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HomeMy WebLinkAbout01/28/1987 Meeting .e e e M I NUT E S Eugene City Council McNutt Room--City Hall January 28, 1987 Noon COUNCILORS PRESENT: Debra Ehrman, Freeman Holmer, Emily Schue, Ruth Bascom, Jeff Miller, Roger Rutan, Robert Bennett. COUNCILORS ABSENT: Cynthia Wooten. The adjourned meeting of January 26, 1987, of the City Council of the City of Eugene, Oregon, was called to order by His Honor Mayor Brian B. Obie. I. ITEMS FROM THE COUNCIL, MAYOR, AND CITY MANAGER A. Gary Papel Service on Budget Committee Mr. Rutan said Gary Papel has worked hard on the Budget Committee and his contributions have been objective and constructive. Mr. Rutan suggested a letter be sent to Mr. Papel expressing appreciation for his service. B. Riverfront Research Park Mr. Rutan said the community is indebted to Mayor Obie and City Manager Micheal Gleason and many members of the City staff because they provided leadership in planning the Riverfront Research Park. He said he is proud to be associated with Mayor Obie and Mr. Gleason because their activities on behalf of the Riverfront Research Park are outstanding. Mr. Rutan said Mayor Obie has pursued plans for the Riverfront Research Park tenaciously for many years and much of the development of the project is due to his leadership. Now, it is the first project in Governor Goldschmidt's Oregon Comeback program. Mr. Rutan said to Mayor Obie and Mr. Gleason, "Thank you, and congratulations." Mayor Obie said the Riverfront Research Park is an example of what can happen to ideas and concepts when people work on them. Mr. Holmer agreed with Mr. Rutanls comments. Ms. Schue said the Board of Directors of the Lane Council of Governments passed a resolution expressing its support for the Riverfront Research Park. She said the mayors of Florence, Oakridge, and other cities in Lane County were involved and their actions are a complement to Eugene and Mayor Obie. MINUTES--Eugene City Council January 28, 1987 Page 1 C. Festival of Lights e Ms. Ehrman said the Festival of Lights will end this Saturday, January 31, 1987. She said the festival has benefited the downtown during the holidays and she will speak at a ceremony ending the festival. D. Concert of Lazar Berman Ms. Bascom said Lazar Berman, a Russian pianist, will perform at the Hult Center for the Performing Arts on February 11, 1987. He will perform later at the Kennedy Center in Washington, DC, and Carnegie Hall in New York. His concert in Eugene will be broadcast nationally on National Public Radio. E. National Conference on Central Retail Management Mr. Bennett said he attended a conference concerning Central Retail Management in San Antonio, Texas, recently. He said Eugene has been developing a downtown retail strategy for about a year. The strategy includes central reta i 1 management whi ch is based on the concept that shoppi ng areas are successful partly because all the businesses operate under the same rules concerning such things as the type and location of businesses, operating hours, the appearance of stores, and cooperative activities. He said many cities are implementing such programs in their downtowns and he looks forward to doing so in Eugene. F. Awning Program of Downtown Commission e Mayor Obie said he wondered about the Downtown Commission action that increased the area in the downtown awning program and changed the funding standards. He said City funding of more than 50 percent of the cost of awnings is not reasonable. Mr. Gleason said the staff will prepare a report on the program for the council. II. WORK SESSION: TENTATIVE CONDOMINIUM CONVERSION ORDINANCE REVISIONS Ci ty Manager Mi chea 1 Gl eason presented Pl anni ng Di rector Susan Brody who introduced the staff presentation. She said the City Council will hold a public hearing on February 9 on the recommendations of the Planning Commission concerning changes to the condominium conversion ordinance. Ms. Brody said the Planning Commission initially intended only to amend the condominium conversion ordinance so that it conforms to State laws and so that the administrative procedures are more efficient. During the deliberations, the Planning Commissioners decided it would be appropriate to consider the purchaser and tenant protections in the ordinance. She said the staff informed the council of the commission's action and received no comments from the counci 1 ors. Ms. Brody said there was very little public comment about the purchaser protections and the administrative procedures in the ordinance. There was e MINUTES--Eugene City Council January 28, 1987 Page 2 e much comment, however, about the tenant protections in the ordinance. Most of the comments concerned the tenant protects for the elderly. She said about 25 people attended a public information session held by the staff on January 24, 1987. Answering a question from Mayor Obie, Ms. Brody said the Planning Commission recommendations received by the council are final recommendations. Robin Johnson, a consultant to the Planning Department, reviewed the history of the condominium conversion ordinance. She said the conversion of apartments to condominiums became an issue in 1979. The City imposed a temporary moratori um on convers ions in November of 1979 and the council adopted the existing ordinance six months later. She said the City has processed applications to convert four developments (440 units) to condominiums since the ordinance was passed in 1980. No units in any of those developments have been sold. She said the State also has a process which must be completed before buildings can be converted to condominiums and the State process has not been started for any of the four developments. The City received applications to convert 230 additional units to condominiums but the City process for those units has not been completed. Ms. Johnson said the condominium conversion ordinance was amended in 1981 to exempt limited-equity cooperatives. e Ms. Johnson reviewed a report titled, IICondominium Converson Ordinance, Planning Commission Recommendations." The report contains an explanation of statements in the existing condominium conversion ordinance, the State law concerning condominiums conversions, and the Planning Commission recommendations for revisions to the existing ordinance. The report is divided into three sections. They are: 1) purchaser protections; 2) administration and procedures; and 3) tenant protections. Ms. Johnson reviewed the provisions in the existing ordinance, the State law, and the changes recommended by the Planning Commission as well as the reasons for the provisions. A. Purchaser Protections 1. Di scl osure Ms. Johnson said the Planning Commission recommended the proVlslons in the existing ordinance that require a developer to make all issued documents available to purchasers prior to sale closure be retained. The commission also recommended that a short summary of purchaser protections prepared by the City be given to prospective purchasers with the State Public Report and that the Architects and Engineers Report, documents about the reserve accounts, and the Building Code Report be delivered to purchasers within ten days after execution of the earnest money agreement. 2. Resale Ms. Johnson said the Planning Commission recommenped the deletion of the requirement in the existing ordinance that subsequent purchasers of a e MINUTES--Eugene City Council January 28, 1987 Page 3 e condominium unit be given the same information a first-time purchaser is given. She said the commissioners recommended the deletion because the requirement would be difficult to enforce. 3. Reserve Account Ms. Johnson said the reserve account provi des a fund to replace common elements in the condominiums. She said the Planning Commission recommended that the requirements for a reserve account be changed to conform to the State law and that the Architects and Engineers Report be used to calculate the reserve account. 4. Architects and Engineers Report Ms. Johnson said the Planning Commission recommended retention of the Architects and Engineers Report as described in the existing ordinance with two additions. The additions require that the report be updated if conversion does not take place within three years and that information about how the data was obtained and who provided the data be included in the report if architects and engineers were not able to personally inspect the common elements. 5. Warranty Requirement Ms. Johnson said the Planning Commission recommended deletion of the warranty requirement in the existing ordinance because other purchaser protections are adequate. 6. Housing Code e Ms. Johnson said the Housing Code was deleted from the Eugene City Code in 1983. She said the Planning Commission recommended that references to the Housing Code be deleted from the ordinance. The commission also recommended that a statement be added to require conformity with Section 104 (Application to Existing Buildings and Building Service Equipment) and Section 203 (Unsafe Buildings, Structures and Building Service Equipment) of the Uniform Building Code, 1979 Edition. Answering questions from Mayor Obie, Ms. Johnson said State laws require a warranty on new condominiums but State laws do not require any warranties on condominium conversions. She said the Planning Commissioners indicated that compliance with the Uniform Building Code, the reserve account for replacement of common elements, and the Architects and Engineers Report are adequate purchaser protections. Replying to questions from Ms. Ehrman, Ms. Johnson said a developer is responsible for giving purchasers the disclosure documents and realtors usually supply the documents to prospective purchasers. Answering questions from Mr. Rutan, Ms. Johnson said the City conversion process has been completed for four developments. The process was begun and not finished for other developments totaling 230 units. She said the proces probably was abandoned because the condominium market in Eugene has not been good recently. e MINUTES--Eugene City Council January 28, 1987 Page 4 e Replying to questions from Ms. Schue and Ms. Bascom, Ms. Johnson said about 200 units were converted to condominiums in Eugene before 1979. Limited equity cooperatives, which are exempted from the ordinance, are cooperative- ownership developments constructed under Federal guidelines for people with low incomes. B. Administration and Procedures 1. Conversion Rate Report Ms. Johnson said the Planning Commission recommended retention of the annual Convers i on Rate Report and a change in its contents. The commi ss ion recommended that the report be required only if conversion activity has taken place during the past year and that it conform to a formula in the Portland Condominium Conversion Ordinance. 2. Prel iminary and Final Permits Ms. Johnson said the Planning Commission recommended the City conversion process be consolidated so that only one permit is issued and so that the process takes no less than 80 and no more than 120 days. 3. Required Reports and Forms Ms. Johnson said the Planning Commission recommended that most of the reports and forms required in the existing ordinance be retained and that they be regulated by administrative rules. e 4. Housekeepi ng Issues Ms. Johnson said the Planning Commission recommended that references to State laws be updated and that the ordinance be administered by the City Manager or a designee. Answering a question from Ms. Ehrman, Ms. Brody said the Conversion Rate Report could be prepared by the City staff. D. Tenant Protections for General and Special Category Tenants Mr. Bennett said he is in the real estate business and manages properties that will be affected by the condominium conversion ordinance. He said he and his wife are the sole owners of the Eugene Manor, a mid-rise building in which many senior citizens have lived for a long time. He said the senior citizens would be affected by the tenant protections for special category tenants in the condominium conversion ordinance. Mr. Bennett said he served on the Planning Commission while it considered the condominium conversion ordinance and a conflict of interest issue was raised. He said he discussed whether his ownership of buildings in the community created a conflict of interest with the City Attorney and the City Attorneyls formal, written opinion indicated he did not have a conflict of interest. e MINUTES--Eugene City Council January 28, 1987 Page 5 e Mr. Bennett said he feels very strongly about the condominium conversion ordinance. He said he has a case to make, and he has a point of view to present. He said he has thought about what is perceived in the community, about his credibility, and about how his comments would be perceived. He said he has sought advise from many people. Mr. Bennett said he has decided not to vote on the condominium conversion ordinance. He said he has had considerable experience with the ordinance and would like to discuss some of the issues. He said the City Attorney has indicated that he may participate in the discussion and not vote on the ordinance. Ms. Schue said Mr. Bennett's decision is wise. She said she thinks the council will want to hear his experience. She said she understands the perceptions of a conflict of interest and she applauds his decision. Ms. Bascom said she agrees with Mr. Bennett's decision. She said she is looking forward to his comments now that the question has been settled. Mayor Obie said he and the councilors respect Mr. Bennett's decision and welcome his participation in the discussion. e Beginning her discussion of the tenant protections, Ms. Johnson said the existing ordinance and the State law require a Notice of Conversion be given to all tenants when the conversion process begins. The Planning Commission recommended the requirement be retained. Ms. Johnson referred to two matrices at the end of the Condominium Conversion Ordinance Report which were reproduced on the wall. One matrix illustrated the tenant benefits in the existing ordinance and the other matrix illustrated the tenant benefits recommended by the Planning Commission. Ms. Johnson said there are three groups of special category tenants in the existing ordinance. They are: 1) people with annual incomes of 80 percent or less of the median income; 2) people 62 years old or older; and 3) handicapped people. She said a provision in the existing ordinance that requires the offer of comparable units and, if comparable units cannot be found, lifetime leases to special category tenants have never been activated. Answering questions from Ms. Ehrman, Ms. Johnson said the annual incomes are calculated from the areals median income and updated annually by the Federal Housing and Urban Development Department (HUD). This year, 80 percent of the median income for one person is $1,077 a month. The eviction protections in the ordinance become effective when the conversion process begins and the Notice of Conversion is delivered. Replying to questions from Mr. Holmer, Ms. Johnson said the eviction protections do not apply to tenants in buildings that are not being converted to condominiums. Responding to questions from Mayor Obie, Ms. Johnson said the eviction protection in the existing ordinance means that all tenants may remain in their apartments at least 180 days after receiving the Notice of Conversion or e MINUTES--Eugene City Council January 28, 1987 Page 6 e until final approval of the conversion is granted. She said the eviction protect ion 1 asted over a year for tenants in the four developments that completed the City process. The existing ordinance provides eviction protection for special category tenants until they move. Rent control begins when the City process begins. From then on, rents are controlled for all tenants and rents can only be raised proportionally to the Consumer Price Index (CPI) since the last time rents were raised. Ms. Johnson said she very recently received information that the State Property Transaction Law prohibits cities from establishing rent control. The law exempts condominium conversions but it stipulates that the Consumer Price Index must be used to raise rents in condominiums and that the Statels timeframe for notifying tenants must be used. She said the City Attorney will analyze the effect of the State law on both the existing ordinance and the proposed changes. Reviewing the tenant protections recommended by the Planning Commission, Ms. Johnson said the commission identified four groups of special category tenants. They are: 1) people with annual incomes of 50 percent or less of the medi an income; 2) people with annual incomes of 50 percent or 1 ess of the median income who have minor dependents; 3) disabled people and people who are 70 years old or older who have annual incomes of 80 percent or less of the median income; and 4) disabled people who have incomes greater than 80 percent of the median income. She said the classification of disabled (handicapped) people has been revised to include people who are IIfrailll and have difficulty with daily living. e Answering questions from Mr. Holmer and Mr. Miller, Ms. Johnson said HUD does not disseminate median incomes for specific age groups. Ms. Brody said the Planning Commissioners were told that people 70 years old and older are more likely than younger people to experience trauma when they are forced to relocate. Replying to questions from Ms. Bascom and Ms. Ehrman, Ms. Johnson said students may be included in the special category tenants if they have low incomes. She said 50 percent of the median income for single people is $673 a month. She read the Planning Commissionls recommended definition of disabled people. She said disabled people with incomes of more than 80 percent of the median income would not receive moving expenses from a developer. Answering questions from Ms. Schue, Ms. Johnson said the Planning Commission recommended that housing offered by a relocation specialist should be similar and available. The commission deleted the requirement that the housing be comparable. Mr. Holmer noted that a statement in the IIServices of a Housing Counselorll indicates that the City Council will decide about subsidizing the developerls costs for the housing counselor. Answering his question, Ms. Brody said the Planning Commission will not make a recommendation about the subsidy because the commission does not recommend fee schedules to the City Council. e MINUTES--Eugene City Council January 28, 1987 Page 7 . Replying to questions from Ms. Bascom and Ms. Schue, Ms. Johnson said the eligibility requirements recommended by the Planning Commission would have decreased the special category tenants in the four developments that have completed the City conversion process about 75 percent. Most of the special category tenants in those developments were over 62 years old. Most of them did not have physical problems or low incomes. She said the commissioners tried to provide help for people who need it most. Mr. Ellison said the changes recommended by the commission are not based on experience because there have not been enough conversions to provide experience. Replying to questions from Ms. Ehrman, Ms. Johnson said the Planning Commission recommended that eviction protection be provided for special category tenants only. Consequently, other tenants could be evicted in 30 days if they do not have longer leases. City Attorney Tim Sercombe discussed 1980 litigation that resulted in a decision that the City may implement the tenant protections in the condominium conversion ordinance. Willamette Towers was converted before the condomi ni um conversi on ordi nance was effective and the ordinance would apply to the conversion of Patterson Towers and Lane Towers. Mr. Holmer said many tenants are affected by changes in the use of real property and he wondered if the council should consider the needs of all tenants in the community. He said the owner of the Delta Villa Mobile Home Park is evicting tenants in order to change the use of the property. Sixteen of the 19 tenants surveyed are over 60 years old, some tenants are disabled, and some tenants have low incomes. e Mr. Rutan said the purpose of the condominium conversion ordinance was to deal with the impact of a conversion to condominiums of several buildings on specific people. However, there have not been any conversions in the last six years. He wondered if the purpose of the revisions is to deal with the same issues or if the purpose is to provide protection for certain categories of people. Ms. Schue said one purpose of the existing ordinance was to protect specific tenants and another purpose was to protect the existing housing stock in Eugene. She said the rental market in Eugene is tight and a tighter and tighter market is created if units are sold and no more are built. She said adoption of the condominium conversion ordinance was a means of dealing with the local rental housing supply. Gerry Gaydos, President of the Planning Commission, discussed the commissionls consideration of the condominium conversion ~rdinance. He said the commissioners often discussed whether it is the public's responsibility or a developer's responsibility to solve the social problems created by a conversion to condominiums. He said the existing ordinance indicates that it is a developer's responsibility. The Planning Commission also questioned whether Eugene should have an ordinance that is different from the State law governing conversions. He said the commission decided that the conversion of a building with 100 tenants has a different effect on the market than the conversion of a duplex. He said testimony indicated that forced relocations create trauma for elderly people and that the trauma can be lessened if people e MINUTES--Eugene City Council January 28, 1987 Page 8 e have time to adjust. The commissioners decided that Eugene should have an ordinance to address problems created by conversions because Eugene is a caring community. Mr. Gaydos said the existing ordinance requires a developer to give a lifetime lease to people for whom comparable housing cannot be found but the definition of comparable housing is so strict that it really means many developments cannot be converted to condominiums in Eugene. Therefore, the commission recommended that IIsimilar and availablell housing is adequate. Answering a question from Ms. Ehrman, Mr. Gaydos said the commission received no testimony from developers who did not proceed with conversions and does not know why they did not proceed. He said Mr. Bennett i ndi cated that the comparable housing and lifetime lease provisions in the existing ordinance probably affected conversions. Mr. Gaydos said the Planning Commission discussed private property rights vs. the public good, the nature of housing, who should pay for problems created, and who should receive benefits. He said some commissioners said that some people 62 years old are able to care for themselves. Therefore, the commission tried to identify people who need help. Jim Ellison, President of the Planning Commission in 1986, said the commissioners learned that the condominium ordinance has social significance. He said they were told that forced relocation creates life-threatening trauma for some people. He said the Planning Commission focused the issues for the City Council. The commissioners did not think a 30-day rental agreement should obligate a developer to give a lifetime lease. He said, therefore, the 4It City Council must address the comparable housing and lifetime lease issues. Mr. Bennett said the comparable housing and lifetime lease provisions in the existing ordinance are not the reason there have been no conversions in the past six years. He said, however, that those provisions would constrain the conversion of certain buildings. He said the units for which the City process was completed have not been sold because there has not been a market for them in the last six years. Answering a question from Ms. Ehrman, Mr. Gaydos said the Planning Commission recommendation that people 70 years old and older should receive special benefits responded to concerns about elderly people. The commission considered making the age limit 75 years. Mr. Miller said he has known people who were not elderly whose lives were threatened by forced relocations. He wondered if the council should consider ways of preserving private investments and, at the same time, addressing the concerns of elderly people and others who need special care. Ms. Brody wondered if the councilors would like the City to consider protecting people in all rental housing from displacement. Responding to Ms. Brody, Mr. Holmer said the council should address the broad issue when it is appropriate but the categories of protected people should be e MINUTES--Eugene City Council January 28, 1987 Page 9 e e e carefully defined. He suggested the council address the condominium conversion ordinance first. Mr. Bennett said the issue of supply and demand should be addressed when the council considers housing issues. He said a tight rental market encourages new construction. He said there has been very little new rental housing constructed in Eugene since 1979 because there was no demand for it. He said housing markets are cyclical. He emphasized that all the Planning Commissioners agreed there are special category tenants who need special benefits. He said the issue of public responsibility for social problems was not addressed by the Planning Commission. Ms. Schue said the existing ordinance was approved because elderly residents of Patterson Tower did not want it converted to condominiums. She said some of the 1980 issues remain. Ms. Bascom suggested the council address the issues in condominium conversions before considering broader issues of tenant protection. Mr. Gaydos said the the comparable housing issue might face the councilors when they consider condemning a building which might result in displacing people. Mr. Gleason suggested the council proceed cautiously in considering tenant protections. He said discussions during consideration of the condominium conversion ordinance will indicate if the council wants to consider the broader issue of tenant protections. If so, the council coul d remand the issue to the Planning Commission for a recommendation. Ms. Brody added that the Planning Commission is considering the addition of housing issues to its work program. Answering a question from Mr. Miller, Ms. Brody said the Planning Commission recommendation does not dramatically change the tenant protections. Alternate housing must be provided for special category tenants. Comparable housing and lifetime leases are the issues that must still be addressed by the council. Mayor Obie said he is not interested in addressing the issue of protections for all special category tenants. He said the housing market is fickle and it is difficult to know the impacts of council action. Mr. Holmer asked the staff to investigate the median income of people 70 years old and older. Mayor Obie adjourned the meeting at 1:30 p.m. to February 4, 1987. ~~7ffl 'Mi:~~~- Ci ty Manager (Recorded by Betty Lou Rarick) mncc0128 MINUTES--Eugene City Council January 28, 1987 Page 10