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HomeMy WebLinkAbout10-Council Office - - CITY OF SAN BERN.DINO - REQUEST Fe COUNCIL ACTION From: Councilman Ralph Hernandez Subject:Refer subject of taxing single family rental units through the business Dept: Council Office registration process to the Legislative Review Committee. Date: 1-12-93 Synopsis of Previous Council action: January tj, 1990 Ordinance MC-700 amending subsection 5.04.525F requiring a business license for leasing or renting residential property was adopted. August 17, 1992 Ordinance MC-846 amending Subsection F of Section 5.04.525 of the San Bernardino Municipal code relating to business registration certificates for commercial, industrial and residential rental or leasing was approved. Recommended motion: That the subject of process be referred taxing single family rental unito through the business registration to the Legiolative Review Committee. ~ Signature Contact person: Phone: Supporting data attached: Ward: FUNDING REQUIREMENTS: Amount: Source: (Acct. No.l (Acct. DescriPtion) Finance: Council Notes: 75-0262 Agenda Item No. /0 r CITY OF SAN BERN~INO - REQUEST Fda COUNCIL ACTION STAFF REPORT The City Clerk's Office charges a $60.00 fee for each business registration permit issued to a single family rental unit. There is no certificate of occupancy required as a pre- requisite to the issuance of the business registration permit. I request that the subject of single family business registration permits be referred to the Legislative Review Committee. 75.0264 . . C I T Y 0 F SAN B ERN A R DIN 0 INTEROFFICE MEMORANDUM CITY ADMINISTRATOR'S OFFICE DATE: January 12, 1993 TO: Members of the Mayor and Common Council FROM: Shauna Clark, City Administrator SUBJECT: Single Family Rental Registration COPIES: Rachel Clark, City Clerk; Al Boughey, Director of Planning and Building Services ------------------------------------------------------------------- Shortly after re-election Mayor Holcomb urged the departments to initiate "revenue enhancement ideas". Based upon a recommendation from John Husing I put forth the attached recommendation. After much discussion, the ordinance licensing single family rental units was given final reading on January 9, 1990. Councilman Hernandez is protesting the fact that a certificate of occupancy is not required prior to the issuance of the business license. If you look at my revenue enhancement suggestion of October 1, 1989, I made it clear that if certificate of occupancy were required, it WQuld have be done through separate action on the part of the then Department of Building and Safety. It is true that at the time single family rental units were licensed, all other businesses in the city had to have a certificate of occupancy before receiving a license. The certificate of occupancy policy was never required for single family units. What was agreed to was that the proceeds from the tax would fund certain positions, including two code enforcement officers. A tax on the privilege of operating a business in a community is a general tax and therefore, cannot be regulatory. For example, we pay property taxes but the County does not regulate what we do on our property. Building codes, the general plan and the development code impose property regulations. That is why the word license was removed and the document one receives for paying the tax is called a business registration certificate. A business registration certificate does not exempt a business from obtaining all other necessary permits in order to operate. It merely shows that a tax has been paid. A certificate if occupancy gives the right to occupy a building for a specified use and ~ regulatory. . . Memo to Mayor and Council Single Family Rental units Page 2 January 12, 1993 If the Mayor and Council wish to require a certificate of occupancy for single family rental units, a code change will have to be initiated and the property owner will be required to pay an 'addi tional fee--the fee that is charged by the Department of Planning and Building Services. Please keep in mind that a certificate of occupancy covers only the initial inspection. If tenants damage the interior of a property to the point that is dangerous to live in, or if over a long period of time the landlord does not perform routine maintenance, the city may never become aware of the situation in order to rectify it. Through the business registration process, the Clerk's Office continues to make property owners aware of city maintenance requirements. The property owner signs a statement on the business registration application that he/she has read and will abide by the terms of the property maintenance ordinance. ~~~ ,/ City Administrator ,--, t""\ ~ . . Revenue .tinoanCeDlt:J1L. nC::}lUL ~ OCtober 1, 1989 .., Raise Minimum Business License Rate Net: S85.18D From 1920 to 1983 the minimum rate for a gross receipts business license was $30.00 per year. In 1984, the rate was raised to $40.00 per year, our current rate. Jane Sneddon of our office has suggested raising that rate to $60.00 per year. This would incur no additional cost to our department and will result in increased revenue of approximately $85,180. The only cost incm:r&d by the city will be the cost of preparing the code changes and changing the rate schedule in the city computer. Impl~tation: Amend Ilunicipal Code. L~ceftBe Sinole Familv Renta1 Units lfett Si352.000 Dr. John Busing has rec~nded charging a business license for each single family dwelling or multi dwelling, three or less. Presently we charge for four or IIIOre on the s_ parcel or on contiguous parcels. Riverside has a s1.nqle family rental ordinance and charges $55.00 for a license. According to Ilanuel Ilereno, Jr., we have 35,000 single family refuse accounts. If 20' of those accounts are rentals, _ are looking at 7000 certificates of occupancy and business licenses. The present rate for those lictuules would be $40. If the IIIinimum rate were raised to $60.00 as rec~nded above, the revenue for business licenses would be: $420,000. There would be costs involved in this endeavor due to the arilllh,;stration and enforcement. Presently we have a staff of a Supervisor, three Inspectors, and three Account Clerks, collecting and enforcing 9000+ accounts and bring1.nq in $3,964,000 in revenue. Single family rentals would be low yield accounts with a lot of enforcement and collection. r rec~nd two-year business license, rather than quarterly, to reduce billing and collection costs. Even 1Inlll_nKl addresses would be renewed in even years, and odd n....-..-.d addresses renewed in odd years. First year, every one gets either a one year license or two year license depending on last number of address. Note: The Kayor is not in favor of a certificate of occupancy requirement. Implementation: 1. Amend municipal code. 2. Authori.ze hiring of an additional business license inspector and account clerk for the purpose of fi1lriil'\g these accounts and getting them licensed. ($43,000) 3. Authorize hiring of additional Building and Safety inspector to follow up on certificates of occupancy (straight cost recovery - they charge for c/o'S). 4. Conduct education program to notify property owners of license requirements. ($15,000 estimate) . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 -..--.) 27 28 . . ORDINANCE NO. MC-700 ORDINANCE OF THE CITY OF SAN BERNARDINO AMENDING SUBSECTION 5.04.525F REQUIRING A BUSINESS LICENSE FOR LEASING OR RENTING RESIDENTIAL PROPERTY. THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO DO ORDAIN AS FOLLOWS: SECTION 1. Subsection 5.04.525F of the San Bernardino Municipal Code is amended as follows: Leasing. "F. Commercial, Industrial and Residential Rental or Every person, firm or corporation conducting, managing, or carryi~g on the business of leasing or renting co~~ercial or industrial buildings or spaces, where the buildings or spaces are to be utilized for any business purpose including but not limited to retail sales, offices and suites or other business rentals including mini- storage; or operating a hotel, roominghouse, lodginghouse, boardinghouse, apartment house, court motel, mobile home park; or leasing or renting any residential dwelling units inCluding single family homes, shall obtain a business license and pay a fee in accordance with the following table based on annual gross receipts: Armual gross Less than 25,000.00 30,000.00 35,000,00 40,000.00 45,000.00 50,000.00 55,000.00 60,000.00 65,000.00 70,000.00 75,000.00 80,000.00 PZ/dys December 4, 1989 receipts 25,000.00 to 29,999.99 to 34,999.99 to 39,999.99 to 44,999.99 to 49,999.99 to 54,999.99 to 59,999.99 to 64,999.99 to 69,999.99 to 74,999.99 to 79,999.99 to 84,99S.99 License fee per year 60.00 70.00 80.00 90.00 100.00 110.00 120.00 130.00 140.00 150.00 160.00 170.00 180.00 1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 . . 1 85,000.00 90,000.00 95,000.00 190.00 200.00 210.00 to to to 89,999.99 94,999.99 100,000.00 2 3 If annual gross receipts exceed one hundred thousand 4 dollars, the annual license fee is two hundred ten dollars, 5 plus fifty cents for each one thousand dollars or major 6 fraction thereof of annual gross receipts in excess of one 7 8 hundred thousand dollars of such gross receipts. Business licenses for single family homes shall be 9 required effective July 1, 1990. There shall be no charge for the first year of the business license for single family homes for those applicants who apply for said licenses on or before June 30, 1990. The intent of this section is to require a license for the business of leasing or renting commercial or industrial buildin~s, for leasing or renting offices or suites or other business rentals, and for leasing or renting dwelling units. For the leasing or renting of dwelling units a separate license shall be required for each building unless the ownership of the building is divided as provided in Government Code Section 66426 and Section 66427 as a condominium, community apartment project or stock cooperative project, and then a separate license shall be required for each such division. Said license shall be good for two (2) years. Buildings with even number street addresses shall renew on even numbered years and buildings with odd number street addresses shall renew on odd numbered years. PZ/dys December 4, 1989 2 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 27 28 . . 1 It shall be unlawful for any property owner, landlord, 2 3 4 manager or agent to demand, accept, receive or retain any payment of rent if -the building for which the rent is paid is unlicensed under this section. Any person violating any 5 of the provisions, or failing to comply with any of the 6 requirements of this section, shall be guilty of a 7 misdemeanor. " 8 I HEREBY CERTIFY that the foregoing ordinance was duly 9 adopted by the Mayor and Common Council of the City of San Bernardino at a regular meeting thereof, held on the 8th day of January , 1990, by the following vote, to wit: AYES: Council Members Estrada, Flores, Maudsley, Miller NAYS: Council Member Pope-Ludlam Council Members Reilly, Minor ABSENT: ~u~~~/ Ct"ty Clerk / / / / / / / / / / / / / / / / / / / / / / / / PZ/dys December 4, 1989 3 . . 1 ORDINANCE...AMENDING SUBSECTION 5.04.525F REQUIRING A BUSINESS LICENSE FOR LEASING OR RENTING RESIDENTIAL PROPERTY. 2 3 of 4 5 6 7 The foregoing ordinance is hereby approved this - I L,;-u&1j , 1990. r../// day " 8 Approved as to form and legal content: 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 JAMES F. PENMAN, City Attorney 1 . B~-: .!0t/h- '7 /~-?r1.r_ / ;' / ,/ PZ/dys December 4, 1989 4 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 . . 1 2 3 4 5 6 7 IIC-846 ORDINANCE NO. AN ORDINANCE OF THE CITY OF SAN BERNARDINO AMENDING SUBSECTION F OF SECTION 5.04.525 OF THE SAN BERNARDINO MUNICIPAL CODE RELATING TO BUSINESS REGISTRATION CERTIFICATES FOR COMMERCIAL, INDUSTRIAL AND RESIDENTIAL RENTAL OR LEASING. THE MAYOR ANO~OMMON COUNCIL OF THE CITY OF SAN BERNARDINO DO ORDAIN AS FOLLOWS, SECTION 1. Subsection F of Section 5.04.525 of the San Bernardino Municipal Code is hereby amended to read as follows: 8 "F. Commercial, industrial and residential rental or 9 leasing. 10 (1) Every person, fi:....r: or corporation conducting, 11 managing, or carrying on the business of leasing or renting commercial or industrial buildings or spaces, where the buildings or spaces are to be utilized for any business purpose including re~ail sales, offices and suites or other business rentals . including mini-storage; or freight forwarding stor~houses, and warehouses; or operating a hotel, roominghouse, lodginghouse, boardinghouse, apartment house, court motel, mobile home park; or leasing or renting any residential ::.~.alling units including single family homes shall obtain a Busine;.' Registration Certificate and pay a fee established by resolutLon of the Mayor and Common Council. (2) All businesses which conduct, manage or carry on the business of leasing or renting of commercial or indus~rial buildings or spaces where buildings or spaces are to be u~ilized for any business purpose, are re'Iuired to furnish a U.st of tenants or lessees for all such buildings to the City Clerk of the City of San Bernardino. The list of tenants shall be included with the Business Registration Cer~:f.icate application or renewal DAB/.../L...1ng.ord 1 July ;13. 199;1 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HC-846 . . S66426 and S66427 as a condominium or stock cooperative project, then a separate Business Registration Certificate sha11 be required for each such division where the owner owns 1ess than four (4) units in one complex. Where the owner owns four (4) or . more such uni ts lo~ted in the same comp1ex on1y one Business Registration Certificate sha1l be required. "Comp1ex. sha11 have the same definition as that in subdivision (4) above. ( 6 ) Business Registration Certificates for the 1easing or renting of dwelling units shall be good for two (2) years. Parce1s or units with even number street addresses sha11 renew on even numbered years and a parcels O~. units with odd number street addresses shall renew on odd number years. (7) It sha1l be unlawfu1 for any property owner, land1ord, manager, or agent to demand, accept, receive or retain anY.payment of rent if the unit for which the rent is paid has not . app1ied for and received a Business'.~egistration Certificate under this Section. Any Plilrson violatjng any of the provisions or fai1ing to comply with any of the requirements of this Section sha1l be guilty of a misdemeanor." III III III III III III III III III 1lAII/...II....iDlI.ord 3 ~y 23. 1992 ('. y.. ~)v "~ . - - - . RENTAL UNITS HOW AND WHY THEY SHOULD BE REGULATED cC Jrud7 /-.-< o-jJ J/I"1E.s' 1/(,1,CTI-/ (909) !1 {,- / J'f CI - #/L7 I' QU€Rtion. AnRwer. ;J... Question. Answer. 3, Question. Answer, if. Question' Answer. S Question. Answer. . . Does San Bernardino have a business license? No Through Municipal Code (M.C.) - 817 adopted on January 7, 1992 Chapter 5.04.025 of the M.C. entitled "license - Certificate of Occupancy required when" was repealed and replaced by " Business Registration Certificate - other permits required." Are a business license and a business ref'istratlon certificate the same thing? Cornmom sense will tell you that the two can not be the same thinf'. If ttey were, why t~en would you have been asked to amend the M. C. as you did in January of 1992? Would the City Attorney and staff have gone through that whole process, incurring add- itional expens~ just for the sake of changing the name of an item found in the ~. C.? Hardly! Not only was there a change of name but the text itself of the registration ordinance differs dramatically from the text of the former business license ordinance. Did the City require that ~efore a businesR license could be issued that all relevant City ordinances & laws be comnlied with~ including C of 0 reauirements ~nd M.C. 679 the City's property maintenflnce ordimcrce? Yes Does the City require that before a Registration Certificate be issued that all relevant laws and City ordinances be complied with? No The City only requires that the business to be registered prove, before obtflinirg their Certificate, thc1t their business, whether it be rentfll or nther, complies with the zoning ordinance of the City. What is the meaninf of quest; ons .3 ~ ~ Any competent legal mind will te'l you a law has very limited value unless it can be effectively enforced. The business license provided tte "eans to revulate, to enforce, to ensure that the City had the necesRary and best tonl available to achieve business compliance with all arpropriate applicable City ordinanceR and provisions of Jaw. A business Registration Certificate fee is in essence nothing more then a tax. G. (uestion, Answer, 7. Question. Answer. 8". Question. Answer. 9. Question, Answer, Question, /0. Answer, . . Does San Bernardino require 8 registration fee be paid on all rental properties in the City including single family home rentals, duplexes, and triplexes? Yes Even one single family home rental requires a minimum $60 fee be paid to the City each year. Does San Bernardino require a Certificate of Occupancy (C of 0) be obtained for single family rentals, duplexes, ~nd triplexes to he rented? No No such C of 0 inspection is required for any of these rental propertiesl even though these consti- tute a significant portion of the rental pro- perties in San Bernardino. To obtain a C of 0 does an inspection need to be done? Yes A C of 0 requires an inspection be done by a quali- fied City inspector to determine if a Pi te is s,de and sanitary - if it complies with the most essential building codes before it is allowed to be used. Does the City of San Bernardino still require rental buildings containing four units or more to obtain a new C of 0 when the building changes ownershio? No Does the City of San Bernardino still reauire rental buildings, containing four units or more, to obtain a new C of 0 at least every four years~ No Even every four years was a long soan in between C of 0 renewals. The condition of a property c~n change significantly over a period of four yearr. Now, under current City requirements, a C of 0 renewal on rental buildings is virtually never required. This means that although the condition of a property cnn change significantly over the yeaTS, our City hap determined that requiring an inspection of a building once will suffice for as long as the building exists and continues to be rented. The requirement for reinspect ions is fane although the need for regular inspections still exists. 1(, Question: Answer: I~. Questi on: Answer: /3 Question; Answer: It/-. Questi on I Answer: - - . . What does the lack of food rental housin~ rerul?tion and the Means toa,ie,quateJ y, e'lui tabl y enforce sllrh mean to respectable tenants? To respectabJ e tenants i t ~eans they ore hifhl y S\1"- ject ,to bein/! victimi zed by unscr\lpuJ ous. US\JC" 1 Y absentee landlords. The tenants, manv of whom are low income or Minority fa~ilies. which make~ it additionally diffirult for them to find suitable rental housinf. They enter into a rental contrart, move in to a build in/! only to discover then the building is unsuitable and or unsafe. Because of additional moving costs that would be incurred'nct often because Inndlords refuse to return rental deposits to their tenants, these nersons remain trapped in buildings I buila i ngs which if they had been inspected by the City would never have be~n allowed to be rented to bepin with. What does the lack of !!ood rental housinf ree-ulations and the means to adequately, equitably enforce such mean to respectable property owners. To respectable property owners it means that deter- iorated, blifhted buildine-s in proximity to their well maintained buildinrs, function as a significant deterrent, creatinp great di fficuli ty for uustand i nF' property owners to attract cnd retain desirable tenants. Would the provisicns of the business license law provide any side benefits to the City in terms of enabling a reduction in criMe? Yes The business license law rrovides buiJding insrectors and code enforcement officers lawful access on to rental properties. While there to determine if a buildin~ i~ safe or sanitary, inspectors and officers will undoubtedly become aware if the site they are to inspect is bein/! used for illepal activitie, such as a drug lab, a crack house, etc. Is there a need to supple~ent the activitie~ nf Jaw enforcement personnel to achieve real ~ucre~s in reducing vice and criITe in our City? Yes The Police Department can't do it Blane. Tn Quote Captain Tom Vaier's letter to The Sun uublished January 15, Ie?), he states. "The personnel in our department are some of the best trained. most hiphly motivated, and hardworkinp police nrofessional~ in the state. Nonetheless, it takes more than a poad police denartment alone to Affect crime." /.t:: Questi on I . . How does the c1lrrent system which does not contain a business license requirement or adeauate C of 0 provisions obtain compliDnc~ from ne~ligent Rnd abusive rental property owners? Answerl The facts are that building inspectors are not allowed to look over fences or in to windows. They are not allowed to trans~ress property lines with- out either the owners or the tenants nermiss'on. All they can do is FO to the door of a rental 8nd ask permission to enter. If they are r~fused ner- mission there is nothin~ they c~n do. It is obvious that if ille,al activity if occurring at the site, an inspector will never be asked inside. If a ~rop- erty is extremely bli,hted 2nd run down Gnd croofs can be shown as evidence. the City can fO to Court and apply for an order to permit build in, and safety inspectors to do an inspection. If the order is granted by the Court, then a new C of 0 may be required. 'This is certainly an impractical, inef- ficent. very time consuminF cost nrohibitive system. It., Questionl. Would changes and revisions to the currel'1t C of 0 and Business Re~istra~ion Certificate ordinances provide for standardized. periodic insnections on all applicable properties? Answerl Yes The current hit and miss accroach where some nepli- ,ent or ab1lsive rental pronerty owners pet cau~ht. while similar property owners Fet away with their abuses. would be done away with. 1'7, G;uestionl Answer, Do the citizens of San Bernardino want adequate inspections of rental properties prior to their be'nF allowed to be rented? Yes Consider the fact that once a unit is, occllcied it can be very difficult to disnlace tenants. "Where will we go?" they ask. Many times tenants cerceive a rotten building as being better than the thouFht of having no roof over their heads at aJ]. Further evidence is the fact that more than 10 fami1ipp in the immediate area of one deteriorated sin~le famiJy home signed and sent a petition to the City in May of 1988 requesting a complete insuectton and evaluR- tion of the home before it would be alJowed to be rented. See exhibit - - . . You have an opportunity before you today to p:ive San Bernardino a reputation to be known for somethin/Z other than its hip:h rates of crime and homicides. San Bernardino has an orpor- tunity to become known for its desirable hivh quality rental housing ~tock. By settinl' and then beinv able to enforce sui.table rental housing standards you will b€ attractinp: desirable tenants from throup:hout the rep:i.on to locate in San Bernardino. Here they would know they will find the assurances of Duality housinv available and not just in the building they choose to live in but also in the buildings which comprise their neighborhood 8nd throughout the City. Respectable landlords and property owners deserve and are paying for this assistance from the City - which would nromote a desirable element of tenants to come to our City. You have an obligation, as our elected officials, to do your upmost to nro- tect and promote the health, safety, and welfare of notential tenants and all of our citizens. You now have the opportunity before you, through the reenactment of the City's business license and revisions to our C of 0 requirements. to raise the quality, cleanliness and safety of our City's rental housing stock. to reduce crime in this City, decrease blip:ht and improve the overall quality of life for all of our citizens. PETITION FOR THE PURPOSES OF A COMPLETE INSPECTION - EVALUATION . . Out of concern for our nei~hborhood. ourselves. and property values. we the undersigned residents livin~ within the vicinity of the West half of lot 48 & the West half of lot 47. Block P. Highland H~i~~ts Tract Resub., a property whose street address is known as 2591 N. MT. VIEW AVENUE, SAN BERNARDINO. do hereby demand the followingl that the city of San Bernardino, its departments and agencies, and all other applicable public authorities fully accept all of their obligations, duties, and responsibilities to the residents living within the vicinity of the above mentioned property. These would include (but not exclusively) assuring the area residents with the highest degree of certainty that before the above mentioned property is allowed to be occupied for the purposes of human habitation, that such property in its entirety has been thoroughly inspected and evaluated and it has been determined in the jud~ement of all the previously referred to authorities to be a property which is decent. safe and sanitary. RES PEC'l'FULL Y , 7 " k/ . (' / \ i ~ /~ . ! /' I :". f:f>:.i..?~ ".J ./i;! 1),. /. , . 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