HomeMy WebLinkAboutMemo - Mail Packet - 12/20/2022 - Memorandum From Meaghan Overton And Marcy Yoder Re: Proposed Rental Housing Program Design
Planning, Development & Transportation
Community Development & Neighborhood Services
281 N. College Ave.
PO Box 580
Fort Collins, CO 80522
970.416.2350
970.224.6134 FAX
www.fcgov.com
MEMORANDUM
DATE: December 15, 2022
TO: Mayor Arndt and City Council Members
THRU: Kelly DiMartino, City Manager
Caryn Champine, Director of Planning, Development, and Transportation
FROM: Meaghan Overton, Housing Manager
Marcy Yoder, Neighborhood Services Manager
RE: Proposed Rental Housing Program Design
The purpose of this memo is to share high-level design features of the proposed Rental Housing
Program that Council will consider on first reading on January 17, 2023. A more detailed
description of the program design, implementation timeline, financial impacts, and past Council
and community engagement will be provided in the Agenda Item Summary (AIS) for the
01/17/2023 meeting with the corresponding ordinance language.
Proposed Program Rationale – Who, What, & Why?
Safe and stable housing provides a foundation that allows individuals, families, and
communities to thrive. Livable housing has a positive impact on health, economic security,
educational attainment, and the overall stability of families and communities.
In Fort Collins, the best available data suggests that more than 40% of all housing units are
renter-occupied. The renter community in Fort Collins makes up a significant portion of the
population and the City does not currently conduct proactive rental property inspections for
health, safety, and habitability. While the City maintains a complaint-based rental inspection
system to promote safe and habitable housing for renters, this program does not adequately
address power dynamics faced by tenants who often fear retaliation, increased rental payments,
damaged relationships with property owners, and eviction.1 Community comments during
Housing Strategic Plan engagement indicated a range of concerns with the City’s current level
of regulation: a need to proactively ensure healthy, safe units; fear of retaliation or loss of
housing if renters report substandard or unsafe units; and concerns about discrimination.
In response to Council feedback during the August 23, 2022, work session and the December 1,
2022, Council Finance Committee meeting, staff have designed a rental housing program that
includes both property enrollment and proactive inspections. This program requires an initial
upfront appropriation of $1.6 million for its start-up phase. The program design described in this
memo aims to address concerns about the lack of proactive inspection and to ensure safe,
1 Chisholm, E., Howden-Chapman, P., & Fougere, G. (2020). Tenants’ responses to substandard housing: Hidden
and invisible power and the failure of rental housing regulation. Housing, Theory and Society, 37(2), 139–161.
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healthy, habitable housing for all Fort Collins residents. It also strives to balance the concerns
expressed by landlords and others in the rental industry regarding unnecessary regulation and
increased costs.
The proposed program includes two primary components – property enrollment and rental
inspections. Enforcement checkpoints are built into the program’s design to ensure compliance
at each stage. The proposed program requires landlords/property owners to enroll their
properties into the program, update contact information annually, and submit their rental
businesses to property inspections once every five years to ensure compliance with minimum
life, health, and safety standards. The proposed program will also impact renters, who will
ultimately benefit from rental units that meet minimum standards but may experience living
disruptions due to required property repairs. Additional impacted stakeholders include property
managers who may be required to allow scheduled entry onto rental premises for inspections,
City staff, and contractors who perform property repairs.
Proposed Program Design Overview
The following descriptions constitute a high-level overview of the proposed rental housing
program upon full implementation. There will be a start-up phase that focuses on outreach,
education, and feedback from those entities participating in the initial stages of implementation.
Rental Property Enrollment
All property owners who rent to tenants would be required to enroll their rental properties into
the program, including both owner-occupied rental properties and solely renter-occupied
properties. The enrollment information required includes:
- The name and contact information of the property owner(s), whether LLC or natural
person;
- The contact information for the property manager if one is used;
- A local contact located no more than 70 miles from the property;
- A complete list of additional rental properties owned by the property manager, if
applicable
- The types of units at the property
- Age of units
- Yes/No – Whether HUD inspections are already being completed at the property
Additional reporting may be added if the start-up phase reveals the need for additional
information that will enable more data-informed decision making.
Property owners would be required to update their enrollment information annually to ensure
that local contact information is up to date, which will ultimately facilitate a streamlined rental
property inspection process.
Proactive Rental Inspections
The key feature of the Rental Housing Program is a proactive inspection program for all renter-
occupied properties in the City of Fort Collins. Inspectors will evaluate the health and safety of
units based upon a comprehensive list of minimum habitability standards (see Attachment 1 for
proposed draft criteria). Under the proposed program, inspections would be conducted by in-
house building inspectors rather than a third party to ensure consistency in the application of
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minimum habitability standards for rental properties. Limited exemptions will exist for properties
under the age of ten years, which will not require an inspection during that time period, and
affordable housing developments that are inspected by the U.S. Department of Housing and
Urban Development (HUD).
The following rental property classifications will require inspections:
- Single detached
- Attached
- Multi-unit buildings
- Condos
- Mobile homes
All single detached, attached units, and individually owned units, regardless of property type,
will require an inspection once every five years. For multi-unit buildings in which units share the
same property owner, properties will be inspected on a percentage basis. The program will
require buildings with 0-10 units to be 100% inspected, 11 to 100 units to have 10% of units
inspected and buildings with greater than 100 units to have 5% of units inspected. The
percentage-based inspections will allow building inspectors to identify the general state of repair
for multi-unit buildings, reinforce the City’s rental housing standards of habitability for multi-unit
buildings, and relieve the burden on staff and property owners of inspecting every unit in large
apartment complexes with several hundred units.
Building Type % Inspected
Single unit, detached 100%
Single unit, attached (e.g., townhouse) 100%
Individually owned (e.g., condo) 100%
Multi-unit, 0-10 units` 100%
Multi-unit, 11-100 units 10%
Multi-unit, 100+ units 5%
The implementation of inspections will be staggered, with city staff inspecting roughly 20% of
the rental housing stock each year. After the start-up phase, this is likely to happen by
geographic sections of the city. As a result, the program will not reach full implementation until
five years after it formally begins upon the completion of the initial start-up phase. Units will then
be inspected every five years after their first, initial inspection.
In addition to the implementation of proactive rental housing inspections, the current complaint-
based rental inspection system will remain in place. Maintaining the complaint-based system will
allow tenants to report off-cycle life, health, and safety concerns that may arise between
inspections. Moreover, this system will allow renters in multi-unit buildings whose units were not
selected for inspection in the most recent round for that property to report concerns.
If property violations are found upon inspection, property owners will receive a notice of violation
with a specified amount of time to cure the violation(s) depending on severity and implications
for renter life, health, and safety. Properties with violations will require subsequent reinspection
to ensure compliance.
Proposed Enforcement Checkpoints
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Because the rental housing program, as proposed, is comprised of many components and
sequential elements, it has been designed to include several enforcement checkpoints. The
following graphic illustrates places in the enrollment and inspection processes where the
program design builds in enforcement options. The goal is always voluntary compliance rather
than enforcement. The start-up phase will be heavily focused on outreach and education to
mitigate the need for enforcement for the majority of participants.
If unpermitted work is identified during the rental housing inspection that presents a life, health,
or safety issue, a violation notice and enforcement actions would follow the current building
code processes.
Penalties for failure to comply will include fines, civil penalties, and, upon several repeated
instances of noncompliance, misdemeanor charges.
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Financial Impact and Fee Structure
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On December 1, 2022, staff presented initial estimates of the proposed rental housing
program’s initial and ongoing costs and anticipated fee structure, which has been designed to
make the program self-sustaining upon full implementation. Two of three Council Finance
Committee members were supportive of an appropriation of $1.6 million from General Fund
reserves to fund the first two years of the program in its start-up phase with the following
estimated cost breakdown.
The total amount has been rounded to $1.6 million to provide for an inflationary increase in
2024.
The program fee options are all designed to cover all administrative costs for the first five years
of implementation. Fees can be assessed per unit, per property, or using a hybrid approach.
FTE Per FTE Cost 2023 Estimate 2024 Estimate
Compensation
Program Manager 1 $90,000 $67,500 $90,000
Engagement Specialist 1 $65,000 $48,750 $65,000
Admin/Tech 1 $50,000 $37,500 $50,000
.25 Deputy CBO 0.25 $25,000 $4,688 $6,250
Lead Bldg Inspector 1 $80,000 $60,000 $80,000
Bldg Inspector 3.25 $70,000 $113,750 $227,500
Bulding and Dev. Review Tech 1 $60,000 $30,000 $60,000
Total Salaries 8.5 $362,188 $578,750
Benefits 0.25 $90,547 $144,688
One-Time Costs
Software 1 $75,000 $75,000 $0
Translation 1 $10,000 $10,000 $0
Vehicle 4.25 $30,000 $127,500 $0
Clothing 4.25 $500 $2,125 $0
Boots 4.25 $160 $680 $0
Tools 4.25 $100 $425 $0
iPad 4.25 $1,300 $5,525 $0
Destop Computer 4.25 $500 $2,125 $0
Total One-Time Costs $223,380 $0
Ongoing Annual
Marketing 1 $20,000 $20,000 $20,000
Postage 1 $10,000 $10,000 $10,000
Phone 4.25 $50 $213 $213
Clothing 4.25 $250 $1,063 $1,063
Vehicle Maintenance and Fuel 4.25 $10,000 $42,500 $42,500
Total Ongoing Annual Costs $73,775 $73,775
Total Compensation/One-Time/Ongoing Costs $749,889 $797,213
Total 2023-2024 $1,547,102
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The fee analysis from Root Policy Research notes that a per-unit structure is more expensive
for larger multifamily properties whereas the per-property fee is more expensive for single-unit
owners. The hybrid fee provides the most equitable distribution of fee costs among different
property types and unit counts compared to the other two fee structures. Staff concurs with Root
Policy Research’s recommendation to pursue a hybrid fee structure. The figure below outlines
all the potential fee options and the costs to a range of property owners on an annual basis.
Under Option 3 (Hybrid Fee Structure) the cost to a property owner whose rental units require
inspection would be $53 per property and $19 per unit annually. Fees will be assessed annually
at either initial enrollment or upon re-enrollment in the program.
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