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HomeMy WebLinkAboutAdmin Order 53-22-08-F -- Amended Rental Housing Code FeeAdministrative Order – Page 1 of 2 ADMINISTRATIVE ORDER NO. 53-22-08-F of the City Manager of the City of Eugene SETTING THE RENTAL HOUSING CODE REGISTRATION AND APPEAL FEE SCHEDULE AND SUPERSEDING THE FEE SCHEDULE ADOPTED BY ADMINISTRATIVE ORDER NO. 53-05-03-F. The City Manager of the City of Eugene finds as follows: A. Section 2.020 of the Eugene Code, 1971, authorizes the City Manager to determine and set fees and charges to be imposed by the City for services, goods, use of municipal property, and licenses and permits. Pursuant to that authority, on July 7, 2005, Administrative Order No. 53-05-03-F was issued establishing the current Rental Housing Code Registration and Appeal Fee Schedule (“the Fee Schedule”). B. On August 13, 2022, Ordinance No. 20670 took effect and amended section 8.440(2) of the Eugene Code (EC) to provide that the City Manager shall “set a fee for each dwelling unit covered by a rental agreement. The revenues generated by the fee shall be used for the purpose of offsetting the costs to the city associated with the enforcement of this code and costs associated with providing services to tenants and owners and managers of rental housing, including but not limited to: a rental housing navigator position, rental housing data collection, and tenant support services.” I have determined that additional revenues are necessary in order to accomplish the purposes listed in EC 8.440. C. On September 2, 2022, I issued Administrative Order No. 53-22-08 ordering that notice be given of the opportunity to submit written comments on my proposal to amend the Fee Schedule by setting a new rental housing annual registration fee. The Notice specified that comments on the proposed amendment would be received for 15 days from September 7, 2022, the posting date of the Notice. The written comments received during the public comment period are addressed in the City Manager's Findings Supporting Proposed Rental Housing fees attached as Exhibit B to this Order. D. Based on my investigation pursuant to the provisions of Section 2.020 of the Eugene Code, 1971, and after considering the comments that were submitted, I find that the fee should be set as proposed. (See Exhibit B to this Order) E. The unamended Rental Housing Code fees adopted by Administrative Order No. 53-05-03-F are incorporated into the Fee Schedule attached as Exhibit A to this Order. On the basis of these findings, I order that: 1. The Rental Housing Code Fee Schedule attached as Exhibit A to this Order is the schedule of fees to be charged for the described services as of the effective date of this Order. Administrative Order – Page 2 of 2 2. As of the effective date of this Order, the Fee Schedule attached to Administrative Order No. 53-05-03-F is superseded by the Rental Housing Code Fee Schedule attached as Exhibit A to this Order. Dated and effective this 11th day of October, 2022. Sarah Medary City Manager Exhibit A to Administrative Order No. 53-22-08-F City of Eugene Rental Housing Code Registration and Appeal Fee Schedule (Effective October 11, 2022) Fee 1. Annual Fee $20.00 per unit 2. Late fee for every month the annual fee is not paid by the date specified in the payment notice $20.00 3. Appeal Fee $250.00 Rental Housing Code Registration and Appeal Fee Schedule -- Page 1 of 1 Exhibit B to Administrative Order No. 53-22-08-F Findings -- Page 1 of 5 Proposed FY23 Rental Housing Fee EC 2.020(2) Compliance Findings and Responses to Public Comments Findings Eugene Code 2.020(2) requires that unless the city manager determines in writing that consideration of one or more of the following factors is irrelevant or inapplicable, in determining the amount of a fee the city manager shall consider: a) Applicable policies, enactments and directives of the council Response: On July 11, 2022, City Council adopted Ordinance No. 20670, which directed the adoption of Phase I Renter Protections, and revised the Eugene Code to reflect expanded services related to renter protections including navigation services and increased renter resources. b) The amount charged by the city in the past Response: The fee for the Rental Housing Program has been $10.00 since inception. The expansion of the program will necessitate an increase in the fee to $20.00 to support additional staffing and resources. c) The full costs of providing the service supported by the fee Response: As the Rental Housing Fund is wholly fee supported, it is responsible for charging fees to cover all operating costs, maintaining an adequate fund reserve, and covering charges for allocated non-departmental expenses. The significant expansion of the scope of the program that Ordinance No. 20670 has entailed will require additional resources. d) The amounts charged by other comparable providers Response: Several other jurisdictions have Rental Housing license programs, however there is variability in local ordinances that govern what the programs do. Currently other jurisdictions charge the following rates for their Rental Housing Programs: Exhibit B to Administrative Order No. 53-22-08-F Findings -- Page 2 of 5 d) The revenue needs of the city as determined by the adopted city budget Response: The FY23 budget was reviewed through public process and approved by Council prior to Council’s direction to amend the Rental Housing Code and, as such, only contained allocation for the historic program costs. There is insufficient funding or revenue at the current fee to support this expansion, necessitating a fee change. Conclusion Council’s adoption of Ordinance No. 20670 on July 11, 2022 amending the Rental Housing Code is anticipated to add significant cost to address the new code requirements. The proposed $10 increase would increase revenue to offset the costs related to expanded services. RESPONSES TO PUBLIC COMMENTS ● One commenter noted that the proposed fee adds about $1 per month to break even and asked if tenants welcome the additional cost. Response: The $10 increase to the annual fee (for a total annual fee of $20 per unit) equates to approximately an additional $0.84 per month per unit. Tenants and tenant advocates spoke in favor of the increase in the fee to pay for the new services at the June 21, 2022 public hearing on Ordinance 20670. No changes are being made to the fee order as a result of this comment. ● Four commenters stated they object to the increased fee. They stated they do not believe that landlords should be paying for public services to support low-income and very-low-income residents. They commented that they should not be responsible for the minority of citizens who need special assistance with housing. The commenters said the City should be supporting landlords and requested that the City increase supply by encouraging and incentivizing builders to build new supply. One of these commenters requested that the door fee be abolished as the commenter believes that it is a slush fund to police and punish decent property owners. Response: The services provided by the increase in the fee will support tenants and landlords and will include a new Rental Housing Navigator position within the Planning and Development Department, expanded enforcement through the rental housing code program in Building and Permit Services, and tenant/landlord support programs such as a tenant hotline, risk mitigation funding, and eviction diversion. The Housing Navigator position is a critical component of realizing the current needs for improved local rental housing data metrics; coordinating with local organizations to strengthen opportunities for persons with disabilities to access rental housing; collaborating with code enforcement; providing simplicity, efficiency, and options for tenants and landlords; and overseeing the success of the renter protections program areas. The Housing Navigator position will provide services to both landlords and tenants by serving as a subject matter expert on landlord tenant relationships. The position will develop resources and training materials designed to provide information on the local rental housing code, statewide legislation, Exhibit B to Administrative Order No. 53-22-08-F Findings -- Page 3 of 5 landlord/tenant relationship best practices, and other subjects as needed. These materials will support the work already being done by community housing agencies working with individuals more susceptible to housing insecurity. The Housing Navigator position would manage data collection and outreach for local rental housing data metrics and reporting. Some of the revenues generated by the annual fee could be used to provide additional support to landlords through a risk mitigation fund and/or an eviction prevention fund. Risk mitigation funds provide added protections for landlords willing to rent to tenants with limited income, poor rental history or a criminal background. Funds cover excessive damages, lost rent, and legal fees. Eviction prevention funds provide tenant and landlord mediation support, tenant education, and support for service agencies that build relationships between tenants and landlords. Over half of all Eugene households rent housing and over half of all renters in Eugene are considered “housing cost burdened” (a household that pays 30% or more of their income for housing). The Housing Implementation Pipeline (HIP) is the City of Eugene’s 5-year internal work plan to coordinate current and future resources, goals, and priorities with a systems-thinking approach to housing across the full spectrum from people experiencing homelessness to overall housing supply. The HIP has goals and metrics for increasing the supply of income qualified housing and overall market rate housing. Enforcement staff will be focused on raising awareness of the new requirements, to minimize the need for enforcement. Enforcement for the protections will utilize the existing Rental Housing Code enforcement process. By adding the Phase I protections to the Rental Housing Code and using the existing enforcement process, tenants will be able to file complaints with code enforcement staff without pursuing litigation, as litigation can result in long delays and can be costly. The focus of Eugene’s Rental Housing Code is to ensure rental properties in the City are safe for tenants by creating minimum habitability standards. The program is designed to encourage written communication between the tenant and owner and ideally resolve issues without the need for City enforcement. If a tenant and owner are unable to resolve the issues on their own, the City works with both parties to reach compliance. No changes are being made to the fee order as a result of this comment. ● Six commenters requested that an audit be done on how the current funding is being spent and requested that the existing fee be used to pay for the expanded services related to renter protections. One of these commenters suggested a bond could help fund increased low-income housing. Another of these commenters noted that this is a fee on tenants, as 90% of landlords will pass this extra cost of doing business on to their tenants. Response: The FY23 budget was reviewed through public process and approved by Council in June 2022, which was prior to Council’s direction to amend the Rental Housing Code and, as such, only contained allocation for the program costs in place prior to Council’s approval of Ordinance 20670 on July 11, 2022. There is insufficient funding or revenue at the current fee level to support the expanded services related to renter protections, necessitating a fee change. As stated in the response above, the City has a separate process to and involvement with increasing the supply of housing in Eugene which Exhibit B to Administrative Order No. 53-22-08-F Findings -- Page 4 of 5 is contained in the Housing Implementation Pipeline (HIP). No changes are being made to the fee order as a result of this comment. ● One commenter requested that the fee shall be set as no greater than $20. Response: The proposed fee order sets the fee at $20. No changes are being made to the fee order as a result of this comment. ● One commenter noted that, as a landlord, it was difficult to hold property managers and contractors accountable for the work that the landlord hired them to do. The commenter would like the City to hold property managers and contractors accountable. Response: The issues raised by this comment are not addressed through the Rental Housing Code and associated fees, as they are issues between owners and those hired to do work on the properties, rather than between landlords and tenants. No changes are being made to the fee order as a result of this comment. ● Three commenters noted that they are opposed to the increase in the fee. Two of these commenters stated that property taxes are already expensive. Response: This fee order will increase annual registration fee by $10. The fee order does not affect any property taxes. No changes are being made to the fee order as a result of this comment. ● Nine commenters said they were in favor of the fee increase. They mentioned that a modest increase in the fee will support new programming that will strengthen Eugene. Response: The $20 per unit annual fee is calculated to offset the costs to the City associated with the enforcement of the Rental Housing Code and costs associated with providing services to tenants and owners and managers of rental housing, including but not limited to: a rental housing navigator position, rental housing data collection and tenant support services. No changes are being made to the fee order as a result of this comment. ● Two commenters said the fee increase sounds fair. Response: The $20 per unit annual fee is calculated to offset the costs to the City associated with the enforcement of the Rental Housing Code and costs associated with providing services to tenants and owners and managers of rental housing, including but not limited to: a rental housing navigator position, rental housing data collection and tenant support services. No changes are being made to the fee order as a result of this comment. ● One commenter stated their rent went up by nearly $100/month this year in a building that is already covered by the Oregon rent stabilization statute. The person noted this fee will not be a burden to Exhibit B to Administrative Order No. 53-22-08-F Findings -- Page 5 of 5 landlords. The commenter also said there is a desperate need for a housing navigation services and is glad the City will address this directly. Response: The $20 per unit annual fee is calculated to offset the costs to the City associated with the enforcement of the Rental Housing Code and costs associated with providing services to tenants and owners and managers of rental housing, including but not limited to: a rental housing navigator position, rental housing data collection and tenant support services. No changes are being made to the fee order as a result of this comment.