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Home My WebLink AboutCAP 2008-08-11 Item 2B - Discussion - Rental Housing Licensing City ~fTukwila Department of Community Development TO: FROM: DATE: SUBJECT: Community Affairs & pa~committee Jack Pace, Director, DC t August 11, 2008 Rental Housing Licensing Issue As part of 2008 program goals, the City Council asked that we "develop a proposal for Rental Housing Licensing." In an effort to ensure that rental dwelling units meet minimum standards for health and safety, should the City require a license and mandatory inspection for all rental dwelling units? Background In June 2004 the City contracted with HuckellWeinman and Associates to conduct a survey of Tukwila's housing stock. Their report, "Housing Needs Assessment and Condition Survey" noted the following: . There are more multi-family than single family units in Tukwila (4107 vs. 3549). . There are more renters than homeowners. . 20% of the single-family housing stock is renter-occupied (approx. 700 units) . Overall, nearly 40% of renter-occupied housing units are rated as "needs maintenance", "deteriorated" or "dilapidated". . A large number of housing units are overcrowded (having more than one person per room). The question of whether or not to implement a rental housing licensing/inspection program has been discussed with the council members since the 2005 Council Retreat. In March 2005 Code Enforcement staff made a presentation to the CAP which included information on proactive code enforcement and improving housing stock by addressing substandard conditions in rental housing. In April 2005 this matter was presented to the COW as part of the proactive code enforcement discussion. In April 2006 staff made a presentation to CAP to discuss the issue of rental housing licensing and inspections in detail. This discussion included information from cities around the Puget Sound area as well as cities in other states. Because we were awaiting a decision from the State Supreme Court on Pasco's rental licensing and inspection program, Tukwila decided not to proceed until that matter had been decided. With the Pasco matter decided by the Supreme Court in late 2007, in favor of Pasco's ordinance, the Council requested that Code Enforcement staff provide information for discussion at the 2008 Council Retreat and place this item back on Code Enforcement work plan. Over the past two years Code Enforcement has: ~ Condemned and closed a 32-unit apartment building for severe substandard conditions, including severe mold infestations (measured in square feet), non-functioning heaters, leaking plumbing, deteriorated second-story decks, and other life and health safety concerns. The tenants were relocated, and the owner is currently making repairs. The units remain unoccupied while these repairs are underway. ~ Condemned an illegally converted detached garage which was rented to tenants. Unit had no source of heat other than portable space heaters, rain water poured down the inside wall whenever it rained, carpets were so wet that the tenant had resorted to only walking on pieces of wood laid on top of the carpet. The unit lacked any cooking facilities except for a propane power camp stove and a microwave. ~ Closed an illegal boarding house use in a single family residence: Tenants were renting individual rooms and one illegally converted detached garage. One of the rooms had no windows whatsoever. Another tenant, in order to access the bathroom was forced to exit the building, re-enter the upstairs back door and go back downstairs. ~ Condemned a rental duplex and required relocation of the tenants. Tenants did not have functional heat, emergency egress windows were missing, there were no bathroom sinks, and a large hole in the floor of the bathroom could only be navigated by jumping over it. The duplex will be demolished. ~ Investigated a single family rental house with rotted deck, mold covered walls and non- functioning heaters. The children's bedroom windows were painted shut and unable to serve as emergency egress. Smoke detectors were missing. The tenants had lived there four years and were paying $1100/month rent. After being contacted by code enforcement, the owner rebuilt the front deck, replaced the heaters, cleaned the mold from the walls and repaired the windows to a functional state. Requiring inspections as a condition of a business license for rental units would help to address these kinds of substandard conditions, in some cases before tenants occupy the space. It would also provide the City with additional tools to gain compliance with the City's code. Prospective tenants would be able to determine if a unit was properly certified and licensed, prior to signing a lease or rental agreement. Updated contact information would lessen the amount of time it takes to reach the property owner to make the necessary repairs. A licensing and inspection program coupled with our Relocation Assistance regulations are valuable tools to get the attention of neglectful landlords. S:\Code Enforcement Documents\Kathy\Rental Housing Licensing\2008-08-11 CAP draft. doc Page 2 of 5 Last printed 08/05/2008 11 :42:00 AM Policy Decisions Staff has identified four policy areas to discuss with Council regarding development of a rental housing licensing and inspection program. Discussion of these issues will aid Staff with drafting an ordinance for Council's consideration. 1. Should our rental housing licensing program include inspection of rental dwelling units (single family~ ADUs~ duplex~ triplex~ four-plex~ apartments, condominium units that are rented) for basic minimum standards? Options: . Inspect every rental dwelling unit. . Inspect only multi-family dwellings with more than four units. . Exclude inspections of condominiums . Inspect 20% of all rental dwelling units. Staff recommends: Inspect 20% of dwelling units in multi-family complexes. The specific multi-family units to be inspected will be randomly selected by the City. Inspect 100% of single family rental dwelling units and accessory dwelling units (if used as a rental) every five years. Owners of only ONE rental dwelling unit (single-family, ADU, or condo) in the City of Tukwila would be exempt from this program. Condominiums which are rental units must obtain a business license ONLY, (inspections are not required). The assumption is that the home owner's association will monitor and police conditions in their complex. 2. How often should units be inspected? Options: . Require annual inspections. . Re-inspections required every 3-5 years. Staff Recommends: Inspections to occur every five years (in multi-family complexes will inspect different units, again 20%), unless more than two verified violations are documented in the interim. City of Pasco requires inspections every two years. S:\Code Enforcement Documents\Kathy\Rental Housing Licensing\2008-08-11 CAP draft. doc Page 3 of 5 Last printed 08/05/2008 11 :42:00 AM More than two verified violations documented within the five-year period will trigger inspections of 20% of all units each year for the next three years and payment of a fine. 3. Should fees charged for this program cover ALL costs of implementation? 'Options: . Do not charge fees. . Establish fees which cover 50% of costs . Establish fees which cover 100% of costs. Staff recommends Current budgetary constraints and forecasts will require that this program be self-funding. Staff recommends that the fee schedule cover 100% of costs to implement this program. City of Pasco licenses roughly 6,000 dwelling units per year. Their program is self-sustained with a license fee of $30 for the first unit plus $3.00 for each additional unit. Fee increases can be expected to be passed along to tenants in the form of rental rate increases. With affordability of housing a concern to those on the lower end of the economic spectrum, the city should consider the unintended consequence of a rental housing licensing program may be that housing become less affordable to those most vulnerable. Staff will return with an estimated cost of this program and a proposed fee schedule. 4. What is the implementation timeline for this program? Options . Utilize city's regular business license program and timeline (by January 31, 2009). City to issue "provisional" business license, requiring inspection results by end of the 2009. . Establish a mid-year (fiscal year) implementation program - applications due by July 1, 2009, all inspections to be completed by June 30, 2010. . Full program roll out beginning January 2010. . Roll out program in phases. Staff Recommends: . Establishing a mid-year (July i-June 30) license year to lessen staffing conflicts with the City's regular business license schedule. . A phased roll out will provide more time for training, acquisition of software, developing materials, and public education. It will also naturally spread out the re-inspection schedule. S:\Code Enforcement Documents\Kathy\Rental Housing Licensing\2008-08-11 CAP draft. doc Page 4 of 5 Last printed 08/05/2008 11 :42:00 AM o multi-family units (more than four units) in 2010 o duplex, triplex, fourplex in 2011 o condos, single family and ADU's 2012. . Issue "provisional" license for the first year, allowing 12 months to obtain satisfactory inspection of 20% of units. . Delaying the program start to mid-201 0 will allow staff time to develop processes and forms, set up software, and hire and train staff in the process. Next Steps Direct staff to develop draft ordinance based on this discussion, to present to CAP for consideration. Draft ordinance to include estimated costs and fee schedule. S:\Code Enforcement Documents\Kathy\Rental Housing Licensing\2008-08-11 CAP draft. doc Page 5 of 5 Last printed 08/05/2008 11 :42:00 AM