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HomeMy WebLinkAboutItem A - Housing StandardsEUGENE CITY COUNCIL AGENDA ITEM SUMMARY Work Session: Housing Standards Meeting Date: August 11, 2004 Agenda Item Number: A Department: Planning and Development Staff Contact: Marsha Miller www. cl. eugene, or. us Contact Telephone Number: 682-5224 AGENDA ITEM SUMMARY This work session provides an opportunity for council to review a draft housing code and provide direction to staff to move forward or not to adopt local housing standards for the City of Eugene. BACKGROUND Council Action History In 1983, the City Council eliminated Eugene's Housing Code and Housing Program as part of large budget cuts in the organization. In 1994, the council directed staff to prepare a scoping report on general housing conditions in Eugene. In March 1995, that report (see page 2) was presented to the council. In June 1995, the council directed staff to establish a department advisory committee to develop a housing code. In February 1996, the council requested a delay of the housing code work due to staff work load. In July 1996, the council directed staff to prepare an ordinance adopting the State housing code on an interim basis. In November 1996, the council directed staff to continue work with the department advisory committee and expand the scope of the project to include tenant behavior. A draft housing code was presented to council in November 1997 that included three options for adoption and implementation. The council referred the issue to the Council Committee on Infrastructure and Planning Services (CCIPS). In June and September 1998, the CCIPS discussed options for a housing code and determined there was no funding available to adopt housing standards. On May 24, 2004, the council held a work session to review existing code provisions related to housing. The council directed staff to create draft ordinance language similar to Corvallis and schedule a work session prior to summer break. Policy Issues The policy issues to be addressed are the same as presented on May 24: 1. Should the City of Eugene adopt local housing standards for rental properties in the city of Eugene? 2. If so, how would the program be funded? 3. What would be the scope of the housing code? 4. What properties should be exempted, if any? Council Goals Healthy Natural and Built Environment - A community that conserves and enhances the natural environment and provides an attractive and healthy place to live. L:\CMO\2004 Council Agendas\M040811\S040811A. doc Financial and/or Resource Considerations This would be a new program area; no resources or budget have been allocated. Authorization for new staffing and General Fund expenditures might be required depending on City Council direction. Staff will prepare budget and time estimates for implementation based on that direction. Other Background Information At the May 24, 2004, work session, the council directed staff to create draft ordinance language on housing standards similar to Corvallis, including funding mechanisms and enforcement mechanisms. The draft ordinance language is included in the packet as Attachment A. In addition, the council asked staff to provide information on the following: 1) How would rooms in owner-occupied homes with residents sharing bathroom and kitchen facilities be classified? Staff proposes that all owner-occupied housing be exempt from the rental housing standards. 2) How would single-family dwellings, not occupied in part by owners and where rooms are rented and kitchen and bathroom facilities are shared, be classified? Staff proposes that such houses be considered as single units and included in the program. 3) Would individual complainants be required to pay court costs up front if a suit was initiated in civil court? In order to file a complaint in circuit court, one must pay the filingfee up front. The filingfee depends upon the amount of the claim and whether the case is filed in small claims court (limited to claims of SS, 000 or less). In Lane County, the filingfee is $137 for claims under $10,000 and $203 dollars for claims more than $10,000. In Lane County Small Claims Court, the filingfee is $51for claims less than $1,500 and $98 for claims more than $1,500. A party may apply for a deferral or waiver of filingfees and costs. 4) Can program costs be minimized by reducing outreach and education and focusing on enforcement? Staff's experience in varied enforcement programs and the Corvallis housing code experience suggests that most of the costs incurred wouM be in providing public information and answering questions not enforcement actions generating fine revenues. An effective regulatory program requires public education and information. 5) What would Corvallis change if drafting an ordinance again? Corvallis staff initially exempted low-income housing from both the regulations and the fees associated with the program. Staff has amended the regulations for low-income housing to exempt only the fees associated with the housing code, but the regulations now apply. 6) Would a multi-year license make the program simpler and more efficient to administer and reduce costs and fees? Once the data base is established, there wouM be minimal savings in extending the rental housing fees over multiple years. Corvallis staff feels there is a benefit to an annual rental license fee. It provides an opportunity to remind landlords of the requirements and is valuable in keeping the data base current. L:\CMO\2004 Council Agendas\M040811\S040811A. doc 7) A suggestion was made to look at the possibility of contracting out the program or use dispute resolution services. As noted in the council ' s previous work session, alternate dispute resolution such as mediation may offer benefits to parties in conflict, but can be an inappropriate or ineffective remedy for ensuring compliance with legal requirements. 14/~ith the addition oft new service, it is critical to evaluate whether it shouM be delivered by City employees or through a contractual arrangement. 14/bile cost is one factor in such an evaluation, there are others of equal importance including service quality, customer service, legal/risk issues, control of work outcomes and constituency impacts. If the council directs staff to pursue the possibility of contracting out all or part of the program, staff will return with a proposal for that process. 8) Provide information on the program in East Lansing, Michigan, that offered the opportunity for exemptions by neighborhood. East Lansing doesn't exempt neighborhoods from standards, but can restrict issuance of rental licenses. East Lansing currently has a moratorium on new rental licenses in the city. The City Council is considering whether to extend or lift the moratorium and has recently approved an ordinance giving neighborhoods the ability to control rental licenses in their area. In addition to the requests for information, council directed staff to have the Housing Policy Board review the draft language on housing standards. Staff presented the draft language to the board on June 28, 2004. The Housing Policy Board voted 4-2 to recommend not moving forward with the development of rental housing standards. A memo from the Chair of the Housing Policy Board, John VanLandingham, is included (Attachment B) that outlines the Board's discussion on this matter. Exemptions The draft ordinance attached includes exemptions modeled after Corvallis. The Housing Policy Board discussed exemptions at the June 28 meeting. The board supported exempting low-income rental properties from the rental fees, but did not recommend exempting off-campus University of Oregon Housing. Oregon State University does not have comparable off-campus housing, and this category isn't specified in the Corvallis ordinance. There are 1,541 public/low income housing units currently in Eugene managed by HACSA, St. Vincent dePaul, and the Metropolitan Affordable Housing Corp. The University of Oregon manages 864 units of off-campus housing. Fully assessed, these units represent a little more than $20,000 annual fees to the program. Individually, the $10 annual fee represents a little less than .003% of a $300 monthly housing payment. Of note, many qualified families currently overpaying for housing (over 30% of income) would not benefit from this exemption. Funding Assuming a housing program has the potential to be self-supporting over time, initial seed money from General Fund resources would be needed to implement the program in Eugene until a stable fee base is established, as was the case in Corvallis. In order to fund the program at the level staff is anticipating, a $10/unit per year fee is proposed. General Fund resource needs would be dependent on implementation options; a phased implementation could require more initial General Fund resources until program revenue is recognized. L:\CMO\2004 Council Agendas\M040811\S040811A. doc Timing If the council directs staff to move forward with development of a new housing program, a supplemental budget for FY05 would need to be prepared in the fall unless council wants to incorporate the program implementation funding package into the FY06 budget process and begin the program in July 2005. OPTIONS Staff is seeking direction on whether to proceed with adoption of a housing code. The council can provide direction on one or more of several options: 1. Direct staff to schedule a public hearing on the draft rental housing code as presented. 2. Suggest changes to the draft rental housing code. 3. Provide direction to staff on exemptions. 4. Direct staff to prepare a supplemental budget request to fund a rental housing program. 5. Direct staff not to do any additional work on pursuing a housing code in Eugene. 6. Provide direction on alternatives. In implementing the Corvallis program, City of Corvallis staff required nearly three years to adopt standards, compile data bases for owners and tenants, conduct public outreach, organize staffing and begin enforcement. If council directs staff to move forward with development of a rental housing code, an outline is provided below for implementation in Eugene: Sep/Oct 04 Nov 04 - Nov 05 Nov 05 and beyond Cost Code Development $ 2,500 Program Implementation $ 218,000 On-going with 2-3 FTE $ 200,000 - $ 290,000 Code Development: Finalize code language, set public hearing(s) and adoption. Existing staff. Program Implementation: Advertising, public outreach, rental housing inventory, database creation, rent, vehicle, equipment, printing and postage, 1.0 FTE and associated costs, equipment maintenance charges, rent, hearings official, annual billing to landlords. Limited enforcement would be available in the later phase of implementation. On-going with 2.0-3.0 FTE: 2.0 - 3.0 FTE and associated costs, equipment maintenance charges, rent, hearings official, annual billing to landlords. An alternative, if the council directs staff to implement a code sooner than 12 months, would be a phased implementation of a housing code. Phase 1 could include multi-family units only, as they are easier to identify, which could allow a program to be implemented as early as April 2005. Phase 2 could expand the program to include single family dwelling units which are more difficult to identify as rental units. L:\CMO\2004 Council Agendas\M040811\S040811A. doc STAFF RECOMMENDATION Timing: Staff recommends the phased implementation plan that would enable the City to apply the housing code to multi-family first and expand the program to single-family. Funding: Staff recommends preparing a supplemental budget request for FY05 to fund the 12-month start up costs for implementation of the program. Exemptions: Staff recommends the exemptions outlined in the draft rental housing ordinance section 8.410, RentalHousi,g Applicability, based upon the nature of the uses identified in this section. Staff recommends no exemptions from the housing fee at this time. From an efficiency perspective, exemptions are going to add additional project management cost, for the benefit of a $10/unit/year fee. The policy question becomes, how much administrative cost is undertaken for the benefit of exempting a nominal fee? When the program costs are fully stabilized, and staffing levels are clearly understood, a recommendation could be forwarded relating to exemptions with benefit of program experience. SUGGESTED MOTION Not applicable. ATTACHMENTS A. Draft Rental Housing Ordinance B. Memo from John VanLandingham FOR MORE INFORMATION Staff Contact: Marsha Miller, Building and Permit Services Manager Telephone: 682-5224 Staff E-Mail: marsha.a.miller~ci.eugene.or.us L:\CMO\2004 Council Agendas\M040811\S040811A. doc ATTACHMENT A ORDINANCE NO. AN ORDINANCE CONCERNING RENTAL HOUSING AND ADDING SECTIONS 8.400 THROUGH 8.440, AND SECTION 8.995 TO THE EUGENE CODE, 1971. The City of Eugene does ordain as follows: Section 1. Sections 8.400 through 8.440 are added to the Eugene Code, 1971, to provide: 8.400 Rental Housinq - Title. Sections 8.405 through 8.440 of this code constitute the "City Rental Housing Code," and may be referred to as such. 8.405 Rental Housinq - Purpose. The purpose of this code is to provide minimum habitability criteria to safeguard health, property and public welfare of the owners, occupants and users of residential rental buildings. This code is intended to supplement rather than conflict with the habitability standards of the State of Oregon Residential Landlord and Tenant Act. 8.410 Rental Housinq - Applicability. (1) Except as provided in subsection (2) of this section, these standards shall apply to all buildings or portions thereof which are legally used for human habitation and are covered by a rental agreement. (2) Unless created to avoid the application of the city rental housing code, the following are excluded from the application of sections 8.405 through 8.440 of this code: (a) Hotels, motels and lodging houses; (b) Buildings located on the University of Oregon; (c) Hospitals and other medical facilities; (d) Nursing homes and similar facilities; (e) Assisted care facilities; (f) Owner occupied dwellings; (g) Institutions providing educational, counseling, religious or similar service, but not including residence in off-campus, non-dormitory housing; (h) Dwellings occupied for no more than 90 days by a purchaser prior to the scheduled closing of a real estate sale or by a seller following the closing of a sale, as permitted under the terms of an agreement for sale of a dwelling unit or the property of which it is a part; (i) Structure occupied by and operated for the benefit of a fraternal or social organization; Ordinance- 1 L:\CMO\2004 Council Agendas\M040811\04 Rental Housing Ordinance (00091132).DOC(7/12/04) (j) Dwellings occupied by a squatter; (k) Vacation dwellings; (I) Dwellings occupied by an employee of a landlord whose right to occupancy is conditional upon employment in and about the premises; (m) Condominium unit or holder of a proprietary lease in a cooperative; and (n) Premises rented to be used by the occupant primarily for agricultural purposes. 8.415 Rental Housinq - Definitions. For purposes of sections 8.400 through 8.440 of this code, the following words and phrases mean: Agent. A person authorized by another to act in the person's behalf. Assisted care. As defined in section 9.0500 of this code. Building code. The currently adopted edition of the State of Oregon Structural Specialty Code. City Manager. The city manager or the manager's designee. Dwelling unit. A single unit providing complete independent living facilities for one or more persons including provisions for living, sleeping, eating, cooking and sanitation. For purposes of this code, where portions of a residential building are occupied under separate rental agreements, but tenants share eating, cooking, and/or sanitation facilities, each portion under a separate rental agreement shall be considered a dwelling unit. Habitable room. Any room used for sleeping, living, cooking or dining purposes, but excluding closets, pantries, bath or toilet rooms, hallways, laundries, storage spaces, utility rooms and similar spaces. Mechanical code. The current edition of the State of Oregon Mechanical Specialty Code. Plumbing code. The current edition of the State of Oregon Plumbing Specialty Code. Rental agreement. All written agreements concerning the use and occupancy of a dwelling unit and premises. 8.420 Rental Housinq - Danqerous Buildinqs. Conditions which define a building as dangerous and procedures for the abatement of dangerous buildings are provided in subsection (25) of section 8.005 of this code. Ordinance - 2 L:\CMO\2004 Council Agendas\M040811\04 Rental Housing Ordinance (00091132).DOC(7/12/04) 8.425 Rental Housinq - Standards. (1) Structural Inte,qrity. (a) Roofs, floors, walls, foundations and all other structural components shall be capable of resisting any reasonable stresses and loads to which these components may be subjected. (b) Structural components shall be of materials allowed or approved by the Building Code. (2) Plumbinq. (a) Plumbing systems shall be installed and maintained in a safe and sanitary condition and shall be free of defects, leaks and obstructions. (b) Plumbing components shall be of materials allowed or approved by the Plumbing Code. (3) Heating. (a) There shall be a permanently installed heat source with the ability to provide a room temperature of 68 degrees Fahrenheit three feet above the floor, measured in the approximate center of the room, in all habitable rooms. (b) All heating devices or appliances shall conform to applicable law at the time of installation. (c) Ventilation for fuel-burning heating appliances shall be as required by the Mechanical Code. (4) Weatherproofing. (a) Roof, exterior walls, windows and doors shall be maintained to prevent water leakage into living areas which may cause damage to the structure or its contents or may adversely affect the health of an occupant. (b) Repairs must be permanent rather than temporary and shall be through generally accepted construction methods. (5) Interpretations. (a) The city manager or the manager's designee is empowered to render interpretations of sections 8.400 through 8.440 of this code. (b) Such interpretations shall be consistent with the purpose of this code. 8.430 Rental Housinq - Enforcement. (1) Authoritv. (a) The city manager or the manager's designee shall enforce all the provisions of sections 8.400 through 8.440 this code. (2) Complaint. (a) A complaint must be in writing and may be filed in person or by mail, e-mail or fax. (b) A complaint must include the following: 1. Name of person filing the complaint; complaints may not be submitted anonymously; Ordinance - 3 L:\CMO\2004 Council Agendas\M040811\04 Rental Housing Ordinance (00091132).DOC(7/12/04) 2. Name of the owner or the owner's agent; 3. Address of the alleged violation; 4. A complete description of the alleged violation; and 5. A copy of the written notice of the alleged habitability violation that has been sent by the tenant to the owner or the owner's agent (c) A person who files a complaint must be a party to the current rental agreement covering the property in question or an agent of the party. (d) Complaints shall be processed by the city manager or the manager's designee. The city manager shall adopt rules pursuant to section 2.019 of this code that specify the procedure to be followed in processing complaints. At a minimum, the process shall include: 1. Confirmation that the complainant has standing to file a complaint; 2. Confirmation that the subject of the complaint, if confirmed, could be a violation of this code; 3. Confirmation that the owner or the owner's agent has had ten days since mailing of the written notice by the tenant to respond to the complaint; and 4. Notification of the owner or the owner's agent by the city manager or the manager's designee of the complaint per written procedures. (3) Investi,qations. (a) Investigations shall be initiated only after the process in subsection (2) of this section has been followed. (b) The city manager or the manager's designee shall conduct an investigation to confirm the validity of the complaint. (c) If the complaint is determined to be not valid, the case shall be closed and all parties notified. (d) If the complaint is determined to be valid, the city manager or the manager's designee shall issue a notice and order pursuant to subsection (5) of this section. (4) Inspection and Riqht of Entry. When it may be necessary to inspect to enforce the provisions of sections 8.400 through 8.440 of this code, the city manager or the manager's designee may enter the building or premises at reasonable times to inspect or to perform the duties imposed therein, provided that if such building or premises be occupied that credentials be presented to the occupant and entry requested. If such building or premises be unoccupied, the city manager or the manager's designee shall first make a reasonable effort to locate the owner, the owner's agent, or other person having charge or control of the building or premises and request entry. If entry is refused, the city manager or the manager's designee shall have recourse to every remedy provided by law to secure entry, including issuance of administrative search warrants. Ordinance - 4 L:\CMO\2004 Council Agendas\M040811\04 Rental Housing Ordinance (00091132).DOC(7/12/04) (5) Notices and Orders. (a) For valid complaints, the city manager or the manager's designee shall issue an order to the owner or the owner's agent. The notice and order shall include the following: 1. Street address and unit number if applicable; 2. A statement that the city manager or the manager's designee has found the premises to be in violation of sections 8.400 through 8.440 of this code as alleged in the complaint; 3. A description of the violation; 4. Statements advising the owner or the owner's agent that if the required repairs are not completed within ten days from the date of the notice and order, the city manager or the manager's designee may: a. Issue an administrative civil penalty, or initiate a prosecution in municipal court, or both; and b. Initiate action to recover all city costs associated with the processing of the complaint, investigation and the resolution of the issue. 5. Statements that the owner or the owner's agent may appeal the notice and order as specified in section 8.435 of this code; and 6. The date a reinspection will be scheduled. (b) The order, and any amended or supplemental notice and order, shall be mailed to the tenant, owner or the owner's agent by first class mail. (6) Failure to Comply. Failure to comply with the notice and order issued under subsection (5) of this section by the specified date shall constitute a violation subject to the penalties contained in section 8.995 of this code. 8.435 Rental Housinq - Appeals. Any person upon whom an order is served under section 8.440 of this code shall have the right to appeal within the time and in the manner provided in section 2.021 of this code. The appeal must include the applicable fee. 8.440 Rental Housinq- Fees. (1) For the purpose of offsetting the costs to the city associated with the enforcement of this code, the city manager, using the process contained in section 2.020 of this code, shall set an annual fee for each dwelling unit covered by a rental agreement. (2) The following unit types, while subject to the standards, enforcement procedures, and other requirements established in sections 8.400 through 8.440 of this code, shall be exempt from the fee payment requirements: (a) Rentals with a recorded deed restriction requiring the units to be rented affordably to households at or below 50% of the Area Median Income; (b) Rentals under contract with a public agency for which the contract requires the rental to be inspected at least annually, and where Ordinance - 5 L:\CMO\2004 Council Agendas\M040811\04 Rental Housing Ordinance (00091132).DOC(7/12/04) the public agency or its agent verifies that the dwelling is rented to a Iow income household; and (c) Rentals designated as senior or disabled housing by a public agency. (3) The owner or the owner's agent shall be responsible for paying the annual fee. (4) For each month in which the annual fee is not paid by the date specified in the written notice of payment, a penalty of $100 per month (per unit if more than one unit) shall be assessed to the owner or the owner's agent. (5) The city shall initiate appropriate action to collect the fees due and all costs associated with these actions, including attorney fees, shall be assessed to the owner or the owner's agent. Section 2. Section 8.995 is added to the Eugene Code, 1971, to provide: 8.995 Penalties - Specific. (1) A person who fails to comply with a notice and order by the date specified therein shall be subject to: (a) An administrative civil penalty issued under section 2.018 of this code; and (b) A fine imposed by municipal court in an amount not to exceed $250 per violation, (2) Each day that a violation exists constitutes a separate violation for which an additional penalty may be assessed under subsection (1) of this section. Section 3. The City Recorder, at the request of, or with the concurrence of the City Attorney, is authorized to administratively correct any reference errors contained herein or in other provisions of the Eugene Code, 1971, to the provisions added, amended or repealed herein. Passed by the City Council this Approved by the Mayor this day of ,2004. __ day of ., 2004. City Recorder Mayor Ordinance - 6 L:\CMO\2004 Council Agendas\M040811\04 Rental Housing Ordinance (00091132).DOC(7/12/04) ATTACHMENT B MEMO To: Richie Weinman From: John VanLandingham, chair, Housing Policy Board Date: July 13, 2004 Subject: Housing Policy Board Position Regarding Housing Code Enforcement At its June 28, 2004, meeting the Housing Policy Board voted four to two against recommending that the Eugene City Council adopt and enforce a housing code. Before voting, the HPB had a thorough briefing by Marsha Miller, Building and Permit Services manager for the City's Planning and Development Department, including a review of Corvallis' experience with this issue, and a discussion. The four HPB members who voted against housing code enforcement were vice-chair Norton Cabell, Lane County Commissioner Bobby Green, Patricia Hadley, and Bob Doppelt. Voting in favor were me and Roxie Cuellar. Gary Pape abstained, since the issue will come before him as a Councilor. Several of the "no" voters indicated that it was a close question. Here are the reasons given by those who opposed housing code enforcement, recognizing that not all the no voters agreed with all of these arguments: 1. Housing code enforcement would not promote additional affordable housing, which is the HPB's mission. 2. Housing code enforcement would be of little benefit to most tenants. 3. A per-unit tax or fee on landlords would be better used for affordable housing development or homelessness prevention, as recently recommended by the Homelessness Prevention Task Force, instead of funding a housing code enforcement program. Using the landlord tax for housing code enforcement would make it politically difficult to later increase it for homelessness or affordable housing development. 4. Housing code enforcement would cost more than the benefits warrant. 5. A better solution would be to fix the state landlord-tenant law to make it work better at achieving repairs. 6. Housing code enforcement would create an unneeded bureaucracy. Maybe neighborhood groups could handle enforcement. 7. Don't do enforcement; instead do education. 8. Housing code enforcement is likely to lead to rent increases. Maybe impose the per-unit tax on the tenants, not the landlords. 9. It would be unfair to tax all landlords for the failures of a few bad landlords. Here are the reasons given by those who supported housing code enforcement, again recognizing that not all the yes voters agreed with all of these arguments: 1. The Corvallis experience is impressive and persuasive, indicating that a reasonable program can be run cost-effectively and efficiently. 2. The Corvallis experience also indicates that a housing code enforcement program would be of benefit to both landlords and tenants. Mediation and education are better for landlords and tenants than litigation, which is the primary enforcement tool under state law. 3. Local control of issues such as this one is almost always better than not. 4. Landlords are not responsible for homelessness, and likely won't support a landlord tax for homelessness or affordable housing, while landlords - albeit mostly the few bad ones - are responsible for repair failures. In other words, there is a clearer connection for a landlord tax dedicated to housing code enforcement. 5. The Corvallis model costs each landlord very little per rental unit, and so is unlikely to cause rent increases. Moreover, rents generally are a function of what the market will bear, not a function of a small operating cost increase such as this. 6. The state law, the Oregon Residential Landlord and Tenant Act, has several enforcement tools for tenants whose landlords fail to make repairs. Unfortunately, they generally require a lawyer to represent the tenant or represent a significant risk of loss of one's home, or both, thereby discouraging use of the enforcement remedy. Housing code enforcement is a better remedy for some tenants. 7. Amending the state landlord-tenant law to make its remedies work better for tenants is a difficult task, not easily accomplished; I've tried. Additional issue: Exemptions. If the Council chooses to proceed with housing code enforcement, the HPB unanimously supported exemption, from coverage and/or the tax, for (a) subsidized housing, including Section 8 voucher/privately-owned units, public housing units, and low-income housing projects whose funding was supported by the HPB, and for (b) housing currently exempted from coverage of the state law, both similar to the exemptions provided by the Corvallis program. The primary reason for the first exemption is that these units already have some sort of regular inspection program. f/j hv/hpb.hsgcodeenforcement. 0704.wpd 2