The URL can be used to link to this page

Home My WebLink About16-City Administrator .., IB REALTOR- SA1d3ERNARDINO V poLEY ASSOCIATION OF REALTORS@ 1798 NORTH D STREET. SAN BERNARDINO, CA 92405 P.O. BOX 2183. SAN BERNARDINO, CA 92406 (909) 886-5031 ~~ Date: Subject: June 6, 1994 City of San Bernardino, Mayor and Council Alternative to the proposed Rental Housing Inspection Program To: RECOMMENDATION NO.1: The San Bernardino Valley Association of REALTORS recommends that the City of San Bernardino create a Special Task Force, comprised of Policy Level Representatives of organized Real Estate, The Banking Industry, Non Profit Organizations with Housing Focus, OWners of Repossessed Residential Properties, community Leaders interested in the issue of OWner-Occupancy within the .Core city., Select County Agencies along with specific officials of the city of San Bernardino including the City Administrator, the City Planning Director, the Economic Development Director and the City Clerk. The MISSION OF THE TASK FORCE will become the development of a strategy, to focus the vast array of new Real Estate Loan and other Financial Resources available from both the Public and Private Sectors, the expertise of Real Estate Professionals, Existing Programs to rehabilitate and maintain residential properties and those that prepare interested persons to own real property, which will increase the ratio of OWner Occupied Dwelling in selected neighborhoods within the city. RECOMMENDATION NO.2: We also recommend that the city of San Bernardino delay the consideration of the Proposed Rental Housing Inspection Program on today's agenda. We believe that one outcome of the effort identified above will be a Rental Housing Inspection Program which not only proposes an equitable and temporarily enhanced revenue mechanism but would compliment our overall objective, that of converting many of the properties now tenant occupied to owner occupied dwellings. Such a program would diminish as property owners become increasingly maintenance conscious through the focused efforts of the revitalization team. DISCUSSION: On Thursday, June 2, 1994, three representatives Bernardino Valley Association of REALTORS met with Administrator, the city Clerk and the city Planning Director the proposed Rental Housing Inspection Program. The meeting, of the San the city to discuss originally ~ 1994 OFFICERS: RITA NORTON. Prnldent. SUE MOLLER. President Ellet,. DAVID SCHULZE, 111 Vice Prnldent. LILLIAN MILLER. Secretary JIM TRAMMELL. Tr.a.urer DIRECTORS: LEWIS CANTRELL' RON CARLiSlE' RON KEMPER. STEVE LAMBERSON' ROD LAMBERT' JOHN ROTHENBERGER GEORGE H. SCHNARRE' ROBIN SHIDLER. SANDI SIGDESTAO EXECUTIVE VICE PRESIDENT: SAM G. HENLEY (p~;;! I~ IlL .. o o scheduled in May, and delayed due to scheduling conflicts of the participants, was requested by REALTORS due to a concern among the members of the Association that the proposed financing method was inequitably asking owners who maintained their property to pay the cost of a program needed for those owners who choose not to maintain theirs. REALTORS were given the opportunity to advance a concept we have long held that of the POSITIVE IMPACT a focused intense REALTOR Farming Effort, made by specially trained REALTORS, would have on the stabilization of neighborhoods in distress through greater resulting owner-occupancy, better understanding of the fianacial return from proper property maintenance by property owners contracted through such an effort an improved awareness on the part of residents of programs available to them from both Public and Private Organizations to assist them with their housing needs and decisions. Such REALTOR NEIGHBORHOOD REVITALIZATION SPECIALISTS would be supported by a Special Training Effort to familiarize them with all the tools, programs and loan packages which are available and have been designed specifically to aide in the conversion of Tenants into Homeowners, sub standard property into Market Condition Residential Property and to effect the expeditious delivery of REO Properties back to owner-Occupants. At the suggestion of City Staff, we prepared this brief conceptual description of the first step of our vision. We believe that others who would participate in such a Task Force will bring other ideas and new perspectives that can be integrated into our proposal to make such an effort even better. We know that there are many concerned civic leaders hoping for the opportunity to work with the citizens of our community to make San Bernardino an even better place to live, to conduct business or practice a profession or to invest responsibly. b. Ii C~TY OF SAN BERNODINO - REQUEST F~ COUNCIL ACTION From: Shauna Clark, City Administrator Subject: Dept: Administrative Date: May 23, 1994 Selection of funding mechanism -- Rental Housing Inspection Program and set public hearing for July 5, 1994 at 10:00 a.m. Synopsis of Previous Council action: May 5, 1994 -- Heard by Legislative Review Committee. Recommended motion: That Alternative No. be selected in order to implement the Rental Housing Inspection Program and that a public hearing be scheduled for July 5, 1994, at 10:00 a.m. ~?7t?/$~ ,/ Signature Contact person: Shauna Clark Phone: 5122 Supporting data attached: Yes Ward: FUNDING REQUIREMENTS: Amount: Source: (Acct. No.) (Acct. OescriDtionl Finance: Council Notes: 75.0262 Agenda Item No " - -1. CITY OF SAN BERNODINO - REQUEST FO' COUNCIL ACTION STAFF REPORT In 1990 the City established a single family rental business tax in recognition of the proliferation of housing in transition from owner-occupied to rentals. This tax was imposed to fund code enforcement as it was recognized that rental housing was placing added demands on code enforcement. To date, the Clerk's Office has identified over 5500 single family rental units. The net revenue from these collections is approximately $240,000 per year. The general fund burden for code enforcement is $397,700. ($539,700 less $142,000 paid by EDA). Approximately 75% to 80% of code enforcement time is in response to problems in rental units. At the time the single family rental housing tax was imposed, no specific inspection program was established. Code enforcement was to operate on a complaint response basis. Growing demands have far exceeded the staffing available. Code enforcement is unable at this time to take a proactive stance. They are forced to operate in a far less efficient reactive mode, addressing life safety issues first leaving little time for other complaints. The intensive paper work processing that goes along with code enforcement also bogs them down. Nor does the city have a funding source for inspection of multi- family units. The Fire Department works on inspections when they can, but again, their focus is on life safety issues. Housing stock, especially in the city core where the highest number of single family rental units is concentrated, has continued to deteriorate and devalue. It is apparent that landlords who are deriving income from these units are not reinvesting their profits (or tax savings) in their San Bernardino properties. Based on the experience of other cities, we believe that a proactive program of rental inspections, along with landlord and tenant education programs, will reduce many negative impacts. Eventually, some single family rentals will shift back to owner-occupied which will stabilize neighborhoods and allow housing values to rise. Over time, all property owners will benefit. In order to generate funds for this program, three alternatives are before you today for discussion. Alternative I - Taraeted InSDections - Rental InSDection Surcharae The first of the three the Mayor and Council may recognize as the Santa Ana plan. The City of Santa Ana had a residential business tax similar to ours but added a surcharge to pay for enhanced inspection programs. Because the Santa Ana surcharge did not collect enough money to guarantee an inspection for every rental unit, the inspections were targeted. 75-0264 o o Rental Housing Inspection Program staff Report - Page 2 This alternative would allow the city to target rental housing areas and do full inspections without regard to the license renewal pattern. The surcharge money generated would be a tax, not a fee, and would not require direct correlation to the service being provided. By using existing data on crime patterns, code enforcement complaints, density and other criteria, the Department of Planning and Building Services would develop a strategic plan for targeting the most critical problem areas. A team of inspectors would be placed in the target area and would remain until all inspections for the area were complete. Alternative II - Annual InsDection Cvcle - Pee for service The second alternative is to charge a rental inspection fee (versus a tax) for every unit at the time it is first licensed through the Clerk I s Office and annually upon renewal. Once the fee is collected by the Clerk's Office, the Department of Planning and Building Services would have xx days to complete the inspection. Although this program would generate enough money to inspect every unit once per year, the inspections would not be controlled by the department on a strategic basis. Each inspection would occur randomly, based upon business registration renewal cycles and inspectors would be placed in a reactive, rather than proactive, mode of operation. Fees would be based upon actual costs for providing the inspection. Alternative III - Two vear InSDection CYcle - Fee for service Alternative three is a variation of number two, but cuts inspections in half, requiring inspections once every two years. Fees would also be reduced. SUDDortinq documents There are three supporting documents which expand on this program. 1. A chart from Services which shows alternative. the Department of Planning and Building the budgetary requirements for each 2. A chart which shows the rental inspection fee under each alternative. - o o Rental Housing Inspection Program Staff Report - Page 3 3. An outline which gives a more in depth picture on how the program would be structured.* *Please note that Alternative No. 1 as outlined reduces the business registration tax by 25% (from $60 to $45). I want to emphasize, however, that I do not support a reduction in the tax because the money will still be necessary for funding city services, especially code enforcement. ~?"'?~11";/ c~ty Administrator :IE: < Cl: (;l " Ci: ~ z o .... E-- U Ul ~.... C. ~~ CIl CIl >.~ Z....CIl ...."'Z C1al CJo<c. Z >< ....CU~ CIl > ::l....~ 0.... ='" CU 1040 CUCII: E-....CW Z.... 0< CII:- 0< :E ~ E- CIl >< .. w, 0 ---- 0 ....N\DN...... ---- C Ul 0 OJ:. I"- 0 \ONN""" ONON I"- 0000001 ..... 0.... "" Oll"l........l.t'l N 0 .... ""C I"- OOLnMM 0000000 0 u -0 N 000""""00 0 - - - . CU 011 ..... U'")t'r"\OCC .. ... ... ... ... .. .... ... I.O\DMNLn:""~~"" :> Ul 0 ... ....COM<q"N .... N ~~ " C CU:E N '" I ... .... CU I I I to.... I <J> 'J> '" <J> J:. U '" o cu Ul OJ:. 0.... 0= -0 ..... II N ~ Ul OJ:. 0.... OC - 0 1"-11 \Q M 104 '" CU >- 104 CU Ul cw.... ..... '0 C CU::l .... u.... cu.... e.o< Ul c.... .... U CU Ule. .... Ul .... C c.... ::l o 01.... C ....'0 ....cu ....104 cu.... :J ~ cO' CU .....0:: 1l ~ ~ ;, - rI '0 CU .... '" II .... .... Ul ~- 104 UlO cu.... 'oU ~ CU ....e. UUl cc ... .... - 1.0 >.cu ",e. c Ul wC cuo cw.... .... Ul U C cu o e. ..... Ul .... C ~'oool :J cu c...x .,1 :: ,. I"- '" ., ,... ~MMf"'4 ~ o "" I"- 'lltN....f""I .... 1.0 o .... U cu e. Ul C .... 1.0 cu e. >. .... ..... .... .... .o:l '" e. :0 o C o .... .... U cu Co Ul C .... '0 cu Ul o Co o 1.0 C. 'oUl cuw '00 cu.... CUU z cu '0 e. cu Ul Ul Ul 104 C 0 0.... e. .... '00 UOlcuw CUCUlCW e..... 0 UlUle.tlI C ~ 0 cu .... 0 1.0.... =c..w C" to CWUl.... ..... 0'>: cu ~,..... Io.i W ~ :: :) :J :> :J _ :J = :.~ U ~, ..... "l :l < __~_J -,"""'I-M=1 ----'I ocoo;c~:j CO o r-- N CD ;"-, M OLnO:.nM lJ1 :.nOll"lO"lCC CO ....M~\QN 1""'1 ........ I"- <J> <J> ---- .....N-.::tr-l ---- .. .. .. .. .. Ol"-COM \Q ....COlnN 0 .... M (I> (I> - ~i - ---- C\Qln\QN ONCOQlln .... ll"l an ... t"I 4J ... .. ... .. "'MQlMCO U...MNN .....000'0- ""-1---- .... Ul Ul '" .... U Ul CUW .... Cll:0 Ul .... 0 wU 0 o CU Ul e. .... .... Ul CU > C 104 C 1.0.... 0 C CU........ 0 e.OIU.... tlI ~CCU 1.0 CIl.... e..lO: CU tlItl1w CW C~CCU o 0........ >. .... = Ow .... 01 '" UwC........ ~ 1J..... tI1 ~ ::l.,.- .n..... w :.1 C :.J 0.. t; :: .., ~ ~.:J -.;... ... - ~~ -.. ... ~ - C o '1 .. ~' o .. QI ~ '" - - 000000_ -= 0000000 :> oooo:.noo ~., .. .. .. .. .. .. NN"'LC'\O~O ':"I ........ ..,.....~M ~ .... <J> <J> ~ \Q - 0000000 0 0000000 0 OOOOlnOO "" .. .. .. ... .. .. ....NCOMCOO '" .... ........ (I> <J> Ul CU Ul .... Ul o u U1 Ul VI CU ";3 CU .... C 01 .... 1l 1.0 e. Ul '" Co CU .c: Ul ~ C" Oil o III CUCll 1.0 CU.... to Q) 0\1""4 U .:: C 1.0 e..... U :IE: ..... '" e.J:. .:: J: =' :::. :,J C'HJ U:/} ."0 I: :J C 1l .. ::l tT'..... :E :J ':J C".:: :t1 .-,I ':'" oJ 0 ::.. ~=>-':--':; U)...... _ - :- o ~ - _"::i .:. :.. :.; .~ ~ .:.. :- CU CIl III ..... '" ..... .. 'J .. - i 0 0 000 0 0 "r 000 0 0 ...111. 00 ... 0 ",..re - - - - - 1tl0 M :J'l .....'" '" 0 ... "''''0 ... '" ... V> V> .~ 0 10 ~ Itlltl ... ... - 000 0 - QI OIl'''' - 000 0 0 ,., \010 001tl Itl ::;) III ..Ire . -i . ItlOM CO 10 \GIN Itl... '" .. ...1.. ... ... .. ..\... - . .. .. V> V> V> o 0 SYSTE~C RENTAL HOUSING INSPECT~ (Alternative Analysis) Program Revenue PROGRAM :'ax Accroach Inscection Fee "ccroach 12 + 24 Month CYcle $20 ?er Dwelling Unit $75 for 1st Dwelling Cnit Plus $20 for ea. Additional Dwelling Unit Unit Tvtle Single-Family Duplex Triplex Quad 5-Unit Complex 10-Unit Complex 20-Unit Complex 50-Unit Complex $20 $40 $60 $80 $100 $200 $400 $1,000 p5 $95 $115 $135 $155 $255 $455 $1,055 Estimated Revenue (Based on the above fee structure) $420,000 $1,400,000 annually for 12 month cycle $700,000 annually for 24 month cycle Additional Revenue to be Identified to support a Tenant/ Landlord Education program' Under a Fee Approach, a Tenant/Landlord Educational Program Could Not Be Funded 90.uoq TOTAL REVEWB UQUIUD $510,000 5/4/94 lIIkf/Bl"IlGETII4O 'If educational funds are not identified, the Tax Approach would require a $24 per dwelling unit annual charge. R~AL HOUSING INSPECTION PRO~ I. MISSION STATEMENT Systematically identify and correct code violations in rental units which result in threats to occupant safety: threats to st~uctural integri ~y:. and negati,:,e ~mpacts to surrounding ne~ghborhoods. Add~t~onally, prov~de ~nformation to property owners to enhance their effectiveness as a property manager through educational efforts dealing with: tenant-landlord relationships, tenant screening and eviction procedures and programs available to assist with rehabilitation' of substandard properties. II. SCOPE The provisions of this program shall apply only to residential rental property within the designated proactive rental housing code enforcement areas. III. JUSTIFICATION FOR THE PROGRAM A. B. C. D. E. F. Many landlords for both single properties derive income from their reinvesting sufficient money for maintenance. and multi-family properties without adequate property The majority of rental properties in city have no on-site management. In many cases where on-site management is available, there is a lack of knowledge, skills, resources and direction from the property owner to perform needed maintenance. There is a tendency for crime -rates to be highest in areas where properties are not owner occupied. It is reasonable to make a connection between lack of property maintenance, the deterioration of the neighborhood, and the crime within that neighborhood. Absentee property owners should be held accountable for maintenance and safety of their units and required to help mitigate the impacts generated by tenants. In many cases throughout the City, rental property own7rs may not be aware of proper procedures for select~ng tenants executing rental agreements, the proper method of evicting tenants and other responsibilities related to effective management principles. The lack of such knowledge has resulted in ineffectiv.e ma~agement resulting in a deterioration of many hous~ng un~ts. , , G. A syste(Jtic inspection program wil~ro~ide responsible rent~l.property own~rs w~th a basis for establishing the cond~t~on of a hous~ng un~t when dealing with tenants who have intentionally damaged a unit in order to avoid their responsibilities to the property owner. IV. AUTHORITY A. The State of California Health and Safety Code as well as the State Building Code grant to cities the authority to perform residential inspections. B. The State Constitution permits each city to charge a business tax to all those doing business within its jurisdiction. V. FUNDING AND BUDGET IMPACT A. 75% of the complaints received by Code Enforcement are related to rental properties. Adequate funding to perform a proactive, comprehensive residential rental inspection program has not been set aside in the city's budget and cannot be set aside without significant reductions of funding for other programs. 1. Recognizing that some feel that the existing $60 tax is a hardship, it is proposed that the business registration minimum tax be lowered to $45 per year. 2. Assess a $20 per-unit surcharge on the business registration tax. B. A reduction in the rental housing business registration fee from $60 to $45 will reduce qeneral funds by $83,000. The per-unit surcharge will generate $416,000. All funds from the surcharge will. be allocated to residential rental code enforcement. VI. ECONOMIC IMPACT ON RENTAL PROPERTY OWNERS B. The net tax effect on owners of single family rentals will be an increase of $5 per year. Owners of apartment complexes will have an increase in their taxes based upon the number of units within the complex. In cases of deficient properties,. landlords will incur . the cost of corrections. A. C. VII. BENEFITS TO (JPPERTY OWNERS <:) A. A~l owners of property within the City of San Bernardino w111 benefit through aesthetic improvements made within neighborhoods. B. Reduction of blight which should lead to increased property values. C. D. VIII. A. B. C. Reduction of negative impacts through improved management of rentals. The cumulative benefits of the above should lead to reduced crime. stabilization of property values and improvement in the overall image of San Bernardino. MECHANICS OF PROGRAM City Clerk's Office will collect fee. Funds will be used to create a housing inspection section in the Department of Planning and Building Services. Al though inspections will be mandatory, the time frame for inspections will be adjustable. D. To achieve optimum impact and to minimize fees charged to property owners, inspections will take place in targeted areas selected by .the Mayor and Council on the basis of need. Target area selection criteria may include: 1. appearance of blight 2. crime levels 3. negative impact on surroundinq area 4. high concentration of rental units IX. ORGANIZATIONAL STRUCTURE A. This program will operate as a separate subdivis~on.of the Inspection Division of the Planning and BU1ld1ng Services Department. Housing inspection positions will be specifically created to carry out the program. These positions will be distinct from the code enforcem~nt ~nd building inspection programs. A proposed organ1zat10n chart and initial budget are attached. B. This p~am will operate as a se~ate subdivision of Planning and BUilding Services. - C. The housing inspection- program will build upon current code enforcement processes, but will differentiate from current code enforcement. by emphasizing proactive enforcement and focusing exclusively on rental housing. x. ELEMENTS OF THE INSPECTION PROCESS A. Pro-Active Program The program is intended to be pro-active. A systematic process wlll be developed to target specific areas of the City. Once all rental units have been identified and inspected. the housing inspection team will move to additional target areas. The Housing Inspection Staff will not respond to complaints in order to dedicate their efforts to the systematic program. The Code Enforcement Division will continue to respond to all complaints. B. Inspection Cycle Based on the proposed staffing, it is anticipated that 8,000 to 10,000 units can be inspected annually. With the 20,000 rental units now registered and others expected to be identified, it is anticipated that all units can be inspected within a 36 to 48 month time frame. C. Cooperative Program with Responsible Property OWners Every attempt will be made to develop a positive relationship with property owners. The initial steps of the program will be to schedule joint inspection visits with the property owner or property manager. Where defects are found, a deficiency notice will be given to the owner with a reasonable time frame for correction. The time frame will vary according to the seriousness of the deficiency. A reinspect ion meeting will be scheduled with the owner. If corrections have been completed, an inspection certificate shall be issued. In the event significant progress on corrections h~s not been accomplished, the owner or property manager w111 be issued a formal correction Notice with a second time frame identified for the repairs to be completed. Failure to comply with the correction Notice will ~es~lt in an enforcement action through the Board of BUlldlng Commissioners. The procedure at this point will be the same as for other Code Enforcement violations. D. Inspect~ Standards o The City has property maintenance standards. These standards deal with the required maintenance of the exterior of the seructure such as paint, landscaping, and the removal of junk and debris. The City has also adopted the Housing Code. The purpose of this code is to provide mlnimum seandards to safeguard life and limb, health, property, and pUblic welfare by regulating and controlling the use and occupancy, location and maintenance of all residential buildings and structures within this jurisdiction. These are the two basic ordinances as part of the program. E. Education Program Develop and implement an education program to assist landlords with tenant screening and other aspects of owning and operating rental units. -L '1- ~ U i~ III ~ ... 0 0 " ... .-...... '''' u ... Ufl"l...... i~ 1; ! 1;-...... ....,0 ... .... . .. ... 'loo ... U~....... i5 '" a..~.... I .USUUU 0 , g! u '8;:U;::.,~ U.... ...... " 0.0........ , <.II '8 '8 ...... " t:t: <.I III OJ - -.. N- - . . " .. " 0 0" .. U . ul -- - c ~ - 1. ;- e- - . C 7lt.""-l Co< .. ... =-- .. , c- - II' . ' - -' ".5 ... .. - ", .:. .5 ... :-':..:- U - ._, = :J '--1 . -:;. - .,,3... .- ~.lIl: I : . III - :.~; ...." ~ :), !!! ~ :: - ji.. - - . u ' .. . :'11 g-: ." 0 - ~: G ... -- ...U ~I a -, ..... w:.... . '. ? -:: a.. . ._, 0.... en III III . - ...t .... ~I ... CII.... . - - C:C:1lo = :s :.. II' - .ut: 01 ~ 0 " c: - - =, U'1=E- ... ." .. ... 0 ... .. " ~ - . .. " - 1 ... Q 'IS . .. .. a .= II' ! j u . . ~ a ... ... . ... B . .. .1 - . J ! .. !' J I .. 0 .. III' I .. E' s m~ II c. ! .. I "!' .. J .:l 1 1 c ..! I' .. . i I,j' u .. "1"cC ...1 .. . ! I.... . g ! U j ... .. u S ............... ~ H !! -- ...... -- . . " .. .. :~ ~ . . ..u:: i IZ .. ... .. -:~ ... !.......ae :. ....~ ... ........e- 1 ...!u ... ".: .. ~ ' . .- ~ oS... .... ......... .- C:..!U II II. . - IIl.c.c III