Loading...
HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 04/21/2009 - FIRST READING OF ORDINANCE NO. 045, 2009, AMENDING ITEM NUMBER: 32 AGENDA ITEM SUMMARY DATE: April 21, 2009 FORT COLLINS CITY COUNCIL STAFF: Felix Lee Mike Gebo SUBJECT First Reading of Ordinance No. 045, 2009, Amending Section 5-261 of the City Code Related to Fees for Rental Housing and Establishing an Incentive Program with Regard to the Payment of Such Fees For Rental Dwelling Units Not Previously Recorded With or Approved by the City. RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. FINANCIAL IMPACT Adoption of the Ordinance will financially impact the City and the owners of unrecorded/ unapproved rental dwelling units. Revenue/Savings Costs After Incentive During Incentive During Incentive Period Period Period City Revenues - One Costs-Covered under current Revenues - Fees for: application fee/unit plus Neighborhood & Building development review, building permit fees if Services, Engineering and building permit, and improvements needed to Current Planning budgets past-due impact fees at comply with Rental current rates Standards Property Savings - From waiver of Costs (per rental dwelling No savings - Costs to Owners all past-due fees unit): one application fee owners include current plus any building permit fees fees noted above ENVIRONMENTAL IMPACT Adoption of the Ordinance is expected to improve indoor air quality,safety and sanitation for rental housing residents. April'21, 2009 -2- Item No. 32 EXECUTIVE SUMMARY Council has identified sanitary and safe housing for all Fort Collins residents as one of its primary concerns. On October 21, 2008, Council adopted the Supplemental Rental Housing provisions related to minimum health and safety standards for rental housing.At that time, Council postponed discussion of City Code Section 5-261 relating to fees and"unrecorded/unapproved"dwelling units — housing units created or converted without required City approvals. Council directed staff to consider options for establishing "incentive periods", -- periods of time wherein rental property owners would be encouraged through financial incentives to identify their unrecorded/unapproved rental units and comply with the City's rental housing minimum health and safety standards. At the February 24,2009 work session,staff presented potential incentive options.Council directed staff to further refine these incentives to engage more people in the community who would be directly affected by unrecorded/unapproved rental housing units(including long term residents and CSU students in addition to the rental housing industry), and to obtain their input on the various incentives. The stakeholder group considered options regarding the length of the application period (12 to 24 months),the amount of the application or filing fee($100 to $600),and whether the application fee should be increased over the application period to provide an incentive for owners to identify unrecorded units as soon as possible. Staff,in collaboration with community stakeholders,offers the following proposed incentive period for Council's consideration: Twenty-five month application period. Property owners would have twenty-five months from the date the ordinance goes into effect to apply for a certificate of occupancy. A one-time fee would be charged for processing the application as follows: $200 during the first thirteen months, increasing to $300 for the next six months, then $400 for the last six months. Owners would also have to pay any fees or taxes that would normally be due upon issuance of a building permit for any work needed to bring their dwelling units into compliance with the Rental Housing Standards. Staff, the rental industry, and the Affordable Housing Board recommend the proposed incentive period (24 months). In addition to the 24 months, staff proposed another thirty days to assure advance outreach and comprehensive notice to all stakeholders. BACKGROUND THE ISSUE An unknown number of rental dwelling units do not have formal approval by the City in the form of a final inspection or a certificate of occupancy. All rental dwelling units in the City are required to comply with the City's Rental Housing Standards. In addition, the City Code was recently amended by the Council to require that the owners of all rental dwelling units in the City obtain a certificate of occupancy before renting, offering to rent, or continuing to rent such units. April 21, 2009 -3- Item No. 32 The current City Code has no specific procedures for dealing with existing,unrecorded/unapproved rental housing. If City staff becomes aware of such a housing unit, the owner is required to bring the unit into compliance with current minimum health and safety standards. In addition,impact fees are collected at the current rates as though such housing units were created at the time they are discovered. (Impact fees are fees imposed to offset the added costs of providing public services and infrastructure associated with creating any housing unit.) For a single-family converted to a 1,500 square foot basement-finish duplex today, the impact fees would be approximately $12,000. According to the 2007 census data, approximately 80% of the two-family dwellings in the City (duplexes) are occupied by renters. This would be approximately 1,400 duplexes. However,staff has no reliable way of determining just how many rental dwelling units actually exist in the City,much less how many of those units may present a health or safety risk to their occupants or may otherwise fail to comply with the City's Rental Housing Standards. This is partly because many of the rental units were constructed before certificates of occupancy were required for single and two-family dwellings (before 1980), partly because many others have come into existence through the unlawful conversion of single-family residences to duplexes and finally some current owners may be unaware that the rental dwelling never complied with City requirements. In order to ensure that rental units in the City comply with the Rental Housing Standards, staff recommends that the City Council approve an incentive program to help identify where those units are located and to determine their suitability for habitation. The purpose of the incentives is to motivate the owners of unrecorded/unapproved dwelling units to obtain a certificate of occupancy. Prior to issuing the certificate of occupancy, staff would work with the property owners to ensure that the units come into compliance with the Rental Housing Standards. Essentially,the incentives consist of lowering the cost of bringing the units into compliance for a given period of time. To accomplish this, the suggested incentive period would afford "amnesty" from past due impact fees and civil infractions for property owners who voluntarily identify their unrecorded/unapproved housing/dwelling units and submit an application for a certificate of occupancy. Owners must still make sure the units meet City Rental Housing Standards and must pay the associated costs if work has to be done to meet these standards. COUNCIL DIRECTION FROM WORK SESSION (See attachment#1) Council expressed general agreement with the importance of an amnesty period to encourage compliance. Council's discussion focused on the proposed length of time allowed for rental property owners to come forward with their unrecorded/unapproved dwelling units. Staff initially recommended a twenty-four-month voluntary application period plus a six-month implementation delay for initial public outreach. Council generally agreed to consider an extended incentive period due, in part, to the current economic conditions. Council directed staff to: • consider incentives to deter property owners from waiting until the twenty-four month deadline to identify their rental units; • continue outreach efforts to neighborhoods and renters; and April 21, 2009 -4- Item No. 32 • verify what enforcement tools are available for unrecorded/non-approved rental housing in the interim. Based upon the Council discussion at the work session and feedback from stakeholders, staff now recommends a twenty-five month program,which includes an additional month at the beginning of the program for outreach. During this extra month,staff will commence an ongoing comprehensive and targeted public outreach campaign to inform all affected parties of the incentive program. (See attachment#2) OUTREACH (See attachment#3) From November 2008 to February 2009, staff conducted outreach with a variety of affected parties to gather input on both the problem and proposed solutions, including: rental property owners and managers, landlords, members of CSU Legal Services, citizens, representatives from the Board of Realtors, the Colorado Apartment Association, and the Fort Collins Housing Authority. Since the February work session,staff and various community representatives(including local rental housing industry representatives, long-term residents, and CSU students)have met for the express purpose of developing the proposed incentive option. Councilmember Troxell recommended consulting with the CSU Everitt School of Real Estate for more data on the number of affected rental housing units. Toward this end, staff contacted Anne Spry,Administrator for the Everitt Real Estate Center. She stated that the Center did not have any data and referred staff to other agencies that may be able to help. None of those leads has yet produced specific data regarding the number of unrecorded/unapproved rental housing units in the community. The housing industry (represented by the Fort Collins Board of Realtors, the Colorado Apartment Association,and the Fort Collins Housing Authority),residents,and students collaborated with City staff to develop proposed incentives to encourage widespread compliance with minimum health and safety standards in rental housing. Although there is a consensus within the housing industry that compliance with rental housing minimum health and safety standards is important, there are concerns over the financial impact of having to make necessary improvements during the current economic downturn. The long-term neighbors generally support Council's direction and feel the incentive period should be no longer than twenty-four months.They also generally concur with the early application strategy through progressive fee increases to deter owners from waiting to the last minute to participate. They support the same application period but prefer intervals with fees increased as follows: $200 during the first thirteen months, increasing to $400 for the next six months, then $600 for the last six months. They felt this was a reasonable compromise in lieu of paying impact fees during the incentive period. Students'concerns are related to a possible increase in rents because of needed improvements. They are also reluctant to complain about health and safety violations for fear of retribution by landlords. April 21, 2009 -5- Item No. 32 PROPOSED INCENTIVE OPTION FOR PROPERTY OWNERS With extensive outreach and stakeholder collaboration,together with Council's direction, staff has developed the proposed incentive option described below to encourage widespread compliance. A variety of options were considered. The majority of stakeholders concur with the proposed course of action presented below: Twenty-five month application period. Property owners would have twenty-five months from the date the ordinance goes into effect to apply for a certificate of occupancy. A one-time fee would be charged for processing the application as follows: $200 during the first thirteen months, increasing to $300 for the next six months, then $400 for the last six months. Owners would also be responsible for paying any fees or taxes that would normally be due upon issuance of a building permit for any work needed to bring their dwelling units into compliance with the Rental Housing Standards. The proposed approach would provide an incentive for property owners to voluntarily disclose unrecorded/unapproved rental housing properties. If property owners voluntarily provide this information within the application period, they will be charged a one-time application fee (in lieu of the regular development review fee) but will not have to pay any impact fees or City building permit fees for work done in the past when the units were created. To qualify for the voluntary application period, the added rental housing unit(s) must have been created or converted by December 31,2008. This date was chosen to be as inclusive as possible to encourage compliance of all existing unrecorded/unapproved rental dwelling, yet sending a clear message that any newly created rental units (as of January 1, 2009) must comply with current City standards and pay all applicable fees and taxes. Staff believes most unrecorded/unapproved dwelling units would have been created years ago when there were fewer regulations and lower impact fees. In addition, property owners of two-family and multi-family dwellings in zone districts that currently do not allow for such dwellings would have to produce "clear and convincing evidence" that,when the dwellings were constructed or converted to such use,the use was allowed by the City. If there is no clear evidence and current zoning does not allow two-family or multi-family dwellings, the dwelling unit will have to revert back to a single-family unit. Applicants will not have twenty-five months to make necessary corrections for compliance. Required corrections for compliance will follow the City's standard building permit process for completing work. Once the application has been submitted and the preliminary inspection completed, the time allowed to make any corrections would be based on the degree of urgency of the health/safety violations, the cost of any needed improvements, and the time needed to comply with any zoning requirements. Staff recommends that any property that undergoes ownership transfer during the incentive period be eligible to participate, provided that the new owner applies within the incentive period. Otherwise,the new property owner would have no incentive to submit an application to comply with the Rental Housing Standards. April 21, 2009 -6- Item No. 32 CONTINUED NON-COMPLIANCE If the owner of an unrecorded/unapproved rental dwelling unit fails to come forward during the incentive period, and the unit later comes to the attention of the City,the owner will be assessed all applicable building permit,development review and impact fees at the rates in effect at the time such unit is discovered unless,prior to June 15,2012,the owner can demonstrate to the Building Official or to the Building Review Board that the dwelling was purchased prior December 31,2008,and that the owner could not reasonably have known of the program. The City will also require that the property owner bring the unit into compliance with the Rental Housing Standards and pay the normal fees for any building permits needed to accomplish that. STAFF RECOMMENDATION Staff, representatives from the housing industry and the Affordable Housing Board recommend: a. A 25-month application period. b. A one-time application/filing fee of$200,which would apply during the first thirteen months;the fee would increase to $300 during for the next six months, and increase to $400 during the last six months of the program. C. Owners would have to pay any fees and/or taxes that would normally be due upon issuance of a building permit for any work needed to bring the dwelling unit(s) into compliance with the Rental Housing Standards. d. Owners will not be assessed any City impact fees if they provide a complete application during this 25-month program. e. Owners will not be subject to civil citations during the incentive period. The recommendation is based on: 1. protecting the public interest regarding residents at risk in existing substandard rental housing; 2. ensuring responsible stewardship of City fees; 3. providing an incentive to foster a longstanding community partnership with owners and the housing industry to encourage widespread compliance during the current economic downturn; and 4. allowing a reasonable period of time to make all rental property o wners aware of the incentive program and the need to identify their unrecorded/unapproved rental properties. TIMELINE The proposed ordinance becomes effective ten days from adoption at Second Reading on May 5, 2009. ATTACHMENTS 1. Work Session Summary, February 26, 2009. 2. Communication plan to all stakeholders. 3. Outreach meeting summaries. 4. Power Point Presentation. Planning Development & Transportation City of �y ighborhood A Building Services ��(�]'��-LL Collins[V I` 1�1, 281 N.College Avenue P.O.Box 580 Fort Collins,CO 80522 970.416.2740 1 970.224.6134(fax) fcgov.com ATTACHMENT # 1 February 25, 2009 TO: Mayor and City Council members THRU: Diane Jones, Deputy City Manager Jeff Scheick Planning, Development & Transportation Director FROM: Felix Lee,Neighborhood & Building Services Director RE: February 24, 2009 Work Session Summary Unrecorded/Non-approved Rental Dwelling Units Staff presented Council a brief overview of the issue of unrecorded/non-approved dwelling units. An unknown number of rental dwelling units exist, never having been inspected or approved for use that may pose a risk to occupants. To encourage widespread compliance of minimum health and safety standards, staff proposes an incentive for rental property owners to come forward and identify their unrecorded/non- approved rental housing. The proposed incentive includes an amnesty period. During this time, rental property owners would be encouraged to identify their unrecorded/non-approved rental housing for inspection of minimum health and safety standards. The primary incentive is that any unpaid impact fees (for infrastructure and public services) and related taxes would be waived. Council expressed general agreement with the importance of an amnesty period to encourage compliance and is supportive of staff s outreach efforts thus far. Councilmember Troxell recommended consulting with the CSU Everitt School of Real Estate for more data on the number of affected rental housing units. Council's discussion focused on the proposed length of time allowed for rental property owners to come forward with their unrecorded/non-approved dwelling units. Staff recommended a twenty-four-month voluntary application period. Some Council members expressed reservations with twenty-four months when combined with the additional proposed six-month implementation delay after adoption. The delay would be for a comprehensive public outreach campaign to inform all interested parties of the incentive. 1 Council generally agreed to consider the twenty-four-month incentive period because of the current economic conditions. However, Council directed staff to: • Consider incentives on the front-end of the incentive period for early applications; • Consider incentives to deter property owners from waiting until the twenty-four-month deadline to identify their rental units; • Continue outreach efforts to neighborhoods and renters; and • Verify what enforcement tools are available for unrecorded/non-approved rental housing in the interim. This item has been scheduled for First Reading on April 21, 2009. City Manager Atteberry will discuss this item further with Council at the Leadership meeting Monday March 2°d and determine how long it will take to do what Council has asked and to draft an ordinance. 2 City of Planning Development & Transportation FortCollins Neighborhood Building Services Fort A 281 N.College Avenue P.O.Box 580 Fort Collins,CO 80522 970.416.27401 970.224.6134(fax) fcgov.com ATTACHMENT # 2 Communication Plan Unrecorded/Unapproved Dwelling Units Compliance Program GOAL The communication plan is designed to inform the Fort Collins community about the unrecorded/unapproved dwelling unit compliance program adopted by City Council. This new compliance program intends to encourage that all dwelling units—created at some time in the past without City inspection or approval—meet minimum safety and habitability standards. This plan is an integral element of the compliance program. It is intended to provide the community information on: 1) the scope of the program; 2) the timeframe of implementation; and, 3) to clarify the incentives and benefits of the program for all stakeholders. TARGET AUDIENCE 1. Property owners Program informational brochures will be mailed to the owners of addresses where: • City's Light and Power records indicate the installation of 2 electric meters. • Larimer County assessor's records indicate the address as a rental property. Through this records search, out-of-town owners will also be notified of the program. 2. Rental property managers Since the vast majority of the unapproved dwelling units are for rent, rental property managers will be informed through: • Staff presentations before industry association meetings. • Landlord training classes offered through City - Neighborhood Services. • Phone contacts. • Brochure mailings based on census information of rental households and Larimer County assessor's records that indicate addresses as a rental property. 3. Tenants • Brochure mailings - City's Light and Power records indicate the installation of 2 electric meters. • Brochure mailings - Larimer County assessor's records indicate the address as a rental property. • On-going contact with Associated Students of Colorado State University (ASCSU). • Brochure distribution at Front Range Community College. • Articles in Coloradoan and Collegian. • Highlight on City website. 1 4. Community at large • Press releases through numerous newspaper articles and information on the City website. • Brochure postings at the Fort Collins Housing Authority. • Brochure postings at the Senior Center. • Brochure distribution through United Way. • Brochure distribution through Neighbor to Neighbor. KEY MESSAGES • Safety of all residents is a top priority for the City, it is important that all unapproved dwelling units be inspected for minimum health and safety standards and approved for habitation. • The City requires that each dwelling unit within a building—containing 2 or more separate dwelling units—obtain a City approval for use through the issuance of a Certificate of Occupancy. • The City is offering a voluntary compliance period for owners to have their unapproved dwellings inspected and approved. During the voluntary compliance period, development impact fees of thousands of dollars will be waived. Normally, impact fees are assessed on all newly created dwelling units, including new single family detached dwellings and constructed apartments associated with a single-family or multi-family building. Example of impact fees waived during the voluntary compliance period.Assume an additional apartment unit or new single family detached home of 1,600 square feet built on a 7,000 square_root lot. hnpact fees typically include but are not limited to: Fire Capital Expansion $201.00 General Government Capital Expansion $254.00 Larimer County Road $273.00 Library Capital Expansion $560.00 Parkland: Community $1,869.00 Parkland: Neighborhood $1,677.00 Police Capital Expansion $139.00 Poudre School District (1-4 Units) $1,800.00 Street Oversizing $2,694.00 Building permit fees on assumed 1,000 sq. ft. basement $350.00 Total $9,817.00 2 BUDGET Communications method phase 1: • Printing of brochures with basic information used in "big-push" bulk mailings ($300.00/1,000 brochures). • Printing of checklist identifying minimum health and safety standards and FAQ's. (In-house). • Printing of brochures with more detailed information, to be sent to responders who request application form and procedures for approving their unapproved dwelling units. ($300.00/1,000 brochures). • Mailings of basic brochures to approximately 13,000 addresses based on census information about rental families. ($5,000.00) Total estimate communication method phase I: $5,600.00 Communications method phase I1: • Channel 14 video $5,000 • Other paid advertising, cost-dependent upon source used. Not included in estimates. Total estimate communication method phase 11: $5,000. Total combined communication methods for 25 month voluntary compliance period: Communications method phase 1: $5,600.00 Communications method phase I1: $5,000.00 Total: $109600.00 Alternative Communication Options (not recommended): • Coloradoan electronic banner— this is not considered a viable or cost effective method. ($789/month) • Comcast/MSN electronic banner—this is not considered a viable or cost effective method and would not be local. • Facebook—This would duplicate the City's webpage and be difficult to get people to. COLLABORATION WITH STAKEHOLDERS Ask them if we can run articles in their newsletters. Ask to give presentations to their memberships. Where would they like to help? Would they be willing to assist with some of the cost'? TIMELINE March - May Finalize communication plan and approve phase 1 and/or phase II budget for printed material, submit content for all online media, schedule presentations, and begin video production. May-August Launch "big-push" mailing (start upon second reading approval 5/19/09). Launch full publicity campaign—air video, run articles, run all online media, hold public meetings, seminars.... September— Continue mailing of brochure to new contacts, continued presentations to stakeholder June 30, 2011 groups and continue periodic running of informational article in the Coloradoan. 3 COMMUNICATION PLAN MILESTONES PHASE ONE `May 20-_Au ust 30, 2009 Method Description Staff/Other Timing Basic Available in print and on-line. Staff is Gebo In progress; brochure developing a basic informational brochure to (reviewed by Sowder & ready to inform all stakeholders about the DiMartino) distribute "Unapproved Dwelling Units" program. after Second Brochure to clarify affect on stakeholders and Reading outline the benefits of the voluntary compliance period to owners. Printed brochures will be in the first "big-push" bulk mailings. Big-push period of public outreach is slated for the first 120 days, to focus on reaching owners, rental managers and tenants. Detailed Available in print and on-line. Stakeholders Gebo— checklist In progress-, brochure will be able to access link on City website or final access printed materials with more detailed Baugh/DiMartino— website brochure information. Additional information to & link to online zoning map ready to include: a checklist of dwelling unit items distribute required to meet minimum health and safety after Second standards, frequently asked questions, Reading webpage addresses for printed application form the Fort Collins' on-line zoning map. Webpage The map will assist owners in determining if complete their unapproved dwelling unit is allowed in prior to zone. Second Reading Online zoning map currently available Print articles Articles to provide the general public with an Gebo, Newcomer, Sawyer- Press release overview of the program, how the program press releases, updates ready for affects them and why they should utilize the Newcomer- Citynews and Second voluntary compliance period. Articles will be Coloradoan Reading available in print and on-line. Sawyer- Neighborhood Newsletter Rest during Gillis- Colorado Apartment compliance Association Newsletter period; cover Jacobs- Board of Realtors most Newsletter population in Emerson- CSU Parent "big push" Newsletter period Sowder— Collegian (working with Jim Beers at CSU) 4 Extended Front Range Community College Sowder— Deliver brochures to Ready and Community Student Life Office. delivered Outreach United Way Sowder— Deliver information immediately and contact info to United following 2nd Way 2-1-1 Director. Reading. Neighbor To Neighbor Sowder— Deliver brochures to Neighbor To Neighbor to distribute to renters. Senior Center Gebo— Deliver brochures to Senior Center for distribution. Fort Collins Housing Authority Gebo— Deliver brochures to Housing Authority for distribution to tenants. PHASE'TWO July2009—June 30, 2011. Streaming Produced by Channel 14. DVDs available for Channel 14—script/taping Video video purchase or could be signed out for loan for Gebo—presentations development meetings and presentations of various script begin stakeholders. 5/19/09— Studio 14 Bulletin Board Screens. Begin to air Available online and through Channel 14. July 2009 Presentations available upon request Other paid Staff to evaluate all available other tools for Sowder advertising getting the word out to all stakeholders 5 t Neighborhood & Building Services City o 281 N College Ave - PO Box 580 ®rt Collins Fort Collins, CO 80522 970.416.2740- main / 970.224.6134 - fax fcgov.corn/nbs ATTACHMENT# 3 Unrecorded/Unapproved Rental Dwelling Units Meeting Summary Thursday March 19, 2009 Participants City staff: Diane Jones Jeff Scheick Felix Lee Mike Gebo Peter Barnes Sheri Langenberger Angelina Sanchez-Sprague Real estate industry reps - Michelle Jacobs, Cline Skutchan, Chris Guillan Rolland Moore neighborhood - Doug Brobst Avery Park neighborhood — Greg McMaster Felix reviewed the issues--the City's desire to have an inventory of unrecorded dwelling units. Council wants the property owners to come forward to make application for a certificate of occupancy. At Council's request implementation would be delayed a shorter period--30 days after the adoption of the ordinance and would offer a graduated incentive application period in which all past-due impact fees would be waived. Four options are under consideration for City Council at their April 21" meeting including either a 12 or 24-month application period and a $200 application fee, a $400 application after six months, or application fees starting at $100 and increasing every six month to a $200, $400 or, a $600 level. All past due impact fees at the current rate would be waived. Michelle Jacobs asked if the above meets City Council's direction. Diane Jones said at the Leadership Team level (which includes the Mayor and Mayor Pro-Tem), they agreed a graduated fee schedule, incentives to come in early, and a reduction in the time the application period would begin (to 30 days from 60 days)were considered reasonable and reflective of the direction given at their March 24 work session. Michelle Jacobs asked when were certificate of occupancy instituted? Felix Lee said in the early 1980s but before that the instrument used was Final Inspection. Doug Brobst said at the end of the last meeting staff noted the application fees are not the $200 previously considered but $442—the development review fees for a minor amendment. He also wanted to know why the graduated application period was waiting until the 181h and 241h month for an increase in fees closest to the actual costs. He wondered why staff was offering an option for reducing the $200 application fee to $100. Felix said the $442 was the development review costs for a minor amendment and was different from the $200 fee previously vetted with the Committee. The variability noted above was to offer City Council 1 a number of options to consider. At this time, staff's recommendation is option 4—twenty-four month period with a graduated application fee increase every six months ending at $600. It provides the incentives City Council requested at their work session. Diane noted the City wants (with an eye to improved health and safety standards for rental units) to get the unrecorded units recognized and to simplify that process as much as it is reasonably possible. In many cases, the property owner may not be aware they were not in compliance with City regulations. Greg McMaster asked what the incentives were for unapproved units where not allowed by zoning. Jeff Scheik said when made aware of the zoning violations the City has the authority to correct—requiring the owner to reconvert to single family residence. Mike Gebo said with the addition of a Housing Inspector in 2007, the City has found a number of zoning violations while conducting inspections of health and safety violation complaints. Greg, a resident of Avery Park neighborhood, said he's spoken to a number of his neighbors. They have concerns about when filing a complaint there could be retaliation—that the process is not conducive to building community. There are also concerns about how some people have elected not to follow all sorts of rules and are being allowed, with incentives, to make it right. Diane said the City is willing to make a sizeable investment to improve the health and safety standards of residents. Clint Skutchan said he has concerns about the reduction in the implementation period to 30 (from 60) days after the ordinance passes. Those concerns stem from not having a well-detailed communications plan in place and the need for some assurance that those affected will be contacted and given time to correct. He doesn't want to see it "chopped up" and the process becoming unfair. He believes a successful program will certify 80-90% of those affected had been reached. Diane Jones said staff appreciates his concerns and will offer a more fully flesh out communications plan with timelines and frequencies noted by the time agenda materials are due to City Council. The plan will offer a reasonable period of time for affected parties to act. She envisions a first phase with tools which may include internet notices, mailers, and other tools allowing a reasonable period to act. A second wave will follow to notify property owners the end of the incentive period is approaching. At the end the graduated fees become punitive so it would encourage people to act early in the process. Jeff Scheick said he'd like to review expectations. He thinks "certification" of the percentage reached cannot be guaranteed. How can we prove that those who did not act did not know of the program? Clint said maybe certification was the wrong word—he wants to insure, however, that a comprehensive program is planned. Diane Jones said if due diligence is followed a good faith effort to give proper notice will have been.given. Doug Brobst said while he's not seen the initial communications plan, he thinks we need to draw a line. How can people not know—be out of touch with what's happening at the City? Diane said our responsibility is to have a solid outline and to offer a reasonable amount of time. She appreciates the partnership with the Fort Collins Board of Realtors and the Colorado Apartment Association and would hope they can help in those notification efforts. Michelle suggested using city events for outreach. She also asked how the communications plan would be reviewed with City Council. Diane said Council's agenda materials would include a fully detailed communications plan. Doug Brobst said he did not agree with starting the application fee at $100. He thinks the starting figure should be closer to the $442 cost an applicant would pay to convert a single-family home to a duplex. He thinks applicants should cover current costs. Jeff asked him for his thoughts on what duration the incentive program should be available. Mr. Brobst said something reasonable. He also thinks penalties should be assessed, if after the program ends, units are not compliant. 2 Greg McMaster said he'd like to see a compromise—less than $442 for an initial incentive period then to the $600 level (which adds a small penalty). He was not sure for what duration. Clint believes incentives are what will make the program successful. He thinks if we are not willing to work with affected property owners that it will drive them further underground. He believes we should cast a wide net to get as many units as possible. Michelle Jacobs noted the primary goal of this effort is for broad compliance and for tenant safety. Doug Brobst thinks the incentive is all past due impact fees at the current rate would be waived. Diane believes the incentives early on will encourage people to come in early. Because the meeting period had come to an end, Jeff Scheik suggested the team meet again in an early April timeframe to allow staff time to finalize the materials needed (due April 8 for the April 21 s1 City Council meeting) At that time we can review a detailed communications plan and any other outstanding issues could be reviewed. Next meeting is Thursday, April 2, 11:30 a.m., 281 N. College, Conference Room A. Lunch will be provided. 3 Neighborhood & Building Services C�� 01 281 N College Ave - PO Box 580 Fort Collins, CO 80522 F6rt Coltillb 970.416.2740- main 970.224.6134 -fax fcgov.corn/nbs Unrecorded/Unapproved Rental Dwelling Units Meeting Summary Thursday, April 2, 2009 Participants City staff: Diane Jones Jeff Scheick Felix Lee- Mike Gebo Peter Barnes Sheri Langenberger Derf Green Angelina Sanchez-Sprague Real estate industry reps - Michelle Jacobs, Clint Skutchen, Chris Guillan Apartment Association rep — Carrie Gillis Rolland Moore neighborhood - Doug Brobst Fort Collins Housing Authority— Mike Salza Felix reviewed the goals for the meeting: identify any outstanding issues, reach consensus on the options being proposed to City Council, and review the Communications Plan—are there any "holes? Doug Brobst said he has remaining concerns about the levels at which the application fees were set on the graduated fee schedule. He'd like to underscore how much revenue would be lost by the City. Diane Jones said the City realizes that they will not be making money with this incentive program. They are trying to set a reasonable price point and are focusing on documenting all undocumented units-- improving health and safety standards for tenants. Peter Barnes noted the cost to the City for this type of minor amendment (duplex conversion) would be less...more like $250. The reason for that reduction in cost is attributable to it being a more routine request (not requiring a Planner's time or review by other departments such as Light & Power and Stormwater.) Doug expressed concerns about property owners who would incur conversion improvement costs (tens of thousands of dollars for adding egress windows, etc). He thinks those costs would keep them from participating. Clint Skutchen said while those costs would be in an impediment, they might be induced to come forward (come into compliance) with the incentives. Diane asked if the group was okay with the graduated application fee schedule of $100, $200, $400 and $600. Clint said he'd prefer seeing a flat fee for 18 months with the fee raised for the last six months. Doug said he'd like the $100 level for a short period of time. Michelle said they'd be okay with starting at $200 as that is what has been vetted previously (and is closer to covering actual costs.) Doug said he's okay with the $200 to start. Diane asked if the group was okay with the tiers. Would they rather see a 6, 8 or 9 month tier? The group agreed to move onto a Communications Plan review where issues such as duration would be considered. Communications Plan I Suggestions given by the team: • Michelle asked if besides the Coloradoan, the City would consider using The Collegian and Fort Collins Now. • Clint'said he'd like to see us use other mediums such as KCOL. • Jeff Scheick suggested targeting ethnic groups. Clint suggested La Tribuna. (Greeley Now Wednesday insert) Contact would be Greeley Now Sales Rep Mary Kay, 970.392.4494. • Chris Guillan suggested using msn, gmail, or Comcast—their ads can be targeted to a specific zip code. • Clint recommended editorials or articles such as those written by Beth Sowder. • Michelle suggested targeting the senior community via the Senior Center. • Clint suggested using new mediums such as Face Book. • Clint suggested in addition to ASCSU, Front Range Community College students be targeted. • Members suggested low income populations be targeted with connections available via the Fort Collins Housing Authority and CARE. Jeff noted the development of the Communications Plan was an effort of both Neighborhood & Building Services and Communications & Public Involvement Office staff. In investigating options, they've determined that a Coloradoan Banner is cost prohibitive and is best used for a site specific special event. They're questioning how effective it would be. Michelle agreed it would be okay to drop it as an option. Doug wondered if the City was planning a mailing using the multiple addresses per property listed at the Larimer County Assessor's office. Mike Gebo said yes. Doug wondered how much compliance responsibility lies with the property management company. Carrie Gillis said professionally accredited members (such as those affiliated with the Fort Collins Colorado Apartment Association), because of ethical standards, do not take clients that do not meet all local regulations. The property management company is not liable. Ultimately the responsibility is that of the property owner. Chris said the same holds for the realtors' community—they will not take on/show units that are not in compliance with local codes. Carrie added the local apartment association chapter has been apprised for the past 8-9 months of the improved health and safety of tenants efforts. Diane said the program is planned for a "broad-line" approach: offer incentives without being punitive, (punitive action will be taken if a unit is not in compliance after the program period elapses), have the best possible communication plan, work in partnership with the Fort Collins Board of Realtors to spread the word, the property owner is ultimately responsible, and the end product are units with Certificates of Occupancy and enhanced health and safety for residents. Michelle said that between the Fort Collins Board of Realtors and the Colorado Apartment Association most of the property managers and property owners will be reached. Clint asked what the brochures would look like. Mike Gebo said he envisioned two brochures: • First brochure would introduce the information and state who would be affected • Second brochure would get more into the how to make application and all the associated issues. It will have a checklist and will offer website links where they can click to get an estimate of costs. At this juncture, the City will cover costs related to the two brochures, mailings, web updates, and video production. Both the Fort Collins Board of Realtors and the Colorado Apartment Association would consider financial support. They would, of course, need to get a proposal and to go before their Board of Directors with that request. They asked for a supply of brochures (especially those that have checklists) to be distributed at their member meetings. Clint asked when brochures are being mailed if they could be a separate cover letter to insure the reader does not just toss the materials. 2 Michelle asked how mailings returned and marked undeliverable would be handled. Staff said they would keep those materials and could work to research a more current address to resend as they do now with returned nuisance violation letters. The group agreed that two options (as shown below) would be presented to City Council. Application Tiers Fort Collins Board of Realtors Doug Brobst Duration Rolland Moore Neighborhood Rep. 0-12 months $200 $200 13-18 months $300 $400 19-24 months $400 $600 Felix thanked the group for their work and promised to reconvene as needed during the implementation phase. 3 City of Planning Development & Transportation ortCollins Neighborhood A Building Services 1` 281 N.College Avenue P.O.Box 580 Fort Collins;CO 80522 970.416.2740 1 970.224.6134(fax) (cgov.com Affordable Housing Board 4/2/09 Recommendation Summary for Incentive Options for Unrecorded/Unapproved Rental Dwellings Mike Gebo, Building Code Services Manager presented the proposed incentive options for the Unrecorded/Unapproved Rental Dwelling Unit item that is going before Council on First Reading 4/21/09. The official minutes will be available for Second Reading 5/19/09. Following is a summary of their recommendation: The board did not have any significant concerns with the proposed incentives. They continue to support residential health/safety initiatives. The board also supported the waiver of impact fees to encourage compliance, and felt collection of past due impact fees would probably have a negative effect on affordable housing. . In addition, they understood that some basement dwellings may be taken out of the rental market because of the cost of needed repairs. 1 Unrecorded / Unapproved Rental Housing April 21 , 2009 Council First Reading Jeff Scheick Planning , Development, & Transportation Director Felix Lee Neighborhood & Building Services Director RECOMMENDATION Staff recommends adoption on First Reading ISSUE An unknown number of rental dwelling units DO NOT have : ✓formal approval by the City ✓final inspection ✓or certificate of occupancy C-tWit,f RENTAL HOUSING STANDARDS ADOPTED 10/2008 Objective : safe/sanitary housing for all tenants . Staff directed to : ➢ Propose options for "one-time incentive period " for rental property owners to comply ➢ Engage affected stakeholders �tf1 FEBRUARY 2009 WORK SESSION DIRECTION ➢ Encourage owners to apply ASAP and not wait to last few weeks ➢ Include advance publicity ,mot,f FEBRUARY WORK SESSION DIRE,Qj,0N ( continued ) ➢ Engage owner- residents , students & renters in addition to other stakeholders ➢ Verify interim enforcement tools ➢ Use CSU Everitt School as info resource ,,�rt�1 AFFECTED STAKEHOLDERS • Fort Collins Board of Realtors • Colorado Apartment Association • Fort Collins Housing Authority • Long -term residents • ASCSU • CSU students • Building Review Board • Affordable Housing Board [tins APPROACH TO RESOLVE GOAL : Ensure rental units are safe & sanitary , & comply with Rental Housing Standards • Offer incentives for owners to identify units ➢ Reasonable application period & fees ➢ Waive impact fees in incentive period • Work with owners to correct any health /safety violations • Conduct comprehensive outreach F�t [tins APPLICATION PERIOD • Twenty-five month application period with a one -time application fee : $ 200 during first 13 months $ 300 during next 6 months $400 during last six months • 1st month concentrated outreach ,mot,f INCENTIVES • If apply within 25 - month period : ➢ Pay one -time application fee ➢ "Amnesty" from impact fees and /or civil infractions • Units comply with City health /safety ,wF``ort [tins ELIGIBILITY FOR INCENTIVES Owner eligible if: ➢ Unit ( s ) created by midnight 12/31 /08 ➢ Owner proves rental use allowed in zone when created /converted ,mot, [tins NON -COMPLIANCE unless appeal granted • After incentive expires , owners pay : ➢ Current impact fees ➢ Current development review fees ➢ Related building permit fees & taxes ➢ Unit ( s ) inspected and required corrections comply with Rental Housing Standards F�t [tins FINANCIAL IMPACT — CITY during incentive period Costs : covered under NBS , Engineering & Current Planning budgets Revenues : application fee + building permit fees from cost of improvements ,mot,f FINANCIAL IMPACT — OWNERS during incentive period Savings : waiver of all impact fees ( $ 100s to $ 1000s , 1970 to 1990 ) Costs : application fee + building permit fee and cost of improvements , if necessary _ �t11 FINANCIAL IMPACT - CITY & OWNERS after incentive period Revenues City : Dev . Rev . & Bldg . permit fees & impact fees at current rates Costs Owners : Current Dev . Rev & Bldg permit & impact fees at current rates and cost of improvements , if required Fit,f ENVIRONMENTAL IMPACT For rental housing residents , proposed ordinance will improve : ❑ Indoor air quality ❑ Safety ❑ Sanitation F�t�ins RECOMMENDATION Best balance of: 1 . Tenant health/safety 2 . Stewardship City fees 3 . Consideration economic downturn fostering community partnership 4 . Effective communication to all stakeholders Fit,fly TIMELINE Ordinance effective ten days from adoption at Second Reading May 5 , 2009 �t11 ORDINANCE NO. 045 , 2009 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING SECTION 5 -261 OF THE CODE OF THE CITY OF FORT COLLINS RELATED TO FEES FOR RENTAL HOUSING AND ESTABLISHING AN INCENTIVE PROGRAM WITH REGARD TO THE PAYMENT OF SUCH FEES FOR RENTAL DWELLING UNITS NOT PREVIOUSLY RECORDED WITH OR APPROVED BY THE CITY WHEREAS , sanitary and safe housing for all Fort Collins residents is one of the City Council ' s highest priorities ; and WHEREAS , to help ensure the provision of such housing, the City Council adopted Ordinance No . 108 , 2008 , on October 21 , 2008 , updating minimum health and safety standards for rental housing (the "Rental Housing Standards") ; and WHEREAS , on that same date, the City Council also adopted Ordinance No . 109, 2008 , which, among other things, added language to Section 5 -260 of the City Code stating that no building containing two or more rental dwelling units in the City can be offered for rent unless a certificate of occupancy has been issued for such building; and WHEREAS , there are numerous unrecorded and/or unapproved rental dwelling units in the City, that is, housing units that were created or converted without required City inspections, permits or certificates ; and WHEREAS, City staff has no way of determining just how many rental dwelling units actually exist in the City, much less how many of those units may present a health or safety risk to their occupants or may otherwise fail to comply with the Rental Housing Standards ; and WHEREAS , to address this problem, the City Council has directed staff to develop financial incentives that would encourage the owners of unrecorded/unapproved rental dwelling units to obtain certificates of occupancy and comply with the Rental Housing Standards ; and WHEREAS , City staff and community stakeholders , have jointly recommended to the Council a twenty-five month incentive program during which the owners of unrecorded/unapproved rental dwelling units could apply for certificates of occupancy for their dwelling units and also apply for such building permits as may be necessary to bring such units into compliance with the Rental Housing Standards, without having to pay the fees and taxes that would normally be payable upon the issuance of building permits for construction or conversion of the rental dwelling units ; and WHEREAS , the application fee for such certificates of occupancy during the incentive period would increase during this period of time, starting at $200, increasing to $300, and ultimately to $400 ; and WHEREAS, the City Council believes that such incentive program would: ( 1 ) help eliminate health and safety risks in existing substandard rental housing; (2) encourage widespread compliance with the Rental Housing Standards ; (3 ) allow a reasonable period of time for all rental property owners to become aware of the incentive program, and (4) be in the best interests of the health, safety and welfare of the residents of the City. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows : Section 1 . That Section 5 -261 of the Code of the City of Fort Collins is hereby amended to read as follows : Sec . 5-261 . PrrnTif-fFees. Whenever a building permit or certificate of occupancy is required under this Chapter or under any other provision of the City Building Codes , all applicable City fees and taxes shall be paid by the property owner. Section 2 . That the following incentive program is hereby approved by the Council : a. Notwithstanding any provision of the City Code or Land Use Code to the contrary, the owner of any dwelling containing two (2) or more dwelling units that was constructed or converted to use as a two-family or multi-family dwelling on or before December 31 , 2008 , and that, according to the records of the Building Official, has not previously received a certificate of occupancy or other written evidence of approval from the City, may be issued a certificate of occupancy for such dwelling and, if such of occupancy is issued, be relieved of the obligation to pay all City fees or taxes that would normally be payable under the City's Building Codes or Land Use Code, as long as the following conditions are met: ( 1 ) If the use of the dwelling as a two-family or multi-family dwelling is not currently allowed under the zoning regulations of the Land Use Code, the owner of the dwelling must produce clear and convincing evidence that the dwelling was first used as a two-family or multi-family dwelling at a point in time when such use was permitted in the zone district in which the dwelling is situated; and (2) The owner' s application for such certificate of occupancy must be filed with the City no later than June 15 , 2011 , and the owner must pay an application fee as specified herein. Prior to June 15 , 2010, said application fee shall be in the amount of Two Hundred Dollars ($200) ; between June 16, 2010, and December 15 , 2010, said fee shall be in the amount of Three Hundred Dollars ($300); and between December 16, 2010 , and June 15 , 2011 , said fee shall be in the amount of Four Hundred Dollars ($400) . b. After June 15 , 2011 , the owner of any such dwelling shall pay all fees and taxes applicable at the time the owner applies for a certificate of occupancy, unless the owner came into -2- ownership of such unit on or before December 31 , 2008 , and demonstrates to the satisfaction of the Building Official or the Building Review Board, prior to June 15 , 2012, that he or she could not reasonably have known about the incentive program established by this Section 2 , in which event the owner' s application for a certificate of occupancy shall be processed as if it had been received prior to June 15 , 2011 . c . Nothing herein shall relieve the owner from obtaining, and paying all associated fees for, such building permits and inspections as may be required to bring a rental dwelling unit into compliance with the requirements of this Chapter. Introduced, considered favorably on first reading, and ordered published this 21 st day of April, A.D . 2009, and to be presented for final passage on the 5th day of May, A.D . 2009 . Mayor ATTEST : City Clerk Passed and adopted on final reading on the 5th day of May, A.D . 2009 . Mayor ATTEST : City Clerk -3 -