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HomeMy WebLinkAbout31- City Administrator's Office CITY OF SAN BERNARDINO REQUEST FOR COUNCIL ACTION From: Shauna Clark Subject: Continuation of the Rental Housing City Administrator Program Dept: Administrator ' s Office 7 � AL Date: May 28, 1996 Synopsis of Previous Council action: 12/15/94 -- Mayor and Common Council approved Rental Housing Program for a 12-month period and adopted Ordinance MC 930 establishing a rental housing inspection program. 01/20/95 -- Program was continued through the remainder of the fiscal year; Ordinance MC 956 adopted. Recommended motion: 1. Approve the continuation of the Rental Housing Program for an additional three years , with funding to be provided by EDA; 2 . Direct staff to grant permanent status to the employees working in the Rental Housing Program. Signature Contact person: Lori Sassoon Phone: 5122 Supporting data attached: YeS Ward: FUNDING REQUIREMENTS: Amount:_ $689, 700 Source: (Acct. No.) (Acct. Description) EDA Finance: Council Notes: I'pl3lg� 75-n969 Onenrla I+om Nn VI SUMMARY Attached is a staff report that details the accomplishments of the Rental Housing Program since it was first approved in December of 1994. To date, the program has been more successful than was anticipated. The rental housing inspections have begun to clean up the units located in some of the most blighted, deteriorated areas of the City. Crime and calls for service have been reduced through the Landlord Training and Certification Program. Importantly, the community has demonstrated its support for this new approach to addressing the related problems of blight and crime. By continuing the program for an additional three years, and granting permanent status to the program's employees, the Mayor and Council will ensure that the Rental Housing Program is able to produce lasting results. STAFF REPORT Back rg ound At the meeting of December 15, 1994, the Mayor and Common Council unanimously approved the concept of the pilot Rental Housing Program. The program was designed to reduce crime and blight, and improve housing by pairing rental housing inspections with landlord training and property certification. Over 50% of the City's housing stock is rental housing, and crime analysis by the Police Department has shown that crime is concentrated in areas where rental housing is predominant. While there is no single solution to the complex problem of crime, the Rental Housing Program was designed to play a key role in reducing crime throughout the city. The Mayor and Council approved initial funding of$685,400. Of this total, $529,400 was from EDA 20% set-aside funds, and $156,000 was an offset to the general fund through partial payment of the City Hall debt by EDA. In January of 1996, an ordinance extending the program was enacted, and funding was provided through the end of the fiscal year. It is now being requested that the Rental Housing Program be continued for an additional three years, with funding to be provided through the use of 20% set-aside funds. Program Results: Business Registration The City Clerk's office has focused on reducing the number of unlicensed single family rental properties. To accomplish this goal, the Business Registration division was allocated one Business Registration Inspector and one Account Clerk. The additional personnel began work on February 21, 1995. The Account Clerk has allowed Business Registration to process increased payments generated by the expanded single family program. It has also made it possible for the office to reinstate the random audit of businesses, which has generated additional revenue. The additional Business Registration Inspector has registered over 1,565 previously unlicensed rental properties. This has been critical to the success of the Rental Housing Inspection program, since the Registration division provides the housing inspectors with a current street listing of registered properties. This allows the inspectors to distinguish between rental and owner-occupied property. The expanded program is responsible for a gain of 55,320 in ongoing revenue, and a gain of 922 more registered rental properties than the previous year's total. Staff Report - Rental Housing Program Page 2 Program Results: Rental Housing Inspections A major goal of the program is to improve the condition of the City's rental housing stock by developing an inspection program. As the condition of rental property is improved, the criminal element is encouraged to leave, and responsible, honest tenants are attracted to the property. At the same time, good tenants who are forced by economic circumstances to rent from irresponsible landlords, benefit when their living conditions are improved. Similar programs in other cities, including Azusa and Santa Ana, were effective in reducing criminal activity, improving the quality of life for tenants, and increasing property values. Ordinance No. MC-956 was enacted to assist the City to inspect each rental unit annually to ensure that the property is in compliance with building and property maintenance codes. The Senior Housing Inspector, four Housing Inspectors, and one clerical support person were hired for this program, and came on board in early July. The project team began by taking an inventory of the city's entire housing stock. The goal of the inventory was to determine the general condition of each property, and to allow the project team to prioritize the inspections based on that information. This prioritization was critical, so that resources could be focused to achieve the maximum impact in the community. Planning and Building Services, M.I.S., and City Clerk's Office staff worked together to develop a survey format and methodology. The survey form used information from the City Clerk's business license database, combined with information gathered electronically from the County Tax Assessor's rolls. The Fire Department then offered to assist in this important project, and completed 70% of the field survey work. Planning interns completed the balance of the survey, and entered the survey data into the database created by M.I.S. This teamwork allowed the survey to be finished in just 60 days, which was two weeks ahead of schedule. Inspections of rental property by the housing inspectors began in mid-July. The inspection program was planned to function as a proactive code enforcement program, since it is not based on complaints. Rather, using the data collected in the survey, the inspection team focused its efforts on major arterials where rental properties were in the most deteriorated condition. These areas include portions of Arrowhead Avenue, Baseline, Sierra Way, Fifth Street, Sixth Street, Ninth Street, "D" Street, "F" Street, Mt. View, and Rialto Avenue. Each property inspected receives a letter from the housing inspection team. If the property owner is complying with all City codes, they receive a congratulatory letter thanking them for their help in improving the appearance of their neighborhood. Staff Report - Rental Housing Program Page 3 Each property with violations receives one of two notices. The first, called an Inspection Report, is sent to the owner when less serious violations are found. It explains the nature of the problems, and requests compliance. The Notice and Order is used when more serious violations exist on the property. This notice requires compliance with City code within 10 days. If two or more exterior violations are found, the inspectors request that the occupant allow them to enter the property for an interior inspection. When a number of problems are found outside the unit, the inspectors have a reasonable belief that more violations will be found inside. Since inspections began ten months ago, over 4,100 units have been inspected. Of this number, 55% had violations, and of those properties receiving notices, 59% have complied without any further action by the inspection team. It should be noted that despite misconceptions by some of the public regarding the nature of the inspections, the Housing Inspectors have reported an overwhelmingly positive response to the program, both from tenants and property owners. The Housing Inspectors have been successful in working cooperatively with property owners, as well as easing the fears and concerns of tenants. The neighborhood appearance has significantly improved where the rental housing inspections have been completed. In January, photos showing the "before and after" conditions of inspected properties were shown during a presentation to the Mayor and Council. Though it has been operating only since July of 1995, the program is already achieving its goals. Both crime and blight have been reduced in the inspected areas, which benefits tenants, property owners, and the community as a whole. Program Results: Landlord Training; and Certification The landlord training and certification program, also known as the Crime-Free Rental Housing Program, was designed to create a partnership between property owners and the City for the more effective management of rental properties. A Project Coordinator and an intern were added to implement this program. This program consists of three key phases. In Phase I, property owners and managers attend an eight (8) hour training class. The class covers such topics as keeping properties in a condition that attracts honest, responsible tenants; using the applicant screening process and rental agreements to reduce crime on rental property; and dealing with suspected illegal activity. In Phase II, the property owner is given a checklist that includes the principles of Crime Prevention Through Environmental Design (CPTED). Once the property owner feels the property meets all the requirements, he or she will contact the Project Coordinator for an Staff Report - Rental Housing Program Page 4 inspection. In Phase III, the property owner or manager takes the next step by hosting an Apartment Watch or Neighborhood Watch meeting. The goal of Phase III is to involve the tenants in looking out for their own neighborhood. Upon successful completion of all three phases, the property is certified as having met all the requirements of the City's Crime-Free Rental Housing Program. The property owner then receives a certificate allowing him or her to lease a sign with the "Crime-Free" logo. Phase I classes have been held every other month since September. A total of 240 property owners and managers have attended the training classes, with John Campbell of Campbell DeLong Resources, Inc., serving as the lead trainer. Surveys given after the training show that the program will have a positive impact on the way landlords manage their properties. Of the landlords and property managers surveyed: - 88% felt the class would help them avoid renting to potential tenants involved in drug activity; - 93% "strongly agreed" that the information given was practical; - 94% "definitely agreed" that the training program was time well spent; - 70% said they would "definitely" make changes in the way they manage their properties, and another 19% said they would "probably" make changes. Working with John Campbell of Campbell DeLong Resources, Inc., the project team developed a Landlord Training Manual. The consultant and Project Coordinator interviewed lawyers, tenants, property owners, property managers, and the Fair Housing Authority, as well as staff from Planning and Building Services, Police, City Attorney's Office, and the City Administrator's Office to gather information for the manual. The manual is distributed free of charge to everyone attending the Phase I training class, and serves as an important reference tool. It has also been used as the model manual in California by the U.S. Department of Justice. Status of Funding As stated earlier, the initial allocation of$684,400 was granted in December of 1994, and was sufficient for the one year pilot. Additional funding of $29,700 was approved in January to allow the program to continue through the remainder of the fiscal year. Staff Report - Rental Housing Program Page 5 The proposed 1996-97 budget for the program is as follows: Business Registration Original Budget Proposed 1996-97 Personnel 55,000 61,700 Maint. and Operations 5,300 16,600 Internal Svc. Charges 2,200 700 Capital Outlay 1.500 -0- Total: 64,000 79,000 ----------------------------------------------------------------------------------------------------------------------- Landlord Certification Program Original Budget Proposed 1996-97 Personnel 85,900 73,300 Maint. and Operations 15,700 30,600 Contractual Services 30,000 14,000 Internal Svc. Charges 17,400 4,200 Capital Outlay 3.000 7.000 Total: 152,000 129,100 ----------------------------------------------------------------------------------------------------------------------- Rental Housing Inspection Original Budget Proposed 1996-97 Personnel 331,400 305,000 Maint. and Operations 30,000 38,500 Contractual Services 25,000 50,000 Internal Svc. Charges 62,000 38,100 Capital Outlay 21,000 50.000 Total: 469,400 481,600 ----------------------------------------------------------------------------------------------------------------------- TOTAL PROGRAM BUDGET: 685,400 689,700 Staff Report - Rental Housing Program Page 6 Plans for the Future When the program was approved, staff estimated that no results would be readily apparent for approximately four years. However, in the year since all staff has been in place, the Rental Housing Program has already started to impact the community in a measurable way. The inspection program initially targeted the major arterial streets in the city, most of which have now been inspected. The next streets scheduled for inspection will be "G" Street, "H" Street, and Waterman Avenue. It is estimated that 7500 units will be inspected in the next year, which will improve living conditions and the appearance of these neighborhoods, as well as the city as a whole. As the inspection program focuses on more blighted areas, the rate of progress through the area slows, and each unit absorbs more inspection time. However, the project team will continue to make these more blighted areas the first priority, since the most pressing needs are in these areas. In the landlord training and certification program, Phase I training classes will continue to be offered every other month. Because of the tremendously positive feedback that has been received regarding the training, Campbell DeLong will continue to conduct the training classes. Phase I participants will be surveyed again six months after they complete the training class. This will allow the project team to determine if the training helped landlords to better manage their properties in the long run. Staff will continue to offer Phase II property reviews, and assist landlords and property managers in conducting Phase III meetings. It is anticipated that 150 more properties will be certified, and the colorful new "Crime-Free" signs will begin to be seen throughout the City. The project team will also be evaluating a system of incentives that will serve as rewards for participation in the landlord training and certification program. One incentive that will be studied is the establishment of a bulletin board on Channel 3, which owners of a certified "Crime-Free" property could use to advertise vacancies at no charge. The expanded Business Registration staff will focus on the estimated 2,000 - 3,000 rental units in the City that remain unregistered. Staff may also begin auditing selected property owners, asking that they submit copies of tax returns to prove they are not taking a deduction for rental property. The goal of these efforts is to ensure that all rental property owners comply with the existing City ordinances. Staff Report - Rental Housing Program Page 7 The Rental Housing Quarterly Report will continue to be distributed to the Mayor and Council, as well as interested members of the community. Annual progress reports will be presented during the budget process next year. The project team will also continue identifying ways to measure the effectiveness of the program. The City Clerk's office is now collecting information regarding vacancy rates and rental rates per unit when business licenses are paid. Over the next three years, it is anticipated that analysis of the data will show declining vacancy rates and rising rents, which are both indicators of increasing property values. Crime analysis will be another key measure of the program's success. As more properties are certified, and the inspection program continues, the City's overall crime rate can be expected to decline further. Police Department calls for service to rental properties will likely increase in the short term, as landlords and tenants become more committed to reporting suspected criminal activity. However, over the three year program period, it is anticipated that the program will help to reduce the disproportionate amount of crime on rental property. It should be noted that almost 1 1/2 years have passed since the pilot Rental Housing Program was initially approved. Since that time, the job market in this area has begun to improve, and we have begun to experience losses in program staff. Because the positions must be advertised as temporary, recruiting is especially difficult. It is recommended that the program employees be made regular City employees, so that turnover will be minimized and the program can continue to function effectively. Recommendations It is recommended that the Mayor and Common Council: 1) Approve the continuation of the Rental Housing Program for an additional three years, with funding to be provided through EDA; and 2) Direct staff to grant permanent status to the employees working in the Rental Housing Program. As with all other City positions, these positions will exist subject to continued funding.