The URL can be used to link to this page

Home My WebLink AboutCOUNCIL - AGENDA ITEM - 12/13/2016 - OCCUPANCY STUDY-10 YEAR REVIEWDATE: STAFF: December 13, 2016 Ginny Sawyer, Policy and Project Manager WORK SESSION ITEM City Council SUBJECT FOR DISCUSSION Occupancy Study-10 Year Review. EXECUTIVE SUMMARY The purpose of this item is to review and confirm the scope of study to be included in a 10-year review of the occupancy ordinance. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Does Council support the proposed scope of study? 2. Does Council have any additions or subtractions form the scope of study? BACKGROUND / DISCUSSION The City of Fort Collins has a long history with the occupancy ordinance. The original ordinance was adopted in 1964 and limited occupancy to no more than three unrelated people. In 2005, after much public input and an economic study, City Council amended the ordinance to add clarity and to make violations a civil infraction thus making the ordinance more enforceable. Key findings from this study are included in Attachment 1. Enforcement of the revised ordinance began in 2007. In 2009, a policy discussion and review of the ordinance included an additional economic and impact study. The study provided a mix of quantitative and qualitative information with a goal of determining the impact of enforcement. Key findings included on Attachment 1. The ordinance has always been somewhat controversial among stakeholders with request requests from students to allow more tenants in a property and questions among the real estate community as to the efficacy and the potential impact of the ordinance on housing affordability. Staff has made numerous tweaks over the last 10 years, including changes to notification requirements, to the disclosure statement process, and to allowances for host families and extra-occupancy rental units. At year 10 of enforcement, the City is being asked to again consider soliciting a study to determine both the effectiveness of the ordinance as well as potential unintended consequences. In partnership with Colorado State University (CSU), the Associated Students at Colorado State University (ASCSU), the Board of Realtors (BOR), and neighbors, staff has created the proposed scope of study. The following is intended to help address the questions of: 1. Has the ordinance been effective (i.e., has neighborhood quality improved?) 2. Has the ordinance had unintended consequences? (i.e., housing availability, affordability, limitations on alternative living arrangements) Collect comparison data from 2005, 2009, 2016 showing:  Average rental rates (by unit and by bedroom)  Average home sales and price December 13, 2016 Page 2  Number of available beds  PSD enrollment numbers by neighborhood or census tract  Owner-occupied to rental ratio by neighborhood or census tract  Nuisance violations by neighborhood/census tract  Population and student enrollment change  Neighborhood parking availability Qualitative /perception data on:  Occupancy ordinance  Rental registration/certificate/accountability-compliance mechanism  Unintended consequences Data for:  Ordinance compliance/non-compliance  Nuisance violations by extra-occupancy dwellings (including fraternities/sororities), owner-occupied, and rentals  Growth potential for extra-occupancy dwellings and any hurdles to apply/achieve  Enforcement efficacy/process. Who are the violators? (Property managers, “mom & pop,” etc.?)  Renter demographics Best practices in peer cities:  Occupancy  Rental registration  Nuisance codes  General neighborhood livability/affordability practices Predictive modeling:  Housing availability/affordability into the future In preparing this proposed scope of work, staff met with neighbors, the Board of Realtors (BOR), and representatives from Colorado State University (CSU) and the Associated Students of Colorado State University (ASCSU). Sharing the cost of a study was discussed with the BOR, CSU, and ASCSU. The BOR and ASCSU are willing to consider but do not have monies immediately available and would need to work through their individual processes (Senate vote, grants) to determine ability to contribute. ATTACHMENTS 1. 2005 and 2009 Corona Economic and Market Impact Study Key Findings (PDF) 2. Powerpoint presentation (PDF) Corona Economic and Market Impact Study 2005 Key Findings 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:  Demand for 1190 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  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).  A decrease in vacancy rates for units from $830 to $1, 100, though vacancy rates would remain high.  An increase of vacancy rates for units above $1,100, to over 20%.  No appreciable effect on home sale prices.  Probable decrease in neighborhood problems.  Minor increase in property values in neighborhoods that lose violator households.  Minor sales increases for local businesses that sell to households (e.g., cable television).  Demand for up to 970 new housing units would be created. Corona Economic and Market Impact Study 2009 Key Findings  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 not property- 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, 1 1% 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. ATTACHMENT 1 Level of enforcement perceived by single family/duplex residents is as follows: 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 I 00% 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:  Landlords believe the ordinance should be strictly enforced or not at all.  Tenants believe enforcement process is too fast and encourages spying.  Neighbors believe enforcement process is too slow and are worried about retaliation and conflict.  All groups question why the limit is three unrelated people.  All say that the ordinance has encouraged them to try to forge good relationships with their neighbors. 1 Ginny Sawyer City Council Work Session December 13, 2016 Occupancy Study Scope of Work ATTACHMENT 2 Questions/Direction Sought 1. Does Council support the proposed scope of study? 2. Does Council have any additions or subtractions form the scope of study? 2 Background • City Occupancy Ordinance since 1964 • Changed to a civil infraction in 2005 to increase enforceability • Two previous studies: • 2005, prior to code amendments and again in 2009 the City sponsored economic and market impact studies focused on the occupancy ordinance 3 Background • 10-year mark of active implementation and enforcement • Dedicated staff and systems (disclosure statements, notices, citation process, etc) • Request to again look at economic and market impacts • Board of Realtors • Associated Students of Colorado State University 4 Proposed Scope Questions to address: 1. Has the ordinance been effective (i.e., has neighborhood quality improved?) 2. Has the ordinance had unintended consequences? (i.e., housing availability, affordability, limitations on alternative living arrangements) 5 Proposed Scope Comparison data from 2005, 2009, 2016 showing: • Average rental rates (by unit and by bedroom) • Average home sales and price • Number of available beds • PSD enrollment numbers by neighborhood or census tract • Owner-occupied to rental ratio by neighborhood or census tract • Nuisance violations by neighborhood/census tract • Population and student enrollment change • Neighborhood parking availability 6 Proposed Scope Qualitative /perception data on: • Occupancy ordinance • Rental registration/certificate/accountability-compliance mechanism • Unintended consequences 7 Proposed Scope Data for: • Ordinance compliance/non-compliance • Nuisance violations by extra-occupancy dwellings (including fraternities/sororities), owner-occupied, and rentals • Growth potential for extra-occupancy dwellings and any hurdles to apply/achieve • Enforcement efficacy/process. Who are the violators? (Property managers, “mom & pop,” etc.?) • Renter demographics 8 Proposed Scope 9 Best practices in peer cities: • Occupancy • Rental registration • Nuisance codes • General neighborhood livability/affordability practices Predictive modeling: • Housing availability/affordability into the future Questions/Direction Sought 1. Does Council support the proposed scope of study? 2. Does Council have any additions or subtractions form the scope of study? 10