOPE OF PROGRAM
Option 1: Basic Program*
Create a RHIP for Single-family and duplex rental units, and continue
the Fire Dept.’s Multi-family Inspection Program.
Option 2: Expanded Program
Create a RHIP for Single-family and duplex rental units, and expand
the Fire Department’s Multi-family Inspection Program to include
interior inspections for housing, building and zoning violations.
SCOPE OF INSPECTIONS
Exterior inspections only
Both exterior and interior inspections*
Exterior inspections and interior inspections only under certain
conditions
FREQUENCY OF INSPECTIONS
1 year
3 years*
5 years
INCENTIVES
Self-certification after passing initial inspection*
System and standards to authorize self-certification period*
Training for landlords and tenants
Reduced fines for participation in training
DISINCENTIVES
High fines or re-inspection fees*
Withhold water utilities on tenant turn-over if rental unit is not
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registered or is in violation
Abatement proceedings and legal remedies
POTENTIAL EXEMPTIONS
Owner-occupied units (or occupancy by an immediate family member
without other renters) *
Units in mobile home parks*
Newly constructed dwellings (3-5 years)
Publicly owned or managed housing*
Housing Inspected by other government agencies (e.g. Section 8)
Legal second dwelling units
Units governed by HOA’s
FEES
Set fees at full cost recovery*
Provide discount on base fee if property qualifies for self-certification
OUTREACH
Discuss any additional outreach efforts Council would like to see
utilized
Depending on the direction provided by Council, staff will complete any research and work needed
to return to Council with an appropriate program and necessary ordinance and resolution. Staff will
continue to work with stakeholders to seek input and to address any concerns they may have,
including property owners, renters and neighborhood associations.
CONCURRENCES/PUBLIC NOTIFICATION
The City Attorney, and Finance & Information Technology, Fire and Police Departments concur
with the recommended actions. Notifications of this study session were sent to numerous
individuals and groups, including the neighborhood associations, property management and realtor
groups, business organizations, and Cal Poly students and administration. Staff has conducted
outreach to these stakeholders and will continue to do so in the development of an ordinance, if
Council elects to go forward.
FISCAL IMPACT
The costs and estimated fees associated with each option are outlined in this report narrative. It is
anticipated that fee structures to be developed will be based on full cost recovery for the program,
unless Council directs otherwise. There will be some fiscal impact to property owners, who will
likely pass the cost of the annual fees on to renters.
ALTERNATIVES
1. Maintain status quo by continuing mandated complaint-based code enforcement for housing
violations and the Fire Department’s Multi-family Inspection Program unchanged.
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Rental Housing Inspection Program Page 16
2. Consider an alternative program at the Council’s direction other than what is presented here
to address problems associated with rental units.
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Rental Housing Inspection Program Page 17
ATTACHMENTS
1. CAR March 1, 2005
2. Council Minutes March 1, 2005
3. CAR September 29, 2009
4. Council Minutes September 29, 2009
5. Summary of Existing Enforcement Programs in San Luis Obispo
6. List of California Cities with Rental Housing Inspection Programs
7. Chamber feedback re. Rental Housing Inspection Program
8. Notes from 3_14_14 SLO Assoc. of Realtors Meeting
9. Notes - SLO Property Managers Mtg May 5 2014
10. Notes from RQN Meeting 11_20_13
11. Notes from Alta Vista and Monterey Heights Neighborhood Meeting
12. Notes from ASI Board of Directors Meeting at Cal Poly
13. Case Study – City of Azusa
14. SLO Assoc. of Realtors Position Paper
15. Residents for Quality Neighborhoods Position Paper
16. Email from Monterey Heights Neighbors
T:\Council Agenda Reports\2014\2014-12-16\Rental Inspection Housing Program (Johnson-Lease)\CAR Rental Housing Inspection Program.docx
SS1-17
ATTACHMENT 1
FROM: Deborah Linden, Chief of Police
Wolf Knabe, Fire Chief
John Mandeville, Community Development Director
SUBJECT: RENTAL PROPERTY INSPECTION PROGRAM
CAO RECOMMENDATION
1. Review and discuss options for rental property inspections.
2. Provide staff with direction on which options to pursue, with a focus on full cost recovery
regardless of which option the Council selects.
REPORT-IN-BRIEF
As part of the 2003-05 Neighborhood Wellness Major City Goal, staff researched different rental
housing inspection programs in place in other communities, including an ordinance currently
being used in the City of Azusa. San Luis Obispo has a significant number of rental units,
including many in single-family and duplex dwellings. Except as noted below for fire safety
inspections, these units are not currently inspected for compliance with fire safety regulations,
Uniform Housing Code requirements or zoning designations unless a specific complaint is
received. Members of the community, including representatives from Residents for Quality
Neighborhoods (RQN), have expressed concern about the condition of the City’s rental stock and
compliance with City housing and zoning regulations.
The Fire Department is currently doing all mandated inspections of rental properties containing
three or more rental units. This program is in jeopardy due to staffing and budget reductions.
The law allows the City to charge fees to offset the costs of a rental inspection program;
however, the City currently does not do so.
Staff has outlined several different rental inspection program options for the Council to consider.
These include different versions of the existing Fire Department program, as well as an enhanced
program that would provide for the inspection of single-family and duplex rental units. The fees
for each program vary according to rental type. All the program options would remain under the
management of the Fire Department and assume full cost recovery.
Creating a comprehensive rental inspection program is not without its challenges. The most
significant challenges include the need to identify all of the rental properties in the City and
create a mechanism to collect annual fees from property owners. Staff would also expect
significant stakeholder input from property owners, tenants and neighborhood associations.
March 1, 2005
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ATTACHMENT 1
DISCUSSION
Background
During the 2003-05 Council goal-setting process, representatives from RQN expressed concern
about the quality of rental properties in the City, and the existence of substandard and
unpermitted rental units. RQN described an ordinance in effect in the City of Azusa that funds
annual inspections of rental units by that city to ensure compliance with required housing code
provisions. The inspections are funded by an annual fee paid by rental property owners.
Council directed staff to further research the concept of a rental property inspection program as
part of the Neighborhood Wellness Major City Goal and to return to Council with additional
information. Staff from Police, Fire, Finance & Information Technology, Community
Development and Administration worked together on this project. This report summarizes the
results of the research and outlines five different program options for Council to consider.
Current Situation
Based on the results of the 2000 Census, there are approximately 11,500 rental units in the City
out of 19,600 total housing units (58%). These include approximately 5,100 single-family and
duplex units, and approximately 6,400 rental units housed in complexes containing 3 or more
units (such as apartment complexes, condominiums, hotels and fraternity houses).
There are concerns that residents of rental housing are often subjected to unsafe living
conditions, and that some rental property owners are not maintaining their properties in
compliance with zoning regulations. The Police and Community Development Departments
Code Enforcement) receive about 50 reports annually of substandard rental housing conditions,
illegally converted rental units (such as garages) and other violations of the Uniform Housing
Code. Of these, about 36 per year appear to be valid, of which about 30 relate to single family
residences.
The following is a summary of the complaints received by Code Enforcement regarding
substandard rental housing during the past 10 years:
Number of Complaints and Violations
Total complaints received 539
Confirmed violations 363
Average confirmed violations per year 36.3
Location of Confirmed Violations
in R1 & R2 Zones 85%
in R3 & R4 Zones 9%
in Commercial Zones 6%
Although the average number of reported cases resulting in confirmed violations is relatively
low, staff believes this number is not representative of the actual violations occurring. Staff
spoke with student representatives and staff from Cal Poly and Cuesta who reported that many
student renters are reluctant to report code violations because they fear retaliation by property
owners in the form of rent increases. Some students reported living in housing that is in
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Rental Property Inspection Fee Program Page 3
ATTACHMENT 1
significant disrepair. Neither college maintains statistics on the number of complaints made by
student renters. Representatives of RQN and other neighborhood associations also have told
staff that they believe many violations are not reported by tenants, and that illegal rental
conversions are much more common than reported. Unfortunately, other than the reported
complaints and violations, there are no other known statistical measures of the extent of the
problem.
The Azusa Ordinance
The Azusa rental housing inspection program, enacted in 1989, is based on an ordinance which
requires that all rental housing in the City of Azusa be registered with the City and that it be
inspected annually to insure that the property is being maintained. The properties are inspected
for compliance with state and local laws involving property maintenance. Interior inspections
are conducted only with the consent of tenants. Once an inspection is completed, the owner is
notified of any deficiencies found and required to correct them in a timely manner. The program
was created in response to complaints from tenants, other nearby rental property owners and
residents about the lack of property maintenance on many rental properties, and the fact that the
poorly maintained properties were having an adverse impact on property values. The City of
Azusa has 6,500 rental units which accounts for approximately 50% of existing housing.
Approximately ninety percent (90%) of the complaints received by the City involve rental
housing and the failure of many owners to maintain their property.
During the annual visits, inspectors look for various code violations such as abandoned cars,
dead vegetation, accumulations of junk and debris, lack of building maintenance, graffiti,
inadequate refuse facilities, illegal/unpermitted construction, dilapidated structures and
substandard housing conditions. Inspectors contact tenants and ask if there are problems. In
larger complexes, this is done on a random basis. Exterior areas are viewed for obvious
violations and interiors are inspected if there is an apparent need. When violations are found,
owners receive an inspection report showing the problems and location as well as a deadline for
compliance. If corrective measures are not made by the re-inspection date, the owner is charged
for any additional City staff time and expense in handling the violation. If the City receives a
valid complaint about a property between inspections, the owner is charged for City staff time
and expense associated with investigating the violation. However, if the property is registered,
City staff calls the owner about the complaint in order to save the owner some direct cost
charges.
What Are Other Communities Doing?
Numerous other cities have developed rental inspection programs that include the inspection of
single family rentals, including Berkeley, Buena Park, Carpinteria, Riverside, San Pablo and
Santa Ana. They have either established a set annual fee or charge an hourly rate to offset the
cost of the program. The frequency of inspections ranges from annual to every three years. The
programs typically mandate an interior inspection of each unit, except Riverside, which settled
on an exterior property maintenance program that applies to all properties.
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Rental Property Inspection Fee Program Page 4
ATTACHMENT 1
Possible Options for Implementation of a Rental Inspection Program
Staff has reviewed the various rental inspection programs currently in place in other cities, and
also considered our immediate need to provide the fire inspections required by law. Although
there are a number of ways to address this issue, staff is suggesting the Council consider the
following five options.
Option 1: Basic Program State-mandated inspection program that the Fire
Department is currently doing, but with cost recovery.
Option 2: Expanded Program Some expansion to our currently mandated program.
Option 3: Enhanced Program Further expansion of the basic program even more to
include inspections of rental properties consisting of
single-family residences and duplexes.
Option 4: Something In-Between Any other program Council might wish to explore, such
as one that still addresses single-family and duplex
rentals, to a lesser or greater degree than outlined in
option 3.
Option 5: Status Quo Retention of the current level of inspection but without
cost recovery. As discussed below, staff is supportive
of any of the options except for this one. Given the
City’s existing cost recovery policies, and the fiscal
challenges facing us in delivering core services that
have no cost recovery options, we believe that cost
recovery for these services is warranted.
OPTION 1 – Cost Recovery for the Current Mandated Fire Department Rental Property
Inspection Program (what we are doing now):
The City’s Fire Department currently conducts annual inspections of all rental dwelling
properties containing three or more rental units. There are approximately 500 of these properties
with a total of about 6,400 rental units. These properties include apartments, hotels, motels, bed
breakfast facilities, hostel facilities, senior facilities and sorority and fraternity houses.
These inspections are required by California Health & Safety Code, Section 17921. The purpose
of these inspections is to ensure the safety of these facilities from a solely fire safety perspective
in accordance with State requirements. A typical fire safety inspection at this type of facility
would include checking fire alarm systems, fire sprinkler systems, fire extinguishers, common
areas for fire hazards, exiting, and fire access issues (see Attachment 1). Inspectors do not
examine the interior of all units. They typically spot check vacant units with the cooperation of
the owner or manager and conduct interior inspections if violations are suspected.
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Rental Property Inspection Fee Program Page 5
ATTACHMENT 1
The following Fire Department staff and vehicles are currently dedicated to the rental inspection
program:
1. 0.5 Full-time Equivalent (FTE) Fire Marshal: Oversees the program and does inspections.
2. 1.5 FTE Fire Inspectors: Conduct the inspections.
3. One City vehicle: The vehicle is shared by the employees to conduct field inspections.
Option 1 Cost Recovery Fees
California Health & Safety Code Section 13146.2b provides cities the legal authority to charge
property owners to recover the reasonable costs of providing these annual inspections. The City
does not currently charge for these inspections. Under Proposition 218, the Council is authorized
to set these types of fees; voter or property owner approval is not required.
In an attempt to establish a fair and equitable fee schedule, staff researched other communities in
California who have already implemented rental inspection fee programs. These cities include
Santa Ana, Albany, Santa Monica, Union City, Milpitas, Pasadena and Santa Fe Springs. Many
of these cities have fee-for-service programs based upon the number of rental units.
Staff is proposing that the cost recovery fees differ according to the type of rental property being
inspected. Some types of properties have on-site maintenance personnel and historically have
fewer violations, while others require more frequent or in-depth inspections to ensure
compliance with Uniform Housing Code provisions. The following suggested fee schedule
reflects these differences, and would pay for the current program:
1. Apartment Rental Units
3.34 per month per unit ($40.10 per year per unit)
Administrative Fee of $65.00/year per facility
Explanation of Fees
The inspections of these facilities are mandated by law. Apartment inspections are very
time consuming and often require follow-up inspections. Per unit and administration fees
are set so that full cost recovery is attained and includes the administration of the
program as well as actual time spent on inspections and follow-up.
2. Hotels, Motels, Bed & Breakfast Facilities, and Youth Hostel Facilities
1-50 units - $200/year per facility
50 units- $400/year per facility
Explanation of Fees
These types of facilities frequently have maintenance personnel available 24 hours a day,
and historically, have fewer code violations than other types of rentals.
3. Senior Facilities
1-25 units - $200/year per facility
25-74 units - $300/year per facility
74 units - $500 /year per facility
Explanation of Fees
These facilities have on-site maintenance staff 24 hours a day.
4. Sororities/Fraternities
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Rental Property Inspection Fee Program Page 6
ATTACHMENT 1
Flat fee - $475/year per facility
Explanation of Fees
Sororities and fraternities traditionally have a high number of code violations requiring
numerous reinspections.
These fees are set at a level designed to pay for the existing basic Fire Department program.
Option 1 Fee Revenue and Program Costs
The following table reflects the projected revenue these levels of fees would generate in one
year, as well as the costs of the staff and equipment currently being used for the program:
OPTION 1 – BASIC RENTAL PROPERTY INSPECTION
COST-RECOVERY FEE PROGRAM
REVENUES
Apartments Number Fee Total
Units – Base Rate Per Unit 6,408 $40.10/Unit $256,900
Facilities – Admin. Rate Per Facility 481 $65/Facility $ 31,300 $288,200
Hotels, Motels, Bed & Breakfasts, Youth Hostel
Units Facilities
1-50 19 $200/Facility $ 3,800
50 13 $400/Facility $ 5,200 9,000
Senior Facilities
Units Facilities
1-25 2 $200/Facility $ 400
26-74 2 $300/Facility $ 600
74 2 $500/Facility $ 1,000 2,000
Sororities/Fraternities Sororities & Fraternities
Facilities
11 $475/Facility $ 5,200 5,200
Total Revenues $304,400
EXPENDITURES
0.5 FTE Fire Marshal $56,300
1.5 FTE Fire Inspector III 157,300
Ongoing Costs 3,200
Amortized Vehicle Costs 5,200
Indirect Costs 82,400
Total Costs $304,400
Option 1 Pros and Cons
Pros
1. Full cost recovery for the basic rental inspection program that the Fire Department is required
to do by law and is currently doing.
2. Consistent with adopted user fee cost recovery policies (Attachment 4)
3. Reduces fiscal impact to the General Fund.
4. Fair and reasonable costs for services provided.
Cons
1. Does not provide for any inspection of single-family and duplex rental units.
2. Fire Department is struggling to effectively fulfill their mandate with the employees currently
assigned.
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Rental Property Inspection Fee Program Page 7
ATTACHMENT 1
OPTION 2 – Some Expansion of the Current Mandated Fire Department Basic Rental
Property Inspection Program (with full cost recovery):
Currently, the Fire Department is having difficulty meeting the legal mandate to provide
inspections of rental dwelling properties containing three or more rental units. The loss of an
Administrative Assistant position in 2003-05 due to budget reductions, as well as the lack of a
dedicated funding mechanism, has put the sustainability of the program in doubt.
The Fire Department believes it could more effectively and efficiently meet the State mandate by
adding a full-time Administrative Assistant and one additional vehicle for the Inspectors to use
for their inspections. The Fire Marshal would continue to dedicate 50% of his time to supervise
the rental inspection program and conduct inspections along with the existing 1.5 FTE Fire
Inspector IIIs. The Administrative Assistant is needed to handle all the program’s administrative
and public education aspects.
The expanded program would involve the employees currently assigned to conduct rental
inspections of properties containing three or more rental units, plus the added positions described
in the previous paragraph. The total positions and vehicles needed to effectively conduct the
inspection program would be:
Current Resources
1. 0.5 FTE Fire Marshal: Oversees the program and does inspections.
2. 1.5 FTE Fire Inspector III positions: Conduct the inspections.
3. One shared vehicle used to perform inspections.
Added Resources
4. 1.0 FTE Administrative Assistant: Responsible for computerized data entry, tracking,
scheduling, filing, and public education associated with the program.
5. One dedicated vehicle used to perform inspections.
Having dedicated Fire Department staff, funded through program fees, would allow the
inspection program to operate with consistency and efficiency, and would ensure that the City is
in compliance with current State inspection mandates.
Option 2 Fee Revenue and Program Costs
The following table reflects the projected fees, associated revenue, and program costs for one
year. The fees have been increased slightly to pay for the additional staff added under this
expanded program:
OPTION 2 - EXPANDED RENTAL PROPERTY INSPECTION FEE PROGRAM
REVENUES
Apartments Number Fee Total
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Rental Property Inspection Fee Program Page 8
ATTACHMENT 1
Units – Base Rate Per Unit 6,408 $55.43/Unit $355,200
Facilities – Admin. Rate Per Facility 481 $65/Facility $ 31,300 $386,500
Hotels, Motels, Bed & Breakfasts, Youth Hostel
Units Facilities
1-50 19 $200/Facility $ 3,800
50 13 $400/Facility $ 5,200 9,000
Senior Facilities
Units Facilities
1-25 2 $200/Facility $ 400
26-74 2 $300/Facility $ 600
74 2 $500/Facility $ 1,000 2,000
Sororities/Fraternities Sororities & Fraternities
Facilities
11 $475/Facility $ 5,200 5,200
Total Revenues $402,700
EXPENDITURES
0.5 FTE Fire Marshal 56,300
1.5 FTE Fire Inspector III 157,300
1.0 FTE Administrative Assistant 67,600
Ongoing Costs 3,900
Amortized Vehicle Costs 8,700
Indirect Costs 108,900
Total Costs $402,700
Option 2 Pros and Cons
Pros
1. A more effective program and consistency with our user fee cost recovery policies.
2. Fully complies with legal mandates.
3. Results in lower General Fund subsidy of these mandated regulatory activities, thus
mitigating cuts in other areas that have no user fee opportunities.
Cons
1. Does not provide for any inspection of single-family and duplex rental units.
OPTION 3 - Enhanced Rental Inspection Program (with full cost recovery):
In addition to the 500 properties (containing 6,400 dwelling units) that currently fall under the
Fire Department’s basic rental property inspection program, there are approximately 5,100
single-family and duplex dwelling units in the City’s rental housing stock. Neither the basic
option #1) nor the expanded (option #2) fire inspection programs address problems with single
family and duplex rental properties, nor the need to expand the scope of inspections beyond fire
safety issues. A potential solution to these concerns is to enhance and expand the basic program
to include all rental dwelling units and to provide an opportunity for more review of living
conditions and maintenance of zoning compliance. The California Fire Code (Section 103.3.1.1)
allows local governments to authorize the Fire Chief/Fire Prevention Bureau to conduct
inspections of non-mandated rental units. In addition, the Code (Section 103.1.2) also gives the
Fire Department “right of entry” to make inspections and enforce any provisions of the Code.
An enhanced rental inspection program would provide inspection of all residential rental
properties, including duplexes, town-homes and single-family residences (SRF’s) that are not
owner occupied. The goals of the enhanced program would be to:
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Rental Property Inspection Fee Program Page 9
ATTACHMENT 1
1. Ensure compliance with State law for the inspection of rental properties containing three or
more rental units.
2. Ensure the safety and habitability of single-family and duplex rental units by checking for
violations of the Uniform Housing Code, local zoning regulations and State Health and
Safety and Fire codes.
3. Locate illegal rental units, including unpermitted conversions and unregistered rental
properties.
4. Improve the quality of life for renters and nearby homeowners by ensuring a safe and well
maintained rental stock.
Inspections would be slightly different than the State mandated inspections of apartment units
outlined above under the basic and expanded programs. In addition to determining compliance
with the fire safety checklist, the inspectors would also review properties for compliance with the
Uniform Housing Code and local zoning regulations. Basically, City staff would look for
substandard conditions and ensure that minimum habitability standards are satisfied. These
standards dictate that tenants have adequate sanitation, such as hot and cold running water,
proper ventilation, adequate disposal of wastes, protection from the elements and a permanent
source of heat. Additionally, the City would check for construction without a permit, converted
garages or other structures, and compliance with High Occupancy Use Regulations. In the event
the inspectors discover unrelated suspected criminal activity during an inspection, they would
notify the appropriate authorities.
Inspections would be performed annually for properties containing three or more rental units (per
the State mandate) and once every four years for SFR’s and duplexes (25% per year). In
addition, annual inspections would be conducted on properties that had been the subject of
previous or frequent complaints/violations. When complaints are received, inspectors would
conduct an inspection accordingly, regardless of when the property was last inspected.
Routine inspections of SFR’s and duplexes would consist of an exterior inspection during which
inspectors would check for violations of fire, Uniform Housing Code and zoning regulations.
Inspectors would view a property from the public sidewalk or right-of-way in order to determine
if there were any obvious violations. Inspectors would attempt to contact the tenants and if they
are home, explain the purpose of the inspection and ask if there are any problems inside the
rental unit. Inspectors would conduct an interior inspection if requested by the tenants, or if
warranted based on observed violations or prior arrangements. If the tenant is not home, they
will leave a door hanger with a safety checklist and information about reporting suspected
violations. Inspectors would not enter the interior or private yard area of a rental unit without the
existence of one of the following conditions:
1. Permission of the tenant.
2. Prior appointment with the property owner who has appropriately notified the tenant and is
escorting the inspector.
3. Obvious presence of a condition that could immediately jeopardize public health (i.e. live
sewage, gas leak, etc).
4. The inspectors possess an inspection warrant issued by the court. If violations are suspected
and owners/tenants refuse entry, inspectors would seek a court order to enter the premise.
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ATTACHMENT 1
Staff considered programs that required the inspection of a higher percentage of rental units each
year, or that called for the interior inspection of all rental units. Staff was concerned such
programs would be too costly and too invasive.
With the addition of over 1,100 SFR’s and duplexes to be inspected each year, additional
resources will be required for implementation of an enhanced rental inspection program. Two
new housing inspectors in the Fire Department would be needed to conduct the inspections of the
SFR’s and duplexes. Unlike fire inspectors, who are responsible for a wide range of duties,
housing inspectors are primarily responsibility for inspecting rental housing. Housing inspectors
would need to be well-versed in the laws and regulations pertaining specifically to rental
inspections, but not in other areas of the fire code. Due to their limited scope of responsibilities,
housing inspectors would be classified at a lower pay scale than Fire Inspectors.
Due to the number of units, complexity of scheduling access to units and related data base
management issues, the program would also require one additional administrative assistant.
Additionally, there will be issues too complex for the housing inspectors to process and these
issues will be referred to the Code Enforcement office in the Community Development
Department for investigation and follow-up. Examples include unsafe buildings (as defined in
the Uniform Code for the Abatement of Dangerous Buildings), illegally added dwelling units,
garage conversions and use permit violations. Staff believes that the housing inspectors would
likely discover violations during their routine inspections, including unpermitted rentals and
illegal conversions, and that up to 300 cases per year could potentially be referred to code
enforcement. This increased workload would require the addition of another code enforcement
coordinator in the Community Development Department.
Fire inspectors would continue to inspect all rental dwellings containing three or more rental
units including apartment buildings, motels, hotels, bed & breakfasts, hostels, senior facilities,
and sororities and fraternities as they currently do, without any increase in scope beyond fire
safety issues.
Option 3 Fee Revenue and Program Costs
The following table reflects the projected fees, associated revenue and program costs for one
year. The fees have been increased to pay for the additional staff added under this enhanced
program:
OPTION 3 - ENHANCED RENTAL PROPERTY INSPECTION PROGRAM
REVENUES
Apartments Number Fee Total
Units – Base Rate Per Unit 6,408 $55.43/Unit $355,200
Facilities – Admin. Rate Per Facility 481 $65/Facility $ 31,300 $386,500
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Rental Property Inspection Fee Program Page 11
ATTACHMENT 1
Single Family / Duplex
Units – Base Rate Per Unit 5,100 91.05/Unit $464,400 464,400
Hotels, Motels, Bed & Breakfasts, Youth Hostel
Units Facilities
1-50 19 $200/Facility $ 3,800
50 13 $400/Facility $ 5,200 9,000
Senior Facilities
Units Facilities
1-25 2 $200/Facility $ 400
26-74 2 $300/Facility $ 600
74 2 $500/Facility $ 1,000 2,000
Sororities/Fraternities Sororities & Fraternities
Facilities
11 $475/Facility $ 5,225 $5,200
Total Revenues $867,100
EXPENDITURES
0.5 FTE Fire Marshal $56,300
1.5 FTE Fire Inspector III 157,300
2.0 FTE Housing Inspectors @ $81,200 each 162,400
2.0 FTE Administrative Assistant @ $67,600 each 135,200
1.0 FTE Code Enforcement Coordinator 91,400
Ongoing Costs 10,400
Amortized Vehicle and Other Start-Up Costs 19,500
Indirect Costs 234,600
Total $867,100
The impact of these fees would vary according to the type of rental facility and the number of
rental units. For example, the fee per apartment would be about $4.50 per month; and about
7.50 per month for a single family residence.
Staff has provided their most reasonable estimate regarding the resources needed for this
program, along with the estimated fees needed to offset these costs. However, staff does not
have previous experience with an inspection program of this scope. Should Council direct staff
to pursue the enhanced program, we would conduct a much more in-depth analysis of the
resources needed and the associated costs. This could cause an increase or decrease in needed
resources and associated fees.
Option 3 Program Management Issues
There are several issues that would need to be addressed if Council is interested in implementing
an enhanced rental inspection program, including:
1. Identifying all rental units: Staff would need to design a method to accurately identify the
rental units in the City.
2. Collecting the annual fees: Staff would need to develop processes for billing property owners
for the annual rental inspection fees, and for getting people to actually pay their bill.
3. How will we measure success? Staff would need to establish specific benchmarks in order to
determine if the program is achieving its goals.
Option 3 Pros and Cons
Pros
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Rental Property Inspection Fee Program Page 12
ATTACHMENT 1
1. Program ensures compliance with State mandate and addresses problems associated with
single-family and duplex rental units.
2. Consistent with our user fee cost recovery policies.
3. Utilizes a combination of exterior and interior inspections, along with renter education and
self-reporting, in order to minimize intrusion into rental unit.
Cons
1. More expensive than previous options, and fees could be objectionable.
2. Challenges in identifying all rental units and ensuring payment of fees.
3. May not achieve all of the four program goals identified above.
4. Could be perceived as overly aggressive.
5. Even though the costs are offset by fees, adding four positions at this time could be viewed as
inappropriate.
OPTION 4 – Something In-between:
Should Council have a desire to address problems with all rental units, including single-family
and duplex structures, but to a lesser or greater degree than described in the enhanced program
above, staff could craft a program that would call for the inspection of single-family and duplex
rentals less or more often. For example, a program could be created that calls for the random
inspection of only a certain percentage of single-family and duplex rentals each year (i.e. 10%),
but yet requires inspection annually for “problem locations” that have been the site of frequent
complaints or violations. On the other hand, the enhanced inspections could be conducted more
frequently, or the inspection of “three-plus” units could be expanded in scope beyond fire safety
issues.
Because of the myriad of program options, staff did not prepares detailed cost figures for an “in-
between” approach. Should Council direct staff to pursue this approach, staff will return with
additional program information and fiscal analysis.
OPTION 5 – Do Nothing:
Council could choose not pursue any type of rental inspection program other than the one
currently being conducted by the Fire Department as part of their legal mandate. The City is not
currently receiving cost recovery for this service, although it is specifically authorized by law.
Consistent with our adopted cost recovery policy, staff recommends at least moving toward
greater cost recovery in order to relieve the burden of the mandated program from the General
Fund.
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ATTACHMENT 1
Next Steps
Depending on the direction provided by Council, staff will complete any research and work
needed to return to Council with an appropriate program and necessary ordinance and resolution.
Staff will work with stakeholders to seek input and to address any concerns they may have,
including property owners, renters and neighborhood associations.
CONCURRENCES/PUBLIC NOTIFICATION
The City Attorney and Department of Finance & Information Technology concur with the
recommended actions. Notifications of this study session were sent to numerous individuals and
groups, including all of the neighborhood associations, owners of large rental properties,
property management and realtor groups, business organizations, Cal Poly and Cuesta,
community and housing organizations, media outlets, and others. In researching the information
contained in this report pertaining to the problems associated with rental housing, staff spoke
with representatives from RQN, Cal Poly ASI, and Cal Poly and Cuesta.
FISCAL IMPACT
The costs and estimated fees associated with each option are outlined in the report narrative. If
Council directs staff to pursue an option that includes cost recovery, this will shift some of the
current program costs from the General Fund to the fee-based revenue. There will be some fiscal
impact to property owners, who will likely pass the cost of the annual fees on to renters. In most
cases, this fee is about $4.60 per month for the average apartment. The fee-per-renter may be
higher for some properties that require more frequent inspection.
ALTERNATIVES
Staff has presented several different conceptual program options for Council to consider.
Council could modify these options, for example, in terms of the frequency of inspection or the
fees to be charged. In addition, Council could choose to direct staff to take no further action on
this subject.
ATTACHMENTS
1. Text from California Health & Safety Code Sections 17921, 13146 and 13146.2.
2. Information regarding the Azusa program from the City of Azusa website
3. Annual Fire and Safety Inspection List for Rental Dwellings with 3 or more units
4. User Fee Cost Recovery Policy
SS1-30
California Health & Safety Code Sections
17921. (a) Except as provided in subdivision (b), the department
shall propose the adoption, amendment, or repeal of building
standards to the California Building Standards Commission pursuant to
the provisions of Chapter 4 (commencing with Section 18935) of Part
2.5, and the department shall adopt, amend, and repeal other rules
and regulations for the protection of the public health, safety, and
general welfare of the occupant and the public governing the
erection, construction, enlargement, conversion, alteration, repair,
moving, removal, demolition, occupancy, use, height, court, area,
sanitation, ventilation and maintenance of all hotels, motels,
lodging houses, apartment houses, and dwellings, and buildings and
structures accessory thereto. Except as otherwise provided in this
part, the department shall enforce those building standards and those
other rules and regulations. The other rules and regulations
adopted by the department may include a schedule of fees to pay the
cost of enforcement by the department under Sections 17952 and 17965.
b) The State Fire Marshal shall adopt, amend, or repeal and
submit building standards for approval pursuant to the provisions of
Chapter 4 (commencing with Section 18935) of Part 2.5, and the State
Fire Marshal shall adopt, amend, and repeal other rules and
regulations for fire and panic safety in all hotels, motels, lodging
houses, apartment houses and dwellings, buildings, and structures
accessory thereto. These building standards and regulations shall be
enforced pursuant to Sections 13145 and 13146; however, this section
is not intended to require an inspection by a local fire agency of
each single-family dwelling prior to its occupancy.
13146. The responsibility for enforcement of building standards
adopted by the State Fire Marshal and published in the California
Building Standards Code relating to fire and panic safety and other
regulations of the State Fire Marshal shall be as follows:
a) The city, county, or city and county with jurisdiction in the
area affected by the standard or regulation shall delegate the
enforcement of the building standards relating to fire and panic
safety and other regulations of the State Fire Marshal as they relate
to R-3 dwellings, as described in Section 1201 of Part 2 of the
California Building Standards Code, to either of the following:
1) The chief of the fire authority of the city, county, or city
and county, or his or her authorized representative.
2) The chief building official of the city, county, or city and
county, or his or her authorized representative.
b) The chief of any city or county fire department or of any fire
protection district, and their authorized representatives, shall
enforce within its jurisdiction the building standards and other
regulations of the State Fire Marshal, except those described in
subdivision (a) or (d).
c) The State Fire Marshal shall have authority to enforce the
building standards and other regulations of the State Fire Marshal in
areas outside of corporate cities and districts providing fire
protection services.
d) The State Fire Marshal shall have authority to enforce the
building standards and other regulations of the State Fire Marshal in
corporate cities and districts providing fire protection services
upon request of the chief fire official or the governing body.
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Rental Property Inspection Fee Program Page 15
ATTACHMENT 1
e) Any fee charged pursuant to the enforcement authority of this
section shall not exceed the estimated reasonable cost of providing
the service for which the fee is charged, pursuant to Section 66014
of the Government Code.
13146.2. (a) Every city or county fire department or district
providing fire protection services required by Sections 13145 and
13146 to enforce building standards adopted by the State Fire Marshal
and other regulations of the State Fire Marshal shall, annually,
inspect all structures subject to subdivision (b) of Section 17921,
except dwellings, for compliance with building standards and other
regulations of the State Fire Marshal. (
b) A city, county, or district which inspects a structure
pursuant to subdivision (a) may charge and collect a fee for the
inspection from the owner of the structure in an amount, as
determined by the city, county, or district, sufficient to pay its
costs of that inspection.
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Rental Property Inspection Fee Program Page 16
ATTACHMENT 1
ANNUAL FIRE AND LIFE SAFETY INSPECTION LIST
This list applies to:
1. Rental dwelling properties with three or more units
2. Hotels, motels, bed & breakfasts, and youth hostels
3. Senior facilities
4. Sororities and Fraternities
1. Conduct file review prior to inspection.
2. Check address numbering on building exterior.
3. Check clearance around all fire hydrants.
4. Check fire extinguishers including placement, minimum rating and service records.
5. Check fire sprinkler system (if applicable) for routine maintenance and clearance around fire
risers.
6. Check standpipe hose cabinets and standpipe outlets for obstructions and covers.
7. Check fire alarm system (if applicable) for maintenance records, battery dates and fire alarm
control panel status.
8. Check common areas; i.e. hallways, for penetrations in walls, floors or ceilings.
9. Check exit doors, exit signs, and exit pathways for code compliance.
10. Check utilities/laundry rooms and mechanical rooms for general housekeeping issues.
11. Check main electrical panels for clearance and access.
12. Check smoke detectors in any vacant rental units for placement and operation.
13. Check smoke detector and battery testing records for all apartment units.
14. Check Fire Department’s knox box (if applicable) for current keys.
15. Check perimeter for weeds or any other combustibles.
16. Check fire lanes for signage and red curbs.
17. Update records; i.e. emergency contacts.
18. Input data into computerized inspection tracking program and file paper copies.
19. Telephone owner’s representative after completion of inspection to verify records and
emergency contacts.
20. Re-inspect, if applicable, to verify that deficiencies have been corrected.
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Rental Property Inspection Fee Program Page 17
ATTACHMENT 1
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MINUTE S
REGULAR MEETING OF THE CITY COUNCI L
CITY OF SAN LUIS OBISP O
TUESDAY, MARCH 1 2005 - 4 :00 P .M .
COUNCIL CHAMBER, 990 PALM STREE T
SAN LUIS OBISPO, CALIFORNI A
ROLL CALL :
Council Member s
Present :
City Staff :
Council Members Paul Brown, Christine Mulholland, Allen Settle an d
Mayor Dave Romero were present . Vice Mayor John Ewan arrived
prior to the regular session at 7 :00 p.m .
Present:Ken Hampian, City Administrative Officer ; Jonathan Lowell, Cit y
Attorney ; Audrey Hooper, City Clerk ; Wendy George, Assistant Cit y
Administrative Officer; John Mandeville, Community Developmen t
Director; Bill Stotler, Finance Director ; Deborah Linden, Police Chief ;
Wolfgang Knabe, Fire Chief ; Monica Moloney, Human Resources
Director ; Jay Walter, Public Works Director; Doug Davidson ,
Housing Programs Manager; Matt Horn, Associate Engineer ; Mike
Draze, Deputy Director of Community Development ; Barbara Lynch ,
City Engineer
INTRODUCTION ,
Public Works Director Walter introduced the following new employees in the Public Work s
Department : Anthony Whipple, Tree Trimmer 1, and Steve Garland, Parks Maintenanc e
Worker 1 . He also introduced Barbara Lynch, who was promoted to City Engineer .
Council Member Settleleft the meeting at this time.
STUDY SESSIO N
Because Council Member Settle and Vice Mayor Ewan own rental property in the City, they di d
not attend the Study Session .
1 .RENTAL PROPERTY INSPECTION PROGRAM .
Police Chief Linden and Fire Chief Knabe presented the staff report . Staff, includin g
Finance Director Stotler,Neighborhood Services Manaqer Bryn,and Community
Development Director Mandeville,responded to questions throughout the presentation .
Public Comments
Georqe Movlan,San Luis Obispo, explained why he supports a modified Option 5 ("D o
Nothing"); ie., adding a tenant-landlord information program and a cost recovery program .
Steve Delmartini,San Luis Obispo, explained why he concurred with Mr . Moylan an d
suggested if Council proceeds with a program, additional study sessions should be held .
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City Council Meeting Page 2
Tuesday, March 1, 2005, 4 :00 p.m .
Gary Fowler,San Luis Obispo, spoke In opposition to expanding the existing program an d
pointed out that Insurance companies conduct Inspections . He concurred with comment s
made by Mr. Moylan .
Leslie Halls,San Luis Obispo resident and President of SLO Property Owners Association ,
concurred with Mr. Moylan . She stressed that this should be a complaint-driven program .
Jackie Turner .representing San Luis Property Management, stated that the rental market I s
depleted in this area and it Is unrealistic to think owners can collect costs from their tenants .
Wes Burk,San Luis Obispo, concurred with the prior speakers, but said he supported Optio n
1 . He suggested that costs should be recouped from chronic abusers and that the progra m
should be complaint-driven .
Linda Shinn,San Luis Obispo, explained why she thinks Council should act on Option 5 an d
supported a complaint-driven process .
Patrick Dempsey,San Luis Obispo, opposed a change In the existing program .
Grace Dempsey,San Luis Obispo, discussed the reasons why she thinks expanding th e
program will not succeed . She agreed with Mr . Moylan .
Diane Halsted spoke as a Board member of Neighborhoods North of Foothill Association .
She said the Association supports the existing program, while expanding it to include single -
family dwellings and duplex properties . She also said that the Association wants to b e
involved in the development of the program .
Michael Sullivan,San Luis Obispo, spoke In support of Option 1 or Option 5, but expresse d
concern that Option 1 may consist of excessive fees . He suggested that an option should b e
considered that would Include inspections of duplexes but not single-family units .
John Cribb,San Luis Obispo, explained why he supports Option 1 or Option 5, and discusse d
concerns related to Option 3, particularly a cost-benefit analysis .
Thomas Esser,San Luis Obispo student, said that he lives In a unit that is properl y
maintained and expressed concern regarding the financial burden that expanding th e
program would place on students .
Sandra Rowley,representing Residents for Quality Neighborhoods (RON), spoke In support o f
a program recommended by RON . She asked that fire and property inspections be looked a t
as two separate programs . She suggested additional study needs to be done on the options .
Matt Kokkonen explained why he does not think the proposal will serve the public well .
Regina Brown,San Luis Obispo resident and realtor, expressed concern that the propose d
program could Indirectly increase housing costs and said she supports Option 5 .
end of public comments---
Council discussion ensued regarding cost recovery, during which staff responded to
questions raised by members of the public and Council .
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City Council Meeting Page 3
Tuesday, March 1, 2005, 4 :00 p.m .
Council Member Brown supported directing staff to pursue cost recovery for State -
mandated inspections .
Council Member Mulholland supported cost recovery for the State-mandated program ,
asked for more information on how the City could fully comply with the State mandate ,
suggested there could be a fine-based program with higher fines for repeat offenders, an d
asked that Options 1 and 2 be returned to Council with additional information for furthe r
discussion .
Fire Chief Knabediscussed the inability of staff to achieve 100% compliance withou t
additional staff and an additional vehicle .
Mayor Romero supported cost recovery and said he favors Option 2 because it ensures ful l
compliance with the State-mandated inspections .
Discussion followed regarding the feasibility of expanding or implementing a mor e
aggressive program that would address concerns such as those raised by RQN . However ,
the consensus was not to pursue Option 3 .
ACTION : 1 . Options were reviewed and discussed . 2 . Staff was directed to develo p
recommendations for the implementation of either Option 1 or 2 in order to achieve
full cost recovery for State-mandated inspections, including all possible fundin g
alternatives for offsetting these costs. Consensus was 3 :0 :2 (Councilmember Settl e
and Vice Mayor Ewan absent due to conflicts of interest).
Council recessed from 6 :30 until 7 :00 p .m . The meeting reconvened with all member s
present.
PUBLIC COMMENT
Sifu Kelvin Harrison,San Luis Obispo, discussed his ongoing concerns related t o
harrassment .
Gary Fowler,San Luis Obispo, suggested that there are budget cuts that could be made t o
address the City's budget concerns without increasing taxes .
CONSENT AGENDA
Mayor Romero called for public comments on Consent Agenda items at this time.
Joey Racano,Morro Bay, with Orange County Ocean Outfall Group, andRichard Sadowski ,
Morro Bay, former employee of Cayucos Sanitary District, urged Council not to act on item C3 .
Michael Sullivan,San Luis Obispo, raised a number of questions regarding item C3 an d
proposed that this subject should be taken to Council at a study session .
Gary Fowler,San Luis Obispo, asked Council not to approve item C6, pointing out that Cit y
funds should not be comingled with other funds for the Beeson project or the steelhead trou t
sculpture for the Mission Plaza fountain .
John French,representating a Margarita Area property developer, spoke in support of Ite m
C3, and suggested that ordinarily there would be adequate City staff to process applications ,
but because of the large development applications before them at this time, that isn't the case .
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City Council Meeting Page 4
Tuesday, March 1, 2005, 4 :00 p .m .
A brief discussion ensued, during which staff responded to Council's questions .
Council Member Mulholland said her reasons for opposing item C3, Including her belief that
applications should be handled on a first-come/first-serve basis and her belief in slow growth .
ACTION : Moved by Brown/Settle to approve the consent agenda as recommended b y
the City Administrative Officer, with the exception of Item C3 ; motion carried 5 :0 .
Cl .APPROVE MINUTES OF THURSDAY, FEBRUARY 10, 2005, SPECIAL MEETING ,
MONDAY, FEBRUARY 14 . 2005, SPECIAL MEETING, AND TUESDAY, FEBRUARY 15 .
2005, REGULAR MEETING .
ACTION : Moved by Brown/Settle to waive oral reading and approve as presented ;
motion carried 5 :0 .
C2.AUTHORIZATION OF APPLICATION TO THE CALIFORNIA STATE DEPARTMENT O F
HOUSING AND COMMUNITY DEVELOPMENT (HCD) FOR FUNDING UNDER TH E
WORKFORCE HOUSING REWARD (WFH) PROGRAM (PROPOSITION 46).
ACTION : Moved by Brown/Settle to adopt Resolution No. 9654 (2005 Series )
authorizing staff to complete and submit an application to HCD for the WFH
Program and target the WFH funds to two CIP drainage projects (Augusta Stree t
Culvert and the ongoing Drainage Inlet Replacements); motion carried 5 :0 .
C3.USE OF CONSULTANTS TO EXPEDITE PERMIT PROCESSING .
ACTION : Moved by Settle/Ewan to approve an expedited planning applicatio n
review process that authorizes the City Administrative Officer to enter int o
agreements on a case-by-case basis with : 1 . Applicants for augmented Cit y
resources in order to more quickly process planning applications, contingent upon :
the applicant paying for the full cost of the augmented services in addition to al l
other development review fees that would otherwise be required ; and approval of
the agreement form by the City Attorney . 2 . Consultants or limited-term employee s
to provide augmented resources, contingent upon the added cost being fully pai d
by the applicant before the consultant or limited-term employee is authorized t o
begin work ; motion carried 4 :1 (Mulholland opposed).
C4.FINAL MAP APPROVAL FOR TRACT 2502, A 11-LOT RESIDENTIAL SUBDIVISIO N
AT 3301 ROCKVIEW PL. (D .A. FETYKO. INC ., SUBDIVIDER).
ACTION : Moved by Brown/Settleto adopt Resolution No . 9655 (2005 Series )
approving the final map for Tract 2502 and authorizing the Mayor to execute th e
subdivision agreement on behalf of the City; motion carried 5 :0 .
C5.APPROVAL OF GUIDING PRINCIPLES FOR DEVELOPMENT OF A PUBLIC ,
EDUCATIONAL AND GOVERNMENT (PEG) ACCESS CHANNELS OPERATING PLAN .
ACTION : Moved by Brown/Settle to approve guiding principles to allow for th e
development of a PEG Access Operating Plan and the subsequent release of PE G
operating funds from Charter Communications, Including : 1) The designation o f
SLO County Public Access Television, Inc . (Public Access Television) as the sol e
provider of public access programming (P portion) in the City of San Luis Obispo ;
2) The designation of San Luis Coastal Unified School District (SLCUSD) as the sol e
provider of education access programming (E portion) In the City of San Luis
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City Council Meeting Page 5
Tuesday, March 1, 2005, 4 :00 p .m .
Obispo ; 3) The equal distribution of PEG Access Funds between the City of Sa n
Luis Obispo, Public Access Television and SLCUSD to use solely for PEG acces s
equipment and facilities ; motion carried 5 :0.
C6.REQUEST FOR USE OF PUBLIC ART IN-LIEU FUNDS FOR VARIOUS PUBLIC AR T
PROJECTS .
ACTION : Moved by Brown/Settle to 1 . Allocate Public Art In-Lieu funds for th e
following public art projects : (a) As requested by the San Luis Obispo County Art s
Council, up to $10,000 to match the Bill Beeson Memorial Fund to commission a
piece of public art in honor of Mr. Beeson's contributions to public art in ou r
community ; (b) As requested by the Chamber of Commerce and the Receptio n
Committee for Ken Schwartz Appreciation Day, $1,780 to complete the purchase of a
bronze steelhead trout for the Mission Plaza fountain ; (c) $7,000 for maintenance
costs associated with the City's public art piece "Community Bridge," normall y
located on Higuera Street in front of the Court Street Project . 2. Approve Resolutio n
No. 9656 (2005 Series)adding language to the City's Public Art Policies an d
Procedures Manual that permits,with Council approval, public art in-lieu funds to be
used as matching funds for the purchase of public art for the City's public ar t
program; motion carried 5 :0 .
C7.2005 STREET SLURRY SEAL PROJECT, SPECIFICATION NO . 90516 .
ACTION : Moved by Brown/Settle to 1) Approve plans and specifications for 200 5
Street Slurry Seal Project, Specification No . 90516 ; 2) Authorize staff to advertise for
bids ; 3) Authorize the City Administrative Officer to award the contract if the lowes t
responsible bid is within the engineer's estimate of $600,000; motion carried 5 :0.
PUBLIC HEARING S
2.2005 COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM (CDBG), REQUES T
FOR THE CITY'S AFFORDABLE HOUSING FUND (AHF), AND FIRST YEAR REPOR T
ON HOUSING PROGRAMS MANAGER POSITION .
HousingPrograms Manager Davidsoncommenced the staff presentation with a review of
the HRC's and CAO's recommendations for funding.
Community Development Director Mandeville presented an Annual Update highlighting th e
achievements accomplished by the Housing Programs Manager since February 2004 . H e
reviewed some of the changes in the CDBG Program proposed in the 2006 Federal Budget
which would reduce CDBG funding and result in a competitive program .
HRC Chair Janna Nichols discussed the priorities established by the HRC and said that th e
fundamental difference in the HRC's and CAO's recommendations is related to the Railroa d
Warehouse . She discussed the process undertaken by the HRC in coming to it s
conclusions.
Mayor Romero opened the public hearing .
Brad Larose.President of San Luis Obispo Railroad Museum, spoke in support of funding th e
rehabilitation of the Railroad Warehouse, pointing out that the Museum will attract tourist s
and result in a return that Is greater than the CDBG funds expended on it .
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City Council Meeting Page 6
Tuesday, March 1, 2005, 4 :00 p .m .
Jerry Rioux,Executive Director of the Housing Trust Fund, spoke in support of the HRC's
recommendation given the lack of affordable housing In this community and asked that, t o
the greatest extent possible, CDBG funds be used for housing .
Catherine Manning,EOC Homeless Services, asked Council to support the fundin g
recommendations for the Homeless Shelter and Prado Day Center .
Andrew Carter,San Luis Obispo, supported the HRC recommendation, concurring wit h
comments made by HRC Chair Nichols .
Michael Sullivan,San Luis Obispo, also supported the HRC recommendation and suggeste d
that the City needs to be more aggressive In providing subsidies and pursuing inclusionar y
housing .
George Movlan,Housing Authority, clarified housing ownership Issues related to the Nort h
Chorro property and spoke in support of the HRC's recommendation .
Arnold Jonas,San Luis Obispo, member of the Board of Directors of the Railroad Museum ,
discussed the need to nurture the entire community and noted the financial, educational an d
historical benefits that will result from the Railroad Museum project .
Mayor Romero closed the public hearing .
CAO Hampian and Assistant CAO George responded to Council's questions. They note d
that there are no other sources of funding for the Railroad Museum at this time, reviewe d
the processes undertaken at the staff level when the CAO recommendation wa s
established, and noted Council established the Freight Warehouse rehabilitation as one o f
its top goals for 2005-07 .
Council Member Settlesaid he would support the CAO's recommendation because th e
Railroad Museum is the gateway to the community, It Is Important to finish what has bee n
started, and it Is important to retain the historic foundations of the community .
Vice Mayor Ewan explained that he considers the SLO Railroad Museum as an economi c
development which Is Included in the CDBG priorities, and said that there Is a need t o
proceed with the rehabilitation of the warehouse .
Mayor Romero acknowledged the need to support housing, but said that he will support th e
CAO's recommendation on the basis that there Is no other source of funding to assist th e
Railroad Museum, and because It will create tourism and serve as an attraction to the City .
Council Member Mulhollandacknowledged the HRC's recommendation, but explained tha t
she will support the CAO recommendation because the Railroad Museum is addressed by
one of the Council's four CDBG priorities .
HRC ACTION : Approve the 2005 CDBG Program activities and funding a s
recommended ; recommend CDBG funding of $275,000 for the Housing Authorit y
site acquisition (235 North Chorro Street); endorse the Urban County's Draft One -
Year Action Plan, Including HOME, Special Urban Projects and Emergency Shelte r
Grant funding ; forward the Council's actions and funding recommendations to th e
Board of Supervisors; recommend allocation of $356,000 of the City's Affordabl e
Housing Fund (AHF) to the People's Self-Help Housing project on South Higuer a
Street (formerly McBride's Plumbing) and $25,000 of the AHF for site acquisition by
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City Council Meeting Page 7
Tuesday, March 1, 2005, 4 :00 p.m .
the Housing Authority (235 North Chorro Street). No action was taken on the HR C
recommendation .
CAO ACTION : Moved by Ewan/Brown to : 1 . Adopt Resolution No. 9657 (200 5
Series)consistent with the HRC recommendation with the following modifications :
a) Approve the 2005 CDBG Program activities and funding as modified, wit h
adjustments based on a new funding estimate ; b) recommend CDBG funding o f
190,079 for the Housing Authority site acquisition and $125,000 in CDBG fundin g
for the Southern Pacific Railroad Freight Warehouse Rehabilitation ; and c )
recommend funding of $109,921 from the City's AHF for site acquisition by the
Housing Authority (235 North Chorro Street). 2 . Authorize the City Administrativ e
Officer to execute an agreement with the Housing Authority for a grant of $109,92 1
from the City's Affordable Housing Fund . 3 . Accept the annual report of the firs t
year of the Housing Programs Manager position ; motion carried 5 :0 .
3.CONSIDERATION OF A VESTING TENTATIVE PARCEL MAP WITH AN EXCEPTION ;
2915 & 2917 JOHNSON AVENUE (MS 21-05).
Community Development Director Mandeville presented the staff report .
Mayor Romero opened the public hearing . Hearing no comments,Mayor Romeroclose d
the public hearing .
ACTION : Moved by Mulholland/Ewan to adoptResolution No. 9658 (2005 Series )
reaffirming the Council's prior approval (October 15, 2002) of a Mitigated Negativ e
Declaration of environmental impact (ER 13-02) and vesting tentative parcel map ,
based on findings, and subject to conditions and code requirements ; motion carrie d
5:0.
STUDY SESSIO N
4.STORM SEWER MANAGEMENT PLAN .
Public Works Director Waltercommenced the staff presentation, providing an overview o f
the types of storm sewer systems in the City's Storm Water Management Plan, syste m
components, Federal regulations that require a Storm Sewer Management Plan, and th e
history of how storm sewers have been repaired/improved/maintained in the past .
Associate Engineer Horndisplayed photographs depicting and discussed the existin g
storm sewer system, the extent of the problems with the system, and historic flooding an d
failures of the system, as well as alternatives for replacing the existing system o r
maintaining the system .
Public Works Director Walterreviewed staff's preferred alternatives . He and Financ e
Director Statler responded to Council's questions .
Council Member Settle discussed his support of Alternative 3 for system replacement an d
alternative 2 for system maintenance. He stressed that the City needs to convey to th e
Federal government and State agencies that the City can't do what is mandated withou t
federal funding . He also said he supports legislative changes at the State level fo r
Proposition 218 .
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City Council Meeting Page 8
Tuesday, March 1, 2005, 4 :00 p.m .
Mayor Romero expressed concern that this Is only part of the City's storm drain protection
system and that there Is no way to fund the remainder of It . He suggested that there may b e
a need to consider bringing this matter to voters .
Discussion ensued, during which staff responded to questions and Council Members
Brown and Mulholland Indicated that It Is premature to take this to the taxpayers at thi s
time .
Public Comment s
Andrew Carter,San Luis Obispo, suggested that Council needs to make a decision as to wha t
actions are really necessary as opposed to what would be preferred .
end of public comments---
ACTION : 1 . Received the Storm Sewer Management Plan . 2 . By a unanimou s
consensus, directed staff to pursue the most aggressive alternatives if the change s
In Proposition 218 occur while at the same time, dealing with the problem to th e
degree possible by pursuing Alternative 3 for system replacement and Alternative 2
for system maintenance .
COUNCIL LIAISON REPORT S
Council Member Brownreported on his attendance at the last Economic Opportunit y
Commission Board meeting and the Economic Vitality Commission meeting .
Council Member Mulholland and Mayor Romeroreported on their attendance at a draft desig n
charette hosted by RRM Design Group regarding the old Albertson's project area . They note d
that they were participants as Individuals and did not represent the Council .
Mayor Romero reported on his attendance at the Naclmiento Project Commission meeting .
COMMUNICATION S
Council Member Settlediscussed the need to take action opposing the public employe e
pension legislation and reform, and asked Council to direct staff to agendize this matter fo r
further action (see memo on file In the City Clerk's Office). He stated for the record hi s
opposition to this legislation and reform .
A brief discussion ensued during which Council consensus was to direct staff to agendiz e
this matter and return with a draft resolution at the first meeting In April .
Council Member Mulholland referred to her communication asking for a modification to th e
language to the Legislative Action Platform (see memo on file in the City Clerk's Office )
Following a brief discussion, Council directed staff to agendize this matter as a Business Ite m
and to provide Information at that time from the Utilities Director regarding the implications o f
Council Member Mulholland's recommendation .
Mayor Romero referenced a letter from Chamber of Commerce President Bob Wacke r
conveying the Chamber's suggestion that Council consider expanding advisory bod y
members to Include applicants who own a business or property or work in the City .
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City Council Meeting Page 9
Tuesday, March 1, 2005, 4 :00 p.m .
Because of the large number of applications that were received, Council concurred that the y
would not pursue this suggestion .
Council Member Brownasked whether there was Council interest in pursuing a suggestio n
from Mike Spangler related to Downtown parking .
Mayor Romerowas interested in pursuing this matter . However, the rest of the Counci l
Members were not . As a result, no direction was given to staff .
There being no further business to come before the City Council,Mayor Romeroadjourned
the meeting at 10 :10 p.m . to a Closed Session on Tuesday, March 7, 2005 at 9 :00 a .m . in th e
Council Hearing Room, 990 Palm Street, San Luis Obispo .
APPROVED BY COUNCIL : 3/15/2005
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ATTACHMENT 3
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ATTACHMENT 3
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ATTACHMENT 5
Existing Enforcement Programs in the City of San Luis Obispo
1. The Fire Department’s Multi-family Housing Inspection Program (MFHIP)
California Health & Safety Code, Section 13146.2(a) requires city Fire Departments to
annually inspect multi-family rental units. The program provides for inspections of rental
housing properties having three or more units and has a limited focus, which is on fire
safety. Inspections are conducted by Fire Prevention Officers and are generally limited to
the exterior common areas. When illegal conversions or other housing or building code
violations are discovered, they are referred to the Community Development Department
for enforcement.
2. Code Enforcement
The Community Development Department employs two Code Enforcement Officers who
respond to citizen complaints regarding violations of the City’s Municipal Code and State
Housing and Building Codes. These officers also work proactively as time permits.
Statistics for the past complete year show that highest category of violations dealt with
substandard housing violations. A significant number of violations deal with unpermitted
construction and improper occupancies, unpermitted garage or attic conversions and
unpermitted second units.
3. Neighborhood Services (Proactive Code Enforcement)
In 2012, two Neighborhood Services Specialists were added to the Community
Development Department to commence a proactive code enforcement program focused
on property maintenance and other municipal code violations in visible yards in
residential areas.
4. Noise abatement
The Police Department, with the assistance of the Student Neighborhood Assistance
Program (SNAP) staff from Cal Poly, enforces the City’s ordinances related to noise and
unruly gatherings.
5. Business Tax and Business License Ordinances
Currently all rental businesses that operate in the City are required to obtain a business
tax certificate and a business license. The business tax is levied at an annual rate of
0005% of gross receipts while the business license is a flat fee of $46. To date, the City
has issued 2,596 tax certificates to residential rental businesses. The tax certificate is
issued to the rental business entity rather than by individual rental property. This number
does not reflect the actual number of rental units in the City as some businesses have
multiple rental locations.
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ATTACHMENT 5
6. Weekend Residential Parking Control
Parking Services added a part-time Parking Officer to patrol residential neighborhoods on
the weekends from 8:00 am to 5:00 pm as part of the 2011-13 Neighborhood Wellness
Major City Goal. The Officer pro-actively issues parking violations and reports any
neighborhood code violations. The Officer is averaging approximately 68 parking
citations and 20 referrals to the Neighborhood Services office per month. This position is
funded for the 2013-15 Parking Enterprise budget and will continue unless it is not
approved.
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ATTACHMENT 6
List of California cities with Rental Housing Inspection Programs
Jurisdiction Year
Adopted
Percentage of
Rental Units
College/University
Azusa 1989 48% Azusa Pacific University
Berkeley 2003 57% UC Berkeley
Brentwood 2008 24%
Carpinteria 1994 43%
Colton 2012 48%
Concord 2000 39%
Costa Mesa 2013 48%
County of Contra Costa 2005 31%
Hayward 1989 47% CSU East Bay
Highland 1999 36%
Los Angeles 1998 62% USC, UCLA etc.
Ontario 2008 43%
Pasadena 1987 55%
Pittsburg 2006 40%
Rialto 2009 38%
Richmond 2005 50%
Sacramento 2008 51% CSU Sacramento
Sacramento County 2008 42%
San Bernardino 1995 49% CSU San Bernardino
San Pablo 1986 54%
Santa Ana 1992 53%
Santa Cruz 2010 56% UC Santa Cruz
Santa Fe Springs 1995 45%
Stockton 2012 48% University of the Pacific
Rancho Cordova 2007 44%
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From:Charlene Rosales
To:Lease, Joseph
Cc:Johnson, Derek
Subject:Chamber feedback re. Rental Housing Inspection Program
Date:Wednesday, April 23, 2014 4:49:36 PM
Hi Joseph,
I wanted to share with you the Chamber’s position at this time regarding the proposed rental
inspection program as our Board discussed it at their meeting last week. We will be sharing this with
our attendees at tomorrow’s Good Morning SLO program.
Our Board is in agreement that rental property safety and neighborhood wellness are shared values
and also discussed concerns about the ability for the City to implement a new inspection program,
the qualifications of the inspectors, why owner occupied dwellings were not included and if this is
duplicating already existing elements of fire inspections. Discussion at both the committee and
Board level centered around whether the actual number of complaints warranted a new program
when a complaint driven enforcement program already exists), and whether such a program would
improve the housing stock. Several comments were made about educating owners and tenants
rather than creating a new program, as well as that being an opportunity to inform people about
energy efficiency programs and weatherization opportunities.
The Board was in favor of a self-certification process rather than proactive city-conducted
inspections. Ultimately, the Board did not see overwhelming benefit in the way the program is
currently outlined –realizing that this is the outreach stage of formulating a draft of the program -
and look forward to continuing to track the progress of the proposed program as it moves further
along. We look forward to engaging in the process as it develops. I would welcome further
conversations with you on the subject as well.
Thank you again for being a part of this conversation at our committee meeting this month and for
reaching out to us for feedback at this early stage. Community and member participation is crucial
to our Board in making important policy decisions on behalf of our entire membership. Please let
me know if you have any questions or comments regarding this position.
Charlene Rosales
Director of Governmental Affairs
San Luis Obispo Chamber of Commerce
895 Monterey St., San Luis Obispo, CA 93401
p (805) 786-2770 f (805) 543-1255
www.slochamber.org : www.visitslo.com : www.slo-business.com
facebook.com/slochamber : @slochamber
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ATTACHMENT 8
March 11, 2014
San Luis Obispo Association of Realtors Meeting
Madonna Inn
Program: Presentation on the Development of a Rental Housing Inspection Program by the City of SLO
Presentation by: Joseph Lease, Chief Building Official for the City of San Luis Obispo
Meeting Notes/Questions
Q: Will energy efficiency be addressed during rental inspections? Have you considered partnering with
other organizations to certify for energy efficiency?
Q: How frequent will the inspections be and how do you expect that to impact the need for more
employees?
Q: With 12,000 units, how would so many inspections take place?
Clarification was provided that the number of single family residences of the 12,000 or so rentals is
closer to 4,700).
Q: Have there be any notable court cases of citizens challenging city ordinances?
Q: How would complaints in Cal Poly neighborhoods be handled—does Council
want to target specific parts of town for with this program?
Q: Will fees be self-supporting?
Q: What will be done about inspecting rentals that are inhabited by students whose parents or family
own the property?
Q: Is the reactive process working?
Q: Will this process affect the masses too much if we have an effective code enforcement program
already in place? Would the City be overstepping its bounds?
Q: Exemptions: which are debatable? How would HOAs be handled?
Q: Board of Realtors Legislative Committee would like to meet one on one to further discuss the
program.
Q: Why would public housing be exempt?
Q: Where did the twelve cities chosen for research come from?
Q: How many college communities have these programs? Was choosing the cities done at random?
Does Isla Vista have a similar program in place?
Q: How does reactive versus proactive enforcement work? Do houses with multiple violations take
precedence?
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ATTACHMENT 8
Q: Is there potential for litigation if the City “requires” inspections?
Q: Who will do all of these inspections? Would the overhead be enormous?
Q: How could this program separate the good eggs from the bad ones? Why would it be worth having a
rental inspection program when there’s a proactive code enforcement program already in place?
Q: Investors will be pushed out of the city, or not interested in buying here if the City chooses such a
heavy-handed program.
Q: With too many regulations in place, people will be deterred from investing in property here.
Q: How much outreach will be a part of the program?
Q: How many complaints come annually on the approximately 4,700 single family units?
Q: Will background checks be required on all inspectors?
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ATTACHMENT 9
Rental Housing Inspection Program
Notes from SLO Property Managers Association Meeting
May 5, 2014, 1:00- 2:30 pm
Property Management Reps In Attendance
Steve Ingels - Haven Properties
Tim Townley - Comet Realty
Hayley Townley - Comet Realty
Shari Bone - Patterson Realty
Curtis Mortenson – San Luis Property Mgmt
Mike McNamara - McNamara Realty
Kerry Sansone - Sansone Realty
CJ Tatum - Rentslo.com
David Singer - REG Property Mgmt
Larry Smyth - Farrell Smyth
Hal Sweasey - Remax
Graham Updegrove - Sotheby’s
Hal Sweasey questioned if the goal of the Rental Housing Inspection Program was more code
enforcement or to ensure the health and safety of the tenants. He also inquired why there was a shift
from reactive strategies to proactive strategies.
Mike McNamara - Has the City of San Luis Obispo identified the percentage of sub-standard housing?
What are the violation rates for other cities? Did violation rates decrease after their rental housing
program was initiated?
Mr. Smyth liked the idea of a checklist, but how subjective is the determination by the code officer if a
violation does/doesn’t exist?
Are the majority of complaints on the same house/same people?
Tim Townley commented that self-inspection by property managers may involve a cost (their extra
time), which may be passed on to the property owner. He suggested the program should be reactive
and target areas based on appearance. Perhaps to target a specific area instead of a blanket program.
How many additional people would be needed if the inspection program ran on a 3-5 year cycle?
What if a tenant does not respond? What is the procedure?
Self-certification may result in a unaturally high pass rate.
Should there be a checklist with business license?
What is the budget regarding neighborhood wellness?
Program may affect affordable housing.
Everyone agreed that perhaps bringing all the groups together (RQN, alta-vista, property managers,
businesses) for a town hall meeting to discuss the rental housing inspection program.
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ATTACHMENT 10
Notes From RQN Meeting 11/20/2013
Overcrowding units
Living in the garage
5 in contract but 8 living in the property
Documentation
Illegal &substandard living condition in properties
Inspection for protection (the tenants shall know that the inspection are for their benefit)
Incomplete List of rental units
Volunteer for updating the list?
Cooperation with financial department or CDD?
Recommendations:
Cost benefits (Self-Certification-Program?)
Always (first time) interior inspection
Quadrants? Impacted areas first? (Use sufficient data from neighborhood service)
Program / Ordinance should give legitimation to act against the violations (overcrowding)
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ATTACHMENT 11
Notes from Alta Vista and Monterey Heights Neighborhood Meeting
November 5, 2014
Audience Comments:
Program must have interior and exterior inspections to be successful.
Fees should not go into the general fund.
Fees should be low and fines high.
The exception for newly constructed housing is not a good fit here.
General agreement with the suggested exemptions.
Property owners should be able to volunteer for inspections.
There should be responses to the common objections in the staff report.
Include an inspection prior to sale requirement for all residential property.
Audience Questions:
Does it work?
Do the survey cities have colleges?
What is the basis of legal challenges of similar programs?
What is the minimum bedroom size?
What is the minimum square feet by person in bedrooms?
Are garage conversions ever legal?
What is the process for bringing non-permitted construction into
compliance?
Could a request for a high occupancy permit trigger things like fire
sprinklers?
What prompted other cities to pass programs where rental rate is low?
What did we learn in studying the other cities that is applicable to SLO?
Are fees going into the general fund? Did other cities use a special fund?
Have other cities noticed any definite improvements?
Are section 8 housing units inspected?
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ATTACHMENT 12
Notes from Cal Poly ASI Board of Directors Meeting – November 12, 2014
Rental Housing Inspection Program Presentation and Q & A
By Lauren Parker
Problems/questions/concerns that students raised:
There is a severe shortage of rental options and students are worried that
RHIP will only worsen the shortage.
Where is the tenant going to go if there are issues in their place of living
that means that they have to leave?
Often the landlord does not care about substandard conditions and still
make tenant pay full price and the tenant has no other option but to pay
even if there are substandard conditions.
If relocation were necessary due to substandard conditions it would be a
hardship, because students often choose their place of living based on the
situation (no car, walking to work/school, etc).
How are we going to pay for this?
Is there going to be a warning before inspectors come in? Concerns about
privacy.
What if students do not wish to have their place inspected?
Is there some sort of certification stamp that owners can display so the
students know that it is up to standards when they are choosing houses?
Is there a way for getting an inspection just by requesting?
Will issues of having too many people occupying a unit be addressed by
inspectors.
Parking – big issue.
Will families and students be treated the same?
Will this include apartments?
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ATTACHMENT 13
Case Study: Azusa’s Rental Housing Inspection Program
The City of Azusa’s Rental Housing Inspection Program is notable in that it is one of the oldest
programs in the State, having been established in 1989. It is often cited as the model for other
programs in the State. From a statistical standpoint, Azusa is similar to San Luis Obispo in
population (46,361 to 45,525), but shows some variation in the number of housing units (13,386
to 20,553), estimated percentage of rentals (48% to 61.8%) and number of rental units (6,372 to
12,700). Azusa also does not have the impacts associated with hosting a major university and a
sizable student population. Nevertheless, the City of Azusa’s Rental Housing Inspection Program
is probably the most applicable and analogous community and inspection program available to
use in designing a similar program for San Luis Obispo.
The Azusa Rental Housing Inspection Program is based on an ordinance that requires all rental
housing in the City of Azusa to be registered with the City and to be inspected annually to insure
compliance with state and local housing and property maintenance codes. The program consists
primarily of exterior inspections of rental units, however, if the rental unit is in a high crime or
blighted area the inspector will request to inspect the interior of units with a signed consent form.
In addition, if during the course of an inspection a tenant complains of substandard living
conditions within their unit, an interior inspection will be made with written consent from the
tenant. During the course of the inspections the assigned inspector will contact tenants and ask if
there are problems. In large multifamily complexes this is done on a random basis, such that
each tenant is not necessarily contacted.
The scope of the inspections include any and all observable violations such as improper
maintenance and dilapidation of buildings, substandard housing conditions, accumulation of
debris and junk, abandoned vehicles, overgrown or unmaintained vegetation, inadequate
sanitation, and illegal/unpermitted construction. Azusa’s program includes all rental unit types
including single-family, duplexes, triplexes, and multifamily complexes. Once an inspection is
complete the owner is issued a Notice of Violation if deficiencies are found and required to make
corrections in a timely manner, typically 5 days for the more serious violations, and 30 days for
others. When violations are found the owner is charged for all incurred costs resulting from
follow up inspections or further enforcement action necessitated by noncompliance. As a matter
of policy, properties that pass the initial inspection with either no violations or very minor
violations may be exempted from reinspection for 2-3 years.
A key element of Azusa’s program is the ability to withhold the connection of water, electricity
and gas utilities for any dwelling unit that has been vacated by its prior tenants if the unit is not
registered in the Rental Housing Inspection Program (AMC Sec. 14-353).1 Since tenancies
change relatively frequently and landlords prefer not to pay for utilities, this requirement is
effective in maximizing the number of properties that participate in the program.
The City of Azusa’s current staffing is:
1 Supervisor
1 It should be noted that the City of Azusa is the electrical utility provider.
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ATTACHMENT 13
1 Administrative Assistant
2 Code Enforcement Officers (CEO’s)
Formerly, the City had four Code Enforcement Officers for the program. While this program is
often cited as a model, and even though it has been in place for over 20 years, challenges still
exist in inspecting rental units at the frequency prescribed in the program, and at the current
staffing level, they are not able to meet the annual inspection goal.
Their annual rental inspection fees are as follows:
111 per Single-family Dwelling
118 per Duplex
111 per Multi-family Parcel, plus $7 per additional unit
In addition to the fee revenue, they have substantial revenues ranging from $200,000 to $300,000
per year from administrative citations and incurred costs. Fines and costs, when not paid upon
notice to the owner, are collected through a property lien process.
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ATTACHMENT 15
Position Paper: Rental Property Inspection
The Residents for Quality Neighborhoods (RQN) Board is unanimously in favor of the establishment
of a Rental Inspection Program. Lest it appear that this is a program we want solely to impose on
others, fully one-half of RQN Board members own rental property.
a.Our primary concern is the health, welfare and safety of tenants and nearby homeowners.
b.Our secondary concern is the maintenance of the city’s housing stock for future residents.
c.Our long-term concern is the prevention of houses that are uninhabitable, vacant and, thus, an
attractive location for unlawful behavior.
The current system of identifying health, welfare and safety problems in rental properties rests on
receiving complaints from tenants or others knowledgeable about the situation. Regrettably, some
renters may not have the requisite knowledge to be able to identify potentially harmful situations.
Recent focus by Cal Poly on student success and the various factors that contribute to that success
has revealed the reluctance of student renters to address problems with their landlords because of
concerns about being evicted, losing their deposits and/or having their rents increase. Subsequent
conversations with older renters revealed some of the same concerns, especially the concern about
future rent increases. Thus, those most knowledgeable about problems that exist in a rental house
are the most reluctant to complain.
Owning residential rental property is a recognized business as evidenced by the City’s Business
License and Business Tax requirements for rental properties. Per the City’s website, a “business
license” is issued as a regulatory permit and a “business tax certificate” is issued to raise revenue for
general municipal services. Both are required of owners of residential rental property (see
attachment). It is not uncommon for businesses to be inspected; this business should not be
exempt.
It has become apparent that current regulatory measures are insufficient to insure the continued
maintenance of residential rental properties. The obviously unkempt appearance of the exterior of
many rental properties is an indication that the interior may be similarly neglected, thus
endangering the health, welfare and safety of both occupants and nearby residents. Currently there
is no mechanism to insure that houses for rent are safe for occupancy.
There are additional, related, problems to overseeing the City’s rental housing.
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ATTACHMENT 15
a.Much of the rental housing is owned by absentee owners who cannot or do not regularly visit
the property and may never see or learn about problems that exist or overall deterioration that may
have occurred since they purchased the property.
b.It is unclear whether realtors who sell residential property that is to be rented disclose the
City’s business license and business tax requirements and provide applicable forms.
Page 2
c.However, the most significant problem is that City staff does not possess a complete list of
rental houses, where each is located (the address) and the name of the owner. The Business
License applies to all businesses owned by the license holder, including the aggregate of rental
properties; residential rental property owners are not required to list all rental properties covered
by the license. This needs to be corrected, and can be as part of the rental inspection program.
We are not the first city in California to initiate residential rental inspections. Several cities, large
and small, have such ordinances. Sacramento has one as does Santa Ana. Cities with populations
similar to that of San Luis Obispo that have such ordinances are Azusa (pop. 46,000) where
approximately 50% of the housing are rentals, Oakley (pop. 35,000) and Santa Cruz (pop. 62,000).
Although acknowledging the need for a residential rental inspection program, some of our
membership worry that the City is creating another bureaucracy and that funds collected for this
program will be diverted from the General Fund to support other purposes. Requiring that the
program be not only self-supporting but that fees collected for the program be separately
accounted for may allay some of those fears.
In addition to supporting a Residential Rental Inspection Program, we encourage you to insure that
the following be included:
a.Incentives for properties that have no violations or violations that can be, and are, easily
corrected.
b.Disincentives for properties that have multiple violations, violations that are not easily
correctable and violations that, after being identified and discussed, are not corrected.
c.Reinspection fees that rise if multiple reinspections are required.
d.Contract inspectors and/or privately hired, certified inspectors be available as an option to
rental property owners.
e.Inspection of the interior and exterior, with emphasis on the interior.
f.Exemptions for mobile homes and publicly-owned housing, but not for owner-occupied homes
with rooms for rent. Home owners renting rooms have the same obligation to insure the health,
welfare and safety of their tenants and of nearby homeowners.
g.The program be limited to R-1 and R-2 neighborhoods. Unlike R-3 and R-4, dwellings in these
zones are not subject to other inspection programs.
h.A phased program beginning in areas that City staff have identified as having sub-standard
rental housing.
Respectfully submitted,
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ATTACHMENT 15
Sandra Rowley
Chairperson, RQN
Attachment
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ATTACHMENT 17
Page 3
The following is an excerpt from the City’s website.
What is a Business Tax Certificate?
The purpose of the City’s Business Tax ordinance is solely to raise revenue for general municipal
services to residents and businesses, such as police and fire protection and street maintenance. It is
not a “license" or "permit.” The Business Tax Certificate is issued by the City of San Luis Obispo to all
persons conducting business in the City. “Business” means and includes enterprises, leases,
establishments, professions, rentals, services, trades, vocations, and occupations of all types
whether or not the business has a fixed location in the City. (Emphasis added)
What is a Business License?
The purpose of the City's business license regulations is to provide for necessary regulation of
lawful businesses being conducted within the City in the interest of the public health, safety and
welfare of the people of the City. While due diligence will be exercised in reasonably ensuring
compliance with all City policies, regulations and ordinances before issuing a business license, the
primary focus of the City's business license regulations is to provide reasonable assurance that
businesses operating in the City are doing so in compliance with the City's planning and building
policies, regulations, and ordinances; and in compliance with the City's business tax provisions.
Emphasis added)
What is the difference between a license and a tax?
A “business license” is issued as a regulatory permit. A “business tax certificate” is issued to raise
revenue for general municipal services.
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