Loading...
HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 08/25/2009 - OCCUPANCY ORDINANCE ECONOMIC AND MARKET IMPACT STU DATE: August 25, 2009 STAFF: Beth er WORK SESSION ITEM Corona Researchch Presenters: Kevin Raines FORT COLLINS CITY COUNCIL Joe Fitzler Pre-taped staff presentation: available at fcgov.com/clerk/agendas.php SUBJECT FOR DISCUSSION Occupancy Ordinance "Economic and Market Impact Study." EXECUTIVE SUMMARY In 2005,City Council amended the Occupancy Ordinance,which prohibits more than three unrelated persons from inhabiting a single dwelling unit. Enforcement of the revised ordinance began in 2007. The Corona Research "Economic and Market Impact Study" was a follow-up study conducted to determine the impact of the first two years of enforcement of the revised ordinance. The Study provides the City with a valuable mix of quantitative and qualitative information. It is important to get data and numbers while also attempting to understand how the ordinance impacts people. The study focused on market impacts,how stakeholders have been affected,individual impacts including unanticipated effects,and whether the ordinance is achieving the intended results. In addition,staff will provide some occupancy and nuisance code violation data and an update regarding public outreach. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Staff seeks direction from Council in response to the following questions: 1. Do the Study and additional data provide Council with an adequate base of information for the Occupancy Ordinance policy discussion at the Council work session on October 27, 2009? 2. If not, what other information and data does Council need? 3. Are the following the right policy questions for Council to discuss at its work session on October 27, 2009: a. Is the Occupancy Ordinance working? b. Does Council wish to continue the ordinance? C. If so, are there any changes Council would like to consider to the ordinance? August 25, 2009 Page 2 BACKGROUND In 2005, City Council took an in-depth look at a variety of ordinances and process changes in an effort to improve neighborhood quality of life. The Occupancy Ordinance was one of the items Council discussed and ultimately chose to revise. The primary changes to the ordinance included: 1. Occupancy Limit defined as: a. One family and not more than one additional person; or b. Two adults and their dependants (if any) and not more than one additional person. 2. Decriminalized the ordinance—changed it from a criminal misdemeanor to a civil infraction. 3. Occupancy Limit Disclosure Statement requirement-to be provided by the landlord or seller to the tenants or buyers at time of lease-signing or sale. In early 2005, the City contracted with Corona Research to conduct a market analysis of the Occupancy Ordinance in order to estimate the magnitude of the violator population;understand the characteristics of the violator population; understand what populations would be impacted by enforcement;and estimate the impact of strong enforcement on rental vacancy rates and rental prices in various segments of the market. Corona utilized a public survey, census and other data, and developed a Rental Impact Model. , The 2005 key findings included (see Attachment 1 for a`more detailed description): There are an estimated 1,070 violator households in the community. • Residents who lived near violator households were significantly more likely to have neighborhood problems. • Stronger enforcement of the ordinance was supported by 58% of single-family home or duplex residents. • If all violator households were broken up, then there would be: o Demand for 1,190 new rental units. o Zero vacancy for units under $440, with price increases. 0 Zero vacancy for units from $440 to $830 with no price increases,but lower quality —nicer housing will likely move into the next price category(e.g.,a$350 apartment in a healthy market will be of higher quality than a$350 apartment in a zero-vacancy market). o A decrease in vacancy rates for units from $830 to $1,100, though vacancy rates would remain high. o An increase of vacancy rates for units above $1,100, to over 20%. 0 No appreciable effect on home sale prices. o Probable decrease in neighborhood problems. o Minor increase in property values in neighborhoods that lose violator households. o Minor sales increases for local businesses that sell to households (e.g., cable television). 0 Demand for up to 970 new housing units would be created. August 25, 2009 Page 3 2009 Study The research goal for the 2009 follow-up study was to determine the impact of the first two years of actual enforcement of the revised ordinance. It included market impacts, how stakeholders have been affected, and the impact on individuals including unanticipated outcomes. It also attempted to determine whether the ordinance was achieving the intended results and-whether the stakeholders believe improvements or changes should be made. Corona's methodology included a public survey (same as the previous study) with additional questions to gauge the effect of the ordinance in order to develop estimates of the prevalence of violators, neighborhood impacts, awareness of the ordinance, and the level of support for enforcement. Specialized census data was analyzed as a way to triangulate the estimates of the prevalence of violators. Colorado Division of Housing data comparing the rental markets of various Colorado cities of similar size was analyzed to arrive at an estimate of rental market conditions and determine whether Fort Collins has seen different impacts compared to other communities. Lastly, qualitative interviews were conducted with stakeholders (e.g., tenants with various experiences, landlords of various property types, and long-term neighborhood residents who have or have not filed occupancy complaints) to gain an understanding of their personal experiences, how the ordinance is perceived, and what they believe works well and does not work well. The 2009 key findings include (See Attachment 2 for a more detailed description): • Violator households have decreased by approximately 46% (from 1,070 to 579). • Vacancy rates have dropped but are still in the "healthy" range. • Most of the vacancy rate decrease is due to forces other than the occupancy ordinance. • Rental prices are not rising disproportionately but warrant continued monitoring. • Neighborhood problems have decreased, but it cannot be substantiated whether this is or is not a direct impact (result) of the occupancy ordinance. • There is a strong correlation between the presence of violator households and neighborhood problems; however, this could be neighborhood-specific notproperty-specific. • Of those who reported that a violator neighbor had to move because of the ordinance, 67% reported this had a positive impact on the neighborhood, 11%negative,and 22%no change. This was a small sampling - 9 respondents. • Of those who reported owning rental property, 7% reported that the ordinance has had a positive impact, 12% negative impact, and 81% reported no change. • Level of enforcement perceived by single family/duplex residents is as follows: I August 25, 2009 Page 4 41% - at the right level 27% - would like stronger enforcement • 67% if live near two or more violator households • 49% if live near one violator household • 22% if live near zero violator households *These numbers add to 100%across categories; not within categories. 14% - would like less enforcement • 0% if live near two or more violator households • 7% if live near one violator household • 16% if live near zero violator households *These numbers add to 100%across categories; not within categories. 18% - had no opinion about the level of enforcement • All recognize the intent of the ordinance to improve neighborhood quality; other intents are also inferred by some (anti-student, anti-rental, neighborhood planning). • Landlords recognize that non-student renters are also significantly impacted,particularly two couples living together. • Tenants think it is primarily a"party issue",and long-term residents state that it is more than just parties (numerous cars, coming and going late at night creating noise). • Landlords and tenants question why enforcement of other code provisions (noise, parking, property maintenance) is not sufficient. • With regard to compliance, tenants take their cues from their landlords. The landlords are generally the people with greater societal seniority and the power to evict, so the renters will likely be influenced by them. • All groups expressed concerns with the complaint-based nature of the ordinance, but each group had different perspectives: o Landlords believe the ordinance should be strictly enforced or not at all. o Tenants believe enforcement process is too fast and encourages spying. o Neighbors believe enforcement process is too slow and are worried about retaliation and conflict. o All groups question why the limit is three unrelated people. o All say that the ordinance has encouraged them to try to forge good relationships with their neighbors. Additional Information In addition to the data and information provided by the Study, staff looked at occupancy violation data and compared it to nuisance and noise violations. The occupancy ordinance data shows that the strong majority of occupancy violations were corrected by the tenants and/or property owner once they were notified by the City that a violation existed. (See Attachment 3 for map) August 25, 2009 Page 5 Occupancy Ordinance Violation Data 2007-2008 203 - Total number of occupancy complaints 115 - Total number of occupancy violation notices sent • 95 - came into compliance once notified • 20 - citations issued Staff looked at the number of nuisance and noise violations that occurred at the properties that had been notified of occupancy violations both during the 12 months prior and the 12 months after notification of the occupancy violation. Staff found that the percentage of properties that had multiple nuisance and noise violations decreased 24% after occupancy ordinance enforcement occurred. (See Attachment 4) Other Updates In addition to the Corona Study and the data provided above, staff is also seeking information from the following sources to provide to Council at the October 27, 2009 Work Session: Stakeholder Committee—The Occupancy Ordinance Stakeholder Committee includes stakeholders from three main groups: CSU students and renters, neighborhood representatives, and "industry" representatives (property managers, Board of Realtors, landlords, etc.). This group is providing detailed feedback regarding their perspectives,opinions/perceptions,and impacts resulting from the Occupancy Ordinance. Each stakeholder group has five or six representatives (total of 17). Occupancy Complainant Survey— Staff is conducting an additional survey of occupancy violation complainants in an effort to understand how enforcement has directly impacted them and the degree to which it has been effective. CSU Forum and Round Table Discussion—An open forum at CSU to provide an opportunity for students to discuss the Occupancy Ordinance with City staff was conducted on April 16, 2009 and an additional round table discussion will occur in September 2009. Additional Public Outreach — An open public forum will be available to the community in September 2009. Additionally, a "Your Voice" web feedback will be conducted from the end of August through mid-September to collect feedback from the community regarding the occupancy ordinance. Conclusion The Corona Study provides the City with a valuable mix of quantitative and qualitative information. It is important to obtain data while also attempting to understand how the ordinance impacts people. The Study concluded that since the change in the occupancy ordinance in 2005, there has been a significant decrease in violator households and most of the decline has been due to voluntary compliance. Additionally, improvements in neighborhood, quality and a decrease in violator households have coincided. However, while there seems to be a correlation, a direct cause and effect relationship cannot be proven. August 25, 2009 Page 6 The Study also indicates that factors other than the occupancy ordinance have impacted rental vacancies and prices. All stakeholders have concerns about the complaint-based method of enforcement. While the Corona Study provides useful information and data, the additional information and data provided by staff will help Council to consider and determine whether the ordinance is achieving the intended results. The occupancy violation data indicates that the majority of violator households comply with the ordinance once they are notified by the City about the violation. In addition, data shows that multiple nuisance and noise violations decrease in over-occupied households after occupancy enforcement had occurred. Additional information and data will be provided at the Council work session on October 27,2009. As Council and staff engage in the two-year review to determine the effectiveness of the City's Occupancy Ordinance, Council will need to determine whether or not changes to the revised occupancy ordinance are desired. NEXT STEPS • Additional community outreach activities in August and September 2009 • October 27, 2009 — City Council Work Session — Comprehensive Two-year Review and Policy Discussion of the Occupancy Ordinance ATTACHMENTS v 1. 2005 Corona Research Economic and Market Impact Study Executive Summary 2. 2009 Corona Research Economic and Market Impact Study 3. Occupancy Complaint Cases 2007-2008 Map 4. Nuisance or Noise Violations at Occupancy Violation Properties 2007-2008 Chart 5. PowerPoint presentation r Attachment 1 j S E R ECONOMIC AND MARKET STUDY IMPACT ANALYSIS OF " THREE UNRELATED PERSONS " ORDINANCE ENFORCEMENT IN THE CITY OF FORT COLLINS EXECUTIVE SUMMARY Submitted by: Corona Research, Inc. 1630 Welton Street, Suite 525 Denver, CO 80202 Phone: 303-894-8246 Fax: 303-894- 9651 E-mail: Kcvin@co.tonaresearch.com Web Site: www.coronatesearch.corn Economic and Market Study IMPACT ANALYSIS OF "THREE UNRELATED PERSONS " ORDINANCE ENFORCEMENT IN THE CITY OF FORT COLLINS J w _ U In January of 2005, Corona Research was retained by the City of Fort Collins to examine the impacts of a strong enforcement of the City's "Three Unrelated Persons" ordinance. This ordinance states that no more than three unrelated adults may share one housing unit. The ordinance is currently in place, but has historically been enforced at a very low level, if at all. As a result, a large number of households are currently in violation. This executive summary offers an overview of the key findings and conclusions of the study. The full report provides much more information and detail to support these findings and conclusions. The following language was provided for this report by the City of Fort Collins. The City of Fort Collins Land Use Code stipulates that any dwelling unit, renter- and owner- occupied alike, cannot be occupied by more than one family. There are three distinct types of "families" that are defined in the Code that are legally permitted to live in one dwelling as a single housekeeping unit. These are: ■ Any number of persons related biologically or through marriage, adoption, guardianship, legal custody, etc. ■ Any unrelated group of not more than two adults and their (biological or otherwise related as noted above) children. Any unrelated group of not more than three persons. This means that in most cases, if more than three persons occupy a rental dwelling unit, they MUST ALL be related to each other. Conversely, if they were not all related to each other, then such occupancy would be considered to be a zoning violation. The exception to this rule applies ONLY to owner-occupied dwelling units. City Code allows an owner-occupant who is a member of either of the three types of "legal families" defined above to rent rooms to two additional people, provided the owner obtains a Fort Collins "Home Occupation License" from the City Building & Zoning Department. Such licenses cost $10 and are valid for two years. Additionally, to qualify for the license, one off-street parking space must be provided for each additional person and any bedroom for that use must have an approved emergency escape window. As a nomenclature note, households currently in violation of the ordinance are referred to as "violator households" in this executive summary and in the full report. ECONOMIC AND MARKET STUDY — EXECUTIVE SUMMARY PAGE 1 CORONA RESEARCH , INC . u INI G : _ WHO SEEM= � . As an initial step, the research team developed estimates of the number of households currently in violation of the "Three Unrelated People" ordinance. The research team also documented the relationship between the presence of violating households and other neighborhood nuisances. THE NUMBER OF VIOLATING HOUSEHOLDS There are an estimated 1,070 violator households in Fort Collins. Overall, 5,003 renters will be affected by the enforcement of the ordinance, either by moving or by downsizing their household. As an initial step in examining the impacts of the ordinance, it is first necessary to know the number of households that are currently in violation of the ordinance. The research team used three methods to estimate this figure: an analysis of individual Year 2000 Census records (updated to 2004); an analysis of summary Census data from the Year 2000 (updated to 2004); and analysis of a public telephone survey conducted for this project. The three methods of estimation produced somewhat similar estimates, ranging from 905 households to 1 ,266 households. Because none of the estimates is judged to be a flawless estimator, none takes precedence over the others. As a figure for continuing the impact analysis, the research team chose to average these three estimates, yielding a final estimate of 1 ,070 violator households. At an average of 4.46 people per household, the 1 ,070 violator households contain approximately 4,773 people. Additionally, another estimated 168 owner-occupied units would need to shed a total of 230 renters to satisfy the ordinance. When this figure is added to the figure for renters currently living in rental violator households, the total impact of the ordinance will be changes in households among an estimated 5,003 renters . IMPACTS ON NEIGHBORHOODS Residents living in close proximity to violator households are significantly more likely to identify problems with their neighbors in numerous areas, such as disruptive parties, noise, parking issues and other neighbor-to-neighbor problems. Residents living in close proximity to violator households are also more likely to have negative perceptions of their neighborhood on specific issues. During the public survey, households were asked whether any of the four houses nearest to their own home contain more than three unrelated people. They were also asked independently whether any of the four nearby houses experience other types of neighborhood problems. While the findings do not necessarily prove causation or link negative behaviors directly to violator households, there is a strong correlation between residents' proximity to violator households and their reporting of problems such as disruptive parties, loud noise, inappropriate parking of vehicles, unkempt lawns, trash or junk in yards, poorly maintained houses, and criminal activity. Actual figures from the survey are reported in the full report. ECONOMIC AND MARKET STUDY - EXECUTIVE SUMMARY PAGE 2 CORONA RESEARCH , INC . SUPPORT FOR ORDINANCE ENFORCEMENT A majority of public survey respondents would support stronger enforcement of the ordinance . More than half of respondents (56 percent) would support stronger enforcement of an existing city ordinance that limits the number of unrelated adults who can share a house to three people. The figure rises to 69 percent among households that have two or more violator households among the four houses nearest to them. It should be noted that this is an un-weighted survey of residents and does not differentiate between registered voters and non-voters. The following are selected key attributes of the violator population, both in terms of households and the people who live in those households . Additional information is provided in the full report. 1. Approximately two-thirds of violator households occupy single-family homes. One striking difference between violator households and other rental households is their choice of housing units. Single-family homes are the housing of choice for two-thirds of violator households, compared to only 22 percent of non-violator households. 2. Most violator households (64 percent) are only slightly over the three-person ordinance limit, with four people sharing a housing unit. Only nine percent of violator households have six or more people, and another 27 percent have five people. 3. The majority of violators (86 percent) live in thrcc-bedroom units or larger. Violator households make up 29 percent of the market for four-bedroom units, and 51 percent of the market for five-bedroom units. They make up 4 percent of the market for three-bedroom units, and less than one percent of the market for smaller units. 4. The average household incomes of violator household are generally higher than those of other renters, despite the fact that individual tenants' incomes are lower and individual tenants in violator households are more likely to be below the poverty line. Violator households tend to have higher incomes than other rental households, in large part because they have more people generating income. A total of 62 percent have household incomes above $34,000, in comparison to only 40 percent of other rental households. However, taken individually, 52 percent of the people living in these households would be below the poverty line. 5. Household rent levels tend to be high among violator households. When examining rent levels , violator households tend to pay higher rent levels. Nearly half (49 percent) of violator households pay rents of $1 ,102 per month or more, compared to only 10 percent of non-violator rental households. ECONOMIC AND MARKET STUDY — EXECUTIVE SUMMARY PAGE 3 CORONA RESEARCH , INC . Interestingly, a significant subset of violator households pay low rent levels as well. Violator households are more likely than other households to pay rents of less than $550, and also far more likely to pay rents of more than $1 ,102. 6. The rent per person in violator households is nearly 50 percent less than that paid by other renters, on a per-adult basis . While violator households may pay more total rent, they have more adults who are contributing to that rental payment. While nearly half of other renters have payment obligations of $400 per month or more (in the Year 2000), nearly half of violator households paid less than $200 per month. On the whole, the median rent obligation of a tenant in a violator household is almost exactly half that of a person living in a non-violator household. 7. Overall, 71 percent of violator household tenants are college students. Among tenants in violator households, 63 percent are undergraduate students, 8 percent are graduate students, and 29 percent are non-students. 8. Seventy percent of the tenants in violator households are males and 82 percent of the tenants are under the age of 25. Regardless of their student status, tenants in violator households are young. Only five percent of these tenants are over the age of 27, and 82 percent are between the ages of 19 and 24, inclusive. Tenants in violating households are also disproportionately male, with more than twice as many males as females in this population. This skewing is not true for other renters, who are evenly divided between males and females. Corona developed an extensive impact analysis to identify the impacts of ordinance enforcement, including impacts on rental vacancy rates, rental prices, and home values . The analysis was conducted via seven distinct steps. 1 . Corona developed a profile of the rental market, as it existed during the 2000 Census . 2. Corona developed an updated estimate of the rental market, as it exists today, using a variety of sources and techniques . 3. Corona used the profiles of violator households to identify the market presence of violator households within the rental market. 4. Corona developed estimates for how violator households will reform if broken up by the ordinance, and what the housing preferences will be for the newly formed (and smaller) households that will result. 5. Carona altered the existing profile of the rental market to reflect the loss of violator households and the addition of newly formed non-violator households. 6. Corona assessed the rental market's reaction to these shifts in demand. 7. Corona examined the impacts of these shifts on rental vacancy rates, pricing, and property values . ECONOMIC AND MARKET STUDY — EXECUTIVE SUMMARY PAGE 4 CORONA RESEARCH , INC . A SUMMARY OF RENTAL MARKET IMPACTS After taking into account the number of violator households, their demographics, the supply of rental housing, and the rental preferences of households at various income levels, the research team determined that a strong enforcement of the "three unrelated people" ordinance will have the following impact on the rental market. ■ A total of 13070 rental units are in violation of the ordinance and would be forced to downsize or dissolve. ■ These households contain a total of 4,773 renters. In addition, another 230 tenants would be forced to vacate owner-occupied housing so that those homes would satisfy the ordinance. A total of 5,003 renters would need to change their living arrangements. ■ These 5,003 renters would reform into 1 , 2, or 3-person households. The research team estimates that the ratio will be as follows: ■ 260 of these people will form new one-person households, for a total of 260 new one-person households. ■ 2518 of these people will form new two-person households, for a total of 1 ,259 new two-person households ■ 2,225 of these people will form new three-person households, for a total of 742 new households . In essence, 1 ,070 large households will disappear from the Fort Collins housing market, and 2,261 new smaller households will appear, for a net gain of 1 , 191 households (with no change in total population) . ■ When examined by income, strong ordinance enforcement will result in the net loss of nearly 250 households with incomes over approximately $60,000 per year, and the net creation of approximately 190 new households with incomes from $30,000 to $60,000 per year. The number of households with incomes below $30,000 will increase by over 1 ,250. As a means of comparison, the total city's number of households with incomes below approximately $22,000 per year will increase by approximately 10 percent. The city's total number of households with incomes between $22,00 and $33,000 will increase by approximately 5 percent. The change in the number of households with incomes over $33,000 will decrease by approximately 1 percent. However, the change on the rental market will be much larger. ■ When translated to rental demand, these changes in households will produce a significant increase in demand for units in the $ 550 to $775 price range, and a decrease in demand among units priced above $ 1 ,100. ECONOMIC AND MARKET STUDY — EXECUTIVE SUMMARY PAGE 5 CORONA RESEARCH , INC . Exhibit ES-1 Change in Rental Demand by Price Level Rental Unit Lost Rental Unit Demand of New Demand of Violator Net Change in Rental Price Households Households Demand Under $222 68 0 fib $222 to $332 103 101 2 $333 to $387 115 54 81 $388 to $442 130 136 -6 $443 to $498 117 0 117 $499 to $553 120 16 104 $554 to $609 252 31 221 $610 to $664 187 0 187 $665to $720 270 19 251 $721to $775 202 35 167 $776 to $831 165 23 142 $832 to $886 103 74 29 $887 to $997 135 25 110 $998 to $ 1 ,108 105 35 70 $1 ,109 to $1 , 385 124 299 -175 $1 ,386 to $1 ,662 19 140 -121 $13663 to $2,217 36 82 -46 $2,218 and Up 10 0 10 2 ,261 11070 1 ,191 When these changes in rental demand are entered into the current Fort Collins rental market, the impacts will be quite significant. The overall rental vacancy rate will drop by five percentage points, and the initial impact will produce negative vacancy rates in several market segments, which of course are not possible. The various market scenarios to deal with this situation are discussed later in the analysis of affected parties. Exhibit ES-2 Impact of Ordinance on Rental Market Baseline Scenario Scenario with Ordinance 2004 Baseline Change In Chango in 2004 Occupied 2004 Renter- 2004 Occupied Demand Demand Unitswith Preferred Vacancy Rental Rate Vacancy Rates Supply Units (Units) (Percent) Ordinance Rate with Ordinance Under $222 11 .0% 636 566 68 12% 634 0.3% $222 to $332 10.2% 794 713 2 0% 715 9.9% $333to $387 6.9% 1 ,061 988 61 6% 1 ,049 1 .1 % $388 to $442 6.4% 814 762 -6 -1 % 756 7.1 % $443 to $498 9.6% 959 867 117 13% 984 -2.6% $499to $553 4.3% 1 ,270 11216 104 9% 1 ,320 -3.9% $554 to $609 4.5% 1 ,840 11756 221 13% 19977 -7.4% $610 to $664 9.2% 1 ,943 11764 187 11 % 1 ,951 -0.4% $6651o $720 10.3% 29499 21242 251 11 % 2,493 0.2% $721 to $775 4.8% 21630 21504 167 7% 2,671 -1 .6% $776 to $831 53% 1 ,452 11375 142 1 %% 1 ,517 rt.5°/u $832 to $886 12.0% 11244 11095 29 3% 19124 9.6% $887 to $997 17.3% 1 ,613 11333 110 8% 1 ,443 10.5% $998 to $1 , 108 13.4% 1 ,456 1 ,261 70 6% 1 ,331 8.6% $1 ,109 to $1 ,385 11 .7% 11966 1 ,735 -175 -10% 1 ,560 20.7% $1 ,386 to $1 ,662 7.0% 377 351 -121 -34% 230 39.0% $1 ,663 to $2,217 7.6% _ _ _ 401 370 -36 -10% 334 16.7% $2,218 and Up 0.0% 66 66 0 0% 66 0.0% Total Rental Market 8.9% 23,02 20, 5.7 0 22,155 3.8% ECONOMIC AND MARKET STUDY - EXECUTIVE SUMMARY PAGE 6 CORONA RESEARCH , INC . IMPACTS ON AFFECTED POPULATIONS The impacts of this market shift will now be discussed for each of nine affected parties. KEY MARKET 1 : RENTERS AND LANDLORDS IN THE LOW-RANGE MARKET (UNDER $440) Default Market Side: 3,300 housing units, 3, 150 rental households (befolv market shifting) Landlords in the low-rent market will gain immensely in the short-term from ordinance enforcement. On the other hand, renters in this price range will suffer from extreme competition for housing and higher prices even to stay in their current units. These units typically have a high vacancy rate as they are generally less desirable units, and most rental households can afford to pay a higher price for a nicer or larger unit. In a post-ordinance environment, three strong factors will change this market: • First, the large increase in demand will create a net increase in demand at this price level, reducing natural vacancy rates for the group from over 8 percent to the 4 to 5 percent range even before a secondary market reaction (below) . ■ Second, the price levels above this market range will face huge supply shortages. As a result, the best units in this price range will be able to increase into the price range above $440, with a subsequent shift upward in price through the entire supply of low-market rentals. The research team predicts that approximately 15 percent of this low-cost housing supply will move up to the medium-range market and the supply will be lost to low-range renters, and pricing levels for these units will increase by a *ninirnum of 5 to 20 percent. ■ Third, the pricing movement of housing supply out of this market will cause even greater shortages at the lowest end of the low-range market. This change in supply will essentially lower the vacancy rate to zero, with more demand than supply. It is likely that approximately 150 to 250 households at this extreme low end of the market will be unable to compete for housing, requiring either public assistance or creating a market for "non-standard" housing or illegal overcrowding. Another option, albeit unlikely for this income group, is that the lowest-income households will simply leave the city. In the long run, increased construction in the mid-range market will almost certainly push back the units that priced themselves out of this market. However, with the increased demand and the likelihood that few new units will be built in this price range, the long-term return of these units will merely return vacancy rates to a healthy level in the 4 to 5 percent range. This segment will most likely not be directly served by new market-level construction, but will benefit only indirectly by increases in supply in the mid-market range. KEY MARKET 2: RENTERS AND LANDLORDS IN THE MID-RANGE IVL3RKET ($440 TO $830) Default Market Site: 12, 600 housing units, 12,900 rental households (before market skiing) ECONOMIC AND MARKET STUDY — EXECUTIVE SUMMARY PAGE 7 CORONA RESEARCH , INC . Landlords in the mid-range rental market will gain somewhat in the short-term from ordinance enforcement, though to a lesser extent than landlords of low-rent properties. Once again, the situation will be detrimental to renters, due to extreme competition for housing. However, pricing for these units may not increase dramatically due to downward price pressure from upper-end rentals. In this price range, pre-ordinance vacancy levels were somewhat high in some price segments and were moderately healthy in others. However, the addition of over 1 ,100 new households into this market range alone will completely swamp the housing supply, with demand for units outstripping supply throughout the range. Aside from competing fiercely to find units, renters in this price range will have four options: ■ Pay more money to rent larger units, an option that is only available to those at the top end of this price range. This will happen to some extent, since the vacancy rate for units in the $830 to $1 ,100 range will be higher than a healthy rate. However, vacancy rates at those levels are not high enough to provoke a full-scale downsizing, so price cutting of upper-middle units into the mid-range market will be limited. Similarly, relatively few renters will venture out of the competitive mid-range market into the somewhat stagnant upper-middle market. ■ Another option is to move down and rent cheaper units that are less desirable, and which typically have high vacancy rates for that reason. However, the competition for those units will be even more fierce, and a significant part of that supply will have already risen to mid- range prices. As a result, this will not happen. ■ Move out of the area, either permanently or on a commuting basis. This may actually be an attractive option for some of these households, particularly if there is an oversupply of mid- range rentals in other nearby communities. Depending on other factors such as the availability of rental housing in the unincorporated county and/or nearby communities, one to two percent of the market could relocate out of the city, equating to 100 to 300 mid-range renters. We caution that this is merely a rough estimate. ■ One- and two-person households can double up and obtain roommates, while staying under the limit set by the ordinance. This is a probable scenario as well, and has the potential to create overcrowding to some extent in one- and two-bedroom rental units where two or three renters share a unit. On the positive side, price pressure from upper mid-range units may dampen the price increases that will be prevalent in the low-range market. Units in the $800 range cannot significantly increase prices without running into competition from the upper mid-range market, which will still have a relatively high vacancy rate. Therefore, landlords will benefit from extremely low vacancy rates (on the order of 0 to 1 percent), but will not be able to use that to price units up significantly. Even so, some price increases are likely, perhaps in the five to ten percent range, as the entire market shifts upward in response to competition. In the long term, the housing construction market will almost certainly correct for this intense shortage of housing by increasing new construction. In the short term, some additional low-end owner-occupied units could be converted to rentals as well. ECONOMIC AND MARKET STUDY — EXECUTIVE SUMMARY PAGE 8 CORONA RESEARCH , INC . KEY IvLMUCET 3: RENTERS AND LANDLORDS IN THE UPPER MIDDLE A,IARKET ($830 TO $1 ,100) Default Market Side: 4,300 housing units, 3,900 rental households (before market shifting) Landlords and tenants in this price range will exist somewhat on the tipping point of the market, between the high vacancies and lost demand at the upper end of the market and the saturated market and increased demand in the mid-range market. As a result, the impact on this market segment will be relatively small. Vacancy rates at this price range are currently high, estimated in the 14 to 15 percent range. With the breakup of larger households formerly renting upper-end housing, this market segment will benefit as some of those households downsize and move down into the upper middle market. Even so, most of the demand will bypass them and move further down the price scale, so rental rates will remain somewhat high, in the 8 to 10 percent range. This market will be impacted by two key factors that cannot be predicted with great confidence: 1 . Landlords' willingness to discount pricing at the lower end of the scale will be an important factor. A move down into the $800 price range will produce large demand and low vacancies. However, history shows that landlords in this price range are hesitant to discount prices, while renters in the $800 range are hesitant to move up. The research team predicts some crossover, but history indicates that landlords in this price range are willing to tolerate vacancies in the ten percent range in exchange for keeping their rental rates high. 2. A threat to this market exists from above. Upper-end rentals will be facing extraordinarily high vacancy rates, and landlords will be facing decisions about whether to sell their units, wait until demand increases again, or lower their prices. If they lower their prices, they then transfer that market stress to the upper middle market. However, the upper middle market is approximately 50 percent larger than the upper end market (4,300 units versus 2,800 units), and the upper end landlords may have little interest in dropping their prices to compete in a market that already has high vacancy rates. 3. A third potential factor is that the research team assumed that roughly 5 percent of the tenants in the dissolved households will reform as one-person households, 50 percent as two-person households, and 45 percent as three-person households, based on existing patterns among other renters (with adjustments to denote this population's propensity for having roommates). It is possible that some of those one- and two-person households will merge to escape the competition at the mid-market and low -rent levels, and will, in combination, have enough household income to afford upper middle range housing. This would be a positive in many respects, as it would ease the demand pressures at the lower and middle price levels. However, it may lead to overcrowding to some degree as three renters move into two-bedroom units. Overall, this market will probably not be impacted significantly by the ordinance. Demand will increase, which will aid landlords, but vacancy rates will remain high enough that renters who can afford this price range will have an ample opportunity to rent at stable prices. ECONOMIC AND MARKET STUDY — EXECUTIVE SUMMARY PAGE 9 CORONA RESEARCH , INC . KEY ? 1YL- F.T 4: RENTERS AND LANDLORDS IN THE UPPER-END MARKET ($1,100 AND UP) Default Market Shve. 2,800 housing units, 2,200 rental households (before market shifting) This market will essentially see exactly the opposite effect of the low-end market The breakup of violator households will disproportionately impact the upper end rental market, and most of the reformed smaller households will not be able to afford these larger, more expensive properties. Enforcement of the ordinance would be expected to more than double vacancy rates in this market segment, from a current level in the 10 percent range to an expected 22 percent level. Housing in the $1 ,400 to $1 ,700 range would be particularly hard-hit, with vacancies approaching 40 percent Landlords in this market segment will have three primary choices: 1 . They can hold on to their properties and attempt to "wait out" the housing glut created by the ordinance enforcement, In order to consider this option, it is important to estimate how long it will take for the vacancy rate in that sector to fall back to a reasonable level. For this analysis, a reasonable level is assumed to be 10 percent, Assuming constant growth in the city that is proportionate by owner/renter households and price demand, and assuming that the number of rental units in the higher end of the market remains the same (i.e., no new construction or conversion takes place), it will take approximately 7.4 years to reach a 10 percent vacancy rate. 2. They can lower their rental price. This may not be an option to some landlords who have to cover mortgage costs. However, for others who have held their properties for some time, it may be feasible. In considering the mechanics of price dynamics at this end of the market, one can consider the various property levels and their "natural" vacancy rate if the ordinance is passed. For landlords at the low end of the upper end market, there is significant potential for lowering their rental prices, because that would move them into the $998 to $1,108 category, which has an acceptable (if slightly high) vacancy rate. Since their unit was previously priced higher, it is presumably a larger or higher quality unit and could compete well in that range. On median, though, this would represent a 16 percent price discount. At higher rent levels, the same mechanism holds true: a discounted unit of higher quality should be more desirable than a non-discounted unit of lower quality. However, the dynamics are made difficult by the high vacancy rates at higher levels. For example, discounting a $1 ,900 per month rental down to $1 ,525 will certainly make it desirable, but at the same time it is difficult even to lease desirable units in an atmosphere with a 39 percent vacancy rate. In summary, lowering prices is an option, particularly to landlords on the lower end of the market, but it may not be feasible from a business perspective. 3. They can sell their property. Obviously, this is not a preferred approach for a person who has invested in a rental property, but it remains a feasible option. As a rental property, these large units will lose value as a result of the ordinance, because their market size will drop significantly. Decreases of 15 to 25 percent may be necessary to lease an upper-end unit, with a proportional decrease in property value. However, this does not reflect the true picture. Most rental units at this price range are single-family homes, and were originally built to be owner-occupied units. In most cases, a ECONOMIC AND MARKET STUDY — EXECUTIVE SUMMARY PAGE 10 CORONA RESEARCH , INC . conversion back from rental to single-family home would be painless, and the ownership market is much larger than the rental market for houses in this value range. Additionally, the impacts of ordinance enforcement on the owner-occupied housing market will be negligible, so it is likely that the home could be sold for its pre-ordinance value as an owner-occupied home. (Of course, this depends on some property-specific attributes such as location, condition, and home layout.) Another bonus for sellers would be the potential impact of the sale of multiple single-family rentals in a neighborhood. According to the research team's analysis (described later in this section), it appears that a neighborhood's median home value declines by $391 for every percent of the single-family home inventory that is a rental property. In other words, a house in a neighborhood where all single-family homes are rentals can be estimated to be valued at $39,100 less than a house in a neighborhood where no single-family homes are rentals.' If multiple landlords opt to sell their properties, those who sell later may reap the benefits of the neighborhood's return to single-family occupant status. The above impacts all relate to landlords. As a closing note, it should be observed that renters in this price category would benefit from ordinance enforcement, as they will have many more homes to choose from, and potentially lower pricing. KEY M. RKF.T 5: DISPLACED TENANTS FROM VIOLATOR HOUSEHOLDS Market Shyv 5,003 inddvddualr This market consists of the 5,003 individuals who will have to change their housing situations as a result of the ordinance. While they are included in the rental markets that have already been discussed in Key Markets 1 through 4, they warrant additional analysis because of their nature as the focal point of the ordinance. From a game theory perspective, these individuals are by definition losers in the ordinance enforcement, because they will be banned from pursuing a housing arrangement that they have already decided to be in their best interest. They have already decided that living in a household with three or more other people is their best housing option, and will be forced to abandon that option if the ordinance is enforced. Not only is this true in theory, but it is also true in practice. The tenants in violator households currently average approximately $211 per person in rental costs. In their new living situations after ordinance enforcement, it is estimates that their rental costs will increase by over $100 per month as they relocate to smaller households. These figures do not include any "new market" rent changes as described in Key Markets 1 through 4, which could further increase rents and will affect low-income individuals more than high-income individuals. Keeping in mind that a significant portion of current tenants in violator households has incomes that would place them below the poverty line, the ordinance will have a strong negative impact on housing for some portions of this population. I Note that the model used to develop the figure of $391 explains only 58 percent of the variation in median home values across neighborhoods. This figure should be considered a "ballpark estimate" rather than a firm figure_ ECONOMIC AND MARKET STUDY — EXECUTIVE SUMMARY PAGE 11 CORONA RESEARCH, INC . In addition to ongoing rental costs, these households will face increased costs in other ways as well. For example, some fixed household expenses such as cable television, Internet access, and telephone service will be split among a smaller number of people. Further, the individual will have to absorb the cost of moving their household. In summary, enforcement of the ordinance would produce strong negative outcomes for the tenants currently residing in violator households. KEY MARKET 6: OWNERS IN OWNER-OCCUPIED VIOLATOR HOUSEHOLDS Market Site: 168 individuals Less than 200 housing units are owner-occupied, but take on renters in a number that is in violation of the ordinance. It is unlikely that these households would dissolve, but they would have to shed one or more tenants to satisfy the ordinance. Because this is such a small population, little data is available through which to draw conclusions about the impact of the ordinance. Certainly, the ejection of one or more renters will reduce cash flow to the owner, but it is not clear whether that loss of income will also result in the owner not being able to maintain the mortgage. The impact of the ordinance on this population is therefore limited to stating that the owner will generally lose at a minimum 25 percent of his or her rental income. In the limited data that is available, it should be pointed out that the stated owners of these properties might be predominantly college students themselves. In the few data records that are available, the majority of property owners were undergraduate college students. KEY l A1U<ET 7: NON-VIOLATOR HOUSEHOLDS Market Site: City boweboUs This market consists of all city households other than violator households. Aside from the impacts on rental markets discussed earlier, this group will receive two primary benefits from ordinance enforcement, at the cost of one potential risk. The first benefit is that there may be an increase in "peace and quiet" in neighborhoods that currently host violator households, and a decrease in negative activities that cause problems for neighbors, such as inappropriate parking, loud noise, disruptive parties, and poor lawn and home maintenance. While the data from the public survey in Section 1 of this report cannot definitively identify violator households as the cause of neighborhood problems, there is a strong correlation between neighborhood problems and proximity to violator households. The second benefit is in property values. As noted earlier, the research team has identified a potential relationship between median home values in a neighborhood and the presence of single- family rental units. For each percentage point of single-family housing that is rented out, the median value of homes in the neighborhood drops by $391 . If the number of single-family rentals declines, the value of homes in the neighborhood will increase by a like amount. Citywide, it is estimated that about two-thirds of violator households live in single-family homes, which means that about 800 such homes exist. This represents less than three percent of all single-family homes. While impacts ECONOMIC AND MARKET STUDY — EXECUTIVE SUMMARY PAGE 12 CORONA RESEARCH, INC . would vary greatly by neighborhood, the model suggests that, on a citywide average, home values are diminished by about $1 ,200 per home due to the presence of single-family rental units. The potential risk involves the transition of violator households to new households. The individuals in violator households will reform new households of three people or less, and will move to different housing units in many cases . With the expected increase in their costs, they may be more likely to overcrowd small housing units as long as the overcrowding involves only two or three people. With the increase in demand for those smaller units, a neighborhood could conceivably end up with more overcrowded units than were present before the ordinance enforcement took place. Those units will merely be smaller and hold fewer people. KEY NL-k=T 8: LOCAL COMPANIES The local economy will be impacted by the ordinance as well. While a quantification of the impact is beyond the scope of this study, it can easily be noted that companies that sell household products will benefit from the spontaneous creation of over 1 ,100 new households. Companies that provide services such as Internet connections, telephone service, and television services will benefit as more households come into being to purchase their services. On the other hand, many tenants from violator households will face increasing demands for their limited funds . This will cut their discretionary spending, which will impact firms that provide discretionary goods and services. KEY MARKET 9: HOUSING CONSTRUCTION INDUSTRY The enforcement of this ordinance will be a boon to the local housing construction industry. The creation of nearly 1 ,200 new households in a short period of time will have profound implications on vacancy rates, as noted earlier, with strong housing shortages in all price ranges below $830 where no such shortage existed before. In order to bring the housing supply in those price ranges back up to a healthy level, new construction of over 970 rental units would be needed. This equates to nearly two years of multi-family unit construction above and beyond the normal construction growth. If the multi-family construction industry ramps up 50 percent above current capacity, it would then take four years to bring vacancy rates in the low-end and mid-range price levels back to healthy levels. Of course, this new construction would generate significant additional economic benefits to the community in terms of jobs, spending, and taxes. As seen above, a strong enforcement of the ordinance would have a significant and immediate impact on the housing market. The next key question was whether this change would permanently alter the housing market in the city. The study examined case studies of other communities that have experienced similar types of household change, and described changes in those markets' rental vacancy rates, rental costs, and home values. Fort Collins' population growth was calculated using census data for 1990 and 2000 and county population projections. Two special issues were also addressed: ECONOMIC AND MARKET STUDY — EXECUTIVE SUMMARY PAGE 13 CORONA RESEARCH, INC . ■ The growth in households due to the implementation of the ordinance (without a corresponding increase in population); and ■ An estimated growth of the Colorado State University population by 4,000 students between 2005 and 2015. The goal of this analysis is to find cities that experienced a growth profile from 1990 to 2000 that was similar to the projected future growth profile for Fort Collins , and then examine changes in vacancy rates, housing costs, and housing stock in those cities during that time period. CASE STUDIES - COMMUNITIES WITH SIMILAR PAST GROWTH The growth pattern predicted for Fort Collins is not unique. Sixteen cities of similar size experienced similar growth patterns between 1990 and 2000, and can be studied to learn best practices. (One of these sixteen cities was Fort Collins itself.) A total of 16 cities were identified to have exhibited highly similar household growth patterns to those projected for Fort Collins, based on total household growth, household growth among traditional college-age students, and a higher growth rate among the second group than the first. Interestingly, one of these similar cities was port Collins itself. Exhibit ES-3 Cities with Similar Past Growth Patterns Ratio of Annual Household Annual Household Youngrrotal Growth Growth, Ages 15-24 Household Growth Fort Collins, 2005-2015 2.43% 3.32% 1 .38 Communities with Similar Growth, 1990-2000 Greensboro, North Carolina 2,12% 3.34% 1 .58 Provo, Utah 2.13% 3.06% 1 .44 Sioux Falls, South Dakota 2.22% 2.93% 1 .32 Salem, Oregon 2.09% 3.39% 1 .63 Winston-Salem, North Carolina 2.49% 2.94% 1 ,18 Eugene,_ Oregon 2.26% 3,68% 1 .63 Durham , North Carolina 2.95% 3.33% 1 .13 Fort Wayne, Indiana 1 .86% 3.20% 1 .72 Fort Collins, Colorado 3.07% 3.34% 1 .08 Joliet, Illinois 3.06% 3.10% 1 .01 Lincoln, Nebraska 1 .83% 2.73% 1 .49 Raleigh, Forth Carolina 2.77% 2.69% 0.97 Lexin ton-Fayette, Kentuck 1 .93% 3.73% 1 .93 Mesquite, Texas 2.03% 2.52% 1 .24 Columbia, South Carolina 2.19% 4;140/6 1 .89 Lakewood, Colorado 1 .59% 2.74% 1 .73 Housing attributes of these cities were compared to those of 141 other cities to examine differences and similarities in their housing markets. CHANGES IN VACANCY RATES In cities that have experienced similar growth patterns in the past, new housing construction has risen to meet demand. In fact, cities with this growth pattern are almost as likely to see increases in vacancy rates over the long term as decreases. ECONOMIC AND MARKET STUDY - EXECUTIVE SUMMARY PAGE 14 CORONA RESEARCH , INC . When changes in rental vacancy rates were compared over the 10-yeat time period from 1990 to 2000, a majority of cities in both groups saw declines in vacancies. However, the median change in the cities with similar growth patterns was -0. 5 percent (a 0 . 5 percentage point decrease in vacancies) , while the decrease in other cities was -2.9 percent. More than 75 percent of dissimilar cities saw declines, and the median decline was higher in those cities. CHANGES IN RENTAL PRICES Rental prices in cities with similar past growth patterns have risen at a rate about one- third faster than in cities with different growth patterns. While cities with differing growth patterns saw rental increases of 33 percent over their ten-year period of growth, cities with growth patterns similar to those predicted for Fort Collins saw higher increases on average. Half of the cities with similar growth patterns saw rental increases of 42 percent or more, and half of the cities saw increases within a narrow band of 37 to 49 percent. CHANGES IN HOUSING STOCK Over a ten-year period of experiencing the growth pattern predicted for the city, one would expect to see an increase in the housing inventory of 20 to 28 percent. Cities that have experienced growth patterns similar to the pattern forecast for Fort Collins have seen significant housing growth. On average, these cities saw increases in their entire housing inventory of 25 percent or more, on average, over the course of the ten-year growth period. This is more than three times higher than the typical growth (8 percent) of other cities. ECONOMIC AND MARKET STUDY — EXECUTIVE SUMMARY PAGE 15 CORONA RESEARCH , INC . ATTACHMENT 2 RES(mi L r. RCH ECONOMIC AND MARKET IMPACT STUDY FOLLOW - UP STUDY : IMPACT OF THE " THREE UNRELATED PERSONS ORDINANCE " ENFORCEMENT CITY OF FORT COLLINS FINAL REPORT Prepared by: Corona Research, Inc. © Corona Research, 2009 www.coronaresearch.com TABLE OF CONTENTS EXECUTIVESUMMARY .............................................................. .. .. .. .. .......... .. .. .. .. ........................ .. . 1 BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I SUMMARY OF KEY FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 EXPANDED KEY FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 INDIVIDUAL EXPERIENCES AND OPINIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 INTRODUCTION AND OVERVIEW ................................................... .. .. ....................................... 12 BACKGROUND - THE ORDINANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 BACKGROUND - PREVIOUS RESEARCH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 INTRODUCTION TO 2009 FOLLOW-UP STUDY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 NUMBER OF VIOLATOR HOUSEHOLDS .......................................... .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ........... 17 COMPLAINTS AND VIOLATOR HOUSEHOLDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 MARKETIMPACTS.......................................................................................................................... 21 PREDICTED IMPACT ON RENTAL MARKET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 OBSERVED CHANGES IN RENTAL HOUSING MARKET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 OBSERVED CHANGES IN NEIGHBORHOOD ISSUES ............................................................. 34 NUMBER OF NEARBY VIOLATORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 AWARENESS OF ORDINANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 ORDINANCEIMPACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 PREFERRED ORDINANCE ENFORCEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 NEIGHBORHOOD PROBLEMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 NEIGHBORHOOD RATING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 COMPARISON OF 2009 AND 2005 SURVEYS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 IMPACTS ON AN INDIVIDUAL LEVEL ....................................................................................... 53 BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 PROJECT DESIGN AND METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 RESEARCHGOALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 NOMENCLATURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 LANDLORDS (PROPERTY OWNERS OR MANAGERS) - 10 INTERVIEWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 TENANTS - 10 INTERVIEWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 NEIGHBORS - 10 INTERVIEWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 KEYFINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 DETAILED FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 SUGGESTIONS FOR CHANGES OR IMPROVEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 APPENDIX A: PUBLIC PHONE SURVEY INSTRUMENT........................................................ 110 APPENDIX B: INTERVIEW GUIDES .................................................. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..... 114 FOLLOW- UP STUDY: IMPACT OF THE " THREE UNRELATED PERSONS ORDINANCE " ENFORCEMENT EXECUTIVE SUMMARY BACKGROUND Corona Research conducted a study in 2005 to analyze the potential impacts of the enforcement of the "three unrelated" ordinance in Fort Collins. The study included an estimation of the number of violators, a profile of these violators, potential rental impacts from full-scale enforcement, and the perception of Fort Collins residents on various neighborhood issues. Corona Research conducted a follow-up study in 2009, which is described in this executive summary. This study estimated the number of violators in 2009, included a second public perception survey (and comparison to 2005 survey results) , examined changes in rental prices and vacancy rates, and included interviews with key groups affected by the ordinance to examine its real-world impacts and any unanticipated outcomes. METHODOLOGY For the public survey, Corona surveyed 387 people living in Fort Collins in single family homes or townhomes. The questions and sampling procedure were very similar to those used in the 2005 made including the screening questions and the mode of the survey (telephone) so that comparisons could be made. Several additional questions were added so the effect of the ordinance could be evaluated. The survey results were not weighed, keeping consistent with the previous study. The survey was used to develop an estimate of the number of violator households and to examine neighborhood issues and opinions about the ordinance. Corona used special US Census data as another means to calculate the number of violators in Fort Collins. The procedure was the same as used in the 2005 study, and was compared to the survey data to triangulate on an accurate estimate of violator households. Colorado Department of Housing data was utilized to capture rental prices and vacancy rates for multifamily units in Fort Collins and four other similar Colorado cities. The data was available for the units in aggregate as well as for efficiencies, and 1 , 2, and 3 bedroom units. The increase or decrease in the rental prices and vacancy rates were analyzed to see if they changed in Fort Collins differently than in the other cities, to assess whether enforcement of the "three unrelated" ordinance had a significant exogenous impact on the rental market. Interviews were conducted with three stakeholder groups: landlords of various property types, tenants with various experiences, and residents who have or have not filed complaints citing the ordinance. The goal was to gather the unique perspective and experiences of each group as related to the ordinance, and to possibly learn about unanticipated outcomes and suggestions for improvement to implementation. NOMENCLATURE As a nomenclature note, households currently in violation of the ordinance are referred to as "violator households" or "violators" in the executive summary and in the full report. This statement • � PAGE 1 R E S E R C H is not intended as a judgment, but merely represents a technical description of these households to differentiate them from other households. SUMMARY OF PREVIOUS RESEARCH In 2005, the precursor to this study was undertaken. The study included a public survey of 387 Fort Collins residents, special census data analysis including the creation of a profile of ordinance violators and an estimate of violators, and rental market impacts including an estimated demand for rental units if the ordinance was strongly enforced. The survey found those living near violators were significantly more likely to complain about neighborhood issues . Though this does not necessarily prove a causal link, there is a correlation between those living near violators and those experiencing neighborhood problems. More than half (58%) of those surveyed in 2005 supported stronger enforcement of the ordinance while 44% were opposed to stronger enforcement. The survey, Census data, and Public User Microdata Sample (PUMS) data analysis revealed 5,003 violators living in 1 ,070 rental households (5. 1 % of the rental population and 12% of single family homes) and 168 owner-occupied households o Approximately two-thirds of violator households occupied single-family homes. o Most violator households (64 percent) were only slightly over the three-person ordinance limit, with four people sharing a housing unit. o Overall, 71 percent of violator household tenants were college students, 70 percent of the tenants in violator households were males and 82 percent of the tenants were under the age of 25. The 2005 study estimated impacts on the rental market assuming strict and complete enforcement of the ordinance. If all violator households were broken up and reformed into smaller legal households, there would have been a demand for 1 ,190 new rental units. This new demand would have made the rental market for cheaper (smaller) units very challenging, with rental rates more or less at zero percent. Note, though, that this assumed a breakup of all violator households, which did not occur since the City instead adopted a complaint-based approach. Under strong enforcement and all violator households broken up, Fort Collins would likely have seen: o A decrease in neighborhood problems (or possible transfer of problems to smaller units) o Minor increase in property values in neighborhoods that lose violator households, o Minor impacts on local businesses (both positive and negative, depending on the type of business) o Demand for up to 970 new housing units for the construction industry • � PAGE 2 R E S E R C H SUMMARY OF KEY FINDINGS The research team presents the following list of 15 key findings for easy digestion by the reader. These findings represent the research team's most notable observations, with the recognition that other readers may find different findings to be more notable. An expanded summary is presented in the following section with additional detail. 1 . The number of violator rental households has dropped by about 46 percent since initiation of the ordinance. The research estimates that there are approximately 579 violator households in existence, down from 1 ,070 in 2005 . Up to 97 owner-occupied households may have "downsized" as well, which can be compared to 168 estimated owner-occupied households in violation in 2005. 2. Only about 20 percent of that drop is due to active enforcement. The remainder is likely voluntary compliance on behalf of landlords and tenants. 3. Given that roughly 70 percent of violator households are college student households, it should be recognized that the drop in violator households may not be the breakup of existing households, but rather the lack of formation of new large households as the relatively transient student population flows through the community. 4. Rental vacancy rates have declined rapidly, but have gone from unhealthy high levels to what is generally considered a healthy range for both tenants and landlords. One-bedroom apartments are on the verge of being unhealthily low in availability, though. Trends in rental vacancy rates warrant continued monitoring as vacancy rates have declined strongly. 5. The ordinance is not responsible for most of the drop in vacancy rates, as other forces (economy, foreclosures, etc.) appear to have had at least an equal or larger impact. The likely estimate is that the ordinance has produced about one-sixth to one-fifth of the decline in vacancy rates (but one data source shows that it could be as much as half) . 6. Rental prices are increasing, but not disproportionately to other comparable Colorado cities. It is likely that this is due to the fact that vacancy rates were high when the ordinance was initially enforced. 7. Neighborhood problems have declined and positive indicators have risen since enactment of the ordinance, but the research does not conclusively show that the changes are due (or not due) to the impacts of the ordinance. There remains a correlation between proximity to violator households and neighborhood problems, but this could be neighborhood-specific and not property-specific. 8. Among households who reported that a neighbor violating the ordinance had to move out, 67 percent said the moving had a positive impact on the neighborhood while only 11 percent said the impact was negative. However, there were only 9 survey respondents who were in this situation. 9. A total of 41 percent of single-family/duplex home dwellers believe the current enforcement is taking place at the right level, 27 percent would prefer more strict enforcement, 14 percent would prefer less strict enforcement, and 18 percent have no opinion. However, support for stricter enforcement rises dramatically with proximity to violator households — 67 percent • � PAGE 3 R E S E R C H for those near two or more, 49 percent for those near one, and 22 percent for those not near any- 10. All groups recognize that neighborhoods have a right to peace and quiet. However, some groups question the full intent of the ordinance. College students tend to think the ordinance is aimed at keeping students out of neighborhoods, while landlords tend to think the ordinance is aimed at preventing rentals out of neighborhoods. Some neighbors also tend to view the ordinance positively as a way to help plan or control neighborhood change. 11 . The number "three" makes all major constituent groups — tenants, landlords, and neighbors — somewhat uncomfortable, in that they do not understand why the number `three' was chosen over, say, 2 or 4. 12. Landlords note that non-students are a significant portion of people affected by the ordinance, especially households where two couples hope to live together. Landlords question whether this impact is fully recognized. 13. Landlords and tenants note that the ordinance is indirect and that other ordinances addressing noise and parking actually tackle the core problems. Neighbors noted that "loud parties" are often thought of as the issue, when in reality other issues are also important. Some neighbors also noted that tenants in larger households are more likely to be active late at night and that talking, parking, and vehicle noise are also negative impacts on their neighborhoods. 14. Tenants, and to some extent landlords, agree that landlords can drive the culture of the law. Landlords either participate in the ordinance or they "wink" at the fourth or fifth tenant and only put three tenants on the lease. Tenants draw their cues from the landlords. 15 . All constituent groups had concerns with the complaint-based nature of the ordinance. Tenants believe that the actual enforcement causes hardships on tenants who are forced to move out on short notices, and that it can create friction in neighborhoods. Meanwhile, some neighbors express frustration that the enforcement process allows ample time to hide evidence and temporarily move one or more tenants out. Neighbors are also often wary of filing a complaint because of concerns about neighborhood conflict. Landlords note that other landlords are easily able to hide violators from the ordinance, and that the ordinance creates competitive advantages for unethical landlords. EXPANDED KEY FINDINGS NUMBER OF VIOLATOR HOUSEHOLDS Overall, the number of households violating the ordinance has decreased significantly. In 2005, the research estimated that there were 1 ,070 violator rental households, while the estimate for 2009 is 579. This means that the number of violator rental households has decreased by approximately 491 households. Up to 97 of an estimated 168 owner-occupied violator households have "downsized" to comply as well. As opposed to a gradual decline, this decline appeared to occur sharply in 2006. While it is reasonable that this decline occurred as a result of the rep sence of the ordinance, the total estimated decrease in violator households cannot be fully attributed to the enforcement of the ordinance. City records indicate that enforcement of the ordinance directly caused 105 violator households to break up. The other 483 rental and owner households were broken up for other reasons; perhaps landlords adhering to the ordinance, tenants not choosing to live in violation, or any • PAGE 4 R E S E R C H number of other reasons completely unrelated to the ordinance. The research team concludes that the bulk of the decrease in violator households is not fully driven by the complaint based ordinance enforcement, and likely is the result of voluntary compliance on the part of landlords and/or tenants. It should also be noted that, since 70 percent of the violator households were occupied by college students in the initial study, and since rental households tend to be relatively transient anyway, the changes may not even be actual breakups of existing households. Some of those households likely broke up naturally due to college graduation, tenants moving for jobs or personal reasons, or other factors. The decline may instead be a decreased formation of new violator households . ESTIMATED DIRECT IMPACT ON RENTAL MARKET A predictive model was created to determine the effect of the violators finding new living arrangements would be on vacancy rates of rental units in Fort Collins. If those in violation chose new living arrangements similar to that of like-aged people, they would create 1 ,037 new non-violator households, and would have eliminated 491 violator households on the rental market, and another 108 net new households as a result of downsizing in owner-occupied units. This difference of 654 units would reduce the vacancy rate of rental units by approximately 1 . 8 percentage points. This can be considered within the context of the overall market, discussed below. OBSERVED CHANGES IN RENTAL HOUSING MARKET Using Colorado Department of Housing data, rental and vacancy rates were analyzed for Fort Collins/Loveland, Colorado Springs, Pueblo, Greeley, and Grand Junction because housing trends were likely skewed as a result of the recent downturn in the housing market and comparing these cities will account for the external influence. Only data for multifamily homes was available for these cities for 2003-2008, though they still provide an indication of the trends and patterns in the rental housing market. Based on these data, rental unit prices have increased by approximately 10 percent in Fort Collins from 2003 through 2008, or roughly 2 percent per year. Increases were lower in Colorado Springs (5 percent) and Pueblo (7 percent) , much higher in Grand Junction (37 percent) , and similar in Greeley/Weld County (10 percent) . Prices have risen faster in the 2006 through 2008 time frame, with a 7 percent increase in that time period, compared to 3 percent from 2003 through 2006. It should be noted, though, that market pricing may not completely reflect the impact on individuals. Previous research showed that tenants living in larger households tend to pay less per person in rent. If they convert to smaller households, that move may not impact the prices of the units, but may increase the prices paid per person. Vacancy rates declined in all five comparable cities, with Fort Collins seeing the largest decrease. Multi-family rental vacancy rates went from 14% in 2003 to 8% in 2006 to 5% in 2008 in the Fort Collins /Loveland market. As noted above, it is estimated that the changes in households due to the ordinance (directly or indirectly) likely produced a 1 .5 percent impact during that time period, or roughly one-sixth of the change. ' These changes likely had no negative impact on the multi-family ' A second independent data source, the American Community Survey, is available only through 2007. This data source shows vacancies for all rental units as opposed to just multi-family, and showed a trend of 8.3 percent in 2005, 5. 1 percent in 2006, and 5.0 percent in 2007. This would indicate that the ordinance produced about half the change in vacancy rates during this time period in the total rental market. • � PAGE 5 R E S E R C H market as a whole, as vacancy rates were higher than desired in 2003 and are now at a rate that is generally considered in the healthy range. Grand Junction saw a decline of roughly 7 percentage points in vacancy, from 9 percent to 2 percent, while the other three cities saw declines of 3 to 4 percentage points to levels still at 6 percent or higher. OBSERVED CHANGES IN RENTAL HOUSING MARKET BY UNIT SIZE Efficiency units and one-bedroom units in the Fort Collins/Loveland market are seeing price increases, but at or below the median level of the five cities. Increases in rates for 2-bedroom units are increasing, but below the rates in all other comparable cities other than Colorado Springs. Pricing for three-bedroom units is increasing at a rate slightly above the median (second-highest among the five cities) . The greatest price increases (roughly 5 percent per year) are seen in one-bedroom units, but all five cities are seeing their greatest increases in that size category. Fort Collins has seen a steady decrease in vacancy rates across all unit types. Vacancy rates for all unit sizes were above ideal levels in 2003, and vacancy rates for three-bedroom units remain above those levels at 7.3 percent (median among the five cities) . Rates for two-bedroom units are at 4. 1 percent, lower than three of the four comparable cities but not unreasonably high or low. Rates for one-bedroom units are at 3.2 percent, lower than three of the four comparable cities and on the edge of being unhealthily low. Rates for efficiency units are at 5.5 percent, lower than other cities but still at or above a healthy level. OBSERVED CHANGES IN NEIGHBORHOOD ISSUES Neighborhood problems have slightly declined and neighborhood perceptions have improved since 2005. The increases are broad across all types of issues, but are generally not statistically significant. However, while the new survey data continues to indicate that more problems are present in areas where violator households are nearby, the new survey data cannot show definitively that the reduced number of violator households is the cause of the increase. For the most part, conditions were improved both in neighborhoods with (current) violator households and without (current) violator households, which indicates that some factor other than reduced violator households caused the increase in whole or in part. Some key findings from the survey include: o In the 2005 survey, 70% of respondents reported having no neighbors violating the ordinance while the 2009 survey had 84% report having no neighbors violating the ordinance. o Over 85 percent of residents are aware of the ordinance. o Of the 9 respondents who reported a neighbor violating the ordinance had to move out, 6 said the moving had a positive impact on the neighborhood while only 1 said the impact was negative. o The more violator households respondents lived near, the more likely they were to say the ordinance should be enforced "more strictly." o Those living near two or more violators were more than three times as likely to say the ordinance should be enforced more strictly than those living near zero violators. o In every neighborhood problem category, the number of households causing the neighborhood problem increase as the number of "three unrelated" violator • PAGE 6 R E S E R C H households increases. However, this does not necessarily indicate that the violator households were the offenders because the respondent was not asked to identify the home with the problem. It does imply that people living near violator households observe more problems, though it cannot be proven from this data alone whether violator households create the problems or whether they simply are located in neighborhoods where the problems are more common. o When comparing the 2005 and 2009 surveys, every neighborhood rating has fewer "good" and "very good" ratings as the number of nearby violator houses goes up. While the differences are small in many cases, every category has seen an increase in the number of households reporting that zero nearby homes have a given problem. However, the ratings generally rose for both those who live near violator households and those who don't, which argues against a conclusion that having fewer violator households is the source of the increase. o 41 percent of single family/duplex residents believe that enforcement of the ordinance is at the right level. Another 27 percent would like stronger enforcement, while 14 percent would prefer less strict enforcement. The other 18 percent have no opinion. More telling, though, is the relationship between proximity to a violator household and enforcement opinions. Households were asked how many of the four nearest households to their home are in violation, and opinions were broken out proportionally. Findings in this manner show a strong pattern, as follows: 27% would like stronger enforcement, but support is . . . o 67% among those living near two or more violator households o 49% among those living near one violator household o 22% among those living near zero violator households 14% want less strict enforcement, but these opinions are . . . o 0% if near two or more violator households o 7% if near one violator household o 16% if near zero violator households These findings show that proximity to violator households produces more desire for enforcement of the ordinance, implying an impact on nearby households. INDIVIDUAL EXPERIENCES AND OPINIONS The intent of the interview portion of the research was to learn about the impact that the occupancy ordinance has had on individuals living and/or conducting business in the City of Fort Collins . Additionally, this portion of the research attempted to gauge opinions of the ordinance and how opinions may have changed over time and how the ordinance might be improved in design and/or enforcement. • PAGE 7 R E S E R C H It is probably of no surprise that a wide range of opinions were revealed in conducting interviews with the three segments as each group - landlords, neighbors, and tenants - has been impacted differently by the ordinance. Recruiting for the interviews was conducted such that a variety of perspectives would be gathered, even within each segment. Even so, there were some themes that ran strongly throughout all interviews which allow the City a deeper look at some of the core reasons that an individual may support or oppose the occupancy ordinance. There were a number of respondents who did not understand exactly what the ordinance is intended to do, other than what it says at face value. In other words, other than preventing more than three unrelated adults from living together, many people did not understand why the enforcement of the ordinance was initiated. College students tended to think that its purpose is to keep students out of neighborhoods, while some landlords regarded it as a means for keeping rentals as a whole out of neighborhoods. Participants in the neighbor segment had varying views as to the purpose of the ordinance. It can be noted that even though opinions are bound to differ regarding the ordinance, promoting a uniform purpose for the ordinance to all parties alike could potentially create more support, or at least build more of an understanding. Everyone who was interviewed understood and often commented that a homeowner has a right to peace and quiet in their home. However, it was clear that not everyone felt that the occupancy ordinance is the best way to ensure that this goal is met. Some people simply did not believe that the ordinance is the way to solve problems with noise, parking, property maintenance, and other neighborhood issues. Therefore, even if a person agreed with the goals that the ordinance was likely put in place to achieve, it does not necessarily mean that they were in support of the ordinance itself In each segment, there were participants who felt that other ordinances addressing specific, unacceptable behaviors should be enforced. Whether in lieu of the occupancy ordinance or not, there were many respondents who indicated that there are already ordinances in place to prevent issues like noise problems. Some people expressed that they feel that these types of ordinance should be enforced more strongly by the city in order to correct and discourage those specific behaviors. Perceptions of the effectiveness of the ordinance varied widely among respondents. A few people were extremely happy with the results of the ordinance that they had personally witnessed, and they did feel as though its enforcement is bringing about major improvements in their neighborhoods. According to others, however, many landlords and/or tenants who truly need to be impacted by the ordinance have yet to experience any consequences. That is to say that some neighbors still have to tolerate poor property maintenance and unruly tenants nearby. The exact circumstances surrounding these different cases vary, of course, but these situations have led some residents to have the perception that the ordinance is not effectively bringing about change. Additionally, personal experiences and involvement with the ordinance varied widely within each segment. For some, the ordinance had brought about drastic changes in their living situations, while others had difficulty thinking of anyone who had been affected by it. This led some participants to believe that the ordinance is not being enforced at all, and others to think that it is being enforced to an extreme, with little leniency. It is not known if this is because perhaps the enforcement processes have changed since inception, if enforcement has fluctuated over time, if perhaps perceptions of the process simply vary widely by individual. The number `three' is part of the debate over the ordinance because the limitation to three tenants in a household seems to have been made without reason according to some, but makes good sense to others. Homeowners who have, or still do live near homes with more than three people were much more likely to say that the number of people in a home does matter, especially when • PAGE 8 R E S E R C H considering problems with parking. They explained that as the number of residents in a home increases, so do the number of visitors, and in some cases, the likelihood for parties to occur. Conversely, others argued that behavior varies widely by individual, and that there are plenty of instances in which three people may be just as loud, or louder than four or even five may be. Some neighbors also commented that parties weren't the sole problem, but rather other noise from tenants who were out late and perhaps didn't realize that their late arrival home (presumably with talking, noise, and vehicles) also generated noise and disturbances. A principal difference between proponents and opponents of the ordinance are their differing views of the evolution of neighborhoods. This was true for the neighbors and landlords who viewed the ordinance as a means for reducing the number of rentals in a neighborhood. Opponents of the ordinance felt that the progression towards high percentages of rentals is cyclical, a sort of natural evolution, and that the housing market itself will even out the balance between owner-occupied and rental homes. They were much less inclined to believe that the evolution of neighborhoods from owner-occupied to higher percentages of rentals should be regulated by the city. Ordinance proponents tended to feel that having this regulation in place gives them the ability to create the balance themselves, to even out a mix of owners and renters, and to provide some kind of control over the development of the city as a whole. Enforcement was a major topic throughout the interviews. As previously noted, there were participants who expressed that they feel the ordinance is already improving their neighborhoods. These seemed to be areas where homeowners were working together to watch for violators, and reported accordingly. However, there were plenty of people in both the neighbor and landlord segments who felt that if the ordinance is to be in place, it should be enforced evenly so that everyone will be affected in the same way. Neighbors who have not seen improvements stated that the city should enforce the ordinance more proactively, although they were not always certain how such action could be funded. Some neighbors wanted more active enforcement in part because they feared retribution and conflict if they themselves filed complaints. When landlords commented on increased enforcement, it was not necessarily because they supported the ordinance, but because they want all property owners and managers to be held to the same standards. This was frequently heard from owners and managers who currently comply with the ordinance, but must conduct business in an arena where there are still plenty of owners and managers who do not abide by it. The end result is lost business for the companies who are following the law. All parties noted that there are still large numbers of violator households in the marketplace. Another issue noted by participants included the fact that currently, exceptions to the ordinance are not being made in any case. This adversely affects people who may be trying to help a friend who needs a place to stay temporarily, or perhaps those in caretaker positions. Some people even stated that the ordinance is making liars and lawbreakers out of otherwise honest people, just because they are trying to save money by including a fourth roommate in the case of a tenant, or to be able to make the mortgage payment on a rental property, in the case of a landlord. Even neighbors who supported the ordinance noted concerns about whether a caretaker or a friend in need might place an otherwise-solid household in violation. The interviews provided mixed reviews of the effects of the ordinance. Obviously perspectives vary quite a bit depending on an individual's situation (i.e., landlord, tenant, or neighbor) . While this information is not intended to judge the occupancy ordinance as either `good' or `bad,' and it should be recognized that not all perspectives are taken into account, the findings from this branch of the research do suggest that there may be some areas for improvement. • PAGE 9 R E S E R C H Many perspectives were offered, and not all people agreed, even with the landlord, tenant, and neighbor segments. However, some patterns emerged. A succinct summary would include (in no particular order) : • Landlords noted an unanticipated outcome of not being able to maintain their properties as well if they had fewer renters providing payment. Neighbors noted that maintenance has not improved with the ordinance. • Landlords felt that the ordinance's current structure gave unethical businesses an advantage, and that many landlords were getting around the ordinance. They note that the ordinance should be enforced strictly or not at all. Tenants tended to agree that many landlords work around the ordinance. • Landlords think that tenants should be responsible for their behavior, and that they are absorbing unnecessary costs for the ordinance. Tenants and neighbors tend to think that landlords should be responsible for their properties and property management. • College students tend to think the ordinance is aimed at keeping students out of neighborhoods, while landlords tend to think the ordinance is aimed at preventing rentals out of neighborhoods. Neighbors are most likely to point out the noise, parking, and other issues that correlate with larger households. • Non-students less likely to know about the ordinance and (according to anecdote) are more likely to inadvertently violate it. Landlords note that non-students are a significant portion of people affected by the ordinance, especially households where two couples hope to live together. • The ordinance places a variety of influences on neighbor relations. Neighbors who effectively use the ordinance are those who team up with other neighbors to patrol their neighborhoods, but neighbors without these networks are frustrated and frightened to file complaints. Tenants note that making and maintaining good relationships with their neighbors will likely prevent complaints, but also are wary of "spying" by neighbors. • Tenants, and to some extent landlords, agree that landlords can drive the culture of the law. Landlords either participate in the ordinance or they "wink" at the fourth or fifth tenant and only put three tenants on the lease. Tenants draw their cues from the landlords. • None of the major constituent groups are universally comfortable with the ordinance, though most or all agree with the fundamental goal of the ordinance. Even neighbors, who generally support the ordinance, admit to discomfort with the number three (they do not see a reason three was chosen) and the control of private business decisions. • Neighbors noted that "loud parties" are often thought of as the issue, when in reality other issues are important, such as parking problems. Some neighbors also noted that tenants in larger households are more likely to be active late at night and that talking, parking, and vehicle noise are also negative impacts on their neighborhoods. • Tenants, and to some extent landlords, believe the ordinance overlaps with other ordinances. The behavior of more than three unrelated people was not deemed to be • PAGE 10 R E S E R C H the problem so much as other issues such as noise or parking, and therefore the ordinance is misguided. • All constituent groups note that the complaint-based system leads to inconsistent pick- and-choose enforcement. Tenants believe that the actual enforcement causes hardships on tenants who are forced to move out on short notices, while some neighbors express frustration that the enforcement process allows ample time to hide evidence and temporarily move one tenant out. • PAGE 11 R E S E R C H INTRODUCTION AND OVERVIEW BACKGROUND - THE ORDINANCE In 2007, the City of Fort Collins began enforcement in the "three unrelated" housing ordinance via use of a complaint based system. Prior to 2007, the ordinance had existed but was not actively being enforced, though landlord disclosure form were initiated in December of 2005. The following is the "three unrelated" ordinance: OCCUPANCY LIMITS; INCREASING THE NUMBER OF PERSONS ALLOWED (A) Except as provided in subsection (B) below, or pursuant to a certificate of occupancy issued by the city to the owner of the property, the maximum occupancy allowed per dwelling unit in a single-family, two-family or multi-family dwelling shall be: (1) one (1) family as defined in Section 5 . 1 .2 and not more than one (1) additional person; or (2) two (2) adults and their dependents, if any, and not more than one (1) additional person. (B) Exceptions . The following shall be exempt from the maximum occupancy limit established in subsection (A) above: (1) dwellings regularly inspected or licensed by the state or federal government, including but not limited to group homes; and (2) dwellings owned or operated by a nonprofit organization incorporated under the laws of this state for the purpose of providing housing to victims of domestic violence as such is defined in Section 18-6-800.03, C.R.S. (C) A violation of this Section shall be proven by a preponderance of the evidence. A person shall be liable for allowing occupancy in excess of this Section if he or she knew, or through reasonable diligence should have known, that a violation of this Section was occurring- (D) Definitions. The following works, terms and phrases, when used in this Section, shall have the meanings ascribed to them below: (1) Adult shall mean any person eighteen (18) years of age or older who is not a dependent. (2) Dependent shall mean a person related to an adult occupying a dwelling unit by blood, marriage, adoption, guardianship or other duly authorized custodial relationship who receives financial support from said adult and who resides with said adult in the dwelling unit at least three (3) calendar months in a calendar year. (3) Occupancy or "occupy" shall mean the use of a dwelling unit or portion thereof for living, sleeping and cooking or eating purposes. Indicia of occupancy may include, • � PAGE 12 R E S E R C H without limitation, the use of a dwelling unit as an address for any purpose, living in a dwelling unit under an implied lease or express agreement, overnight use of a dwelling unit for thirty (30) days in a calendar year, or maintaining clothes or other daily living supplies at a dwelling unit. (E) Increasing the Occupancy Limit. (1) With respect to single-family and two-family dwellings, the number of persons allowed under this Section may be increased by the issuance of a certificate of occupancy for use as an extra occupancy rental house in zones allowing such use. (2) With respect to multiple-family dwellings, the decision maker (depending on the type of review, Type 1 or Type 2) may, upon receipt of a written request from the applicant and upon a finding that all applicable criteria of this Land Use Code have been satisfied, increase the number of unrelated persons who may reside in individual dwelling units. The decision maker shall not increase said number unless satisfied that that the applicant has provided such additional open space, recreational areas, parking areas and public facilities as are necessary to adequately serve the occupants of the development and to protect the adjacent neighborhood. (Ord No. 123, 2005 §6, 11 / 15 /05; Ord No. 33, 2006, 3/7/06; Ord. No. 104, 2006 512, 7/ 18/06) BACKGROUND - PREVIOUS RESEARCH Two research studies have been conducted related to the "three unrelated" ordinance in Fort Collins. The first study was completed in 2005. This study focused on the impact that active enforcement of the ordinance would have on the rental housing market, who the ordinance would impact, and the prevalence and profile of violators. This report comprises the second study, and analyzes how the rental housing market, neighborhood perceptions, and prevalence of violators has changed since the enforcement began. Key findings of the 2005 study are presented below. NUMBER OF VIOLATORS - 2005 In order to estimate the number of violator households, the 2005 study included analyses based on a 387 person resident survey of those living in homes or duplexes (the most prevalent type of living arrangement of violators) , Census data analysis, and development of a rental impact model. The survey, Census data, and Public User Microdata Sample (PUMS) data analysis revealed 5,003 violators living in 1 ,070 rental households (5. 1 % of the rental population and 12% of single family homes) and 168 owner-occupied homes. NEIGHBORHOOD ISSUES - 2005 The survey also asked about neighborhood issues of concern. Those living near violators were significantly more likely to complain about neighborhood issues. Though this does not necessarily prove a causal link, there is a correlation between those living near violators and those experiencing neighborhood problems. There are other possible reasons for this, though, such as violator households tending to locate in areas that already face these issues. • PAGE 13 R E S E R C H ORDINANCE SUPPORT/OPPOSITION - 2005 More than half (58%) of those surveyed in 2005 supported stronger enforcement of the ordinance while 44% were opposed to stronger enforcement. VIOLATOR PROFILE - 2005 A violator profile was constructed using special Census data. This level of detail was not available from the Census since the initial study was conducted. We assumed the violator profile has not changed significantly. o Approximately two-thirds of violator households occupied single-family homes. o Most violator households (64 percent) were only slightly over the three-person ordinance limit, with four people sharing a housing unit. o The majority of violators (86 percent) lived in three-bedroom units or larger. o Because there were more people in the household, the average household incomes of violator households were generally higher than those of other renters, despite the fact that individual tenants' incomes was lower and individual tenants in violator households were more likely to be below the poverty line. o Fifty two percent of violators would have been living below the poverty line if they lived alone o Estimated increase of monthly rate of $100 if ordinance strongly enforced o Household rent levels tended to be high among violator households. Nearly half of the violator households paid at least $1 ,102 per month while only 10% of non- violator households paid that amount or more. However, the rent per person in violator households was nearly 50 percent less than that paid by other renters, on a per-adult basis . o Overall, 71 percent of violator household tenants were college students, 70 percent of the tenants in violator households were males and 82 percent of the tenants were under the age of 25. POTENTIAL RENTAL MARKET IMPACT ESTIMATES - 2005 The 2005 study estimated impacts on the rental market assuming strict and complete enforcement of the ordinance. If all violator households were broken up and reformed into smaller legal households, there would have been a demand for 1 ,190 new rental units. Within the rental market: o There would have been zero vacancy for units under $440 with price increases, o There would have been zero vacancy for units from $440 to $830 with no price increases, but likely lower quality, o Vacancy rates for units $830 to $ 1 ,100 would decrease, but still be high compared to traditional estimates of a healthy market, and • PAGE 14 R E S E R C H o Vacancy rates for units above $ 1 , 100 would have doubled to over 20%, with a 7 year recovery period for rentals, though sales prices would not have be strongly affected. It should be noted that complete and strict enforcement did not occur, but rather a complaint- based enforcement system was introduced. OTHER TYPES OF IMPACTS - 2005 Under strong enforcement and all violator households broken up, Fort Collins would likely have seen: o A decrease in neighborhood problems (or possible transfer of problems to smaller units) o Minor increase in property values in neighborhoods that lose violator households, o Minor impacts on local businesses (both positive and negative, depending on the type of business) o Demand for up to 970 new housing units for the construction industry INTRODUCTION TO 2009 FOLLOW-UP STUDY In 2009, the City of Fort Collins wanted to determine the impact of the ordinance enforcement. The research team investigated the market impact using quantitative tools and individual impacts using qualitative tools. The 2009 study consisted of the following elements. PUBLIC SURVEY Corona surveyed 387 people living in the city limits of Fort Collins in single family homes or duplexes . This audience was selected to be directly comparable to the 2005 study, and because violators of the ordinance are most likely to be living in single family homes. The sampling plan and many questions in the survey instrument were identical to those used in the 2005 study so that comparisons could be made. Additional questions were added to the 2009 version with the goal of capturing the effect of ordinance enforcement on Fort Collins Residents. The goal of this research was to develop estimates if violators, neighborhood impacts, awareness of the ordinance, and the level of enforcement support. SPECIAL CENSUS DATA ANALYSIS Corona utilized special US Census data to calculate an estimated number of violators and number of violator households in Fort Collins. Due to the release availability of this data, the most recent data is from 2007. The goal of this research was to provide another estimate of violators. While this is the same data set used in 2005 to develop profiles of violator households, insufficient data exists in the most recent data set to develop updated profiles, so the data is used only to estimate numbers of violators as part of a triangulation process with the survey data. COLORADO DEPARTMENT OF HOUSING ANALYSIS Using Department of Housing data, Corona determined the vacancy rates and average rental prices in Fort Collins and four other Colorado cities of similar scale (Colorado Springs, Greeley, Grand Junction, and Pueblo.) The comparison to other cities was done in order to minimize the LW• A PAGE 15 R E S E R C H effect of the recent housing downturn and economic conditions, in order to establish if Fort Collins behaved differently than the other cities. This data was used to analyze if the vacancy rate or rental prices were affected by the enforcement of the ordinance. The goal of this research was to estimate the rental market conditions and whether Fort Collins has seen different impacts when compared to other similar communities. STAKEHOLDER INTERVIEWS Representatives of several types of stakeholder groups were identified and interviewed. These stakeholders groups included landlords of various property types, tenants with various experiences, and residents who have or have not filed complaints citing the ordinance. These groups were interviewed with the research goal of identifying personal experiences, how the ordinance is perceived, and what works well and what does not. These interviews were not intended as statistical research, but rather as an understanding of the real and practical impacts of the ordinance on various constituents. NOMENCLATURE As a nomenclature note, households currently in violation of the ordinance are referred to as "violator households" or "violators" in the executive summary and in the full report. This statement is not intended as a judgment, but merely represents a technical description of these households to differentiate them from other households. • PAGE 16 R E S E R C H NUMBER OF VIOLATOR HOUSEHOLDS The research team utilized two methods to estimate the number of violators and violator households:2 American Community Survey Public Use Microdata Sample (PUMS) approach. The PUMS dataset is a specialized dataset from the U.S. Census of Population and Housing. This dataset consists of a sample of individual households' responses to the Census, and can be used to identify a wide variety of data not available via the more commonly used Census summary data. Using PUMS data, the research team estimated the proportion of violating households with a high degree of confidence. These proportions were applied to current rental housing stock estimates to develop an estimate of the number of violator households. For this study, a violator was defined as a person living in the City of Fort Collins renting and having three or more roommates. As reported by the U.S. Bureau of the Census: o In the ACS microdata, the basic unit is an individual housing unit, a group quarters person or persons who live in the selected housing unit. Each record shows all the information associated with a specific housing unit or individual except for names, addresses, or other personal identifying information. More information about the PUMS datasets, including sampling and accuracy issues, see this link: ba:/ /www. census. p,oplacslwwwlProductsIPUMSIt)umsaccura_a archived. btml Public survey. Corona Research conducted a survey of 387 households living in single-family homes in Fort Collins, excluding some of the outlying suburban parts of the city. Each household was asked several questions about the four houses closest to them, including whether that household contained more than three unrelated persons. These figures were used to calculate an estimated number of violating households. This survey's margin of error was 5%. The following table is a summary of the estimated number of violators and violator households through the 2005 and 2009 surveys as well as PUMS and Census data analysis. Overall, a general decrease in violator households and violators can be seen. In 2005, the research team estimated a total of 1 ,070 households by triangulating various estimation techniques. In 2009, we estimate 579 households with a similar methodology. Available data shows a marked decrease in 2006. Exhibit 2 2 A third method was also used in the 2005 study, but the data source for that method (the decennial census) has not been updated since the 2005 study was completed and therefore would not be useful in examining changes between 2005 and 2009. • PAGE 17 R E S E R C H Summary of Violators • A ors Violator • • • 2009 Study - 579 2009 Study (with owners) 650 2009 Survey with owners 818 2009 Survey - 677 2007 PUMS 25052 482 2006 PUMS with owners 25429 538 2006 PUMS 23320 514 2005 PUMS 53458 1281 2005 Study - 1070 2005 Study (with owners) 55003 1238 2005 Survey - 1266 2000 PUMS, scaled up to 2004 4,100 905 2000 Census, scaled up to 2004 - 1038 The estimate of violator households from the public survey was calculated via the following steps: 1 . The team totaled the number of reported violator households and divided it by the total number of houses for which data was collected (387 x 4) . 2. Because of selection statistics, the total number of identified violator households will be four times higher than the actual number, because each violator household could be identified by four nearby homes. This is corrected by merely dividing the reported numbers of violators by four prior to developing rates and incidence calculations. 3. These figures address violator household rates in single-family homes, but an additional figure must be used to estimate violator households in multi-family units. This was accomplished by using the PUMS-defined ratio of single-family home violators versus multi-family home violators. The 2005 study concentrated on the rental market and reported an official number of rental household violators (1070) , but also contained data on owner-occupied violator households as well (another 168 households) . This study contains figures (above) to represent both groups, comparing the official renter numbers (1 ,070 in 2005 versus 579 in 2009) and total numbers (1 ,238 in 2005 versus 650 in 2009) . Due to sampling issues, it is probable that the 650 figure underrepresents owner-occupied violator households, but both renter-only and total figures indicated similar magnitudes of change. The two main methods of estimation do not produce the same initial estimate, but both see the number of violator households drop significantly. The 2005 survey and 2005 PUMS data produce fairly similar results . Comparing the 2009 survey with the 2007 PUMS is not ideal, but 2007 is the latest year for which PUMS data is available. QM � PAGE 18 R E S E R C H Overall, based on a combination of the estimates, it is estimates that the number of violators has dropped by approximately 2,020 people and the number of violator households has dropped by approximately 491 renter households, and up to 97 additional owner-occupied households. The total estimated drop from 2005 in the number of violator households cannot be fully attributed to the enforcement of the ordinance. As noted below, the ordinance directly caused 105 violator households to break up. The other 380 to 480 households were broken up for other reasons; perhaps landlords adhering to the ordinance, tenants not choosing to live in violation, or any number of other reasons completely unrelated to the ordinance. One can easily conclude that the decrease in violator households is not fully driven by the complaint based ordinance enforcement, and likely is the result of voluntary compliance on the part of landlords and/or tenants. COMPLAINTS AND VIOLATOR HOUSEHOLDS The overall number of complaints filed with the City in 2007 and 2008 was 200 with 105 being founded and the violators having to find different living arrangements. Exhibit 3 Status of Occupancy Complaints from 2007 and 2008 rl -��l Lhbh�, � ■ Violation Founded ■ Violation Unfounded ■ Other COMPLAINT PROFILE Through special census data, the previous study found 70% of the violators were male. A total 86% of the houses for which complaints were filed had the gender of at least some of the tenants identified in the records, and just over three quarters (76%) of the households were primarily male based on those records. ("Primarily male" is defined as having a majority of named violators in a violator household being male.) This implies male households may be slightly more likely to be reported and forced to move than female households, though the prevalence of complaints against male households is mainly due to the fact that they're much more common. • PAGE 19 R E S E R C H Exhibit 4 Composition of Founded Violator Households L - '.... 76% ■ Households with Males or Mostly Males ■ Households with Females or Mostly Females • 3 PAGE 20 MARKET IMPACTS PREDICTED IMPACT ON RENTAL MARKET The following estimates are based on the housing choice of people of similar age as the violators. It is meant to be a model of violators' likely housing choices if they were forced to break up their household due to ordinance violation. From the 2005 study, under strict enforcement, a total of 1 ,070 rental units are in violation of the ordinance and would be forced to downsize or dissolve. This 2009 study has shown that 491 rental households (2,295 violators) have actually downsized of dissolved: These 2,295 renters from the 491 households would reform into 1 , 2, or 3-person households . Based on the 2005 research, the research team estimates that the ratio will be as follows : 0 119 of these people will form new one-person households, for a total of 119 new one-person households. 0 1 ,156 of these people will form new two-person households, for a total of 578 new two-person households 0 1 ,020 of these people will form new three-person households, for a total of 340 new households. This is a total of 1 ,037 new households. When considering that 491 violator housing units would re-enter the housing market, the net impact on the rental market is 546 new units in demand, which amount to roughly 1 . 5 percentage points of vacancy rate change. If another 97 owner- occupied units ceased to exist, the vacancy-rate impacts would rise to roughly a 1 .8 percentage point impact on vacancy rates, or 654 units. While these changes in behavior may or may not have been fully the impact of the ordinance, it is not unreasonable to assume that the ordinance was the primary factor. Note that, since 70 percent of the violator households were occupied by college students, and since rental households tend to be relatively transient anyway, the changes may not be actual breakups of existing households. Some of those households likely broke up naturally due to college graduation, tenants moving for jobs or personal reasons, or other factors. The decline may instead be a decreased formation of new violator households after existing households cycle out of existence. OBSERVED CHANGES IN RENTAL HOUSING MARKET The above changes estimate the impact of the ordinance on the housing market, based on assumptions about violators' housing choices in the event of disbanding their households (or in the case of new students, making choices other than large households) . An analysis of overall market changes in Fort Collins may be instructive in determining the relative scale of these changes within other forces that affect the rental market. In order to examine overall changes in the rental market, Corona Research used Colorado Department of Housing data to analyze rental prices and vacancy rates. Housing trends are likely changing as a result of the recent downturn in the economy and the housing market, so comparisons AL 14 • PAGE 21 R E S E X R C H using only Fort Collins data may not be completely illustrative. In order to account for this external interference, four other metro areas in Colorado of similar size were also examined and compared, using the same data source. This source contained data on the (combined) Fort Collins/Loveland market, Colorado Springs market, Grand Junction market, Greeley market, and Pueblo market as comparables.3 It should be noted that the data below is for multifamily homes as single family home data is not available for Fort Collins. The time periods were chosen because 2003 is the oldest data for which all cities had consistent data, and the period of 2006-2008 has values that reflect changes from the post-ordinance period to the most recent data. However, the time period has some uncertainty because, while enforcement began in 2007, education and registration began in 2006. Based on previous data, it appears that the year 2006 may have seen the biggest change in rental patterns due to the ordinance. RENTAL PRICES Rental price trends in the four cities, plus the Fort Collins /Loveland market, are shown below. Since first-quarter and third-quarter data are developed by the Colorado Division of Housing, both sets of figures are shown. Exhibit 5 First Quarter Rental Values - Multi-Family Units Average Rent Rental Price Change Fort Collins/Loveland $743.27 $748.88 $760.21 2% $16.94 1 % $5.61 2% $11 .33 Colorado Springs $658.26 $703.10 $689.65 5% $31 .39 7% $44.84 -2% -$13.45 Grand Junction $472.71 $557.91 $648.57 37% $175.86 18% $85.20 16% $90.66 Greeley/Weld County $590.67 $625.10 $636.38 8% $45.71 6% $34.43 2% $11 .28 Pueblo $460.39 $474.97 $497.11 8% $36.72 3% $14.58 5% $22.14 Comparing first quarter rents among the cities, Fort Collins had the highest average rent in 2003 among the five cities, but the lowest increases from 2003 to 2008, both in dollar amount and in percentage increase. While there has been some slight acceleration in the 2006-2008 time period, the increases were only at the median of the five cities. 3 Another potential comparable city, Boulder, did not have directly comparable data as it is included in the metro Denver area, which is a separate study by the Colorado Division of Housing and which is not reported in the same manner. • PAGE 22 R E S E R C H Exhibit 6 Third Quarter Rental Values - Multi-Family Units Average Rent Rental Price Change 2003 2006 2008 2003-2008 2003-2008 2003-2006 2003-2006 2006-2008 2006-2008 7Fo,1hnsLoveland $721 .84 $766.14 $854.38 18% $132.54 6% $44.30 12% $88.24 ngs $666.79 $695.36 $699.09 5% $32.30 4% $28.57 1% $3.73 n $488.22 $566.19 $670.24 37% $182.02 16% $77.97 18% $104.05 Coun $588.50 $634.45 $655.11 11% $66.61 8% $45.95 3% $20.66 $486.81 $493.95 $513.97 6% $27.16 1% $7.14 4% $20.02 Comparing third-quarter rents, Fort Collins has seen larger increases than three of the other four cities from the 2003 through 2008, with some acceleration in the most recent time period from 2006 through 2008. The proportional increase was at the median of the five cities from 2003 through 2006 with increases in the two percent annual range, and is the second-highest from 2006 through 2008, with increases of roughly six percent per year. An average of first-quarter and third-quarter rents is shown below, to provide an estimate of year-round rents. As can be seen, Fort Collins has the highest average rents of the five cities, with rates that have risen ten percent from 2003 to 2008 (tied for second-highest during that period. Much of that increase occurred in the 2006 to 2008 time period. PAGE 23 Exhibit 7 Rental Prices — Annual Estimate Average Rent ental Price Change Fort Collins/Loveland $732.56 $757.51 $807.30 10% $74.74 3% $24.95 7% $49.79 Colorado Springs $662.53 $699.23 $694.37 5% $31 .85 6% $36.71 -1% -$4.86 Grand Junction $480.47 $562.05 $659.41 37% $178.94 17% $81.58 17% $97.36 Greeley/Weld County $589.59 $629.78 $645.75 10% $56.16 7% $40.19 3% $15.97 Pueblo $473.60 $484.46 $505.54 7% $31.94 2% $10.86 4% $21 .08 Note: the rental prices are the average of the first and third quarterprices Exhibit 8 Plotted Rental Values, All Units $ 800 $ 700 $ 600 $ 500 $400 2003 2004 2005 2006 2007 2008 Colorado Springs Fort Collins /Loveland Grand Junction — Greeley/Weld County Pueblo Note: the rental prices are the average of the first and third guarterprices • PAGE 24 R E S E R C H RENTAL VACANCY RATES Vacancy rate data is presented below for time periods from 2003 through 2008. Exhibit 9 First Quarter Vacancy Rates ChangeV a�axlvy-rkwlc Vacancy Rate II II . m=OJW II I1 : 11 116 I16 II : Fort Collins /Loveland 16% 9% 5% -10.9 -7.3 -3.6 Colorado Springs 13% 11 % 9% -3 .7 -2. 1 -1 .6 Grand Junction 10% 3% 2% -8 .3 -7. 1 - 1 .2 Greeley/Weld County 11 % 8% 7% -3 .4 -2.6 -0.8 Pueblo 1 8% 1 9% 1 6% 1 -2.3 1 0.4 1 -2.7 In 2003, all five metro areas had vacancy rates above what is normally considered an ideal rate of approximately 3 to 5 percent (low enough to be profitable for landlords and high enough to offer housing choice to tenants) . Declines in vacancies were observed in all markets over the next five years. By 2008, Grand Junction was at a level below what is normally considered healthy, while Fort Collins was in the typical healthy range. Fort Collins has seen the largest decline in vacancy rates of any of the five cities during the 2003 through 2008 time period, with a decline of nearly 11 percentage points. However, this decline has taken the market from a previously unhealthy level for landlords to a healthy level, so as noted earlier the effect on prices is not particularly large compared to other cities where vacancy rates have not changed so strongly. Exhibit 10 Third Quarter Vacancy Rates Changecancy Rate Vacancy Rate i2006 2008 II II : II II II II : Fort Collins /Loveland 12% 8% 4% -8 . 1 -4. 1 -4.0 Colorado Springs 11 % 11 % 9% -2. 1 0.0 -2. 1 Grand Junction 9% 3% 2% -6 .3 -5.9 -0.4 Greeley/Weld County 10% 7% 6% -4.3 -2.5 - 1 .8 Pueblo 10% 8% 7% -3 .4 -2.2 - 1 .2 Similar to the first-quarter figures, declines in vacancies were seen in all markets. Fort Collins saw the largest decrease in vacancy rates between 2003 and 2008. For the third quarter in 2008, vacancy rates dropped into the ideal vacancy rate range of 3 to 5 percent. By doing a simple combination of first-quarter and third-quarter vacancy rates, an overall vacancy rate portrait can be prepared, as shown below. AL di PAGE 25• R E S E X R C H Exhibit 11 Vacancy Rates — Annual Estimates ChangeVacancy Rate Vacancy Rate 11 116 2008 II I1 : II 116 I16 II : Fort Collins /Loveland 14% 8% 5% -9 .5 -5.7 -3.8 Colorado Springs 12% 11 % 9% -2.9 -1 .1 -1 .9 Grand Junction 9% 3% 2% -7 .3 -6.5 -0.8 Greeley/Weld County 10% 8% 6% -3.9 -2.6 -1 .3 Pueblo 9% 8% 6% -2.9 -0.9 -2.0 Note: the vacancy rates are a simple average of the first and third quarter rates In terms of actual vacancy rates, the following exhibit shows that all five metro areas except Grand Junction had vacancy rates at or above what is normally considered an ideal rate of approximately 3 to 5 percent, and also that all five metro areas saw declined in vacancy rates during the period. In the 2003-2008 time frame, Grand Junction has seen a strong decrease in vacancy rate, to the point where that market is seeing an unhealthy shortage of available rental properties. Fort Collins /Loveland has seen a decrease from a previous level that was unhealthy for landlords to a level that is now in the healthy range. Decreases in the other three markets still leave them at a relatively high vacancy rate. Exhibit 12 Plotted Vacancy Rates, All Units 14.0 12.0 10.0 8.0 6 .0 4.0 2.0 0.0 2003 2004 2005 2006 2007 2008 Colorado Springs Fort Collins /Loveland Grand Junction Greeley/Weld County Pueblo Note: the vacancy rates are the average of the first and third quarter rates • PAGE 26 R E S E R C H PRICE CHANGES BY UNIT TYPE Rental prices by unit size are shown below, for efficiency units as well as 1 , 2, and 3-bedroom units. (Again) all are for multi-family units only, since this is the only data gathered by the Colorado Division of Housing in their reports.) Note that for the following tables and graphs, the rental values and the vacancy rates are a simple average of the first and third quarter values for each year. Exhibit 13 Rental Values, Efficiency Units �Iw Rental Price Change Fort Collins/Loveland $486.74 $444.00 $564.66 16% $77.93 9% -$42.74 27% $120.67 Colorado Springs $506.48 $479.79 $498.96 -1 % -$7.52 -5% -$26.69 4% $19.18 Grand Junction $185.65 $221 .81 $340.49 83% $154.85 19% $36.17 54% $118.68 Greeley/Weld County $431 .39 $465.47 $465.40 8% $34.01 8% $34.08 0% -$0.07 Pueblo $266.44 $361 .60 $357.50 34% $91 .07 36% $95.16 -1 % -$4.10 For efficiency units, three of the five cities have seen notable price increases from 2003 to 2008, and Fort Collins is the median in terms of price increases at roughly 3 percent per year. Fort Collins has the highest overall prices. Exhibit 14 Plotted Rental Values, Efficiency Units $ 550 $450 $ 350 $250 $ 150 2003 2004 2005 2006 2007 2008 Colorado Springs Fort Collins /Loveland Grand Junction Greeley/Weld County Pueblo • PAGE 27 R E S E R C H Exhibit 15 Rental Values, 1 Bedroom Units Rent WRental Price Change Fort Collins/Loveland $625.61 $669.46 $796.95 27% $171 .34 7% $43.85 19% $127.49 Colorado Springs $582.79 $610.77 $839.10 44% $256.31 5% $27.98 37% $228.33 Grand Junction $399.53 $517.35 $602.97 51 % $203.45 29% $117.82 17% $85.63 Greeley/Weld County $555.86 $547.82 $708.05 27% $152.19 -1% -$8.04 29% $160.23 Pueblo $429.01 $439.00 $619.00 44% $189.99 2% $9.99 41% $180.00 For one-bedroom units, all five cities have seen notable price increases from 2003 to 2008, with Fort Collins seeing the lowest increases overall. Fort Collins has the second-highest overall prices. Exhibit 16 Plotted Rental Values, 1 Bedroom Units $750 $700 $650 $600 $ 550 $ 500 $450 $400 $350 2003 2004 2005 2006 2007 2008 Colorado Springs Fort Collins /Loveland Grand Junction � Greeley/Weld County Pueblo • � PAGE 28 R E S E R C H Exhibit 17 Rental Values, 2 Bedroom Units Rent WRental Price Change Fort Collins/Loveland $754.66 $766.53 $810.51 7% $55.84 2% $11 .87 6% $43.98 Colorado Springs $733.61 $758.89 $778.31 6% $44.70 3% $25.29 3% $19.42 Grand Junction $529.28 $642.45 $742.52 40% $213.25 21% $113.17 16% $100.08 Greeley/Weld County $642.34 $672.22 $704.56 10% $62.22 5% $29.88 5% $32.34 Pueblo $546.70 $598.55 $711 .62 30% $164.93 9% $51 .86 19% $113.07 For two-bedroom units, two of the five cities have seen notable price increases from 2003 to 2008, and Fort Collins had relatively small price increases of less than one percent per year (though with some acceleration in recent years) . Fort Collins has the highest overall prices. Exhibit 18 Plotted Rental Values , 2 Bedroom Units $ 850 $ 800 $ 750 - $ 700 _ $ 650 $ 600 $ 550 $ 500 $450 2003 2004 2005 2006 2007 2008 Colorado Springs Fort Collins /Loveland Grand Junction Greeley/Weld County Pueblo • PAGE 29 R E S E R C H Exhibit 19 Rental Values, 3 Bedroom Units Rent WRental Price Change 2003 2006 2008 2003-2008 2003-2008 2003-2006 2003-2006 2006-2008 2006-2008 Fort Collins/Loveland $895.06 $892.65 $1 ,059.16 18% $164.10 0% -$2.41 19% $166.51 Colorado Springs $883.71 $924.80 $962.03 9% $78.32 5% $41 .09 4% $37.23 Grand Junction $634.00 $620.78 $807.31 27% $173.31 -2% -$13.22 30% $186.53 Greeley/Weld County $768.09 $767.39 $736.17 4% -$31 .92 0% -$0.70 -4% -$31 .22 Pueblo $664.14 $676.88 $767.82 16% $103.68 2% $12.75 13% $90.94 For three-bedroom units, three of the five cities have seen notable price increases from 2003 to 2008, with Fort Collins showing the second-highest proportional increase. Those increases have occurred in the 2006 to 2008 time frame only. Fort Collins has the highest overall prices. Exhibit 20 Plotted Rental Values, 3 Bedroom Units $ 1 ,050 $950 woo $ 850 $750 $ 650 $ 550 2003 2004 2005 2006 2007 2008 Colorado Springs Fort Collins /Loveland Grand Junction Greeley/Weld County Pueblo • PAGE 30 R E S E R C H VACANCY RATE CHANGES BY UNIT TYPE Vacancy rates by unit type are shown below, where that data is collected. (Data are not available for all five comparable metro areas.) Exhibit 21 Vacancy Rates , Efficiency Units Vacancy Rate W Vacancy Rate Change 2003 20082006 II II : II II . II . II : Fort Collins /Loveland 17% 11 % 6% -11 .6 -6 .5 -5 . 1 Colorado Springs 9% 9% 9% 0.5 0. 1 0.5 Grand Junction - 2% - - - -1 .5 Greeley/Weld County - 6% 12% - - 5 .8 Pueblo - 6% 6% - - 0.2 Efficiency units in Fort Collins/Loveland have seen significant decreases in vacancy rates, though they are currently still slightly above ideal levels from a market perspective. Exhibit 22 Plotted Vacancy Rates , Efficiency Units 30.0 25.0 20.0 15.0 10.0 5.0 0.0 2003 2004 2005 2006 2007 2008 Colorado Springs Fort Collins /Loveland Grand Junction Greeley/Weld County Pueblo • PAGE 31 R E S E R C H Exhibit 23 Vacancy Rates, 1 Bedroom Units Vacancy Rate Vacancy Rate Change 2003 20082006 II II : II 116 116 II : Fort Collins /Loveland 8% 5% 3% -4.7 -3.2 - 1 .5 Colorado Springs 11 % 8% 8% -3.0 -2.4 -0.6 Grand Junction 3% 1 % 3% -0.7 -2. 1 1 .4 Greeley/Weld County 10% 6% 6% -4.6 -3.8 -0.8 Pueblo 10% 8% 6% -3.9 -1 .8 -2. 1 One-bedroom units in Fort Collins/Loveland have seen significant decreases in vacancy rates, and are currently at the lowest end of ideal levels from a market perspective. Exhibit 24 Plotted Vacancy Rates, 1 Bedroom Units 12.0 10.0 8.0 6 .0 4.0 2.0 0.0 2003 2004 2005 2006 2007 2008 Colorado Springs Fort Collins /Loveland Grand Junction Greeley/Weld County Pueblo • PAGE 32 R E S E R C H Exhibit 25 Vacancy Rates, 2 Bedroom Units Vacancy Rate Vacancy Rate Change 2003 20082006 II II : II 116 116 II : Fort Collins /Loveland 13% 8% 4% -9.4 -5.9 -3 .5 Colorado Springs 12% 13% 10% -2. 1 0.6 -2.7 Grand Junction 14% 3% 2% -11 .7 -10.6 - 1 . 1 Greeley/Weld County 9% 8% 7% -1 .9 -0.7 - 1 .2 Pueblo 10% 9% 8% -1 .8 -1 . 1 -0.7 Two-bedroom units in Fort Collins/Loveland have seen significant decreases in vacancy rates, and are currently in the range of ideal levels from a market perspective. Exhibit 26 Plotted Vacancy Rates, 2 Bedroom Units 20.0 15.0 10.0 5 .0 0.0 2003 2004 2005 2006 2007 2008 Colorado Springs Fort Collins /Loveland Grand Junction Greeley/Weld County Pueblo • PAGE 33 R E S E R C H Exhibit 27 Vacancy Rates, 3 Bedroom Units Vacancy Rate W Vacancy Rate Change I03 22008006 II II : II 116 116 II : Fort Collins /Loveland 16% 11 % 7% -8.8 -4.8 -4. 1 Colorado Springs 12% 13% 10% -2.6 0.7 -3.2 Grand Junction 11 % 7% 2% -9.9 -4.7 -5 .2 Greeley/Weld County 12% 9% 7% -5.3 -2.6 -2.6 Pueblo 10% 9% 9% -1 .6 -1 . 1 -0.5 Three-bedroom units in Fort Collins /Loveland have seen significant decreases in vacancy rates, but are currently still well above the range of ideal levels from a market perspective. Exhibit 28 Plotted Vacancy Rates, 3 Bedroom Units 20.0 15.0 10.0 5 .0 0.0 2003 2004 2005 2006 2007 2008 Colorado Springs Fort Collins /Loveland Grand Junction Greeley/Weld County Pueblo OBSERVED CHANGES IN NEIGHBORHOOD ISSUES The following section contains the key findings from the 2009 survey. Appendix A contains the survey instrument. Any instance of the totals not adding up to 100% is due to rounding. Corona conducted a telephone survey of residents to gather their opinions and knowledge about problem properties in their own neighborhoods. Corona used the same methodology (a telephone survey of 387 residents for a 5% margin of error.) and similar questions as the previous survey to ensure the results can be compared, though it is important to keep in mind that the number of • � PAGE 34 R E S E R C H completed surveys only provided an ability to examine changes with a low level of statistical confidence. NUMBER OF NEARBY VIOLATORS As with the original study, this was one of two methods used to develop estimates of the prevalence of violator housing. Other questions from the previous survey were repeated to examine issues that were corroborated with proximity to violator households. Exhibit 29 Number of Violators Near Respondents House Thinking about the four homes nearest toyours, horn many wouldyou say have had these problems during the just six months? More than three people who are unrelated to each other living in the house -��l ■ Zero ■ One ■ Two ■ Three ■ Four Most respondents do not live near any violators; 17% said they live near a violating household. Because a single violator household could be near up to four other homes, adjustments were made when using these results to estimate the total number of violator households. Exhibit 30 Number of Violators in Nearby Households (If they had a violator living nearby) Horn many of the four houses nearyou? OR PAGE 35 R E S E X R C H 1 02 03 04 Of those who live near violator households, seven-tenths reported live near one violating household and seventeen percent reported living near 2 violators. Exhibit 31 Number of Violators Near Respondents House Prior to 2007 Thinking again about the four houses that are closest to you, _p r to 2007, did any of them have more than three unrelated adults living together? Yes ❑ No ❑ Don't know • PAGE 36 R E S E R C ' i Seventeen percent of respondents said that there were violators living in at least one of the nearest four houses in 2007. As seen earlier, seventeen percent of respondents also said that there were violators living in at least one of the nearest four houses in 2009. This indicates either that the number of violators has not decreased during that time (implying that the observed increases occurred earlier, but still after 2005) ; or that the concentration of violator households has decreased, but there are still such households dispersed in the community (i.e. there used to be three violator households nearby, now there is only one), or perhaps respondents do not have the clearest memory of their neighbors two years ago and reverted to their current neighbors. In the 2005 survey, 70% of respondents reported having no neighbors violating the ordinance while the 2009 survey had 84% report having no neighbors violating the ordinance. AWARENESS OF ORDINANCE Exhibit 32 Awareness of ordinance Areyou aware of a city ordinance thatpmhibits more than three unrelated adults from living together? Yes No Don 't know Over 85 percent of residents are aware of the ordinance. ORDINANCE IMPACT Exhibit 33 Impact on Neighborhood of those who had a Violating Neighbor Move Out Asked to those who had a violating neighbors change their living arrangements: What was the impact of the violating residents moving out on the neighborhood? OR PAGE 37 R E S E X R C H I I I I 0% 20% 40% 60% 80% 100% ■ Positive impact ■ Negative impact ■ No significant impact Of the 9 (17%) respondents who reported a neighbor violating the ordinance had to move out, 67% said the moving had a positive impact on the neighborhood while only 11 % said the impact was negative. When asked to describe the impact on the neighborhood, respondents wrote the following (comments are verbatim and represent all write-in comments) : I think it is a good idea. It seems that when there are more than three unrelated there is a tendency to be more disruptive. It is diermt than a family situation who is raising a family. Not some twenty-somethings. The noisy parties, we bad people who would be sexually explicit in the street on the cars. We bad one who was sleeping on a bench in front of our house. Our bushes were urinated on. So we were happy because of this ordinance we couldget theseyoung men moved out. The rowdiness decreased. They had loud parties, tracks and weeds in the yard, and cars parked inappropriately. The neigbborbood got much quieter after they were forced to leave. They went from a whole bunch of college kids, about five or six. There were parking and lawn problems. Cars parked all over, noise, party things and trash all over, even in our streets. We had put up with an awful lot from that household including noise complaints. So, when they bad to move out, everyone was delighted. Well think our kids feel safer with the bomelessguy gone that was living in the trailer on the lawn. Partying all hours of the night and cars parked everywhere. They were college students. The upkeep of the house at that time was very poor. The noise that tbey made was the biggest factor. (Note that all responses are verbatim and not edited for content.) Exhibit 34 To those Who own Rental Property: What impact has the ordinance had? What kind of impact has the ordinance badyour rental properties? • PAGE 38 R E S E A R C H I I i 0% 20 % 40% 60 % 80 % 100% Positive impact 0 Negative impact No impact Of the 11 % of respondents who owned rental property, 81 % said the ordinance has had "No significant impact" on them. This is significantly more than those who reported either a "Positive" or "Negative" impact. Of those who said the ordinance had an impact, more respondents said the ordinance has had a negative impact than a positive impact. When asked to describe the impact, respondents wrote (comments are verbatim and represent all write-in comments) : We did have the problem with college kids renting the property prior to enforcement of the ordinance. We had to do some evictions when the renters were college students. Now we are getting better tenants in and they are keeping the property up better. When the college kids lived there, they didn 't want to take any responsibility for the house. And it seems like there was more destruction of the proper y with parties when the college kids lived there. When you get families all related living there,you don 't have this problem. It is one of those thingsyou hear, that the ordinance limits the owner in terms of the individuals who can rent your home. It significantly lowers the people living inyour house and, depending on the neighborhood, it could be positive because it creates more demand. I don 't like the ordinance and think they can fix other problems that need to be addressed. We have four bedroom rental houses that we can now only rent to three college students. So now they have to pay more rent. It hasn 't affected us as far as being able to keep the property rented out. I think that is because of the economy and people are losing their houses, so they turn to rental properties. We have had to tell our renters that they cannot move extra people into the house. Because it's single family homes that are renting the properties so it keeps the neighborhoods quiet and it's nicer that way. I own a condominium in a high rise building. I think it would be ridiculous to have three unrelatedpeople living in there. It would be too disruptive. I think the ordinance controls this. My area is over by CSU, it is a problem to have less than two unrelated for college students to rent or more people to hep afford rent during this time. QM � PAGE 39 R E S E R C H Quality of clients has been diminished, along with resale value going down, excessive cost to comply. Too much government makes people move away. That is it. (Note that all responses are verbatim and not edited for content.) PREFERRED ORDINANCE ENFORCEMENT Exhibit 35 Preferred enforcement of the ordinance How strictly would you prefer to see enforcement of the city ordinance that limits the number of unrelated adults who can share a house to three people? 0% 20% 40% 60% 80% 100% ■ More strictly ■ Less strictly At the right level Don't know More respondents said the ordinance is being enforced "At the right level' than any other response. Thirteen percent more responded that they wanted the ordinance enforced "More Strictly" than those who wanted the ordinance enforced "Less Strictly", or about double the rate. Exhibit 36 Preferred enforcement of the ordinance by number of nearby violators How strictly would you prefer to see enforcement of the city ordinance that limits the number of unrelated adults who can share a house to three people? Combined with: • PAGE 40 R E S E R C H Thinking about the four homes nearest toyours, how many wouldyou say have had these problems during the past six months? More than three people who are unrelated to each other living in the house? Zero One — Two or More 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% ■ More Strictly ■ At the right level ■ Less Strictly ■ Don't Know The more violator households respondents lived near, the more likely they were to say the ordiance should be enforced "more strictly." Those living near two or more violators were more than three times as likely to say the ordinance should be enforced more strictly than those living near zero violators. (Note that there were only 21 respondents reporting that they live near two or more violators.) Respondents not living near any violators were more than twice as likely to say the ordinance should be enforced "less strictly" than those living near one violator, and no respondents living near two or more violators said the ordiannce should be enforced "less strictly." NEIGHBORHOOD PROBLEMS Exhibit 37 Number of Nearby Homes with Neighborhood Problems How many of the four homes nearest toyours wouldyou say have had these problems during the past six months? • PAGE 41 R E S E R C H Animals running loose I ' Criminal activity Disruptive parties : I ' More than three unrelated people living in the house Loud noise other than parties, such as stereos or yelling Parking vehicles inappropriately Unkempt lawn Trash or junk in the yard : ' 40/1 Poorly maintained house : ' 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% ■ Zero ■ One ■ Two or more The most prevalent neighborhood problem is "animals running loose" with 26% reporting at least one house having this problem. "Criminal activity" and "disruptive parties" are the least prevalent neighborhood problem listed with 87% reporting zero neighboring households having these problems. Exhibit 38 Number of Nearby Homes with Neighborhood Problems, by number of nearby violators How many of the four homes nearest toyours wouldyou say have had these problems during the past six months? Combined with: Thinking about the four homes nearest toyours, how many wouldyou say have had these problems during the past six months? More than three people wbo are unrelated to each other living in the house? • PAGE 42 R E S E A R C H a� o Zero : ' � o °p One Two or more Zero One Two or more y Zero 4 One Q Two or more % I % ' oo Zero : vl One o 0 Two or more a� Zero a o One � � a Two or more I % ' ' a Zero : ' One Two or more ' -� Zero ' o One I ' � Two or more -� Zero 0 One I ' . 0 0 Two or more 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% ■ Zero ■ One ■ Two or more In every neighborhood problem category, the number of households causing the neighborhood problem increase as the number of "three unrelated" violator households increases. The largest increases are seen in the categories of "parking vehicles inappropriately", "trash or junk in the yard", "poorly maintained house", and "unkempt lawn." This does not necessarily indicate that the violator households were the offenders because the respondent was not asked to identify the home with the • PAGE 43 R E S E R C H problem. It does imply that people living near violator households observe more problems, though it cannot be proven definitively whether violator households create the problems or whether they simply are located in neighborhoods where the problems are more common. (Other data reported elsewhere, though, indicate higher support for strong enforcement of the ordinance when a respondent lives near one or more violator households.) NEIGHBORHOOD RATING Exhibit 39 Neighborhood Rating How wouldyou rateyour neighborhood in terms of the following factors? Peace and quiet Maintenance of lawns Maintenance of houses Sense of communir 0% 40% 60% 80% 1000/0 ❑ Vern good ■ Good ■ Fait ■ Bad ■ Vem bad Very few respondents rated any neighborhood rating category "bad" or "very bad." "Sense of community" had the least "very good" or "good" and also had the most "bad" or "very bad" ratings while "maintenance of houses" had the most "very good" and "good ratings." Overall, very few respondents rated any category as "bad" or "very bad." Exhibit 40 Neighborhood Rating by number of nearby violators How wouldyou rateyour neighborhood in terms of the following factors? Combined with: OR PAGE 44 R E S E A R C H Thinking about the four homes nearest toyours, how many wouldyou say have had these problems during the past six months? More than three people who are unrelated to each other living in the house? -� Zero I ' . U U One % " % % Two or more U Zero One Two or more ----- d I I I I I I I I # U Zero �, o One 2 14 w o Two or more w ��' Zero o °�' One I ' . O Two or more I ' V 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% ■ Very Good ■ Good ■ Fair ■ Bad ■ Very Bad Every neighborhood rating has fewer "good" and "very good" ratings as the number of violator houses goes up. The biggest change is seen in "maintenance of lawns." Those living near two or more violators are significantly more likely to rate a category "bad" and "very bad." As stated with the analysis of neighborhood problems, this does not prove (or disprove) a causal link between the presence of violator households and neighborhood rating. Perhaps an area with a high concentration of violators is more likely to have these problems independent of the presence of violator households. COMPARISON OF 2009 AND 2005 SURVEYS The following are comparisons of the 2009 survey with the 2005 survey. Neighborhood problems have decreased and neighborhood rating has gone up during this four-year time period. This could be due to a number of factors, of which the enforcement of the ordinance is one possibility. Exhibit 41 Comparison of Neighborhood Problems How many of the four homes nearest toyours wouldyou say have had these problems during the past six months? LW• A PAGE 45 R E S E R C H • I 65% 26% 10% 0 59% 29% 12% ■■■■■■■■■■ 0 87% 11% 0 4. 84% 14% 09 87 /0 10 % 4 / 05 • 82% 12% bz • • 0 76% 19% • • 1` • ■■■■■■■■■■ • • • • 09 c�4 05 0 0 09 66% 23% 11% ■■■■■■■■■■ 05 09 0 07 71% 19% 10% 1 ' 1 ' 1 ' 1 ' 41 ' 1 ' 1 ' 1 ' : 1 ' 1 ' 11 ' EZffo MOne MTwoormofe PAGE 46 COR NA While the differences are small in many cases, every category has seen an increase in the number of households reporting that zero nearby homes have a given problem. The greatest increase of zero houses, 14%, can be seen in the "more than three people who are unrelated to each other living in the same house" which had double the increase of any other change. Exhibit 42 Comparison of Neighborhood Rating How wouldyou rateyour neighborhood in terms of the following factors? v 09 L v a� U 05 w 09 U 05 w 09 a a 0 y o 05 4 0 w 09 o v' 0 05 " 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% ■ Very Good ■ Good Fair ■ Bad ■ Very Bad Every neighborhood rating has seen an increase in "good" and "very good" ratings. The biggest increase has been in "sense of community." Exhibit 43 Comparison of Neighborhood Rating by number of nearby violators How wouldyou rateyour neighborhood in terms of the following factors? OR PAGE 47 R E S E A R C H Combined with: Thinking about the four homes nearest toyours, how many wouldyou say have had these problems during the just six months? More than three people who are unrelated to each other living in the house? C% Zero 0 ' 0 Ln Zero 0 l o One -ti C U ,n CD One a� o Two or more "' Two or more 0 °` Zero 0 "' Zero �* a o B 0\ One 0 0 v U "' One ' 0 ' a� o l o Two or more o Two or more 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% ■ Very Good ■ Good Fair ■ Bad ■ Very Bad OR PAGE 48 R E S E AR C H 0 Zero N ^ Zero o 0 �+ One 0 0 V U C � o One l °` Two or more 0 "' Two or more 0 0\ Zero 0 "n Zero 0` One � o 0 U W o Ln One V o C V) o Two or more "' 0 Two or more dh 1 1 - 7; 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% ■ Very Good ■ Good Fair ■ Bad ■ Very Bad Generally, neighborhood ratings have increased even when controlling for number of violator households nearby. If the only change was the ordinance, one would not expect the neighborhood ratings to improve in instances where there were no violator households. Therefore, while it cannot be proven from this data that the ordinance did not have an impact, it also cannot be proven that the ordinance is the driving factor behind the changes. Exhibit 44 Comparison of Neighborhood Problems by number of nearby violators How many of the fbur homes nearest toyours wouldyou say have had these problems during the past six months? Combined with: Thinking about the four homes nearest toyours, how many wouldyou say have had these problems during the past six months? More than three people who are unrelated to each other living in the house? (number of violators shown on the vertical axis) • PAGE 49 R E S E R C H Zero Zero • - CD One 61% 28% 11% CD • or • - Ln • or • -Zer ---------- • ---------- • One 71% 29% One Two or more 61% 28% 11% ---------- C) Two ---------- or more69% 19% 11% ---------- CD •CD ---------- •CN C14 CD One Ln One CN CD ---------- • or • - ---------- • or • 28% 28% 44% CD Zero Ln •CN One 61% 37% • • -Two or more ---------- • or • - 1 ' 1 ' 1 ' 1 ' 1 ' 1 ' 1 ' 1 ' : 1 ' 1 ' 11 ' % MOne MTwoormorc COR NA A 0 ---------- Zero CD • CD One 34% 54% 12% Ln One 44% 44% 12 l C) Two or more ---------- • • • -Zer 47% ---------- CD •Ln CD 82% 16% ---------- • One 37% 49% 15% 04 One CD Two or more CD • or • 31% 22% 47% ---------- •Ln ---------- • One CD 39% 51% 10% One 0 CD CD Two or more Ln o or moreCD --0/---5°/---6°/-- ---------- • ---------- rci 86% 12% • 44% 46% 10% ---------- One • CD • or • - Ln o or more 1 ' 1 ' 1 ' 1 ' 1 ' 1 ' 1 ' 1 ' : 1 ' 1 ' 11 ' • PAGE 51 COR NA Those living near two or more violators saw a decrease in animals running lose, criminal activity, and poorly maintained yards . All other categories saw an increase with relatively large increases seen in loud noises other than parties and parking inappropriately. Those living near zero violators reported fewer instances of every neighborhood in 2009. Those living near one violator household saw an increase in animals running loose, disruptive parties, unkempt lawns, trash in yards, and poorly maintained houses when compared to 2005. There was a decrease or a no change in the rest of the categories. Overall, most neighborhood problems have decreased when looking at the complaints in aggregate. This could indicate that of the violators still in the City, they are behaving better than they were in 2005. PAGE 52 A IMPACTS ON AN INDIVIDUAL LEVEL BACKGROUND Corona conducted telephone interviews with members of three distinct audiences living or having property within Fort Collins city limits including: landlords, tenants (i.e., renters) , and "neighbors" (i.e., owners or long-term residents) . The City desired to hear from a sample of each of these groups in order to learn about the different ways that each had been affected by the ordinance, as well as to hear their opinions. Findings from the interviews are set forth in this report. PROJECT DESIGN AND METHODOLOGY Corona Research conducted a total of 30 in-depth interview sessions, including 10 with each of the three aforementioned audiences. All interviews were conducted over the telephone during the months of March and April, 2009. The following paragraphs describe key factors in the methodology of recruitment and implementation. Recruitment: Each segment of participants required slightly different methods for recruiting. Corona Research carefully considered the recruiting goals for the project so that information collected would represent a variety of different experiences as well as points of view. The different considerations for recruiting participants in each audience are shown in tables below, and each is accompanied by the process for recruiting. Note: It should first be explained that, in each segment, some portion of participants were recruited through the telephone survey that was conducted prior to the interviews. At the end of the survey, the participant was asked if they would be interested in participating in further research related to the three-unrelated ordinance. If interested, they provided their first and last name as well as a telephone number. This information was used to subsequently contact a random sample potential interview participants to see if they were still interested, and to then ensure that they qualified. The tables on the following pages describe the recruiting process for each segment in more detail. RESEARCH GOALS It should be emphasized that the research goal of the qualitative research was to understand the "story" of the ordinance's impacts on various Fort Collins constituent groups. The goal of the interviews was not to develop statistics, and participants were recruited to hear a variety of voices, not necessarily a proportionally representative sample of voices. Because of this, the research team does not report statistics on the proportions of interviewees holding specific viewpoints. The goal of the qualitative research is to understand how the ordinance impacted people, and to understand any unanticipated impacts. The research also listened for examples of potential improvements to the design or implementation of the ordinance, and to areas of specific support or opposition. NOMENCLATURE Throughout this section, the following terms are used to define three groups: • Landlords — people who own residential property in Fort Collins that they rent to other people. • PAGE 53 R E S E R C H • Tenants — people who rent residential property in Fort Collins • Neighbors — people who live in residential property in Fort Collins that they own, or possibly have rented for an extended period as a long-term residence • PAGE 54 RECRUITING LANDLORDS The following chart summarizes both the qualifying characteristics for respondent participation in the study as well as the target profile, or make-up, of landlords to be achieved for the 10 interviews. Recruiting was actively managed and conducted to meet the following parameters. FLANDLORDS (PROPERTY OWNERS OR MANAGERS) - 10 INTERVIEWS Qualification parameters Must currently own a property or properties in Ft. Collins city limits that they rent to other people Must have been a landlord (a property owner or property manager) in Ft. Collins city limits at least since 2006 Must be familiar with the ordinance Target profile of respondents Mix of owners and managers At least 5 must rent out single family home(s) o The remaining property owners can have a townhome(s) or an apartment(s) Mix of small-, medium-, and large-scale property owners/managers (in terms of how many properties they own/manage) Mix of properties with different numbers of bedrooms Landlords were recruited through two methods to achieve the parameters above. Initially, recruiters placed calls to random survey participants who had expressed interest in participating, and had also stated during the survey that they own property in Fort Collins for the purpose of renting. In addition to these potential respondents, the Corona logistics team researched property owners and managers online, and proactively placed calls to organizations in order to invite qualifying professionals working in the rental market in Fort Collins to participate. This step was crucial to ensure that a mix of property owners and managers were reached for the study. Important note: No one in any segment was signed up to participate without first making certain that they qualified to participate in the research. The recruiting team used a set of screener questions in order that each person registered met the requirements set, shown in the chart above. The remaining steps of the recruiting process are described later in this section. RECRUITING TENANTS The following chart summarizes both the qualifying characteristics for respondent participation in the study as well as the target profile, or make-up, of tenants to be achieved for the 10 interviews. Recruiting was actively managed and conducted to meet the following parameters. • � PAGE 55 R E S E R C H TENANTS - i INTERVIEWS Qualification parameters Must have lived in Ft. Collins city limits continuously since 2006 (rented before and after Jan., 2007) Must have at least some level of awareness about the ordinance Should have changed addresses within Ft. Collins since Jan. '07 Must have been a property renter for the time period noted above (does not have to be the same property for the whole time) Target profile of respondents Mix of students/non-students: o About 7 participants should be college students currently o About 3 people can be recent graduates or non-students Mix of ways that people have been affected by the ordinance: o 34 who are currently violating the ordinance—that is, they now live in a home with more than 3 unrelated adults (but no one has complained) o 34 who did live in a home with more than 3 unrelated, but got kicked out due to ordinance o 34 non-violators, but impacted by the ordinance in their own judgment (decided to break up their household due to ordinance or it impacted their decisions for living/visiting arrangements) Mix of ages, although most should be 18-25 Tenants were recruited through several methods. Like the `landlords' segment, recruiters placed calls to the public survey participants who had expressed interest in participating, and had also indicated during the survey that they are currently renting. Because there were relatively few people to call from the survey since the survey targeted single-family home dwellers, additional methods of recruiting were employed. Three additional sources were used: • � PAGE 56 R E S E R C H A list was purchased from a commercial list firm of likely renters in the Fort Collins city limits. Letters were sent to each of these addresses, briefly explaining the project and inviting recipients to call Corona offices for more information and to see if they qualify to participate. Corona Research was provided by the City a list of information concerning complaints that had been placed in the city in 2007 and 2008, related to the occupancy ordinance. This list included names and addresses (in most cases) of both the party placing the complaint, as well as the property that was the focus of the complaint. Corona mailed letters to each of these tenant addresses, inviting residents to call and speak with a Corona representative about participating in the research. A second commercial list was purchased which provided names of college students living off-campus. A mailing was also directed at these households in order to fill the remaining interview spots and meet the target profile for this segment. PAGE 57 �• RECRUITING NEIGHBORS The following chart summarizes both the qualifying characteristics for respondent participation in the study as well as the target profile, or make-up, of neighbors to be achieved for the 10 interviews. Recruiting was actively managed and conducted to meet the following parameters. NEIGHBORS Qualification parameters Must have lived in Ft. Collins city limits continuously since 2006 Must have at least some level of awareness about the ordinance Must not have changed address of residence during the time period noted above Target profile of respondents Residents with a mix of different family statuses avoiding people who are current college students Residents who state a mix of ways they have been affected by the ordinance o 34 who are currently living near at least one violating household o 34 who have complained about their neighbors because they believed they were violating the ordinance o 34 who may not fit into either of the above categories, but have noticed either positive or negative changes in their neighborhood because of the ordinance Mix of types of properties that they live in: o 5-6 who live in single-family homes o Remaining participants can live in other types of properties (townhomes, apartments) Neighbors were recruited through two methods. Like the `landlords' segment, recruiters placed calls to the survey participants who had expressed interest in participating, and had also indicated during the survey that they are currently living near a home with more than three unrelated people living there, or had indicated that, since 2007, they no longer live near a home with three unrelated residents where there previously had been. Additionally, several participants in this segment were recruited from the list provided by the City of Fort Collins described in the `tenants' section above. This was a list of information • A PAGE 58 R E S E A R C H concerning complaints that had been placed in 2007 and 2008, related to the occupancy ordinance. This list included names and addresses (in most cases) of both the party placing the complaint, as well as the property that was the focus of the complaint. For recruiting in this `neighbors' segment, Corona mailed letters to the complaining parties, inviting them to call and speak with a Corona representative about participating in the research. Regardless of the result of the complaint, this ensured that some neighbors who had made use of the ordinance in this manner would be represented in the study. At the same time, the research team limited the number of these participants in order to have a diverse mix of residents in the `neighbors' segment. Follow-up and Confirmation: Once qualified and signed up, all participants were mailed or emailed a confirmation letter reiterating the time and date of the interview. Each registered participant also received a reminder call the evening before the telephone interview to help increase the response rate. All participants were offered incentives for participation. Each was sent a check $40 after the completion of the interview as compensation for their time. Participant Profile: Corona recruited a variety of participants in each of the three respondent segments in order to ensure that multiple viewpoints were captured during the interviews. Three tables summarizing the characteristics of the participants in each segment are provided below. All information presented in each table was collected during the initial screening phone call, as well as some conversation during the interviews : PAGE 59 Exhibit 45 Participant Profile, Landlords ■ 10 ■ 4 male / 6 female ■ Rental property owner (5) ■ Rental property manager (6) ' Real estate agent (1) ■ Single family home(s) : 1 (1) ; 2 (2) _ • ■ Town home: 1 (1) Apartment: Numerous properties (1) ■ Own/work for property management company that manages many properties (4) ■ N/a (one person was a real estate agent)* ■ 1 (2, 1 person has multiple units) ■ 2 (1) ■ 3 (2) ■ 4 (1) ■ 5 (1) ■ Numerous rentals with varying numbers of bedrooms (4) ■ Quiet location (2) ■ Quality of property (2) Close to college (1) ■ In a suburban area (1) ■ Near Old Town (1) ■ Low cost (1) ■ Depends on which property (4) • 8 (1) ; 22 (1) ; 26 (1) ; 34 (1) ; 35 (1) ; 36 (1) ; 50 (2) ; Entire life (2) • 3 (2) ; 4 (2) ; 5 (1) ; 6 (1) ; 9 (1) ; 12 (1) ; 20 (1) ; 29 (1) *With permission from the City of Fort Collins, one real estate agent was interviewed to gather information on that persbective, as a result of suggestions made by other interviewees • PAGE 60 R E S E R C H Exhibit 46 Participant Profile, Tenants ■ 10 ■ 7 male / 3 female ■ I or my roommates were forced to move because we were violating • • • it and someone reported us. (1 ; 1 other reported but not forced to • move) ■ We're breaking the ordinance right now and no one has said anything. (4) ■ I have never been reported and I'm not violating it now, but it has affected the decisions I've made concerning where I live/who I live with. (4) ■ Single family home (8) ■ Townhome (1) ■ Apartment (1) ■ 2 years (7) • • � 2 '/2years (1) ■ 4 years (1) ■ 8 months, but owned in Fort Collins before this (1) • • Yes (10) 1 � � . . 1 (1) ; 3 (5) ; 4 (4) ■ Yes, I am a full-time student. (7) ■ Yes, I am a part-time student. (0) • No, I am not a student. (3) ■ 20 (4) • 21 (2) • 22 (2) ■ 24 (l) ■ 53 (1) • � PAGE 61 R E S E R C H Exhibit 47 Participant Profile, Neighbors ■ 10 ■ 3 male / 7 female ■ Live with spouse (5) ■ Live with partner, unmarried (1) ■ Married with small children (1) ■ Live alone (3) ■ As I think about the four homes that are closest to me, I know that more than three unrelated adults are living in at least one of them. • (5) ■ 1 have placed a complaint with the City of Fort Collins because I believed (or knew for certain) that a nearby household was breaking the ordinance. (4) ■ Even though I have not been personally impacted by the ordinance, I have noticed changes in my neighborhood that have occurred because of it. (1) • • Single family home (10) • Own (10) ■ 5 (1) "• . 10 (1) ■ 11 (1) ■ 17 (1) ■ 24 (1) ■ 30 (4) ■ 33 (1) • No (10) ■ Divorced (3) ■ Single (1) ■ Married, no children (2) ■ Married with children (4) • � PAGE 62 R E S E R C H Time and Location: All in-depth interviews were conducted via telephone at the Corona Research facility in Denver. The interviews took place beginning March 18th and were completed by April Th. Schedulers were as flexible as possible with potential participants and made every attempt to schedule according to their needs. The lengths of the interviews ranged from 30 to 45 minutes depending on the amount of feedback that participants had. Interviewers: In-depth interviews were conducted by Holly Leyendecker, a Research Analyst at Corona. Holly has prior experience conducting one-on-one interviews. Interview Guide: The complete guides used for conducting the interviews with the three different segments are presented in Appendix B. The guides were developed by Corona Research and reviewed by the client at the City of Fort Collins. The guide was used as a standard but somewhat flexible guideline for discussion with each participant, in that the interviewer had the option to diverge from the guide if appropriate. PAGE 63 �• KEY FINDINGS The following includes the key findings from the 30 in-depth interviews conducted in this study. Overall findings that apply to all audiences in this study are presented first, followed by those specific to each audience. Key findings are reported separately, and are presented in the following order: • Combined key findings — all segments; • Key findings — landlord segment; • Key findings — tenant segment; and • Key findings — neighbor segment. ALL SEGMENTS - COMBINED KEY FINDINGS Key findings across all 30 interviews conducted with the segments listed above are presented in this section. 1. Everyone understands a homeowner's right to quiet in their home, but not everyone feels that the ordinance is the proper way to achieve it. Laying aside all other arguments as to whether the ordinance is right or wrong in general, some people do not believe that the occupancy ordinance is the correct way to go about solving problems with noise, parking, property maintenance, and other neighborhood issues. So, even if a person agrees with the goals of the ordinance, it does not necessarily mean that they will support the ordinance itself. I A prime point of contention is the number 3: The limitation to `three' tenants seems to have been made without much reasoning to some, but makes good sense to others . Homeowners who have, or still do live near homes with more than three people were much more likely to say that the number of people in a home does matter, especially when considering problems with parking. As the number of residents in a home increases, so does the number of visitors, and in some cases, the likelihood for parties to occur. Others asserted that behavior varies widely by individual, and that there are plenty of instances in which three people may be just as loud, or louder than four or even five may be. 3. For those who view the ordinance as a means for reducing the number of rentals in a neighborhood, a principal difference between proponents and opponents are their differing views of the evolution of neighborhoods. Opponents of the ordinance feel that the progression towards high percentages of rentals is a natural one, and that the housing market itself will eventually even out the balance between owner-occupied and rental homes. They are much less inclined to believe that the evolution of neighborhoods from owner- occupied to higher percentages of rentals should be regulated by the city. Ordinance proponents tend to feel that it gives them the ability to create the balance of owners and renters themselves, and to provide some kind of control over the development of the city as a whole. There were a smaller number of participants overall who commented that the ordinance is working in this sense. 4. There are many residents who do not understand what the ordinance is actually intended to do in terms of purpose, other than what it says at face value. That is, other than preventing more than three unrelated adults from living together, many people do not understand why the ordinance was initiated. Some young singles generally think that the • PAGE 64 R E S E R C H purpose is to keep young singles out of neighborhoods, while some landlords regard it as a way to keep rentals in general out of neighborhoods. Participants in the `Neighbor' segment have varying views as to its purpose. Even though opinions are bound to differ regarding the ordinance, promoting an explanation of the full purpose for the ordinance to all parties could potentially create more support, or at least more of an understanding. 5. In all segments, there are people who feel that ordinances that address unacceptable behaviors should be enforced. Whether this is in lieu of the occupancy ordinance or not, most participants made comments indicating that there are already ordinances in place to prevent issues like noise problems. They indicated that these should be more strongly enforced by the city in order to correct that behavior. 6. Personal experiences with the ordinance vary widely within all segments. This leads some people to believe that it is not being enforced at all, while others think that it is being enforced to an extreme. It is not known if this is because perhaps the enforcement processes have changed since inception, if enforcement has fluctuated over time, or if perhaps perceptions of the process simply vary widely by individual. 7. Perceptions of the effectiveness of the ordinance vary widely. A few participants were extremely happy with the results of the ordinance that they have witnessed, and did feel as though its enforcement is bringing about major improvements in their neighborhoods. According to some, however, many landlords and/or tenants who truly need to be targeted by the ordinance have yet to experience any consequences. That is to say that some neighbors still have to deal with poor property maintenance and unruly tenants nearby due to large households. The exact situations surrounding these different cases vary, of course, but it stands that this leads to some people feeling as though the ordinance is not helping create change. LANDLORD SEGMENT - KEY FINDINGS Key findings from the interviews conducted with those who are currently property owners or managers are presented in this section. 8. Landlords who follow the rules and comply with the ordinance are at a distinct disadvantage to those landlords who continue, knowingly or unknowingly, to break the law. Landlords who comply with the ordinance, especially large-scale property owners and managers, often commented on the perception that they are losing business because they choose to follow the ordinance. They feel that they have lost business from owners who decide to switch to managers who will break the law so that they can continue to put four or five people in a house and earn the same amount of money. They miss out on business with tenants who would rather find a landlord who will allow them to have more than three in a home. Additionally, landlords that are following the rules must commit resources to ensure that their tenants are abiding by the ordinance, which also costs them money. 9. Although most landlords would rather see an end to the ordinance, most say that it would at least be more tolerable if everyone were made to follow the same rules . Related to the above finding, participants expressed that everyone should be made to conduct business as they do, by adhering to the ordinance. This is an issue of enforcement. Like participants in the neighbor segment, many landlords felt that, if the ordinance is to remain in use, it should be properly enforced so that everyone in the rental market will have to conduct business on a level playing field. • � PAGE 65 R E S E R C H 10 . The extra occupancy home designation does not affect or help the average homeowner. This designation is generally thought to be a non-factor by those landlords who are familiar with it. Homes must be in specific zones in order to qualify, and there are numerous specifications and codes that must be met before a home can receive the designation. As such, it is difficult for most people to get this designation because they cannot afford to meet the specifications. It should be noted, however, that few of the landlords interviewed owned or managed properties in the specified zones. 11. Landlords generally feel that tenants should be held responsible for their own actions, not the property owner or manager. Most of the landlords interviewed explained that they take on quite a bit of responsibility when it comes to their properties . Smaller-scale landlords particularly said that they take care to put seemingly responsible tenants into their homes, and that they make certain their properties are maintained. Larger- scale management companies and owners tended to do more in terms of monitoring their households, in some cases conducting walkthroughs to make sure that tenants have not added a fourth roommate. However, they do not feel as though they should ultimately be responsible for the behavior of their tenants. Many landlords acknowledged that there are some owners do not provide the upkeep that they should, but that perhaps their methods for conducting business should be addressed on an individual basis. TENANT SEGMENT - KEY FINDINGS Key findings from the interviews conducted with those who currently rent property in the city limits of Fort Collins are presented in this section. 12. Students feel singled-out by the ordinance. Most students interviewed felt that the purpose of the ordinance is to try and keep college students out of neighborhoods. Some participants, including some landlords, described the ordinance as `discriminatory' for this reason. Others referred to the ordinance as `unconstitutional'. 13. The ordinance prevents everyone from living more than three unrelated to a home, regardless of their financial restrictions or intent to help someone else. Of course, the ordinance affects not only young singles. A number of people expressed concern over the fact that there are no exceptions to the rule. This means that anyone seeking low-cost living arrangements will find it to be more difficult. For example, the ordinance prevents two couples from living together, which is a situation that is encountered frequently by landlords . Additionally, people who want to help family or friends through difficult situations, or even in caretaker situations, are not given an exception. 14. The ordinance creates an atmosphere of unease for people who are breaking it, but some feel that they must in order to be able to live within budget. A few tenants commented on the fact that the existence of the ordinance has turned people into law- breakers because they have to, in order to live within their budget. Even participants who are currently violating the ordinance and said that they are not too worried about getting caught revealed that they do carry a certain amount of stress when they think about the potential for getting caught. 15. The fact that neighbors must monitor rental homes in order to prove that a violation is taking place creates a sense that a person's privacy is being invaded. The few participants who had been reported for violating the ordinance were surprised when they • � PAGE 66 R E S E R C H found out that they were being inspected. Several participants talked about the somewhat `creepy' process that occurs when a neighbor wants to report someone for violating the ordinance, and the fact that it is almost like spying, by monitoring what is going on at a nearby home. Additionally, it was also mentioned that the ordinance restricts the number of nights per year that a given visitor may stay at a home. If a neighbor records this type of information, it seems even more invasive as they monitor what goes on in a tenant's life. 16. Some individuals, students or otherwise, may not understand that they can be causing disturbances even if they are not throwing large parties . Homeowners often commented that one of the most bothersome types of noise is to have neighbors come home late at night, creating disturbances by slamming car doors and talking loudly to one another in the street. It is possible that some people may not realize that however short-lived a disruption is, it still disturbs a good night's sleep. So, even a tenant who perceives themselves as quiet because they do not have parties, may not realize how disruptive they can actually be. Additionally, several tenants made comments indicating that renting a house provides a kind of freedom that living in an apartment does not provide, which may make them feel as though they do not need to restrict the amount of noise they create, as they may have done in other living situations. NEIGHBOR SEGMENT - KEY FINDINGS Key findings from the interviews conducted with neighbors who either live near a household currently violating the ordinance, have complained about their neighbors, or who have noticed changes in their neighborhood after active enforcement of the ordinance began, are presented in this section. 17. Neighbors who have put the ordinance to use seem to feel empowered by its existence, ifit ends up bringing about change. The residents who seemed to feel that the ordinance is successful are those living in neighborhoods where homeowners work together to make sure that the ordinance is enforced. Others who had used the ordinance but did not see any changes take place, however, seemed to feel deflated by the failure of the process. 18. Homeowners are sometimes hesitant to call and report tenants because they fear retaliation, or because they don't want to cause trouble. A number of participants had not called to report violating households, even in cases where they know that there are more than three people living there. In some cases, this is because the violating household did not seem to be creating any problems, so the neighbor elected not to report them. In other cases, there was the feeling that placing a complaint with the city could `cause trouble', and homeowners were sometimes even somewhat fearful of retaliation. People falling into this category are more likely to say that the City should be taking more initiative to enforce the occupancy ordinance. 19. Some neighbors who are in support of the ordinance view it as part of a larger, long- term plan for developing the city and encouraging growth in a more responsible manner. This was only stated as a goal of the ordinance by a limited number of participants. However, several people did talk about the benefits of developing areas of high- PAGE 67 R E S E R C H density housing around campus as part of a larger plan, and that the ordinance feeds into this plan. 20. Even neighbors who feel that the ordinance has been a success agree that home and yard maintenance are still major issues, especially for rental properties. Almost everyone agreed that there is still room for improvement in this area, and no one seemed to think that the occupancy ordinance helps to address other challenges with some rental units. A few participants in different segments did mention that a new ordinance related to home maintenance was recently initiated. 21. Neighbors generally feel that landlords should be held responsible, at least in part, for the actions of tenants, and especially the maintenance of a property. This is likely related to the previous finding, as well. A couple of participants commented that when tenants do not take responsibility for yard maintenance, it should fall to the landlord to make sure that it gets done. As far as holding landlords accountable for tenant behavior, this could drive them to select more reliable tenants from the start. Additionally, the landlord would be one more entity enforcing good behavior. As one participant pointed out, landlords who own properties earn the financial benefits, while neighbors are left to deal with unruly tenants and poor maintenance. It should be noted that several landlords interviewed volunteered some of the steps that they already take to ensure that tenants do not become unruly. • PAGE 68 DETAILED FINDINGS Detailed findings are presented in the remainder of this report, with direct comments noted in quotations wherever possible. Findings are reported by each major topic area addressed during discussion, and generally follow the order of the interviewer's guides. Under each major topic heading, findings for each segment are explored. Topics are presented in the following order: Current situation Brief history Knowledge & perceptions of the occupancy ordinance Impacts of the occupancy ordinance Extra occupancy rental homes designation (Landlords only) Suggestions for changes or improvements Findings for each the segment studied are presented separately within each major topic heading so that the reader can identify areas where participants from different audiences disagree, and where opinions converge. Major topic areas discussed during the interviews and covered in this report include: Landlords Tenants Neighbors • Current role as landlord • Current living situation • Current living situation • Brief history of renting • Brief history of living • Brief history of • Knowledge & perceptions of situation neighborhood the occupancy ordinance • Knowledge & perceptions of • Knowledge & perceptions of Impacts of the occupancy the occupancy ordinance the occupancy ordinance • ordinance • Impacts of the occupancy • Impacts of the occupancy ordinance ordinance • Extra occupancy rental homes designation • Suggestions for changes or • Suggestions for changes or • Suggestions for changes or improvements improvements improvements A note about documentation: In this study, the interviewer took detailed notes as interviews were conducted, then reviewed notes immediately after interview completion to check for accuracy. As such, some paraphrasing took place as the participant responded. Every care has been taken to ensure that quotes accurately cony the content of a participant response. • A PAGE 69 R E S E A R C H CURRENT SITUATION In the introductory portion of the interviews, participants were asked to provide background information and describe their current situations. This helped to provide context for later responses during the interview. Landlords Initially, landlords were asked to talk about their current role in the real estate rental market in Fort Collins. As noted in the participant profile section, property owners and managers with various circumstances were interviewed in an attempt to hear from a relatively diverse sample. With the approval of the client, one real estate agent was also interviewed in order to gain some insight from a realtor's perspective. Tables that summarize descriptions of the participants in the landlord segment are provided in the beginning of the report. This section provides a brief, overall view of those who participated in the research. Number of properties owned/managed. A total of four smaller-scale property owners and managers were interviewed (those caring for three or fewer properties) . Five larger-scale owners and managers were recruited to participate. Of these, one person managed about 40 properties and the remaining larger-scale owners/managers took care of over 100 total residences each. Length of time as owner/manager. Everyone had owned or managed for at least three years. While some participants are new to their current businesses, others had worked in the Fort Collins rental real estate market since as early as the mid 1980's. Types of residences rented. Among participants, there was a mix of ownership and management of single family homes, duplexes, townhomes, and apartments. Smaller-scale owners tended to own single family homes or townhomes with a varying numbers of bedrooms, while the larger-scale landlords generally owned a variety of different sizes and types of properties. One respondent did own primarily one-bedroom rentals. Very few properties designated as boarding houses were owned or managed by these participants. Locations of properties. Naturally, larger-scale owners/managers tended to have properties in many different communities, while smaller-scale owners were able to describe their individual properties well. Most participants had at least one property near the campus that would be desirable to college students for that reason, although two people had rentals in more suburban locations. Types of tenants. Because of the variety of rentals offered by participants, tenants also varied accordingly. One person commented that their company has renters, " . . . on housing assistance all the way to doctors and lawyers." All of the larger-scale owners and managers rent to a mix of college students, professionals, and families. One participant shared that approximately 17 percent of their renters are college students. Yet another participant explained that they typically rent to those with lower incomes in an effort to help fulfill the needs of that segment. Smaller-scale owners tended to have more specific descriptions of the tenants who generally rent certain properties. These varied according to the property owned, as well. One person rents to college students despite the fact that his property is a fair distance from campus. • � PAGE 70 R E S E R C H Smaller-scale owners tend to be a bit more hesitant about renting to college students, initially. In fact, one man explained that he and his wife had purchased a home for their children to live in while attending school, and that after their children no longer lived there, " . . .it was empty for about a year because we were terrified of putting renters in there, because it was in very good shape." Another person explained that their rental townhome is in very good shape, and they feel that it has "attracted the type of people who appreciate that." As mentioned earlier, one real estate agent was also interviewed. This participant had worked as a realtor in Fort Collins for nine years. She works with properties in many different prices ranges all over the city and beyond, and is therefore involved with a variety of clients . She did explain that she sometimes works with parents of college students looking to purchase a home in order to house their son or daughter. Tenants In the beginning of the interview, tenants were asked to describe their current living arrangements by describing who they live with, as well as the neighborhood that they live in. Current living arrangement. This information is presented for each participant earlier in the report in the Participant Profile tables. To summarize, the majority of the participants in this segment were college students. Otherwise, everyone was required to have lived in Fort Collins for at least two years, and most participants had changed addresses during that time. These requirements were set to ensure that tenants had some knowledge of the ordinance and its impacts on tenants' choices. Most participants lived in single-family homes with more than one person, and four people stated that they are currently in violation of the occupancy ordinance. One woman lived by herself in a two-bedroom apartment while one man lived with his wife and daughter in a family community. Two interviewees had been reported by a neighbor who believed that they were violating the ordinance. Four people said that they had not been reported, but that the ordinance had affected decisions that they had made about their living arrangements. Nearly all participants described their neighborhood as having a great deal of diversity in terms of age and family status. Only three said that their communities are a majority of families, and only one of those was a college student. Some college students say that they decided to rent a home rather than an apartment in order to experience living on their own in a single family home. When participants were asked to explain why they had decided to live in a particular situation, several college students commented that moving into a single-family home was a way to experience a freedom that being in an apartment would not allow. Some said that they felt they were ready to also take on the additional responsibility associated with renting a home, versus an apartment. Being in a house clearly represents a "step up" from an apartment, to some students. "I had been in an apartment a couple of years before this, and was looking for a different experience. I also had some friends that were looking for a house." "I have lived by myself and that can be really lonely. It's nice to have a house, have the responsibility of caring for the house, the lawn." "We wanted the freedom of a house, nobody above or below us . . . plus to have a large living space. It's nice to have different areas and a back and front yard, a two car garage." • � PAGE 71 R E S E R C H Others found that renting a house was the least expensive way for them to live, especially those with four people in a home. One person currently violating the ordinance explained, "I'm living with three students, and we're all at CSU. There are four girls, with four bedrooms and three bathrooms in the house. It's very adequate for four people." She next stated that, "(Having) four roommates is the only way we can afford it." A few participants say that they had initially intended to find a landlord who would not require them to comply with the ordinance so that they could save money. As already noted, four participants were in violation of the ordinance at the time of the interviews. However, there were a few participants who, when initially looking for a house to rent, had thought that they would prefer to find a landlord who would allow them to put four people in a house. They had sometimes also thought about trying to sneak someone in without the landlord's knowledge. These participants had decided against bringing in a fourth individual after a time, because they were enjoying the amount of room that they had in a home without a fourth person. One participant who lives with two other people in a four bedroom house explained that they had thought they might try to put another person in the house with them, but were discouraged from doing so because of the ordinance. Now, they do not think about the ordinance as much, but actually prefer to have the extra space that they can use as storage. It should be said that this was the case only with some participants, and especially for those who were moving into a home for the first time, after the ordinance was already being enforced. "The price was pretty fair. Initially I thought it was a little high, but now I think it's a pretty good cost." One person talked about an experience he had when he first moved into his rental home, in which a policeman and a woman came to his door. They were handing out flyers about the ordinance, and he said that they warned him not to break any noise violations. He felt that their overall experience in the neighborhood had been a good one, but that initially it was, "bad that they were coming around with a preconceived notion (about college students) ." He seemed to feel that it was unfair that such an approach was being taken when he and his roommates had not caused any trouble. Neighbors To start the interview, neighbors were asked to describe their current living arrangements by explaining who they live with, as well as the neighborhood that they live in. Current living arrangement. This information for each participant is presented earlier in the report in the Participant Profile tables. To summarize, a variety of individuals were interviewed in this segment, although the majority lived with only one other person or by themselves. Nine participants had lived in Fort Collins over 10 years, and five of those had lived in the area for at least 30 years, some in the same house. Cost and location are the two main reasons that people have chosen to live where they do. As participants considered why they had initially decided to live in their current neighborhood, responses reflected preferences for location of the neighborhood (close to work or a good school for their children) , or of the actual home itself (a corner lot, or because it is not on a through street) . Cost was also a stated concern for some participants. People also often said that they had chosen a particular neighborhood in order to meet the needs of their young children. •GM PAGE 72 R E S E R C H "It was a new subdivision, close to the foothills, just a good location. We liked the style of homes." Although it became apparent throughout the interviews that some residents place a great deal of value on having a sense of community and interaction with neighbors, no one named this as a reason that they had originally purchased a home. This was a major point of discussion for some participants as they considered how their neighborhood had changed over the years . Even when initially describing their neighborhoods, many people comment that they have seen a marked increase in the number of rental properties where they live. This is considered a major negative to some participants, but perfectly tolerable to others. Opinions varied widely on this subject and had a great deal to do with a participant's current or previous experiences with nearby renters. "It's a great neighborhood, very diverse in terms of ages and student populations. Some renters, some owners . . . the diversity is what makes it so good." "We have a lot of rentals. It's an established subdivision that has turned into a lot of college rentals." "It's becoming a rental neighborhood, mostly to college students." Neighborhoods located relatively further from campus and in more suburban areas had typically not experienced this evolution towards increased rentals. As would likely be assumed, these participants generally had less personal experience with the three-unrelated ordinance. "It's very family-oriented, lots of kids . . . it's a great neighborhood." "Well-established . . . quiet. (We have) lots of good neighbors. Doesn't have very many families with young children or college students, but there are some around. Mostly owner- occupied." People often describe their neighborhoods by first explaining who lives there. This exemplifies the amount of importance that individuals place on who their neighbors are, and the way that this can affect the feel of a neighborhood. Furthermore, neighbors were typically described first as renters or owners, followed by their life situation such as family, couple, students, or retirees. Participants used the following phrases to describe who lives in their neighborhood: "Small families or couples, or slime bucket tenants ." "Still majority of families, but many of the homes that have sold over the last 10 to 15 years have been turned into rentals." "A variety, but mostly rentals. Some young couples, some elderly." No matter how little a person wants to be involved with neighbors or in neighborhood issues, they can still usually describe who lives closest to them. Everyone could at least somewhat describe who lives in the two houses closest to them. This was often related primarily to safety and a desire to know who is `supposed' to be in a given house. People explained that they begin to feel uncertain about who lives next to them when they start seeing unfamiliar cars parked nearby. For some people, a sense of community is also a reason to know who lives nearby. • PAGE 73 R E S E R C H "Next to me is owned by a family that I know and they are renting it to college kids. The other is a couple that is original owners. In our cul-de-sac we have seven homes. Four are owned by families." "To the north is a wreck. It used to be occupied by a nice couple. (The new people there) let it got to pot. To the south is a young couple. They maintain it fairly well." "To the north, it's a rental now. They rent it out as a five bedroom house so there have been as many as five students there. Now there are just three boys. To the south is owner- occupied but I don't know who lives there. It's kind of a hodge-podge (of people) but they don't have any loud parties." Best-liked characteristics about neighborhoods vary according to a homeowner's personal preferences and their lifestyle. Participants named a number of different aspects that they like best about their neighborhoods. This varied widely by individual, and of course, depended upon the actual neighborhood. Some participants were able to name numerous characteristics that they like about where they live. A list showing what was mentioned during the interview is shown below: The neighbors. Three people named this as the best-liked aspect of their neighborhood. This did not mean that everyone wanted a great deal of interaction with neighbors, however, they were simply explaining that they like the amount and type of interaction that they have now. o "Pretty much, people leave me alone, that's good for me." o "Everybody chats with everybody, and we're all respectful of one another." o "The people know each other and they're very congenial people . . . everybody says `hi,' and talks to each other." Low level of noise. Several participants explained that they like their neighborhood because, "It's quiet." Location. This is generally referring to the fact that a neighborhood is convenient to schools for children or work. Others explained that they like the locations of their lot because it is on a corner, or because it is not on a through street. Appearance of neighborhood. This tended to come up more during the interviews as participants talked about what they like least, but two people did indicate that this is one of the best aspects of where they live. Often this was in reference not only to home and yard maintenance, but the care and the appearance of community areas, and availability of green space. Increases in the number of rentals and lack of property maintenance are two of the most frequently mentioned aspects that participants like least about their neighborhood. Participants also tended to draw a strong correlation between these two neighborhood characteristics. In fact, some people outright stated that they do not like having so many rental properties in their neighborhood, and then explained why: Increased number of rentals —> decrease in property maintenance. This was the most common complaint as neighbors described what they like least about their neighborhood. In • � PAGE 74 R E S E R C H some cases, blame was placed on the tenants, while others blamed the landlords for not making sure that proper maintenance was performed either on the house, the yard, or both. o "Right now (what I like least is) the rental problem . . . and the renters don't maintain (the properties) ." o "The rental homes are never taken care of as well as those that are owner- occupied." Increased number of rentals —> difficult to get to know neighbors. One person mentioned that what she used to like best about her neighborhood were the neighbors, but that this is no longer the case since a nearby home had been turned into a rental. For some people, it is simply more difficult to establish relationships with renters because they are apt to move when a lease is complete, so they are only there for about one year. Renters also seem less likely to be involved in helping to build a neighborhood in terms of community. This seemed to be especially true with college students who are clearly not likely to be permanent members of a community. In any case, whether valid or not, there is an obvious division between owners and renters in most neighborhoods. o "(It's) hard to get to know your neighbors because they are changing from year to year . . . it's a real transitional kind of thing." It should be noted that two people in this segment were not able to name anything that they like least about their neighborhood, and feel quite happy with things as they are, now. BRIEF HISTORY During this part of the interview, participants were asked to talk about the history of their housing-related experiences in Fort Collins. Landlords In this section, landlords talked about the history of the rental market in Fort Collins, describing any changes that they might have noticed. Because there were some differences between the smaller- and larger-scale property managers, findings are often divided between the two segments . Smaller scale owners have not shifted their ownership of rental properties because of the ordinance. Of those interviewed, participants could name a few other reasons that they had bought or sold properties, but none of the change in ownership was due to the initiation of the enforcement of the ordinance. Management companies are much more likely to say that they have changed the types of properties that they manage over the years, or the way that they manage them. These changes had usually taken place in an effort to meet city regulations, and that includes the ordinance. A number of these companies explained that they are members of groups or associations that require them to conduct business ethically, so they do follow codes and regulations. Others said that they do simply because it is the right thing to do. Additionally, the types of properties that they manage have changed. In some cases, property owners with homes that have more than three bedrooms decided to sell their properties since they could no longer profit from owning them. In other cases, companies that choose to comply with the LW• A PAGE 75 R E S E R C H ordinance have lost business as property owners seek managers who will break the rules so that they can still earn money on their investment(s) . "When we first started the business, we weren't aware of the illegal duplexes. We've gotten rid of all of them. And we had four-bedroom houses and we had . . . four unrelated in the place, but since they came up with the three unrelated, we only have no more than three unrelated." (In other words, they've changed their management policies because of it) "We had quite a few with more than three bedrooms . . . many owners actually sold the homes, or they (began managing their properties) themselves so they could break the rule. We refuse to do that." "Nothing larger than a four-bedroom . . . I don't take on any new four bedrooms because of the ordinance." Rental properties rarely sit vacant for long, if the rent price is fair. Small-scale owners and managers especially commented that demand for rentals is strong, and that their properties rarely stay empty for long. This was attributed more to the state of the housing industry as a whole, with the difficulty that potential buyers have getting a loan to purchase a home, and with the number of foreclosures. "There's been pressure to keep the rents down from a market point of view, as an owner. It's not a market where you have the ability to earn more cash flow. You have to be competitive." "There were many times (we'd) had to put the `for rent' sign in the yard, and it would be empty for a month. We don't have that problem now, between the fact that it's becoming a little difficult to purchase a home, and northern Fort Collins has been kind of growing. We've had no problems renting the place." The main two factors affecting the rental market in Fort Collins are the economy, and the three unrelated ordinance. Overall, these are the two factors mentioned most frequently by participants in this segment. Demand seems to have remained noticeably strong as long as the price is right. Although this research is intended to focus on the ordinance, it is difficult to ignore the effects that the economy has on the real estate and rental markets. "The economy. . . lots of people are getting laid off. They can't pay and have to move out. The three-unrelated ordinance, it's hard to get them (some properties) rented for the price the owner wants with fewer people. It's mostly the students. They try to put more people in there. I'm turning away so many people and losing tenants because I'm following the rules." "(The rental market has) improved. There are more people in the rental pool now that the mortgage industry has tightened up. Rents are incrementally increasing, not a lot. . . it's pretty typical to increase, it depends on the housing market. . . " "Getting into a home here is not easy (in terms of purchasing one) . The rental market is booming, because of what's going on in the market." Landlords who comply with the ordinance end up losing customers. It is very important to note that participants who work for management companies all commented on the amount of potential tenants they end up having to turn away because the company is unwilling to rent to four unrelated. There is a perception that they can find rentals in violation anyway. Additionally, rental • � PAGE 76 R E S E R C H property owners looking for a management company will sometimes shy away from management companies who adhere to the ordinance, because they feel they will not be able to earn as much money on a four or five bedroom home with only three tenants living there. Since, according to comments heard during the interview research (and the statistics developed elsewhere in this report) , there are still many homes in which there are more than three unrelated still living under the same roof, it stands that not all landlords are enforcing the ordinance. Those who comply lose business for doing so. Additionally, the management companies interviewed stated that they check in on their tenants by scheduling walk-throughs to make sure that they are not breaking the ordinance. One person explained that in some of the homes with more than three bedrooms, they have actually placed locks on bedroom doors so that tenants will not be tempted to sneak in an additional roommate. Each of these measures is disliked by management companies because they feel it is a waste of time and resources, and also creates an atmosphere of distrust where it should not have to exist. On top of this, most companies explained that they have had to lower rent on homes with more than four bedrooms so that they will still be able to offer it at an affordable price. The homes are no longer as profitable as they once were, so companies lose money or profit in this way, too. One person pointed out that because these homes bring in less money, owners are less suited to make repairs that the homes need. If they are earning less on a house, they are much more reluctant, and are sometimes simply unable, to make improvements. "With three unrelated implemented, we had to lower the rents and lock bedroom doors to make sure they're not letting someone else in. It seems so intrusive . . . we have to do house checks to make sure they haven't snuck someone else in . . .we don't want to get fined for having four people there even though only three are on the lease. It just feels bad. There's a lot of mistrust, but the biggest thing is that it has impacted us financially." "We have had to keep the rents the same or lower them so that three could move into a four or five bedroom home. We follow a code of ethics and professionalism. Sometimes others don't follow those, so they'll put four or five in a house, so they're held to a different standard, apparently." "Because (the ordinance) impacted rents, I've put off putting a roof (on one of my properties that needs it) . So the maintenance of the houses suffers because we can't afford it. Now there's an ordinance about the appearance of a property as well. It's a vicious cycle." An increase in demand for units with fewer bedrooms is not apparent to most larger- scale owners and managers. Only one large-scale property owner and manager had noticed an increase in business because of the ordinance. In this case, it is likely more noticeable because the majority of the properties owned by this person have only one bedroom. "The three unrelated law actually has helped our business. By not allowing four in homes, that overflow has to find somewhere to go . . . " (It is important to explain that despite this, the participant is still not in support of the ordinance.) Other owners and managers, even those who own numerous properties, did not say that they have noticed a significant increase in demand for smaller units. The real estate agent who was interviewed commented that clients who come to her to purchase a four-bedroom home for rental purposes change their minds after she explains the ordinance to them. She did not say that she has noticed a change in the number of four-bedroom homes on the • PAGE 77 R E S E R C H market, but did say that they probably now sell for less due to the decrease in demand. The participant did not seem concerned about any ways that the ordinance might have affected her sales, but was more bothered by the amount of regulation that the ordinance "pushes" on Fort Collins residents. Tenants During this part of the conversation, tenants described the history of their own living situations and experiences with the rental market over the past few years. Participants had ended up in their current living situations coming from all sorts of different backgrounds. Most people interviewed had recently moved into a different house, although some had moved into a single-family home for the first time after living in a dorm or an apartment. Two people lived in a townhome or apartment, but neither of these was a college student. The ordinance has influenced the decisions that some people make regarding their living situation. It was clear that some participants who would likely have lived with more than three unrelated people in a home chose not to do so because of the ordinance. In these cases, the ordinance did have an influence on the number of people living in a home. Tenants who choose not to abide by the ordinance sometimes do not worry about getting reported in the first place, because they feel certain that their actions will not draw the attention of their neighbors, which in turn, will likely prevent those neighbors from placing a complaint with the city. There are still others who simply are not worried about the consequences even if they do get reported, because they do not know of anyone who has been affected by enforcement of the ordinance. Although some tenants do not want to violate the ordinance , they feel that it is the only way that they can afford a place to live. Some people who break the ordinance because they feel they must in order to be able to afford a home. One participant explained that prices have not been reduced on larger homes, so in order to be able to live on her budget, it is necessary to put four people in a four bedroom home. She explained that she and her roommates do worry about being caught for breaking the ordinance, commenting, "We worry about that all the time. We know that (if we're caught) the landlord will be forced to make one of us move out. With all the other things I've got going on, I don't dwell on it, but it is always in the back of my mind." In one situation, the interviewee had usually lived only with two other people, but recently they had taken in a fourth person. She explained that this person had just moved back into the city so they are trying to help him by allowing him to stay with them for a while. In her case, she did not feel too worried about getting caught because they are quiet neighbors and are on good terms with the people in the homes closest to them. While some tenants have made decisions concerning their living arrangement based on their knowledge of the three-unrelated rule, no one says that they chose their roommates based on the ordinance. This is true other than that some tenants might have initially have preferred to live with three other people rather than only two. One participant said that prior to moving into the house he is in now, he had lived with three other people in an apartment, where they had not had any problems with the three-unrelated ordinance. He now lives with the same roommates, still breaking the ordinance but in a single family home rather than an apartment. Many tenants feel that rent costs have risen somewhat in the past few years, and in some cases know that this is the case because of their experiences. As participants talked about • A PAGE 78 R E S E X R C H changes that they had noticed when searching for a home within the past year (from when they had initially rented a different property), most people commented that there seemed to be a rise in cost. One person had experienced a rise in rent upon renewing a lease. This is likely not too surprising if the rise in demand that was noted by numerous participants from different segments has really taken place. "When we move out the landlord is going to raise the rent from $ 1 ,100 to $ 1 ,500." "I feel like it's gone up a little bit. The actual prices paid have increased." The ordinance is believed to have affected rental rates for people wanting to rent larger houses. Some participants did not say that they feel rental rates are necessarily on the rise, it's just that they stay the same in larger homes where renters are not allowed to have as many people, anymore. "When owners are forced to limit renting to three, they can't lower their rent, just the number of people." "I know people who have lived in houses where they've had to decrease occupants so (individual) rent went up because of that." One participant lived in a five-bedroom house. When he had first moved in there were four people (two of whom were related) . Now the situation has changed and there are only three people. The rent has not been lowered, so he is now looking to move because it's too difficult to keep up with the rent. He goes to college full-time, and works part-time. His rent used to be $250 per month, but with the change it's now $400. On his income, it is difficult to absorb this increase. In another case, one participant commented that it's difficult to find a place to afford. He had been looking for a place with three other friends after graduating from high school, but they learned they would not be able to do so because of the ordinance. It is not necessarily difficult to find something available for rent, but it can be difficult to find a home that is exactly what a renter is looking for. It was apparent that rentals are available, but it can sometimes be difficult to find something suitable for a person's given situation. Additionally, the time of year can affect availability because of the fact that there are certain times of the year when college students are most likely to be looking for rentals. Several people commented that there is generally enough availability to find the housing that you want, but that properties go fast, so it's necessary to act quickly when you find something you like. "Since it's a college town, it depends on the time of year you're trying to find an apartment. It's really hard in July or August because that's when all of the students are looking." "The only time I've looked is when I was moving into this place. From what I hear, I haven't heard people groaning about not being able to find a place. The searching process has started a lot earlier this year, students looking for houses." "There was definitely a lot of availability. . . but everything goes very quick. You pick and choose between price, location, and size. (We rent from) a private renter, we found it on the down-low. Rent is reasonable, split between four it's good, it's $ 1 ,250 per month. It's cheaper than any of my other friends." on PAGE 79 R E S E R C H One woman talked about her experience looking for a rental property for the first time in many years due to a change in her personal situation. She remarked, "I thought what they were asking, and what I'd be getting, it wasn't worth it. . . the houses I saw for rent, I understand it's a college town and that students generally don't take care of the property. I understand why they wouldn't want to spend too much fixing it up." Although she understands those things, it still made an impression on her, and she's glad to have found the place that she did where the complex is well-maintained. The level of formality involved in renting a property varies widely. Most participants who were renting from smaller-scale owners made comments indicating that there was much less formality involved in the process versus renting from a management company. In each case, renters did sign a lease, but the points emphasized by the landlord varied. One person even said that he had a background check, as well as a credit check, performed. "They do a thorough background check. . . there were times I'd get an apartment and as long as I had a job and a down payment I could get it. Recently they do a background check and make sure you have credit." "There were a host of differences. The apartment deal was a lot quicker and easier with a national chain company. We made the decision in one day. Looking for a house, it takes a lot more trying to match you to the house." Similarly, the rules and regulations stressed are different depending on who is managing the rental property. Although everyone interviewed in this segment was aware of the three unrelated ordinance, the importance of adhering to the ordinance was only emphasized to a couple of people during their leasing process. In other cases, the landlord either knew outright that there would be four in the home, or ignored that fact. "She just didn't want us burning the thing down . . . she didn't really stress other rules other than what was on the lease." "Definitely they use a relatively standard contract. Most of the conduct is talked out face-to- face." "They made it pretty clear they did not want to get in trouble with the city of Fort Collins, so it was just us three. In exchange, they gave us a slightly lower price." "They talked about the three unrelated, and the way they got around it, we just put three people on the lease. The fourth person, they put them on the lease for a different property or something." "We were told about the three unrelated and there was just three of us that signed the lease, but everybody knew there would be four." "Some landlords have gotten very scared because of the city's pressure in threatening to pursue anyone that violates it . . . there are some pretty heavy fines involved . . . sometimes . . . only three people will sign the lease and then the landlord just looks the other way." Neighbors In this section, participants gave a brief history of the neighborhood that they live in and described any changes that they might have noticed take place, especially over the past few years . • PAGE 80 R E S E R C H Most participants have noted changes in their neighborhoods. Participants had noticed different types of changes taking place, which varied widely depending on the neighborhood. Only one person was unable to name any real changes in his neighborhood. (He lived in a development largely populated by couples in owner-occupied homes .) The changes that were noted by participants are categorized below with supporting quotes: Increase in the number of rental properties. Everyone who said that this is the case in their neighborhood, a total of five participants, described this change in tandem with a marked decrease in the quality of the neighborhood. Parking issues were frequently mentioned, and property maintenance was also found to be a major issue with rental properties, among the interviewees. It should be expressed that maintenance issues are not always attributed to the number of college student renters in particular, but the number of renters in general. The following comments were made by participants regarding changes that they had noticed in the neighborhood: "People who have lived here a long time maintain and keep their properties. Those that are rentals, don't. There are more cars parked on the street. Homes for sale usually go to rentals, due to the location. They're investment properties." "More renting instead of owner-occupied, I would say over the last three or four years, and there's more parking on the sides of roads, that I don't know who (the cars) belong to." Increase in the number of owner-occupied homes. Although this was not the most common response, two participants had seen an increased number of homes occupied by the owner. Each of these participants did tend to feel that the ordinance was somewhat responsible for this change, and one person explained, "We've become more owner-occupied over the last two years." "There was a concern for a while that maybe more of these houses would turn into rentals because it's an older neighborhood, but that hasn't really materialized in our immediate sphere." In one of these cases a participant talked about the evolutions that she had witnessed in her neighborhood. She commented, "There was a period of seven years when we saw some changes that were causing a number of our friends to move away," and also noted that fewer families were deciding to purchase in the neighborhood during that timeframe. More landlords were purchasing homes and putting five or six people in a house. There were more vehicles on the street, there were more tenants, and therefore, more friends of tenants. She explained that the cost of housing went up during those years since property owners could charge higher rents. While one might think that this would benefit a homeowner, it actually prevented single families from purchasing in the neighborhood which therefore caused further proliferation of the homes being purchased for rental purposes. She talked about how, since enforcement of the ordinance had begun, her neighborhood has begun to stabilize. She had noticed more families entering the neighborhood as fewer investors seek to purchase homes with a larger number of bedrooms . She also explained that there is still diversity in terms of renters versus owners, but that the ordinance helps establish some limits as to how many rentals there will be in the neighborhood. No large change except with the introduction of new renters. One person could not say that they had noticed a marked increase in the number of rentals, but that as renter occupation and owner occupation fluctuates, there are some apparent differences in the neighborhood. • � PAGE 81 R E S E R C H "Yes, there have been changes, but it fluctuates as to the number of rentals . . .when there are more rentals, the quality of the neighborhood disintegrates." Increase in crime. One participant explained that in his neighborhood, there had been some incidences involving graffiti, and a few break-ins. In this case, it seemed to mainly be mischievous teenagers creating the trouble. Problems with noise vary widely by neighborhood, the behavior of renters in a given home, and the tolerance level of a neighboring individual. While noise is an issue for some neighbors, others feel that volumes are kept at a fairly tame level most of the time. "It's fairly quiet. I moved in last summer, and can count on one hand the nights they've had late night parties, when people were moving out, like at the end of the semester, but it's still a fairly quiet neighborhood." (This participant lives in an apartment complex with majority college students) Problems with noise did seem to be more related to an influx of college students, although it is recognized that not all college students are the same and are therefore not all likely to be disruptive. One person stated that because of the rentals, they had noticed, "More cars, more parties, and definitely lack of maintenance." It is apparent that there are some student renters who do not seem to understand or possibly respect the fact that just because they are living in a structure separate from that of their neighbors does not mean that they are not disruptive when returning home at late hours. An increased number of cars parked on the street raises safety concerns. While an increase in number of cars parked on the street creates an inconvenience, some neighbors also noted that it is an issue of security, as well. Homeowners like to know who is living near them, and often keep track of this by being able to properly identify cars according to owner. When unfamiliar cars start showing up in an area, homeowners become a bit wary. Increases in the number of rental properties are attributed to the location of a neighborhood, as well as the cost of homes. Decreases in owner-occupied homes in particular neighborhoods were not attributed to any one particular issue. Participants in this segment rarely suggested why their neighborhoods are evolving as they are. It can be noted that as neighbors discussed shifts in property ownership that they had noted, they felt that it was mainly due to the economy and housing market changes in general, and only somewhat due to the ordinance. "I think (the number of rentals have increased) probably because of the price, the location is perfect for the university, the price is good for what you get. It's not in the newer part of town, ' i its n the older part. People who can afford to buy better and bigger homes are on the other side of Fort Collins." "I think (changes are taking place) because somebody's renting to college students." Neighbors note changes not only in a neighborhood as a whole, but in those immediate houses around them, which can directly affect their quality of life. Numerous participants discussed changes in both ownership as well as renters in the houses immediately around them. As would be expected, this could have a major effect on the level of noise, peace, and other factors that most people might consider measures of the quality of life in a neighborhood. One person explained that a house right behind hers had been rented to college students after someone had purchased it for a rental property. She said, "For a little while we had students right behind us and the neighborhood was less peaceful. Mostly it was just having late night-parties . . . it wasn't that they had large parties, but after the bars closed they would come home and be out on the back porch and be SM � PAGE 82 R E S E R C H drinking and smoking. . . they didn't realize that it was two in the morning and that sound travels easily across the lawn." It should be noted that while most people interviewed would probably prefer to live by owner- occupied houses, there were homeowners living by renters who are content with their situation. These nearby renters were sometimes families, other times more studious college students who do not tend to create so many (or any) disturbances. In any event, it became clear during the interviews that some people do not seem to care for the presence of rental properties in their neighborhoods at all, while others simply want renters to respect neighbors in terms of volume levels, and yard and home maintenance. The relationship, or lack thereof, that homeowners have with landlords who manage or own nearby properties can add to the stress of dealing with unruly tenants. Most participants who have had problems with disturbances from nearby renters explained that they had initially tried to solve the problem either by speaking directly with the tenants, or to the owner or manager of the property (in a number of cases, it seemed that neighbors know who owns the properties around them) . Absent or uncaring property owners only added to the frustration of neighbors left to live near disruptive neighbors. KNOWLEDGE & PERCEPTIONS OF THE OCCUPANCY ORDINANCE Next, interviewees were prompted to discuss their knowledge and opinions of the `three unrelated persons ordinance.' Even if they did not know a great deal of information about the ordinance, they were encouraged to share their opinions. Landlords In this part of the interview, landlords shared their points of view on the occupancy ordinance. It should be noted that awareness of the ordinance was a requirement for participation in the interviews, though the level of awareness was not specified. AWARENESS & KNOWI EDGE OF THE ORDINANCE In this segment, all participants were aware of the ordinance. Smaller-scale property owners and managers in some cases did not have quite as much knowledge as those who work for property management companies, but on the whole each participant understood the general idea. In order to stay informed on the topic, some participants began attending city council meetings. Others continued to learn more by reading updates in the newspaper, while some people also read stories about households affected by the ordinance. Comments indicating various actions and levels of knowledge about the ordinance are presented below. The reader will note that it was difficult to gather information about the ordinance without soliciting the accompanying opinion: "I was aware that people were discussing this. (I) probably (heard about it through) the board of realtors that the City was discussing making these changes. I attended some city council meetings." " . . . just by looking at what I see in neighborhoods, like where my other property is, I don't think it's well-enforced. I can tell by the number of cars parked outside. I think people do what they need to do in order to live. But I'm in favor of the ordinance because it keeps things from becoming uncontrollable." • PAGE 83 R E S E R C H "From our point of view as a landlord, and the type of people we rent to, I think it's overly restrictive. Kind of arbitrary, just assuming it's not going to be good to have more than four. Especially if the unit is big enough, why not? It doesn't make sense. There was a time we had four people at our place and I looked the other way. It seems like it's targeted at keeping parking down and noise down, but there's plenty of parking (at our rental) ." The real estate agent who was interviewed noted that in addition to understanding the ordinance herself, she must often explain the ordinance to parents of college students who are considering the purchase of a home in Fort Collins, for their child and several roommates. The agent said that she explains the ordinance, "and they all want to know what right the City has to tell them how many, and who can live in a house, and I agree. I tell them it's because of parking, keeping neighborhoods quiet . . . and they want to know, if those are the issues, why not address it with the people who are causing the problem?" INITIAL IMPRESSIONS OF THE ORDINANCE & HOW THEY'VE CIIANGED Participants next gave their opinions on the ordinance. They described their initial point of view, and if that had changed over time, they explained how and why. The ordinance is not initially viewed as a fair solution to the problems that it is intended to address. Some participants commented that the ordinance is in place as a preventative tool, but it ends up punishing people who would not have abused the right to have more than three unrelated people living together in the first place. To some, it simply does not seem to focus well enough on the problems at hand. "I've always thought it was mean-spirited. It holds 100 percent of the people responsible for the misdeeds of the rest." "I thought it was stupid, honestly. There's other ways to get around it, and they had other plans that would've worked but they decided to go this way." A few participants in this segment said that their opinions had changed from when they first learned about the ordinance. In fact, in many cases opinions had intensified. "It's increased to vehemence so strong that I'm planning on moving because the council is planning to make so many more regulations, they are driving me from my hometown!" (Participant explains that these issues are not voted on, but are decided upon by the city council.) One small-scale property owner (with a one-bedroom home and a five-bedroom home) explained that there are certain goals of the ordinance that she likes, such as the prevention of "letting them jam-pack kids into a house . . . I do think that some put many more (people) in that it was made for." However, she also does not feel that the ordinance is accomplishing all that was hoped, and that people who comply with the ordinance, as well as those who take good care of their properties, are being adversely affected. "Some homes would hold four people very comfortably, that's one of the cons. What people were trying to do is not let the values of houses go down because of the rentals. I don't think it's helped at all. We are landlords who take pride in our house, and take good care of it. We have so many property owners that want to make as much without putting money in. I think they are striving to take care of places like that. I don't think that it's helped do that at all." OR PAGE 84 R E S E X R C H Most property managers and owners feel that landlords should not be held responsible for tenants' behavior. Some participants addressed the fact that the ordinance places a good deal of responsibility on the landlord in the event that a complaint is placed. This is a topic that was mentioned several times in each segment, and out of the interviews conducted, a myriad of opinions were heard on the matter. Even within the landlord segment, there was disagreement heard over who should be most held responsible for unruly tenants—the tenants themselves, and/or potentially the landlords. In cases where an owner is mainly absent or managing from afar, some landlords did comment that they should perhaps be held somewhat more responsible for their investment. It should be noted that there are some property managers and owners who seem to take a great deal of preemptive responsibility in making certain that their properties do not become violators in the first place. "There was a group (of us) that tried to make the penalty for noise, parking, trash, we wanted it to reflect on the tenants . (Right now) if a house has a problem with noise or whatever it might be, the problem goes with the house, not with the tenant. We thought maybe the tenants should be held more accountable for some of these things." "I don't like that (renters) were cramming a bunch in a house, but I don't think that a landlord should be responsible for a tenant's behavior. Tenants In this section, tenants explained their understanding of the occupancy ordinance, and shared their opinions about it. AWARENESS & KNOWLEDGE OF THE ORDINANCE Students living on campus before they rent in Fort Collins often learn about the ordinance through the university. Every student interviewed had learned about the ordinance through CSU, either through conversation with other students, the university's newspaper, or other announcements. This does not mean that they know all of the details about the ordinance in regards to enforcement or repercussions of violating the ordinance, but they are aware of what it means for their living arrangements . "When I was coming from the dorms, there was a lot of emphasis on the three unrelated rule. Originally, that was why we had gone with three in the four bedroom." Even though most tenants know about the ordinance before pursuing a rental home, many don't understand the purpose of the ordinance. They generally suppose that the purpose is to eradicate college students from the neighborhoods of Fort Collins, regardless of their ability to live responsibly in a home. This causes some students to feel discriminated against. Everyone understood that the ordinance prohibits more than three unrelated people from living together, but only one person talked about additional restrictions, such as limiting the number of nights that a single guest can stay throughout the year. He explained that the only reason he knew about these restrictions is because he had been reported (even though he only has three people living in his house) , and after an inspection, the investigator had explained these details to him. In his case, additionally, he had not known about the ordinance at all until he learned that he was being investigated. • PAGE 85 R E S E R C H It should also be noted that few people seem to really understand the consequences of getting caught. There were widely varying levels of worry over violating the ordinance. According to responses during the interviews, certainly not every landlord makes a point of explaining everything about the ordinance. One person who is currently violating the ordinance explained that he is not worried about getting caught. He commented, "I don't even know what they would do to you. I don't know what the consequences are." People new to the area, or those entering the workforce after graduating from high school in the area are much less likely to know about the ordinance. This seemed to be the case with the few participants who fell into these categories. One interviewee was not a college student, but had grown up in Fort Collins and had decided to stay there after high school. His father had told him about the ordinance, but he did not believe that the ordinance really existed until he and his friends were turned down during their attempt to rent a home for four people. He explained that he has many friends who are from Fort Collins who have never heard of the ordinance, but generally learn about it when they attempt to rent a home. INITIAL IMPRESSIONS OF THE ORDINANCE & HOW THEY'VE CHANGED Most tenants can understand why some homeowners would be unhappy with certain renters, but feel that the ordinance is the wrong approach to solve the problem. It is often thought to be the wrong approach due to the fact that it assumes guilt before students are able to prove their ability to live responsibly. It seems to punish potential tenants before they have done anything wrong. "I didn't like it very much. I understand why people were upset, living near multiple college students, but I feel like it should be (dealt with) more on an individual case. And it's not just college students. There are a lot of people trying to find cheap places to live." "It was kind of unfair to students, at least responsible students. (I) can see that people want to keep property values up, but we take care of the place and don't really throw parties so it wasn't fair to us. It doesn't seem fair to have that increase in rent. There are a few less cars parked outside, but . . . " "I thought it was an interesting move. I feel like maybe four unrelated would be a little better. Houses with six people have too many cars, but I feel like four people can get along in a house pretty well . . . (they might be loud, but) that's why they have the noise ordinance." Answers varied quite a bit as participants considered how their opinions about the ordinance had changed over time. As would be expected, responses depended upon what their personal experiences had been, and how much enforcement they had actually witnessed, or even heard about through friends. After witnessing a lack of enforcement, some renters are more likely to say that they are not too worried about being reported for violating the ordinance. Roughly half of the tenants interviewed said that they are considerably less worried about breaking the ordinance now as compared to when they first became renters. Generally, these participants had not witnessed a great deal of enforcement, or they feel they are on good terms with neighbors and doubt that they would be reported in the first place. It should be said that most felt they would still worry a bit about getting caught, but they were still willing to try and get away with it if need be. One tenant talked about how his landlord, who used to live two houses away from him, had been having problems with his next door neighbor who had four people living in the home. The • PAGE 86 R E S E R C H landlord had called the City to place a complaint. This participant was present when a City employee returned his landlord's call. The landlord was told that "they're trying their best to prosecute every once in a while but when they get it to court it doesn't hold up . . . there's some loophole in the law . . .it's easy to avoid getting caught, and five out of six get away. That kind of changed my opinions about it." He went on further to say that they might consider having four in their house now because he doubts that anyone would complain about them since he and his roommates are good neighbors. A few tenants mention that they feel that the ordinance has become more of an issue than it was when they had first heard about it. While some tenants worried less as time went by, others tended to express that they are more wary than they used to be about the ordinance. This seemed to be related to the amount of worry expressed by the landlord of a property. If the landlord is concerned about getting caught and expresses that to tenants, there seems to be an increased sense of worry. "At first, I didn't really care. I just didn't think it would make a big difference. It has become more of an issue. The city seems to be putting a little more pressure on homeowners to obey the ordinance." "(We) weren't worried about it, now they're starting to enforce it much more. (Our) landlords were worried about it, didn't want to get caught." The ordinance causes a sense of division, and unfairness. This is one opinion that did not change with time. Regardless of enforcement and fear (or lack thereo fl of being reported for violating the ordinance, this sentiment is very much attached to the ordinance, especially for students. "It gives a lot of us a sense of unfairness . . . I've heard that a lot of people don't feel it's a constitutional thing, to tell somebody how many people (you can live with) , when there's plenty of room . . . " " . . .it's an outdated law that really put kind of a lot of strain on student renters and student landlords. Like my house is designed at least for five people. I don't see any reason for five unrelated to not live together if the house can safely support that many people. I don't quite understand the rationale for enforcing (it) . It's probably kind of a waste of city resources and time, to be frank." Neighbors In this part of the interview, participants in the neighbor segment described what they know about the ordinance, and their opinions surrounding it. AWARENESS & KNOWl EDGE OF THE ORDINANCE Most homeowners are aware of the ordinance, but do not necessarily know all of the details. It seemed that most did not seek additional information unless they found themselves in a situation in which they needed to learn how to report someone. Additionally, it is not clear to everyone how the ordinance works, or even how it might help them in a situation with disruptive neighbors. It should be said that there several of the people interviewed had placed complaints (as an intentional sampling), and did seem to have a more thorough understanding of the process. "No more than three unrelated living in the house. There may be some kind of exception to that, I'm not sure. • � PAGE 87 R E S E R C H "I don't know what you're supposed to really do, like in our situation, of contacting the City." "I think it's intended to limit the number of college students that would shack up together, try to put some type of controls within the city limits to keep unhealthy living conditions from existing. I don't know that it's the right execution, but I understand the intent." Several participants commented that the ordinance has existed for a number of years but that enforcement had begun to take place more recently. Many people heard about the ordinance initially through the newspaper, while others had been familiar with it for a long time. Most participants had read about it at least once in the newspaper, although those who are less affected by the ordinance tend to pay less attention. One person remarked that she had first heard about the ordinance "through the newspaper and the constant articles." There was one participant who had initially said that she was familiar with the ordinance, but after having it explained to her, she realized that she had never heard of the three-unrelated ordinance in particular. She had confused it with other existing ordinances such as one intended for noise reduction, and another aimed at yard upkeep. INITIAL IMPRESSIONS OF THE ORDINANCE & HOW THEY'VE CIIANGED For some neighbors, uncertainty as to how much control the City should have over renters' living situations caused some initial doubts about the ordinance. These neighbors generally seemed to have concerns about the amount of regulation taking place. It wasn't that they were against having an opportunity to respond to situations involving unruly rental neighbors, they were just uncertain about this particular means for addressing the problem. "I wasn't really sure how I felt about it. . . because it's one of those issues, is it really the city's business to be saying who can live in a house and all that. . . " "I thought, `oh the poor landlords, they're not going to make as much money as they thought! ' and, `How are they going to enforce that?"' "In this day and age, I think it's hard to make a living. As long as they have their own bedrooms, I would think it would be okay. If they have sufficient area and they're not destroying others' areas, I think it's fine." "My opinions (about the ordinance) haven't changed that much, although I think in a five bedroom house, I don't suppose there's anything wrong with more than five people living there. One person per bedroom." Others supported the ordinance as soon as they heard about it, as a way to keep some control over what happens in neighborhoods. For these participants, the ordinance seemed to provide a sense of empowerment, or at least some opportunity for action. This was especially important to participants who were watching more and more homes in their neighborhoods become rentals, and had to worry about who would be placed in the home each time someone new moved in. "I thought it was a good idea because I've seen it before where you get a lot of people living in a place, and they don't take care of it." Personal experiences cause some people to support the ordinance more than they initially did. Several participants explained that their support for the ordinance grew over time, • PAGE 88 R E S E R C H especially with the introduction of less than desirable renters nearby. This was sometimes related to issues of home maintenance, other times to issues with noise, and sometimes both. One participant talked about how she had initially not felt that the ordinance was entirely fair, but when she ended up having disruptive neighbors move in behind her, she began to feel that it carries more validity. She did not end up reporting her neighbors to the City, but felt that her letters to the home's owner might have carried more weight due to the existence of the ordinance. Similar sentiments were expressed by other homeowners who may not entirely support the ordinance, but do want some way to control the number of cars parked on a street, and as one woman mentioned, "The more kids, the more activity we see. And it tends to be a pattern when there are a lot of them, four to six, then you see a lot of parties." Increased support for the ordinance did not always translate to actually reporting neighbors for breaking it. It was noted during the interviews that neighbors seem to worry about reporting renters because they are concerned about retaliation. It seemed that in some cases, homeowners are more likely to act if they have the support of other nearby homeowners. In neighborhoods where homeowners do not interact as much, it seemed as though less action had been taken, and less changes had been made. The situation is reversed for some who were initially happy to learn about the ordinance, but were then discouraged by their experiences. There were neighbors interviewed who expressed frustration because they do not believe that the ordinance is enforced as well as it should be. For some participants, this is their impression even though they have not called to place a complaint with the city. One woman actually had placed a complaint, but in the end, no changes took place. She did not feel that the way the ordinance was enforced was effective, because those who are reported are given too much time to hide any evidence of a fourth, or even fifth, person. "It seems like it's good, like it's valid and should be okay. On paper it looks good, but in reality, I don't think it works. I'm not really overly impressed with it. I think it's hard to enforce." Some people draw a connection between disruptions and more than three people in a home, while others do not feel that the number of people matters as much as who the renters are. It was apparent that some participants in this segment do not feel that homes with more than three unrelated people living in them automatically lead to trouble, but that based on their personal experiences, it has been the case. As neighbors recalled some of the issues and incidents that they had had to endure from their nearby renters, it was apparent that some residents were passionate about the issues surrounding this ordinance. "If the students that are renting the home draw attention to the home they're living in for whatever reason, then yes I think they should be (reported) . If there were four people living in a home next to me and they were totally respectable, totally responsible, then I guess I wouldn't have the same issues that I have (participant describes finding broken beer bottles and plastic cups on her lawn) . I feel the landlord should be responsible for the upkeep of the property because the kids won't do it. The more people, the more likely it is to have activity. Parking becomes a huge issue because they don't use the driveway. It's not just (cars belonging to) the three or four that live there." • PAGE 89 R E S E R C H IMPACTS OF THE OCCUPANCY ORDINANCE After talking about their impressions, participants described the way in which they perceive the ordinance to have impacted Fort Collins and whether they feel that these impacts are positive or negative. Landlords Landlords discussed the effects of the ordinance that they have observed, and explained whether they feel that its outcomes are positive or negative. EFFECTIVENESS OF THE ORDINANCE Participants in the landlord segment had varying perceptions as to the effectiveness of the ordinance up to this point. They were asked to talk more about their opinions concerning the ordinance, especially about issues like enforcement. If the ordinance is going to exist, then it needs to be enforced in order to be effective. This is an overriding theme throughout this section of findings as expressed by the landlords interviewed. Even landlords who are generally against the ordinance feel that if it's going to be in place, then more action needs to be taken to enforce it. This opinion branches from several other findings noted in this section in which landlords discuss their concerns with the ordinance as it exists now. "It needs to be enforced more. Until someone complains, there isn't a way to enforce it. They don't know (how many are in a home), how would they?" At this time, the ordinance is not effectively creating change, but it potentially could if it is enforced better at some point. Some participants felt that the potential for change from the ordinance exists, but that it would be need much stronger and even enforcement. "I also think it's not fair to have it when they can't enforce it because people following the rules lose business, they lose money. You still have the same number of cars parking out front, and it's not improving the condition of the houses at all . . . I think it's been a failure." "Where my personal home is, I don't think it's affected it at all . . . (They're) planning for high density housing, and that's where our townhome (rental) is, so by definition, there's a lot of people living there. I don't think the ordinance has made it better or worse one way or another." The ordinance is not creating any improvements because it does not specifically address behaviors. In contrast to the opinions supporting the previous finding, other participants frequently commented that "bad renters" are not defined by the number of people in a home, nor does it have to do with whether they are related or unrelated. They commented that three people can just as easily create disruptions, just as related family members can be quite loud. "The issue is not how many live in the house. The issue is not affected by their relation. It's a stupid, illogical ordinance. They really wanted to reduce the number of rental properties (in their neighborhoods) ." (Participant talks about how this is a very normal progression to take place in neighborhoods.) "(Even) if it were better enforced, I don't think it would do what it was intended to do. I don't think it goes far enough to require owners to maintain the yard. I don't think the • PAGE 90 R E S E R C H ordinance addresses that at all. And the city just does not have the money to do it. I think it's ridiculous to have something that you can't manage." "There is a need to enforce other ordinances that already apply, such as the noise ordinance . . . I think that prevails over that type of situation, or if there were a problem with trash on a property, I believe there are overlapping ordinances that cover those kinds of things." "There are and were already laws on the books regarding all of the behavioral issues that this is supposed to deal with—noise, yard maintenance, loud parties, parking. Those were already in place. They weren't enforcing them. I know that there were people who called and complained about them, and nothing was done." Several participants talked about how the underlying purpose of the ordinance is to keep rental properties out of certain neighborhoods. They argued that this is a sort of natural evolution of neighborhoods, and that, "Demographics change—they just don't want it to." The same person commented that this desire to keep renters out of a neighborhood by using the ordinance is, "blatant discrimination, as far as I'm concerned," which is a sentiment similar to what some of the tenants expressed. Putting the power to report violating houses into the hands of neighbors can create a sense of violation of privacy. Additionally, a few landlords noted that in some cases, homeowners seem to report violating households just to be vindictive. "I think it's sad in that you can have one neighbor causing so much trouble for a house that may not be causing so much trouble. It's just that a person decides they don't like rentals in their neighborhood. My sense is that this started in a retirement neighborhood where people had a lot of time on their hands. I don't think investors or property managers' voices have been heard. It's just the squeaky wheel . . . I think a bunch of people got together about rentals in their neighborhood. "It has given the government more teeth to fine people for having more than three unrelated. It's on a case by case basis, but you have to be turned in, so it's almost like you have little vigilante groups. I knew a guy who cruised the neighborhood looking for it. I had a house with four in it—two were cousins. I thought it was okay, but it wasn't. It wasn't about behavior, or parking, it was about one person cruising the neighborhood and watching, watching, watching. . . the only reason you get caught is by having someone watch you, which is creepy." Several landlords also talked about the issue of visitors and the fact that no visitor can spend more than 30 nights per calendar year at a house without being considered a resident. So as a result, neighbors tracking this type of activity end up taking notes on the personal lives of those renters who choose to have visitors stay multiple nights, for whatever reason. Moreover, a few participants described the ordinance as `unconstitutional,' especially because of the manner in which it is enforced. "The enforcement is constitutionally unsupportable. It's based on complaints that can be and usually are anonymous." (Participant explains that they don't tell the renters what evidence they have, and do not tell them what they're looking for when it's time for the inspection.) • � PAGE 91 R E S E R C H Not all feedback from landlords is negative; some feel that it is having some effect in neighborhoods, and others appreciate and support it for certain reasons. Landlords had witnessed different levels of enforcement through their own experiences. One person felt that enforcement had been relatively good, which in turn must be having a positive effect on neighborhoods. "Yes, in a sense (it is working) , because they have enforced it. I know it makes neighbors happy. . . it has worked, but at the same time, it's turned ordinary tenants and landlords into criminals, and it's just because they're trying to get by. It's almost like, did I make a mistake buying this five bedroom house?" One person talked about how he actually likes the three-unrelated ordinance in some cases, such as where students are concerned. He said that his properties with student renters are much easier to manage with only three people living in them because, "a lot of our students aren't clued into the world, yet . . .it's a training process . . . we try to work closely with student tenants." CHANGES NOTED IN THE RENTAL MARKET The ordinance is not evenly enforced which means that management companies and property owners who follow the rules are essentially punished for doing so. Landlords falling into this category, those who follow the rules, explained that they lose opportunities to rent to tenants, and lose out on managing properties, as these two groups of potential customers choose to work instead with someone who is willing to break the ordinance. "The people who are following the rule, it's affected them. Usually, if you have five bedroom houses, you can have five kids there. You can't charge as much rent [with the ordinance in place] . That's why a lot of people sold (their properties) . We're following it, but there's other people that don't. People (renters) think there are loopholes because other landlords are lying. When someone does call to complain, they take weeks to go and inspect, so of course they're gone, nobody gets in trouble. I don't think they've even fined one person yet. It's just irritating." "We have lost income because of this. We tell our customers that we can't put more than three in there so they take the property from us and go elsewhere. About 10 (clients) sold properties because they don't want to deal with government here." The ordinance requires the use of additional resources for property managers to do what they need to do to make sure than tenants stay in compliance. Several property managers talked about the additional time and energy that they spend doing things like walk-throughs in their properties to make sure that tenants have not introduced a fourth person into a home. They commented that there are some properties that are reported because even though there are only three people in a home, the renters have multiple cars. One landlord suggested that, because of all the resources they waste on cases such as these, "We also think that we should go after (neighbors reporting non-violating homes) them for harassment." About four participants said that they had had to reduce prices on their homes with four or more bedrooms in order to keep renters in the properties. They could not rent the properties for the same amount that they would have, because renters cannot afford to pay the same amount when split only among three people. One landlord noted that the maintenance of her properties has suffered for this reason because it's more difficult to afford to make the improvements that are needed. on PAGE 92 R E S E R C H "I would probably say that it has been detrimental (to the appearance of her homes) because we can't afford to make improvements anymore (after reducing rents so that fewer people can afford to live in the homes) ." "Yes, I know that some people . . . have had to drop the price on their larger homes. They drop the price a little and have four instead of five, so they're not breaking it as much, it's not as obvious. For those who ignore the law, the prices stay the same." Perceptions concerning supply and demand varied based on personal experience, as well. Some people feel that the demand for one and two bedrooms has increased noticeably. In fact, one landlord who owns mainly one-bedroom units said that they are currently at 100 percent occupancy in Fort Collins, but not in Loveland, where residents are able to live 3+ in a home. Even though this participant might have benefitted monetarily from the ordinance, they are not at all in support of it because of its negative impacts. "Attention has shifted to smaller properties, which makes it a whole lot more expensive (to rent them) . It's taken away the affordable housing in town. I have two couples that wanted to rent a place together to save money, but they can't do it. It's not just students. It's families, young couples, people struggling, it's everyone . . . .it's the affordability for our residents that's really been affected." A number of landlords do not feel that many changes have taken place concerning supply and demand, and that it's probably because there are still so many people violating the ordinance. The majority of the landlords interviewed were of this opinion, as reflected in the comments that follow. "People are not buying the four bedroom, two bath houses as much but if they do, they go to a property management company that will rent to over three (people) , because they'll do it until they get caught." "I think it's probably about 50 percent compliance. There's a huge shadow of landlords renting to three. Many put three on the lease and wink to the fourth tenant. The renters and landlords have an agreement to break the law." "It's all pretty much stayed the same. I thought that one and two bedrooms would go faster, but there are still those who will rent to more than three, so change hasn't really been that noticeable." OTHER PARTIESAFFECTED BY THE ORDINANCE Landlords were asked to discuss other segments that they feel are probably affected by the ordinance, either positively or negatively. They named the groups listed below: Investors. Current owners and potential buyers were named as groups affected by the ordinance. "Do we want people buying four or five bedrooms for investment in Loveland, instead? They are being impacted too, and I think they know it. They may be taking their money elsewhere . . . they're not going to make their mortgages. They're up against the wall to put the fourth person in. They don't want to sell. The fourth person has extra stress, as does the landlord." "This is causing people to go into foreclosure, to not take care of properties." • PAGE 93 R E S E R C H "Investors purchased (these properties) with the purpose of generating revenue. Now people want to change the rules so it can't be used as intended. I know some people who have been badly hurt by that. Students are being hurt by it because they have to pay the rent and go to college." Neighbors. Some neighbors are made unhappy by the inability of the ordinance to be enforced, in some cases. "We have a neighbor right down the street, and she has called (to report violators) . And when they (City employee) come check, there's only three there. I think she has just given up, after three calls ." The city also incurs additional expenses because of the ordinance. Landlords also talked about costs inflicted not only on their businesses due to the ordinance, but the cost to the city. Several people complained that the city does not have the funding that it would need to enforce the ordinance anyway, which makes the ordinance even more of a waste of the resources that are used on it. One person commented, "The problem is that the city has no funds to enforce it properly." He later spoke of a new ordinance now in effect geared towards the maintenance of properties. He again remarked, "It's strange. I don't know where the city is going to come up with all of the funds . . . they can't (even) do the basics." Tenants are widely affected by the ordinance, in large part by the financial repercussions of being limited to only three renters. Once again, a few participants commented that those who are following the rules are the ones who are adversely affected by the ordinance. Naturally, landlords talked about college students who simply cannot afford to pay above a certain amount per month for rent. Additionally, there are young people just starting out who need to be able to split the rent among more people rather than less. Numerous participants talked about the fact that two couples cannot live together either, and "you see that actually quite a bit." The economy was also discussed briefly by a few people who mentioned that the ordinance certainly does not help anyone struggling to get through difficult times. " . . .if anything, it's going to hurt more because of the economy. People who are losing their jobs, what are they to do?" Aside from the fact that landlords repeatedly commented on the inability of tenants to find affordable properties, they also commented on the general intrusive nature of the ordinance based on the fact that neighbors essentially `spy' on those in nearby homes. "I have lots of clients who may not be personally affected by the ordinance, but they are outraged by the intrusiveness. They are also looking elsewhere to purchase because of the tactic the council is taking (instigating more regulations) ." "They just don't have the resources (to enforce the ordinance) , (it) relies on neighbors to spy on neighbors, which is never good." "There are actually spies out there . . . this man goes out at 6 a.m. every morning to record what he sees, the number of cars in the driveway. . . takes his clipboard to monitor license plates. I think that's mean. I think the ordinance is an absolute slap to four different groups of people: sincere students, disabled adults that are mildly mentally or physically disabled, those people need to be four to a home . . . there are really trying times out there. The other big group are divorced men who pay child support. These guys need extremely affordable • PAGE 94 R E S E R C H housing. Mess them up and they won't be able to pay the child support. If they can't find ways to get support themselves, it will fall to the City." OUTCOMES: POSITIVE OR NEGATIVE? The outcomes of the ordinance are thought to be a net-negative by this segment. While it is perhaps not surprising to learn that most landlords consider the majority of the outcomes of the ordinance to be negative, it is interesting to learn that there are a multitude of reasons wby it is felt that this is the case. Not all opinions expressed during the interviews were related to money, and could often be traced back to a concern for tenants in search of situations that could help them save money on their living arrangements. This segment also carries a great deal of concern about `fairness' as it relates to the ordinance. "I think it's unconstitutional and discriminatory. It's discriminating against our most vulnerable citizens (the people who need the most financial help) ." "Since it's only on a complaint basis, the neighbors can just pick and choose. Inconsistent enforcement of any law is bad." "Negative. It was supposed to be a cure-all, except that it's made liars and thieves and cheats out of renters and landlords. So four people who work somewhere together, (let's say) they sneak a fourth person in (a home) , that can't be a comfortable feeling. And the students, also. A $ 1 ,200 house used to be $300 per person, now it's $400 per person." Tenants Tenants discussed any effects of the ordinance that they have observed, and explained whether they feel that its outcomes are positive or negative. EFFECTIVENESS OF THE ORDINANCE Tenants who are against the ordinance do not feel that it needs to be enforced, but that there are other more directed laws that should be enforced instead. Numerous participants in this segment reiterated that they understand that homeowners have concerns and are probably tired of living near noisy students, or those who do not take care of the properties that they live in. Similar to some participants in the landlord segment, however, tenants often suggested better and stronger enforcement of laws that address specific behaviors rather than using a tactic like the ordinance. It seemed that many participants felt that if the ordinance is going to exist, then it should be enforced. However, it was also heard time and again that there should be exceptions made to the ordinance, so that people who are more responsible would be able to live with more than three unrelated under the same roof. "I think there's a need to enforce any law. This one specifically, I can see why it does need to be enforced in some circumstances, otherwise it's ridiculous. When you do have unruly houses, it might be necessary. . . five or six just increases the chance of people coming (to visit) ." "I would say that it would be up to the owner of the property to make sure that it's enforced, as well as the City. Obviously if the owner has no clue, somebody needs to take care of it." • � PAGE 95 R E S E R C H "I understand it's a college town and they don't want a bunch of college students living in a house . . .in some situations I completely understand, but if it's done right, there's a way to live with more people." Additionally, some tenants questioned the choice of the number three, and commented that three people, unrelated or not, are just as capable of being noisy or neglecting house and yard maintenance. Almost everyone knows multiple homes where the ordinance is not being followed, which leads many people to say that they do not think that the ordinance is successfully doing what it was intended to do. Taken at face value, many people say that the ordinance is not working because they know so many instances in which it is not being followed. "I guess somewhat, but at the same time I know there are a lot who work around the ordinance and break it all the time." "I knew people last year that had up to eight in their house. People just turn a blind eye to it." " . . . not exactly sure what it was intended to do in the first place. In a literal way, no it doesn't keep three unrelated from living together at all . . . mostly what I think it is accomplishing is just making landlords really scared which limits the (number of renters and) drives up prices, so I feel like it's kind of a negative effect. I don't think they're enforcing it as much as they need to be if they want to see positives come from it." However, a couple of tenants did comment that they might have noticed a slight decrease in noise. They said that the ordinance might have brought about a small amount of change. And it should also be noted that there were several people interviewed who stated that they only have three in their home, specifically because of the ordinance, whether it was a decision that they made themselves, or it was pushed on them by their landlord. "Most of the houses I go to, most have more than three people living there . . . I guess it is (working), I mean we got knocked down to three even though we weren't (fully) investigated. I think it affects landlords more than students. Students don't really worry about it because they feel like it's unfair, so they'll just try and get away with it." `2 haven 't heard of a lot of enforcement. I'm sure its kind of hard to do. I know tons of people who are in violation of the law right now. I know the City is kind of under fire from a lot of students and community members. It seems to target students specifically. " Most students are able to state some way in which the ordinance has affected them personally. Participants talked about numerous ways the ordinance affects them, whether it is because they are currently violating it, because they had been reported, or it had limited them to three in a home. A few tenants did not feel personally affected by it, two of whom are not students. One was a woman living on her own, and another was a man living with his wife and child. "We took on the fourth roommate illegally, but it (the ordinance) was more of an afterthought than anything. We just figure we're not in any danger of getting turned in for that, and it's not for very long." • PAGE 96 R E S E R c H "I would have to say yes, because we know we're in violation. That's an effect because it kind of makes you nervous." " . . . my roommate had to kind of get around the lease by not being on it, but it didn't affect me that much. I think when we were looking for houses, a couple of landlords told us we'd have to kind of lie about it, but it's easy to get around . . .it didn't change who I lived with, we just waited until we found a place that worked." One participant explained that he had been reported by a neighbor, although he was not certain who had complained. They received notes indicating that they were under investigation although no one ever ended up coming to the house to inspect it. In their case, there had actually been two brothers living with two other young men, so the ordinance was not technically being broken. However, the incident "scared the landlords. They were worried about having too many people there." This meant that after the two brothers moved out, the landlord restricted occupancy to only three people, whereas they might have been more lenient if the investigation had not occurred. Another tenant explained that they would have more people in their home if it weren't for the ordinance. They only have three people in their home because their landlord made it clear that they would like to limit the property to three people. He went on to say of the ordinance, "It's made the landlords a little more shady. They're opposed to the law, and do their best to work with students to keep everyone out of trouble. They'll have three sign the lease, but five in the house." Most people know at least one person who has been affected by the ordinance in one way or another. Participants described hearing perspectives from people who have lost roommates, or who had actually been `kicked out' of a home. One person had a friend who had to move back in with their parents in Loveland because they were unable to afford rent without living four to a home. In one case, a young man was unable to live with a fourth person who is "like a brother." These two young men had been raised together part of their lives but were not legally brothers, so were unable to have a fourth person in the home. "I have one friend who actually got kicked out, but besides that I don't really know anyone who's been forced to leave." "They got an ultimatum that they had to move within five or six days . This was in the middle of the school semester, so it was hard on that individual plus it changes the financial situation of the people left behind." A participant also described situations that several of his friends had been in. They learned that they were to be investigated and hid the bed until the inspection was complete. He wondered how the number of people living in a home could ever truly be counted, which would make the ordinance extremely difficult to enforce. Tenants can imagine how the ordinance affects landlords, but are not certain to what extent they have actually been impacted. One participant felt that landlords are "probably more strict about who they let rent, probably a little more concerned about making sure it's only three. I kind of feel like five bedrooms aren't going to be as valuable anymore." "I'm sure it does impact them, I'm not sure how much. When worst comes to worst, you have to rent out a place. It must just be harder to sell (as a rental space) ." • PAGE 97 R E S E R C H Another participant in this segment explained that she has a friend in real estate who was talking about how the ordinance isn't just affecting college students. He knows plenty of people who are looking for cheaper residences and was frustrated because the ordinance is affecting a lot of people who need to be able to find less expensive living situations. It's difficult to say how neighbors may have been impacted by the ordinance. When asked how they think neighbors have been affected, most tenants guessed that the changes must not have been too substantial, so far. One person pointed out that their neighbors still have rental homes nearby, so on his block, it had not meant a reduction in the number of rentals. He also noted that in his home they had always taken care of the property. Most people tended to feel that the amount of difference the ordinance would be able to make would really depend on who a neighbor is living near, in terms of their level of responsibility and rowdiness. "It really depends on the three people that live there. You could just have one screw up that lives there. We're all pretty quiet, and we're good at taking care of things." "I'm sure there are neighborhoods closer to campus where people were probably partying a little bit more. Neighbors might have seen an improvement—people don't want to get evicted." OUTCOMES: POSITIVE OR NEGATIVE? Most tenants can imagine that there might be positives associated with the ordinance, but had generally not seen evidence of them. Participants were able to name some positives that they believe could result from the ordinance. These were mainly related to how neighbors might have benefitted from it. Since many of these participants feel that they are able to live in a home responsibly already, and don't feel that they are a part of a problem, they tended to speak of areas needing improvement as if they were in other parts of the city. "I guess it has placated the people that live in the neighborhoods with a high population of college students. They probably feel a little better, but I don't know if it's changed much at all so I don't really know if that's a positive." "I guess that you probably might be cutting down on the party houses, but I haven't seen any research that says that cutting down on five people in a house means less partying." "Those certain situations where there really are five or 10 living there and it's not built for that. It kind of keeps Fort Collins cleaner, I guess." It is interesting to note that participants in the neighbor segment talked about homes where noise was not necessarily related to massive parties, but that they were often disturbed by people coming home late at night. The noises associated with coming home had awakened numerous neighbors, and meant an interrupted night's sleep. It seems quite possible that these are situations in which some students (or anyone else, for that matter) think they are being quiet when in fact they are not, and while they may not see a problem with their behavior, it creates a disturbance for nearby neighbors. It is easier for students to name negative results from the ordinance because that is the way they feel they are being impacted by it. Participants reiterated the ways that they have been impacted, such as increased rents, living with worry about getting caught for violating the ordinance, and fewer options available. OR PAGE 98 N A ' R E S E R C H "For me it's definitely been a negative. Now I have to pay $ 150 extra per month for rent, and I'm going to move out in a few weeks because of that." "It's harder for kids to get a lease on a place. You might end up paying more if you only have three in a house instead of four . . .you're going to pay the same amount for the houses whether you have three or four people. Most don't rent by the number of rooms." "That's one more to add to the bureaucracy, it's one more thing to enforce, rather than something like drunk driving. I can see how in my situation it's limited my options . . . possibly it could hurt the school, there's less housing available, less cheap places to live." Another participant talked about a situation in which a landlord with a four bedroom place might meet with four people looking for a place to live, but because of the ordinance, they are unable to make a deal. In that case, nobody wins—the potential tenants are still looking for a place to live, and the landlord still has an empty apartment. Neighbors Neighbors discussed any effects of the ordinance that they have observed, and explained whether they feel that its outcomes are positive or negative. EFFECTIVENESS OF THE ORDINANCE Neighbors who work together and take the initiative to aid in the enforcement of the ordinance feel that it's working. It seemed that some participants had teamed up with at least a few other neighbors to keep an eye on their own block or area in terms of occupancy. A couple of participants had been a part of several complaints, whether as the person who had filed the complaint, or as a supporter. One man described a situation in which he was taking pictures and documenting the cars in front of a nearby rental house as a step towards proving that a neighbor was in violation. He was confronted by one of the people living in the house, who explained that living with more than three in a home was the only way that they could afford to pay their bills. So, confrontations can and do take place, which likely makes some neighbors hesitant to report a neighbor. "I was part of an official complaint on two or three houses. We're a part of a group that watches homes to see what's going on, where potential violators are. The city investigates after a complaint . . . I know a fair amount of how it works and how our neighborhood approaches it. We don't (place any complaints) unless we feel there's a solid case. The city has been very good at taking it to the next step." "I was kind of the `bad guy' in the neighborhood, taking pictures, logging vehicles . . . it took about four to five months to get something to happen, to reduce it to three people." It happened that one participant had been a part of the initial movement to research the ordinance as it had originally existed in Fort Collins. She and some other citizens had researched other cities where similar ordinances had been instigated. They approached the initiation of the enforcement of the ordinance with considerations for a number of facets. One of these was an issue of public safety, such as homes where people were living in basements without windows, and rooms without proper heating. They also thought about neighborhoods where people had purchased single-family homes with the goal of living near other families. One of the described goals of the ordinance is not specifically • PAGE 99 R E S E R C H to keep students from living next door, but to try and maintain a balance of renters and owners in neighborhoods that are intended for single families . She explained, "Keeping everyone happy is a challenge, but we thought that what was happening in our neighborhood (numerous homes being sold to become rentals) could happen other places." It was also explained that the enforcement of the ordinance has long-term goals as well, as far as the development of the city of Fort Collins. If the ordinance is able to keep the number of rentals in neighborhoods with single family homes under some control, the character of the city can be better preserved. There were also environmental considerations, such as promoting high density developments closer to campus in order to prevent sprawl and lengthy commutes. Please note that the above paragraphs provide a brief summary of goals written based on one interview, and are not intended to be a summary of all overriding goals of the ordinance. ". . . the people I know that have lived here almost as long as I have. . . we share the same concerns. They are all coming together and doing their part. Its been pretty much toned dozen, fewer cars, very few loud noise or part' complaints. " The results of the enforcement of the ordinance are evident in some areas, where neighbors seem to work together to ensure the ordinance is being followed. Noise reduction, fewer cars parked on the street, and some improvement in maintenance are noted in areas where neighbors are diligent, according to some participants. The results are not apparent to everyone in every neighborhood, however, and this is further addressed in later findings. "ffhe reduction in number of cars parked on the street) is visibly noticeable, but the main thing is traffic, especially late-night traffic. (Tenants') acquaintances are part of what make parking and traffic so bad. We still have a fair number of rentals, so reducing the number of people in a house must make a difference." "Our two blocks are pretty much compliant (now) . Now in other neighborhoods, I would read what was going on, but you don't see a whole lot of that in the paper anymore. Certain neighborhoods had individuals who were kind of on patrol. There seems to be less of it going on, so there's probably more compliance." Rental home and yard maintenance are still issues, although this seems to depend upon the landlord. One issue that does not seem to have improved as a result of the ordinance, according to responses heard during the interviews, is the maintenance of homes and yards. While the tenant may be partially responsible for taking care of these things, the landlord often becomes the main focus of these complaints. When tenants will not care for a property, neighbors tend to feel that the responsibility falls then to the landlord. "A lot of it has to do with what the landlord is like, if they're totally absent. You can't have a dirt yard. (Owning) a rental property is a business, and we have a lot of limits with businesses, so there should be some regulation." " (The ordinance) hasn't really improved the visual aspect of the properties ." " . . . I think it's more that it's a rental, and possibly students (are living there) . If someone wants to rent it out, build into the rental price the maintenance of the yard." • PAGE 100 R E S E R C H A few people talked about how there is now a new ordinance in place concerning the appearance and upkeep of properties. `2f you re a re ponsible young adult, you should be able to take care of where you live. Otherwise, live in an apartment or a dorm. " Some people who have placed complaints with the City are sometimes discouraged when no change takes place after a property is investigated. Anyone falling into this category generally did not feel that the ordinance is effective. This was true for a woman who had had this experience herself, and interviewees who knew of neighbors who had placed a complaint to no avail. One participant said that she had reported a nearby house, and had done what she needed to do in order to have the property further investigated by the City. She did not feel that the process for investigating was very fair to the person reporting, because those who are violating the ordinance are given so many opportunities to hide the fact that they are not following the rules. She explained, "They give (the household) a week before they come check, so of course it's all cleaned up by the time the inspectors get there. So ultimately they found that the renters weren't doing anything wrong. It didn't work." A few people were hesitant to place a complaint because, as one woman said, they "don't want to start any trouble." It is interesting to note that, in other respondent segments, participants sometimes felt that the process for investigating was unfair because the turnaround is so quick. It is not understood whether the investigation process has changed, if has been executed inconsistently, or if perceptions simply vary based on an individual's point of view. Some neighbors do not feel as though any changes have occurred on account of the ordinance, and feel that it is because it is not being effectively enforced. Several people expressed that they do not feel the ordinance is making a difference in their neighborhood, and it is because it is not enforced as it should be. One woman talked about areas in her own neighborhood, as well as others throughout the city where properties have not been cared for as they should be because they are rental properties, and more than three people are likely living there. Two people specifically commented that not only having renters on a block, but having more than three people in a home means that disturbances are much more likely to occur. "There's no sense having a law that's not enforced. Why have it?" " (It is) absolutely not (making any changes) . I see none of it being enforced." So, there are many who believe that the need to enforce the ordinance exists, but that it is not currently done so properly. For people living in areas less impacted by the ordinance, it's difficult to say whether or not it's effective, or if it needs to be enforced. Generally, participants in this situation tended to feel that the ordinance must be more put to use in neighborhoods with high volumes of college students. "I guess I would say no (it does not need to be enforced), but I don't even know . . .we didn't have to get the city involved (in our situation) . . . if someone wanted to enforce the ordinance, what do they do? I think it's fine the way it is. I think fines help." • PAGE 101 R E S E R C H "There are quite a few parties, but I went to college too, and as long as it's the weekend, it doesn't bother me. I think some people are too cranky." Home values may have been helped in some neighborhoods. Many comments connected the fact that a greater number of rentals in a neighborhood can bring home values down. In other areas, home values had stabilized which enabled more families to purchase homes in an area. Opinions varied on this topic, too, as one woman explained that her home value remains high because of the number of rentals in her neighborhood, which is fine with her. "In my neighborhood, I don't think it has affected us, but I can see why it would in other neighborhoods." "Our home values have stabilized. For a short while they were going up and up because investors thought it would be a good neighborhood for buying for rentals . . . that drives out single family home buyers." "From what I've seen . . . I believe it has helped upgrade the neighborhood . . . of course your real estate values are going to go up." OUTCOMES. POSITIVE OR NEGATIVE? Those who feel that the ordinance is not enforced say that its impacts are neither positive nor negative. Neighbors who do not feel that the ordinance has made a difference in one way or another cannot say whether the impact has been positive or negative. These participants were much less likely to place a complaint with the city. The reasons for this seemed to vary by individual. Some neighbors feared retribution from those whom they might report, others didn't feel that it would make much a difference, anyway. Still others were bothered by neighborhood situations, but did not feel like the ordinance would solve their problems, like poor yard maintenance. Even if they haven't experienced positive outcomes themselves, most homeowners can imagine how some people are benefitting from the ordinance. Others looked forward to experiencing positive outcomes when (if) enforcement is strengthened. And, as already mentioned, there were several respondents who feel that the ordinance has been highly effective in their neighborhoods, with the positive effects of creating a balance between the number of rentals with owner-occupied homes, a better sense of community, and reduced noise levels . "We've seen a revitalization in our neighborhood. People feel more confident about purchasing in our neighborhood. I've only heard good things about it." "Generally, in my neighborhood, I make my observations almost on a daily basis and I really don't see anything negative. Students are still wanting to come to CSU . . .we need to take care of students, because the cost of housing is changing." "Probably (there are positives for) people in neighborhoods closer to the college with more students around." "If only three lived in a home, I would say there would be room in the driveway for parking, and I just think it would help. Parking would be the number one positive." • PAGE 102 R E S E R C H "We can call the police when there are parties. It might not have anything to do with the three unrelated, but when there are four to six in the house, they are more likely to have parties." One participant tended to think of the overall effects that excessive numbers of rental homes can have on developments as a whole. He talked about neighborhoods that he had watched change over time in Chicago and Washington, D.C. He commented, " . . . I've seen neighborhood go down the hill and I don't want to see it here. You start (to see) a little bit and the whole thing deteriorates." While most neighbors could understand how the ordinance might affect landlords and renters, they don't feel that the effect must be extremely damaging because there are still so many homes where violations are taking place. EXTRA OCCUPANCY RENTAL HOMES DESIGNATION (LANDLORDS ONLY) This particular section was geared specifically towards the landlord segment, although one person in the neighbor segment did touch on the topic. There are many obstacles in order to earn this designation, so it does not help many property owners around the ordinance. All participants who owned or managed numerous properties were familiar with this designation. Smaller-scale owners had either not heard of it, or knew a very limited amount. Primarily, most feedback on the topic was geared toward the limited zoning in which such a designation is allowable, as well as the costs required to ensure that a property meets all of the necessary requirements. "That's costly to go through, and it's not a given that you can get that designation. I have a lot of people who have chosen not to do it because of the cost. It's not just the fees and permits, it's the upgrades to current city codes." " (The designation) only exists (as an option) if your house is in the zone to permit, and there are only a few zones where you can take advantage of it. I have an elderly couple who purchased two four-bedroom homes in 2003, but neither neighborhood is zoned (for this designation) . But those certainly aren't the only ones affected by the ordinance. Owners are losing money." "That's stupid, too. For our properties, we can't even do that because there are so many things you have to go by (rules to follow) . . . there are so many things you have to do, like heating, the extra parking, for us it's just not worth it. We have lots of properties in zones where that can't be done." Most people do not use the designation, so its existence is not considered a positive or a negative to most people. Because the designation requires so much work (and likely investment) , it ends up being passed as an option by many property owners, as indicated during the interviews. As such, it is somewhat of a non-factor. One property manager explained that, out of the hundreds of properties they manage, they were only able to convert one house into this type of property, because it was in the proper zone. "To have it available (as an option) is a positive, but some of the guidelines are just tremendous. It's just expensive." (participant explains that if a house is to accommodate five • � PAGE 103 R E S E R C H people, it must also have room and specific conditions for five cars to be able to park there, which can be an extremely expensive requirement to fulfill) "There are exceptions, but only in those particular neighborhoods, and they're highly regulated in terms of safety and code. They are inspected, and there has to be a certain amount of off-street parking. . . so your average person would not be able to apply to it. That's why I feel there's a need for some other process." One small-scale owner had not heard of the designation. After a brief explanation was given, she was still hesitant to provide many opinions on the topic without having many details. She explained, "I think it might be helpful if it's done correctly. I just see so many things that they try, but they get all the extra junk in it that it just doesn't work. It really upsets me when people who have money can buy their way through. I'm afraid that we have things like that happen." Another small-scale owner made the following remark: "I know that it makes sense for property owners, but if (you're) in a single family, owner- occupied home, I would think that they would be negatively impacted by that. I don't know how the City makes those exceptions. I'm assuming the rules are relatively strict." The participant in the `neighbor' segment who mentioned this designation talked about the importance of the zoning requirements in order for a property to be acceptable for boarding purposes. She explained it from the perspective of a person who had purchased a home with the understanding that the neighborhood would be for single families, not to be interspersed with boarding-house type situations . SUGGESTIONS FOR CHANGES OR IMPROVEMENTS In the last section of the conversation, participants were asked to share their ideas for improving the ordinance, if they felt that changes were desirable. LANDLORDS In the final portion of the interview discussion, landlords were asked to make their own suggestions for improvements to the ordinance. Their suggestions, which varied depending on their level of support for the ordinance, are presented below. Punish specific people for their specific actions. That is, instead of using the ordinance as a way of preventing behavior, use existing laws to enforce more appropriate behavior. As an example, one woman talked about enforcing noise ordinances with very heavy fines, and following through with the punishment. Make students experience the consequences of their actions, but don't punish other people who would not have broken the rules to begin with. "Enforce the already existing ordinances that correct behavior. Hold the tenants responsible for their behavior. I know that there are some landlords that are not responsive . . . but I think (the City doesn't) do much at all about dealing with the people that have the bad behavior." "If they could keep the neighborhoods quieter, I think that I like that aspect. Everybody has a right to not have wild parties going on, but I don't think the enforcement on the noise issue, I don't think they have enough teeth in it. The owner can be fined for the noise, and that should not be. It's the people who live in the house, and they ought to make the fine really big so that it really hurts, not just a slap on the wrist." AL di • PAGE 104 R E S E X R C H Considering punishment for particular actions caused some people to think about the other issues that the ordinance had been designed to help, such as parking. Most people agreed that it might be nice to have fewer cars parked outside a home, but that it is not fair or realistic to restrict the number of cars that a person owns. One woman commented, "A family with a bunch of teenagers would have the same problem." She also noted, "A family can be just as noisy as a group of students." `7t seems to me thatyou either have it (the ordinance), oryou don 't. Just let people live together in a home where it seems to be appropriate, and let market forces or neighbors (drive change). I don 't think its the kind of thing that should be legislated so heavily. . . living in a neighborhood means you 're a part of it, so it's your responsibility. You don 't need an ordinance i tith the City to say whatyou can have and whatyou can 't have. " JL Choose some areas of the city in which to purposefully grow student populations. Interestingly, this was suggested by one landlord. It should be noted, however, that in this case no one would be limited to a certain number of unrelated people in a home. This participant expressed particular concern for the fact that the ordinance disables numerous groups of people that desperately need to be able to find affordable housing from being able to do so. "There are some areas where students already are welcome. Maybe limit their presence in other places. Let's welcome CSU to our economy and not make it really crummy on how it works. Most students are very hard-working, and extremely worried about the recession." Increase the number to four-unrelated. One person commented that even allowing just one more person in a home would help not only landlords, but students and others who need to live as inexpensively as possible. For example, this would allow two couples to live together, a situation which was frequently raised by landlords. "What I'd really like to see is four-unrelated . . . that just seems to be the breaking point. There are a lot of four-bedroom, two bath houses. If it were four unrelated, it would make housing more affordable and help us out as investors. Then you wouldn't have people sneaking others in. Four would be a good, happy medium for everybody." If the ordinance is to be upheld, enforce it seriously so that all landlords are affected in the same way. This relates back to the numerous comments presented in earlier sections regarding the unfairness of the fact that so many landlords still allow more than three to live together. This is much to the detriment of businesspeople who make the decision to follow the rules. " . . . they need to do something where people were actually getting in trouble. It probably wouldn't affect us so much if all the landlords were following the rule. All owners could stick together and keep price ranges reasonable. It won't work unless you all follow the rule. They give too much time (to renters) to fix it and so no one gets caught. . . there are a lot of owners with one or two properties who have no clue about (the ordinance) , there are others who just break it. We miss out on business because we won't break the rules." (Participant comments that renters are given time to remove evidence of a fourth person and that they can just move back in after the inspection.) Similarly, one person made a suggestion as to how the City might be able to more effectively enforce behavioral issues by having property managers and owners provide a profile of renters in each of their properties so that the City would know who is living where. "My suggestion would be, there would need to be a reporting process for telling the city how many people are in each • PAGE 105 R E S E R C H property. . . mandatory reporting for which properties are rentals, and if it's a single family or college renters, so they will know where to look for problems." Conversely, several landlords were under the impression that the enforcement of the ordinance is very strict, and that it does not allow a fourth tenant more than seven days to move from a home before they are fined $ 1 ,000 a day. These participants commented that this approach should be changed, with a little more consideration for the stress (both emotional as well as financial) that tenants would experience because of this enforcement. One person commented that one of the reasons Fort Collins has been a great place to live is because a student could rent a bedroom for $300 per month close to campus, and in a great area. He commented, "If they really start cracking down on it, what else are you going to do as a student?" Make exceptions for tenants who will obviously not create problems. Landlords talked about people who have come to them to rent, but could not because it would have meant that more than three unrelated people would be living together. These were sometimes situations in which friends were trying to help someone else by inviting them to live in the same house for a while, or maybe two couples wanting to live together. Several people commented on situations involving caretakers who were unable to live in certain situations that would have helped them keep watch over someone else. "There should be an exception process if they are going to enforce the ordinance." With all the frustration and questions that surround the ordinance, some landlords feel that it would be best to scrap the current ordinance and decide on new ways to approach neighborhood issues . One person commented that the lack of resources to enforce the ordinance is even frustrating to the people trying to enforce it. It was stated that the best thing to do might be to get new city council members, and then make a fresh start. TENANTS In the closing section of the interview, tenants were asked to make suggestions for improvements to the ordinance. Regulating the number of people that an individual is allowed to live with seems very restrictive, and neglects to punish specific people for specific behaviors. Tenants tended to advocate enforcing laws concerning behavior, instead of the occupancy ordinance. Numerous people commented that simply having four people under the same roof seems like a ridiculous reason to be punished, especially if they are not causing any disturbances. Furthermore, they could not imagine why a neighbor would need to report a house just because of the number of people living there, if the behavior did not warrant it. "If they have a good reason to call the city, if the kids are out of line that seems fair, but if you just see four people, that doesn't really justify it." Repeal the occupancy ordinance, and direct the City's resources towards enforcing ordinances geared towards noise and other behaviors. Related to the above finding, numerous tenants suggested punishing particular types of behavior when they arise. "There are noise ordinances in place. If you break the law, you break the law. Start enforcing that more." • � PAGE 106 R E S E R C H "I think the ordinance is unnecessary. We need to improve the laws that punish the specific instances themselves. (We need) better enforcement of the existing laws. All of these problems, people were already having—we don't need this ordinance in addition to those (other) laws." The size of the property should be taken into consideration. In other words, some people suggested that it makes sense to limit the number of people that can live in a home, but that it should be based on the amount of living space. "I would honestly say that the ordinance should just (be applied) house to house. If it's a four bedroom house, then four people should be able to live there, or a two bedroom house with two couples—it would depend on a lot of different things. Couples should have a part in it, and the number of bedrooms and bathrooms, rather than just three people, a blanket on the whole city." "I would add a couple more complexities like maybe allow four (people) if parking space is available . . . but I really think that three is good for those smaller houses . . . smaller four bedrooms, where if it's a little tight, it's pushing it . . . overall, things are working, but it's a tough issue." It's difficult to accept the ordinance as-is, when it seems like there are so many situations that should be acceptable. Like the landlords, tenants felt like if the ordinance is to be upheld, there should be exceptions to the rule. A couple of people mentioned that this is true especially if they were trying to help a family member or a friend through a difficult time. " . . .what if a family member needed a place to stay for a couple of months, but we got in trouble for letting them stay for bit, when all we're trying to do is help? There are so many situations where it should be okay." Place more responsibility on the landlords to make certain that their properties are in compliance. One person suggested that landlords need to take responsibility for their properties and ensure that rules are being followed. "I think it's up to the landlord. Our landlord comes around—he's around enough to know if somebody's violating or not. If something like that were going on, I think one of us would tend to say something to him about that. I think it's up to the landlords and then the neighborhood . . . out of the four-plex I'm in, I know all of my neighbors, and we watch out for one another." Make certain areas of the city rental zones, or areas geared towards college students . Interestingly, two participants in this segment suggested trying to designate certain areas as rental zones. They each acknowledged that this is a college town and that students are likely to want to live closer to campus, and are also more likely to at least occasionally have parties. Separating this population from family homes would be a way to keep everyone happy. As a final statement, one participant expressed frustration over the fact that she doesn't feel as though some groups who are highly impacted by this ordinance have been given a chance to be heard, namely students. She noted that meetings intended for public input on issues such as the ordinance have been rescheduled on several occasions so that they occur at times when the majority of the student body is not in town, such as during the summer months. • � PAGE 107 R E S E R C H NEIGHBORS In the final portion of the interview discussion, neighbors provided their ideas for suggestions to improve the ordinance. Many neighbors feel that the ordinance has the potential to make more of an impact if enforcement is increased. Several people commented that the city should be more proactive in pursuing offenders. Some participants thought that the city should be more aggressive so that offenders will actually be caught in the act, while others felt that an inspector should actively seek out offenders. " . . .if they want this in compliance, someone should drive out and do a visual look and then do some questioning. I think that seeing is the actual means, and then giving notice on their door or then a mailer. They can't let it linger because by the time they investigate, the college students are out so they don't get caught." "I think they need to address the complaint right when somebody has complained." "They should have enforcement that is not solely on a complaint basis. They should actively seek out violators, just like you seek out speeders . If you see someone breaking the law, you take action. It's a very worthy ordinance that benefits the city as a whole, and it needs to be enforced." Despite the fact that numerous people commented on this topic, few were able to suggest how exactly more thorough enforcement could be pursued. Not everyone seemed completely convinced that enforcing the ordinance would actually make too much of a difference in their neighborhood, even those living in areas with higher percentages of renters. The goal of producing change seemed less attainable to these neighbors. Many of them were also very likely to say that they would not be likely to call the City unless they were extremely unhappy with a nearby rental situation. One person commented that there is also the issue of checking out the actual validity of a complaint. She remarked, "It can get out of control . . . there are definitely some complaints that are very petty." `The owners are getting more funding (higher rents) because they re breaking the ordinance, whereas we 're the ones putting up with the extra tralc and the extra noise. Its kind of a safety issue, too, for the children. " Landlords should be held more accountable for their properties. Many residents made comments indicating that they feel this way. Participants in the landlord segment felt that actions should be directed towards tenants and that they should be held most responsible. "It falls back to the city needs to be responsible for making the landlords responsible. They need to hit the landlords with a fine." "First, I would talk to the owner about it, and if he didn't do anything then the City would be notified." "They really need to make the landlord responsible, and then make the tenants responsible." "At one house, the landlord only rents to kids from the church, and you can tell. It's the landlord's responsibility to control who is in their home." • PAGE 108 R E S R C H Even though some neighbors had not yet reported a nearby home, they said that they have used the ordinance as a sort of bargaining chip when talking with nearby renters or landlords, as a way to ensure that tenants respect the rights of their neighbors. It seemed that, often, neighbors began trying to solve an issue with noise by speaking directly with the tenants themselves, or frequently the landlord. The resulting action very much depended on the landlord. The ordinance is not viewed by all residents as a fair solution to the problems that it seeks to solve, and it does not address property maintenance. This was clearly not a point agreed upon by all participants . Some neighbors clearly stated that they have noticed that homes with more people are more inclined to parties and increased traffic and parking issues. Others really felt that the number three was chosen quite arbitrarily, and that placing this type of a limit is not going to solve problems. "I just know that I don't know that limiting it to three is going to . . . I don't know why three is the magic number. Why isn't it just, if the house is a four bedroom house, just have four (people living in it) , five bedroom house just have five . . . it seems like it's not really in-line with the needs of the full community, including those investors (in rental properties) . As three people, they can still cause as many problems as four." "I guess the number of people isn't the total answer. I would like to see some sort of ordinance that would say okay, in addition to how many people live there, you have to maintain the property. . . it would be nice if rental units would be monitored and had to be maintained." "Our other concern is that the property is so run down now, he'll probably always just rent it to kids. It's really sad, because the couple that was there before (took excellent care of it), it was beautiful." There may need to be a way for exceptions to be made to the ordinance . Even one participant who is very happy with the effects of the ordinance mentioned that the need may exist to look into certain circumstances where exceptions could be made. She mentioned, "Let's say we try to help somebody out for a while (by allowing them to live with us) . It they're not related, that would break the ordinance . . . also there are situations with caretakers. I think it just needs to be researched. I don't have any answers." 'We like to think that this is just the beginning of really creating a bigger picture of a viable community, more density development where its needed, more apartments. More urban renewal. . . tear down trashy old rentals and put up apartments and house more people on less (land) . . . more organised pace. " PAGE 109 APPENDIX A : PUBLIC PHONE SURVEY INSTRUMENT FORT COLLINS ORDINANCE QUESTIONNAIRE Good evening. I'm calling on behalf of the City of Fort Collins, and we're conducting a short eight-minute survey about neighborhood issues. May I begin the survey? Great. Before we begin, I'll ask you two quick questions to ensure that you're eligible for the survey. (q1) As a first question, this survey is being conducted only with people who live inside the city limits of Fort Collins. Do you live inside the city limits? 1 Yes 2 No [IF NO, SAY, "Thank you for your time, but you are not eligible for the survey. Have a pleasant evening."] (q2) As a second question, this survey is being conducted only with people who currently live in a house or duplex, as opposed to a condominium or apartment building. Do you live in a house or duplex? 1 Yes 2 No [IF NO, SAY, "Thank you for your time, but you are not eligible for the survey. Have a pleasant evening."] Okay, we can start the survey now. I'd like to first mention that your phone number is one of several hundred that we have randomly selected for this survey. The survey is being conducted to gather statistical information about neighborhoods and neighborhood problems. The information will not be used to respond specifically to any reported problems, and all of your responses will be confidential. (q3) How would you rate your neighborhood in terms of the following factors? For each category, please answer Very Good, Good, Fair, Bad, or Very Bad. Ve Go Fair Bad Ver ry od y Bad Good (q3a) Peace and quiet 1 2 3 4 5 (q3b) Maintenance of lawns (q3c) Maintenance of houses (q3d) Sense of community • PAGE 110 R E S E R C H I'd like for you to take a moment now and think about the four houses that are closest to your home. They can be in any direction. I'll then ask you some questions about those homes . I'll give you a moment to think about it. (Give the person a moment to think.) Do you have the four nearest houses in mind? (q4) I'm going to read several categories of potential neighborhood problems. Thinking about the four homes nearest to yours, how many would you say have had these problems during the past six months? For each category I read, please answer zero, 1 , 2, 3, or 4 houses. Zero 1 2 3 4 (q4a) Animals running loose 0 1 2 3 4 (q4b) Criminal activity (q4c) Disruptive parties (q4d) Loud noise other than parties, such as stereos or yelling (q4e) More than three people who are unrelated to each other living in the house (q4� Parking vehicles inappropriately (q4g) Unkempt lawn (q4h) Trash or junk in the yard (q4i) Poorly maintained house I'd like to ask you now a few questions about a specific city ordinance. (q5) Are you aware of a city ordinance that prohibits more than three unrelated adults from living together? (Note if asked: More than three unrelated adults living together is a violation of the ordinance.) 1 Yes 2 No 3 Don't Know Active enforcement of that ordinance began in January of 2007, in instances where complaints have been lodged. People who might have been affected in some way by the ordinance include renters, landlords, and people who live near households that were affected. • PAGE 111 R E S E R C H (q6) Thinking again about the four houses that are closest to you, prior to 2007, did any of them have more than three unrelated adults living together? 1 Yes 2 No 3 Don't Know [IF YES: How many of the four houses?] (q6a) Were the residents of that house affected by the ordinance? In other words, did some or all residents have to move out? 1 Yes 2 No 3 Don't Know (q7b) [IF YES: Did this have a positive impact on the neighborhood, a negative impact, or no significant impact?] 1 Positive impact 2 Negative impact 3 No significant impact (q7c) [IF POSITIVE IMPACT OR NEGATIVE IMPACT: Can you describe the impact?] (q8) Since the enforcement of the ordinance in January of 2007, did you personally have to change your living arrangements or the living arrangements in the property you own to comply with the ordinance? 1 Yes 2 No 3 Don't Know (q8a) [IF YES: Has this change had a positive impact, a negative impact, or no significant impact on your life?] 1 Positive impact 2 Negative impact 3 No significant impact (q8b) [IF POSITIVE IMPACT OR NEGATIVE IMPACT: Can you describe the impact?] (q9) Do you own any residential properties in Fort Collins that you rent to tenants? 1 Yes 2 No 3 Don't Know [IF YES: Has this ordinance had a positive impact on your rental properties, a negative impact, or no significant impact?] 1 Positive impact 2. Negative impact 3 No significant impact [IF POSITIVE IMPACT OR NEGATIVE IMPACT: Can you describe the impact?] • � PAGE 112 R E S E A R C H (q10) Would you prefer to see enforcement of the city ordinance that limits the number of unrelated adults who can share a house to three people enforced more strictly, less strictly, or is it currently enforced at the right level? 1 —More Strictly 2 _Less Strictly 3 At the right level 4 Don't Know (q11) Do you currently own or rent the home you live in now? 1-Own 2 _Rent 3 Other/Don't Know [IF RENT: How many bedrooms are in your rental unit?] [IF YES to q4e, q6, q8, or q9, or Rent in Q11 with more than 2 bedrooms] I have one more question. Would you be willing to participate in additional paid research on the topic of the three unrelated persons ordinance?] [IF YES: get name and phone number] Thank you for your time! We appreciate hearing your opinions. GENDER: 1 Male 2 Female • PAGE 113 R E S E R C H APPENDIX B : INTERVIEW GUIDES On the following pages, we present the guides that were written for the interviewer's use in order to ensure that all appropriate topics were covered during conversation. Three separate guides were written and used for the audiences studied. They are presented in the following order: Interview guide: Neighbors Interview guide: Tenants Interview guide: Landlords • PAGE 114 R E S E R C H INTERVIEW GUIDE: NEIGHBORS Name: Date: [Introduction] Hello. My name is and I am with Corona Research. We are conducting market research for the City of Fort Collins. [You may have recently taken a brief telephone survey on this topic and expressed interest in participating in additional research] . The purpose of the research is to learn more about residents' perceptions of the occupancy ordinance. Regardless of how much you know, your opinions will be very valuable to the City as it gauges the effects of the ordinance. The results from the interviews being conducted will be compiled by Corona Research into a final report, and will be provided to the City. Your name is not included in the final report and everything that you say is reported anonymously. Some final details for you before we begin: as you probably already know, we'll be on the phone for about 35 to 45 minutes. We have promised to pay you $40 after your completion of the interview. Where should I have this check sent? (Verify address and spelling of name for the check.) Address verification: Do you have any questions for me before we begin? [Interviewer: Review screener data before beginning interview. Screener data will provide a lot of background information such as length of time lived in Ft. Collins, length of time lived in current neighborhood, whether living in a house or apartment, etc.] CURRENT LIVING SITUATION (7 MINUTES) In our first topic area, I'll just ask a few questions about your current living arrangements in Fort Collins. 22. Please tell me about people who live with you in your house/apartment. . . that is, your relationship with them. Are they family members, relatives, coworkers, friends, etc. .? (Inquire about related, unrelated if not offered.) 23. In general, how would you describe the neighborhood that you live in? [Interviewer: Let them answer this question first, then proceed with the following] What do you like best? Least? Why did you choose to live in this neighborhood over another? Who would you say lives in your neighborhood—mostly families, college students, elderly, etc.? Describe the two households closest to you. • PAGE 115 R E S E R C H BRIEF HISTORY OF NEIGHBORHOOD (5-7 MINUTES) Now, let's talk a little bit about how your neighborhood may have changed since you've lived there. 24. Overall, have you noticed any changes take place in your neighborhood over the years? If yes, please talk a little bit about that and how you think it has changed. 25. Now please think about your neighborhood and how life has been there, especially during the past twoyears. [Interviewer, give participant time to talk about any experiences they've had or what that they have noticed, in particular—this will be further addressed in the next section.] a. Have you noticed changes during this timeframe? Please describe. b. Why do you think these changes have occurred? KNOWLEDGE & PERCEPTIONS OF THE OCCUPANCY ORDINANCE (20 MINUTES) In this section, we'll talk a little bit more specifically about changes that may have taken place in Fort Collins neighborhoods over the past few years. Don't worry if you do not know exact facts — we just want to hear your opinions. Jnterviewer: During this part of the conversation, listen to the person's situation and refer to screener data (e.g. how long they have lived in Ft. Collins) . Ask questions accordingly.] 26. [If participant has not mentioned it already] Are you familiar with any City ordinance that prohibits more than three unrelated adults from living together? What do you know about the ordinance? Please describe to me what you know. How did you first learn about the ordinance? o Have you seen or heard anything since you first learned about the ordinance? 27. What was your first impression of the ordinance? Have your opinions about the ordinance changed since you first heard about it? Please explain. At this point, let me explain a little more about the ordinance. Active enforcement of an ordinance that prohibits more than three unrelated adults from living together began in the City of Fort Collins in January of 2007, in instances where complaints have been lodged. People who might have been affected in some way by the ordinance include renters, landlords, and people who live near households that were affected. • � PAGE 116 R E S E R C H 28. Do you believe that there is a need to enforce this ordinance? Please explain. Are you familiar with any examples of the type of living situation that this ordinance targets? Please explain. Do you feel like the ordinance is doing what it was intended to do? Why do you say that? 29. Has this ordinance affected you personally and/or your living situation? How? a. Have you made any personal decisions concerning where you live based on the ordinance? Please explain. 30. Have you noticed changes in your neighborhood since the enforcement began? Please describe these to me. [Probe on bullet points below. These are particular elements to a neighborhood's general quality of life that can be addressed.] i. Noise levels ii. Appearance of surrounding yards /properties iii. Number of cars parked on street iv. Sense of community 31. As a homeowner, do you think that home values have been affected by any of the changes that we were just discussing? [Comments about the economy will undoubtedly arise but interviewer will steer conversation back to the issue at hand.] a. Aside from the obvious impacts of recent economic events, have you noticed any other changes in the real estate market in Ft. Collins over the past few years for either renters or homeowners? [that might have been spurred by local issues/happenings?] 32. Do you know any (other) people or entities that have been affected by the enforcement of this ordinance? If so: Who? What were the outcomes? (If not offered, mention landlords, tenants, neighbors.) How do you think they've been affected? 33. In your opinion, have the outcomes of the enforcement of the ordinance been positive or negative? [The following questions will prompt for additional information regarding this question] In your opinion, what are the positive outcomes of the enforcement of the ordinance? Why do you say that? • � PAGE 117 R E S E R C H o Even if you don't feel like you have benefitted from the ordinance, do you think that there is anyone who has? What do you think are the negative outcomes of this? Why do you say that? o Even ifyou have not been negatively impacted by the ordinance, do you think there are others who have been? SUGGESTIONS FOR CHANGES OR IMPROVEMENTS (5 MINUTES) Optional section depending on time available and the need perceived by the client. We'll finish up by talking about your ideas concerning this ordinance. 34. If you feel that the "more than 3" ordinance or its implementation could use some improvements, what would you suggest? What changes would you make? 35. [If participant has shown a negative reaction towards ordinance] It doesn't sound as though you are completely in support of the ordinance, but let's say that its main purpose is to keep Ft. Collins' neighborhoods peaceful and attractive, and the best way that they've found to do it is using this ordinance. (I don't know if that's true or not, I'm just asking a question, here.) Do you have any other ideas as to how they might go about working towards these goals without using this ordinance? -OR- 36. [If participant seems generally in support of the ordinance] I understand that you are generally in support of the ordinance, but can you think of any ways that it might actually be even more effective? Any ideas how to improve upon it? Think especially about some of the negatives that we discussed earlier, and what you might like to change about the ordinance in order to reduce those who are negatively affected. 37. Well, those are all of the questions that I have for you. Do you have any final comments that you would like to make on this topic? CONCLUSION Thank you for your time! This information is going to be very helpful to the City of Fort Collins as they consider the impacts of the occupancy ordinance has had on the city and its residents as well as any possible improvements . . . • PAGE 118 R E S E R C H INTERVIEW GUIDE: TENANT Name: Date: [Introduction] Hello. My name is and I am with Corona Research. We are conducting market research for the City of Fort Collins. [You may have recently taken a brief telephone survey on this topic and expressed interest in participating in additional research] . The purpose of the research is to learn more about residents' perceptions of the occupancy ordinance. Regardless of how much you know, your opinions will be very valuable to the City as it gauges the effects of the ordinance. The results from the interviews being conducted will be compiled by Corona Research into a final report, and will be provided to the City. Your name is not included in the final report and everything that you say is reported anonymously. Some final details for you before we begin: as you probably already know, we'll be on the phone for about 35 to 45 minutes. We have promised to pay you $40 after your completion of the interview. Where should I have this check sent? (Verify address and spelling of name for the check.) Address verification: Do you have any questions for me before we begin? [Interviewer: Review screener data before beginning interview. Screener data will provide a lot of background info. such as length of time lived in Ft. Collins, # of tenants in household, etc.] CURRENT LIVING SITUATION (10 MINUTES) In our first topic area, I'll just ask a few questions about your current living arrangements in Fort Collins. 1. Please tell me about people who live with you in your house/apartment . . . that is, your relationship with them. Are they family members, relatives, coworkers, friends, etc. .? (Inquire about related, unrelated if not offered.) 2. Why did you choose this living situation? (to save money, wanted to live with friends, etc.) 3. In general, how would you describe the neighborhood that you live in? [Interviewer: Let them answer this question first, then proceed with the following] Who would you say lives in your neighborhood—mostly families, college students, elderly, etc.? Describe the two households closest to you. BRIEF HISTORY OF LIVING SITUATION (5 MINUTES) Now let's talk a little bit about where you have lived in the past. • � PAGE 119 R E S E R C H 4. Have your living arrangements changed, if any, over the past few years? Please talk a little bit about that, and why they may have, or have not, changed. 5. As you think about any renting of properties that you have done over the past several years in Ft. Collins, have you noticed any changes in the process? [Prompt again with:] Does anything else stand out in your mind? a. Have you changed roommates over the past few years? b. How about rental rates, in particular? Have these changed any? If so, how? c. Has rental unit availability changed at all, in terms of either the number of residences available or the types or residences available? If yes, please explain. d. Do you remember the landlord or management company emphasizing any particular rules, regulations or restrictions? KNOWLEDGE & PERCEPTIONS OF THE OCCUPANCY ORDINANCE (20 MINUTES) In this section, we'll talk about any changes that may have taken place in the Fort Collins' rental market over the past few years. Don't worry if you do not know exact facts — we just want to hear your opinions . (Interviewer: During this part of the conversation, listen to the person's situation and remember their status (i.e. violator/non-violator, live/impacted by >3, etc.) and ask questions accordingly. For example, if they've been in the same neighborhood for over 2 years, ask if they have noticed any changes.] 6. [If participant has not mentioned it already] Are you familiar with any City ordinance that prohibits more than three unrelated adults from living together? [Note: Respondents should say "yes" given that this is a screening requirement to participate.] What do you know about the ordinance? Please describe to me what you know. How did you first learn about the ordinance? 7. What was your first impression of the ordinance? Have your opinions about the ordinance changed since you first heard about it? Please explain. At this point, let me explain a little more about the ordinance. Active enforcement of an ordinance that prohibits more than three unrelated adults from living together began in the City of Fort Collins in January of 2007, in instances where complaints have been lodged. People who might have been affected in some way by the ordinance include renters, landlords, and people who live near households that were affected. 8. Do you believe that there is a need to enforce this ordinance? Please explain. • PAGE 120 R E 5 E R C H Are you familiar with any examples of the type of living situation that this ordinance targets? Please explain. Do you feel like the ordinance is doing what it was intended to do? Why do you say that? 9. Has this ordinance affected you personally and/or your living situation? How? Please tell me a little bit about what happened. Have you made any personal decisions based on the ordinance? Please explain. Have you noticed any changes in your neighborhood since the enforcement of the ordinance began? What? Please talk about this and explain what you think brought about the changes. (Of course, some people may not be able to provide feedback on this question.) 10. Do you know any (other) people or entities that have been affected by the enforcement of this ordinance? If so: Who? What were the outcomes? (If not offered, mention landlords, tenants, neighbors.) How do you think they've been affected? 11. In your opinion, have the outcomes of the enforcement of the ordinance been positive or negative? [The following questions will prompt for additional information regarding this question] In your opinion, what are the positive outcomes of the enforcement of the ordinance? Why do you say that? o Even if you don't feel like you have benefitted from the ordinance, do you think that there is anyone who has? What do you think are the negative outcomes of this? Why do you say that? o Even ifyou have not been negatively impacted by the ordinance, do you think there are others who have been? SUGGESTIONS FOR CHANGES OR IMPROVEMENTS (5 MINUTES) Optional section depending on time available. We'll finish up by talking about your ideas concerning this ordinance. 12. If you feel that the "more than 3" ordinance or its implementation could use some improvements, what would you suggest? What changes would you make? • PAGE 121 R E S E R C H 13. [If participant has shown a negative reaction towards ordinance] It doesn't sound as though you are completely in support of the ordinance, but let's say that its main purpose is to keep Ft. Collins' neighborhoods peaceful and attractive, and the best way that they've found to do it is using this ordinance. (I don't know if that's true or not, I'm just asking a question, here.) Do you have any other ideas as to how they might go about working towards these goals without using this ordinance? -OR- 14. [If participant seems to generally in support of the ordinance] I understand that you are generally in support of the ordinance, but can you think of any ways that it might actually be even more effective? Any ideas how to improve upon it? Think especially about some of the negatives that we discussed earlier, and what you might like to change about the ordinance in order to reduce those who are negatively affected. 15. Well, those are all of the questions that I have for you. Do you have any final comments that you would like to make on this topic? CONCLUSION Thank you for your time! This information is going to be very helpful to the City of Fort Collins as they consider the impacts of the occupancy ordinance has had on the city and its residents as well as any possible improvements . . . • � PAGE 122 R E S E R C H INTERVIEW GUIDE: LANDLORDS Name /Agency: Date : [Introduction] Hello. My name is and I am with Corona Research. We are conducting market research for the City of Fort Collins. [You may have recently taken a brief telephone survey on this topic and expressed interest in participating in additional research] . The purpose of the research is to learn more about residents' perceptions of the occupancy ordinance. Regardless of how much you know, your opinions will be very valuable to the City as it gauges the effects of the ordinance. The results from the interviews being conducted will be compiled by Corona Research into a final report, and will be provided to the City. Your name is not included in the final report and everything that you say is reported anonymously. Some final details for you before we begin: as you probably already know, we'll be on the phone for about 35 to 45 minutes. We have promised to pay you $40 after your completion of the interview. Where should I have this check sent? (Verify address and spelling of name for the check.) Address verification: Do you have any questions for me before we begin? [Interviewer: Review screener data before beginning interview. Screener data will provide a lot of background information such as length of time lived in Ft. Collins, length of timing owning or managing rental properties in Ft. Collins, etc.] CURRENT ROLE AS LANDLORD (5 MINUTES) In our first topic area, I'll just ask a few questions about your current role in the rental market in Fort Collins. 1. Please tell me about the types of properties in the city of Fort Collins that you own or manage currently. a. How long have you owned/managed each of these? b. What types of residence (s) is (are) these? [House, townhome, apartment, # of bedrooms, etc.] In particular, be sure to ask about si.Ze of units. The ordinance impacts small units and big units differently. It increases demand for small units and decreases demand for big units. c. Please talk a little bit about the surrounding neighborhood(s)? d. Please describe the types of tenants that live in your rental property (properties) . 2. Why do your tenants generally choose to rent your properties? In other words, is it a matter of money, size of property, location, etc.? • � PAGE 123 R E S E R C H BRIEF HISTORY OF RENTING (5 MINUTES) Now let's talk a little bit about the housing rental market in Ft. Collins, how it may or may not have changed over the years, and whether or not it has affected you. 3. Have you changed the number and/or type of rental properties that you have owned over the years? Please talk a little bit about that, and how they may or may not have changed. [Trying to learn about buying/selling tendencies that may depend on different aspects of the market.] a. [Ask if it seems reasonable based on the response heard above.] Can you just briefly explain to me what your reasoning is, behind buying and selling as you do (or don't) ? b. Have you considered buying or selling any of your current properties over the past two years? Why or why not? 4. Now please think about the rental market in Ft. Collins as a whole, especially during the past two years. a. Have you noticed changes in the rental market specifically in Ft. Collins during this timeframe? Please describe. [May be necessary to ask participant to focus on local issues taking place.] b. Why do you think these changes have occurred? [Ask how much each stated factor has contributed compared to other factors.] KNOWLEDGE & PERCEPTIONS OF THE OCCUPANCY ORDINANCE (20 MINUTES) In this section, we'll talk a little bit more about any changes that may have taken place in Fort Collins neighborhoods over the past few years. Don't worry if you do not know exact facts — we just want to hear your opinions. (Interviewer: During this part of the conversation, listen to the person's situation and remember how long they have had rental property in Ft. Collins. Ask questions accordingly.] 5. [If participant has not mentioned it already] Are you familiar with any City ordinance that prohibits more than three unrelated adults from living together? [Note: Respondents should say "yes" given that this is a screening requirement to participate.] What do you know about the ordinance? Please describe to me what you know. How did you first learn about the ordinance? o Have you seen or heard anything since you first learned about the ordinance? 6. What was your first impression of the ordinance? • � PAGE 124 R E S E R C H Have your opinions about the ordinance changed since you first heard about it? Please explain. At this point, let me explain a little more about the ordinance [if necessary] . Active enforcement of an ordinance that prohibits more than three unrelated adults from living together began in the City of Fort Collins in January of 2007, in instances where complaints have been lodged. People who might have been affected in some way by the ordinance include renters, landlords, and people who live near households that were affected. 7. Do you believe that there is a need to enforce this ordinance? Please explain. Are you familiar with any examples of the type of living situation that this ordinance targets? Please explain. Do you feel like the ordinance is doing what it was intended to do? Why do you say that? 8. Has this ordinance affected any of your properties in terms of the neighborhoods where they are located? How (or if no effects have been noted, why do you think that is the case)? a. From your perspective and/or experiences, how has this affected your tenants? 9. Have you noticed changes in your property's neighborhood since the enforcement began? Please describe these to me. [The bullets below are particular elements to a neighborhood's quality of life that can be addressed.] i. Noise levels ii. Appearance of surrounding yards /properties M. Number of cars parked on street iv. Sense of community 10. Have you made any changes in your property ownership because of the ordinance? Please explain. 11. How would you say the ordinance has (or has not) affected the Ft. Collins rental market overall? a. How have potential renters been impacted? b. Have you noticed a change in supply or demand? c. Has it affected rental pricing? Is the impact different for different types of units or different locations? d. Aside from the obvious impacts of recent economic events, have you noticed any other changes in the real estate market in Ft. Collins over the past few years? [that might have been spurred by local issues/happenings?] • PAGE 125 R E S E R C H 12. Do you know any (other) people or entities that have been affected by the enforcement of this ordinance? If so: Who? What were the outcomes? (If not offered, mention landlords, tenants, neighbors.) How do you think they've been affected? 13. In your opinion, have the outcomes of the enforcement of the ordinance been positive or negative? [The following questions will prompt for additional information regarding this question] Note: This answer might be different for different populations . Listen for that. In your opinion, what are the positive outcomes of the enforcement of the ordinance? Why do you say that? o Even if you don't feel like you have benefitted from the ordinance, do you think that there is anyone who has? What do you think are the negative outcomes of this? Why do you say that? o Even if you have not been negatively impacted by the ordinance, do you think there are others who have been? EXTRA OCCUPANCY RENTAL HOMES DESIGNATION (5 MINUTES) In this section, we'll talk about an option available to some property owners. 14. (If not already addressed) Are you familiar with the option to designate certain properties, if they meet certain criteria, as Extra Occupancy Rental Homes? [If they are not, just let them know that it is a designation that property owners can apply for that would allow them exception from the 3 Unrelated ordinance IF the property meets the necessary criteria.] a. [If familiar] Please briefly explain to me what you know about it. 15. Do you have any properties for which you've applied for this designation? a. Why did you choose to apply (or not to apply) for this? b. [If they do have a property with this designation] Please describe to me how this is working for you. Have you benefitted from using it? 16. What is your opinion of this designation? Please talk a little bit about this. a. Has this option caused you to change your opinion about the ordinance overall? b. Has this option caused you to change your actions or decisions regarding your rental property (properties) ? • PAGE 126 R E S E R C H c. Are there benefits of having such a designation? Please explain. d. Are there any negatives to having such a designation? Please explain. SUGGESTIONS FOR CHANGES OR IMPROVEMENTS (5 MINUTES) These questions to be asked only if time allows. We'll finish up by talking about your ideas concerning this ordinance. 17. If you feel that the "more than 3" ordinance or its implementation could use some improvements, what would you suggest? What changes would you make? 18. [If participant has shown a negative reaction towards ordinance] It doesn't sound as though you are completely in support of the ordinance, but let's say that its main purpose is to keep Ft. Collins' neighborhoods peaceful and attractive, and the best way that they've found to do it is using this ordinance. (I don't know if that's true or not, I'm just asking a question, here.) Do you have any other ideas as to how they might go about working towards these goals without using this ordinance? -OR- 19. [If participant seems generally in support of the ordinance] I understand that you are generally in support of the ordinance, but can you think of any ways that it might actually be even more effective? Any ideas how to improve upon it? Think especially about some of the negatives that we discussed earlier, and what you might like to change about the ordinance in order to reduce those who are negatively affected. 20. Well, those are all of the questions that I have for you. Do you have any final comments that you would like to make on this topic? CONCLUSION Thank you for your time! This information is going to be very helpful to the City of Fort Collins as they consider the impacts of the occupancy ordinance has had on the city and its residents as well as any possible improvements . . . • � PAGE 127 R E S E R C H ATTACHMENT 3 Neighborhood & Building Services Occupancy Complaint Cases 2007 = 2008 N U " HIG CO � � RI HARD LAKE RD COUNTY ROAD 52 COU TRY CLUB RI � Q "' l I o J (noems } = o W WILLOX, EeVFLLOj� � \ UNTY ROAD 50 L~L w j MOUNTAIN VISTADR /' to z z w — w — 4 P O w z j z j J ~ V�Iif E * w � �. "� I EfV NE DR z VINE III f _j z '.......... . ------- ---- -- ---- ---i.._ z W I LBERI ZY ST y* 1 V 3 LA�JRELl � �� — _' L �(� E MULBE S / - ?AE� IZ ETH ST ram _ ��``��� 3 ft _ — 3 �3LL rl _E P ECT RD PR�JbYEC113 — 3 > YR�SPE — � fir I ft -iE� ft I o 3<� 3�3 �lif3 w QO 1 ��> �D KE RD � o th .33 ' 3 RD3 'iflt � a- W HORSETO H FADl E HO SETOOTH RD Q 38E w Z p H NY RD N E HARMOP IY Rt3r- I I r Q r I ce r — J ,Q , j f" r _ 4T � r O w - = I — ; z ❑ I II3 ECHTER RID r . ^ w O � Q CIO I I O f' I r:; — — �✓-j LU I TRILBY RDmmm TRI BY RD Uj O r- N W E Miles 0 0.25 0.5 1 1.5 2 s Legend City of These map products and all underlying data are developed for use by the City of Fort Collins for its internal purposes only, and were not designed or intended for general use by members Occupancy complaints 07-08 Fort Collins of the public. The City makes no representation or warranty as to its accuracy, timeliness, or competencies, lab ss, and in particular, i6 accuracy in eluding or displaying dimensions, contents, property boundaries, or placement of location of any map features thereon. THE CITY OF FORT COLLINS MAKES NO WARRANTY OF MERCHANTABILITY OR WARRANTY FOR f3 Unfounded! FITNESS OF USE FOR PARTICULAR PURPOSE, EXPRESSED OR IMPLIED, WITH RESPECT TO THESE MAP PRODUCTS OR THE UNDERLYING DATA. Any users of these map G I S pmtluc6, map applications, or data accept same AS IS, WITH ALL FAULTS, and assumes all responsibility of the use thereof, and fuller covenant and agrees to hod the City harmless horn and against all damage, loss, or liability arcing train any use of the map product, in consideration of the City's having made this information available. Independent verification of all data Violation FourWed confainetl herein shouts be obtained by any users of these predicts, or underlying tlata. The City disclaims, and shall not be held liable for any and all damage, less, or lability, whether direct, 1 ,.I L, q q indirect, or consequential, which arises or may arse fmm these map products or the use thereof by any person or entity. Printed . FebrUary 3, 2009 Noise or Nuisance Violations at Occupancy Violation Properties 2007 =2008 120 ❑ Total Number 100 of Occupancy Violation $ � Notices 60 El Number of Repeat 40 Nuisance Violations prior 20 El Number of 0 Repeat Number of Violation Nuisance Properties Violations after Occupancy Ordinance Impact Study 2009 ATTACHMENT 5 City Council Work Session August 25 , 200f Beth Sowder, Neighborhood Services Manager Kevin Raines , Corona Research Principal Joe Fitzler, Corona Research Analyst Council Direction Sought 1 . Do the Study and additional data provide Council with an adequate base of information for the Occupancy Ordinance policy discussion at the Council work session on October 27 , 2009 ? 2 . If not , what other information and data does Council need ? Council Direction Sought 3 . Are the following the right policy questions for the Council to discuss at its work session on October 27 , 2009? a ) Is the Occupancy Ordinance working ? b ) Does Council wish to continue the ordinance? c) If so , are there any changes Council would like to consider to the ordinance ? Overview • 2005 — Council revised existing Occupancy Ordinance • Occupancy Ordinance Economic and Market Impact Study — 2005 • Occupancy Ordinance Economic and Market Impact Study - 2009 F� [tins Background ■ In 2005 , the research goals were to . . . • Estimate the size of the violator population • Understand who the violator population is • Understand what populations would be impacted by strong enforcement , and • Estimate the impact of strong enforcement on rental vacancy rates and rental costs in various segments of the market ,,.8r Collins Background ■ We did this via . . . • Public Survey o 384 residents living in homes or duplexes surveyed • Census Data and Other Data Analysis • Developing a Rental Impact Model ,�t [tins Background ■ Previous study ' s findings • Estimated 5 , 003 violators in 1 , 070 rental households and 168 owner households 5 . 1 % of rental households were in violation 12 % of single-family rental households were in violation Background ■ Previous study ' s findings • Residents living near violators were significantly more likely to have neighborhood problems ( noise , parking problems , etc . ) , though it' s unclear whether violators caused the problems • 58 % of home/duplex residents supported stronger enforcement of the ordinance City of ins FL tf Background ■ Previous study ' s findings • If all violator households were broken up . . . • Demand for 1 , 190 new rental units • Zero vacancy for units under $440 with price increases • Zero vacancy for units from $440 to $ 830 with no price increases , but lower quality Background ■ Previous study ' s findings • If all violator households were broken up . . . • Vacancy rates for units $ 830 to $ 1 , 100 would decrease , but still be high • Vacancy rates for units above $ 11100 would double to over 20 % , 7 year recovery period for rentals , though sales prices wouldn 't be strongly affected FL [tins Background ■ Previous study ' s findings • If all violator households were broken up . . . • Probably decrease in neighborhood problems (or possible transfer of problems to smaller units ) • Minor increase in property values in neighborhoods that lose violator households Background ■ Previous study ' s findings • If all violator households were broken up . . . • Minor impacts on local businesses • Demand for up to 970 new housing units for the construction industry F�tf 2009 Study Overview ■ Research Goals • What has been the impact of the actual ordinance enforcement? • Market impacts — how stakeholders have been impacted • Individual impacts • Unanticipated effects • What' s working/not working/can be improved 2009 Study Overview ■ Research Goals • Ordinance may have impact on overall market • Approach 4 Quantitative research • If not , individuals may be impacted • Approach 4 Qualitative research • Want to know how stakeholders have been impacted F� [tins Our Approach ■ Methodology o Quantitative • Public Survey — Same methodology as previous study — Additional questions to gauge effect of ordinance • Goal : Develop estimates of prevalence of violators , neighborhood impacts , awareness of ordinance , enforcement support Our Approach ■ Methodology o Quantitative • Specialized Census Data Analysis — Same methodology as previous study , but less detail is currently available • Goal : Another estimate of prevalence to triangulate F� [tins Our Approach ■ Methodology o Quantitative • Colorado Division of Housing Analysis — Rental markets compared to other Colorado cities of similar size o Goal : General estimate of rental market conditions , and whether Fort Collins has seen differential impacts compared to other communities Our Approach ■ Methodology o Qualitative • Interviews with stakeholders — Tenants — Landlords . Long -term Residents F� [tins Our Approach ■ Methodology o Qualitative • Interviews will take place with various types of stakeholders , e . g . landlords of various property types , tenants with various experiences , residents who have or have not filed complaints , etc . City f FGfCollins Our Approach ■ Methodology o Qualitative • Goal : What have been personal experiences with the ordinance . How is it perceived ? What works well/doesn 't work well ? F of �tf 1 Key Findings Source Violators Violator Households 2005 Study - 1070 2005 Study (with owners) 5 , 003 1238 2005 Survey - 1266 2000 PUMS, scaled up to 2004 4 , 100 905 2000 Census , scaled up to 2004 - 1038 Key Findings Source A Violators Violator Households 2009 Study - 579 2009 Study (w/ owners) 650 2009 Survey w/ owners 818 2009 Survey - 677 2007 PUMS 29052 482 2006 PUMS w/ owners 29429 538 2006 PUMS 29320 514 2005 PUMS 5, 458 1281 ►a City of FL tfins � Key Findings ■ Violator rental households have dropped by about 46 % • Only 20 % of drop due to active enforcement • Much of "drop " is likely the non -formation of new violator households rather than breakups of existing households Key Findings ■ Vacancy rates have dropped , but are still in the " healthy" range • Vacancy rates were " unhealthy" high , now generally " healthy" • Most of the decline is due to other forces besides the ordinance • One bedroom units are on the verge of " unhealthy" • Prices not rising disproportionately . . . yet . • Warrants continued monitoring F� [tins Key Findings Average Rent 2003 2006 2008 Fort Collins/Loveland $732. 56 $ 757. 51 $ 807.30 Colorado S rin s $662. 53 $ 699.23 $694.37 Grand unction $480.47 $ 562.05 $659.41 Greele /Weld Coun $589. 59 $ 629.78 $645. 75 Pueblo $473. 60 $484.46 $ 505.54 Fort Collins Rental Price Change 2003.2008 2003.2008 2003.2006 2003.2006 2006.2008 2006.2008 Fort Collins�Loveland 10% $14.14 3% $24.95 1% $49.19 Colorado S rin s 5% $31 .85 6% $36.11 -1% -$4.86 Grand unction 37% $178.94 17% $81 .58 17% $97.36 Greele Weld Coun 10% $56.16 1% $4019 3% $15.91 Pueblo 1% $31 .94 2% $10.86 4% $21 .08 Key Findings Vacancy Rate Vacancy Rate Change 2003 2006 2008 2003.2008 2003-2006 2006-2008 27 Fort Collins/Loveland 14% 8% 5% -9.5 -�.i -3, 8 Colorado S ri s 12% 11% 9% -2.9 -1 .1 -1 .9 Grand unction 9% 3% 2% -1.3 -6.5 -0.8 Greele /Weld Coun 10% 8% 6% -3.9 -2.6 -1 .3 Fit,f1 Key Findings ■ Overall , neighborhood problems have decreased , but it cannot be proven that there is , or is not , a relation to the ordinance • However, there is a strong correlation between the presence of violators and neighborhood problems • This could be aneighborh off -specific and not property specific issue 28 F�tf Key Findings ■ Of those reporting a violator neighbor had to move because of the ordinance , 67 % reported this as a positive impact on the neighborhood ( 11 % negative , 22 % no change ) • Note that only 9 respondents reported a violator neighbor moving because of the ordinance Key Findings ■ Of those with rental properties , 7 % reported this as a positive impact , 12 % negative , 81 % no change ) • Note that only 44 respondents reported owning rental properties F�tf Key Findings ■ 41 % of single family/duplex residents believe the enforcement at the right level ■ 27 % would like stronger enforcement 67% if near two or more violator households 49% if near one violator household 22% if near zero violator households ■ 14 % want less strict enforcement 0% if near two or more violator households 7% if near one violator household 16% if near zero violator households ■ 18 % don ' t have an opinion Key Findings ■ All constituents recognize the intent of the ordinance • Other intents are inferred — anti -student , anti - rental , neighborhood planning , etc . ■ Recognition by landlords that non -students are significantly affected • Particularly two couples living together F� [tins Key Findings ■ Tenants : it ' s a party issue ■ Neighbors : it' s more than just parties ■ Landlords and tenants question why enforcement of parking , noise through other code provisions isn ' t sufficient [l1 Key Findings ■ Landlords can drive the culture of the ordinance • Allow tenants to live in violation and not include them on the lease ■ Tenants take cues from landlords [tins Key Findings ■ All constituent groups had concerns with the complaint- based nature of the ordinance , but with different lenses • Landlords — enforce strongly or not at all • Tenants — enforcement forces fast moves , spying • Neighbors — enforcement is too slow , worried about conflict Key Findings ■ All constituent groups had concerns with the complaint- based nature of the ordinance , but with different lenses • All sides were unsure why "three" was chosen • All sides say they want to/try to forge good relationships F� [tins Study Conclusions ■ Violators have decreased since the ordinance has been enacted , mostly voluntarily ■ Improvements in neighborhood conditions and a decrease in violator households have coincided , but cause and effect relationship cannot be proven or disproven Fit,f1 Study Conclusions ■ Rental vacancies and prices impacted , but other factors are larger ■ All sides have tactical concerns about enforcement ,, F�`ort [tins Additional Information Occupancy Ordinance violation data 2007-2008 : • 203 — total number of occupancy complaints • 115 — total number of occupancy violation notices sent • 95 — came into compliance once notified • 20 — citations issued Noise or Nuisance Violations at Occupancy Violation Properties 2007 -2008 120 n Total Number 100 of Occupancy Violation 80 Notices 60 ❑ Number of Repeat 40 Nuisance Violations prior 20 ❑ Number of 0 Repeat 39 Number of Violation Nuisance Properties Violations after 1 Other Updates • Stakeholder Committee - - Includes CSU students and renters , neighborhood representatives , and " industry" representatives — Provide feedback about perspectives , opinions , perceptions , and impacts resulting from the Occupancy Ordinance — Will provide a full report at Council Work Session on October 27 , 2009 ,,.8r Collins Other Updates • Occupancy Complainant Survey — conducted to understand how enforcement impacted complainants • CSU Forums — one conducted on April 16 , 2009 and another one will be scheduled in September 2009 • Additional Public Outreach — Open Public Forum — September 2009 — "Your Voice" — web tool to collect feedback — end of August thru September 2009 F�tf Next Steps • Additional community outreach — August and September 2009 • October 27 , 2009 — City Council Work Session — Comprehensive Two-year Review and Policy Discussion of Occupancy Ordinance Council Direction Sought 1 . Do the Study and additional data provide Council with an adequate base of information for the Occupancy Ordinance policy discussion at the Council work session on October 27 , 2009 ? 2 . If not , what other information and data does Council need ? F� [tins Council Direction Sought 3 . Are the following the right policy questions for the Council to discuss at its work session on October 27 , 2009 : a ) Is the Occupancy Ordinance working ? b ) Does Council wish to continue the ordinance ? c) If so , are there any changes Council would like to consider to the ordinance?