Rental Housing Inspections Program Discussion

Councilmembers Howell and Musgrove requested the fees associated with the Rental Housing Inspections Program be discussed. 

In 2023, the City Council unanimously adopted Ramsey City Code Article XIV. Rental Residential Dwelling Units and the associated rates and fees. City Council supported the Crime-Free and Rental Housing Program as long as the current licensing fees fully covered the costs of the inspection program without subsidies from the Ramsey taxpayers. The purpose of the code is to protect the public health and safety of the residents in the city by adopting a rental dwelling licensing, inspection and maintenance program. The code ensures residents of the city that occupy rental units can enjoy a safe, secure and sanitary property. It also gives the property owners the opportunity to ensure their properties are up to code and safe for the Ramsey residents. 

Program Update
Ramsey has 510 single family/townhome rentals and 10 apartment buildings with 994 rental units. To date, the City has 375 registered rental licenses, including 10 apartment buildings. There are 135 rental homes that have yet to submit the required rental license. The 2024 projected license fees to be collected to fund the program is $200,000; to date, $156,230 has been collected in rental license fees. 

Approximately 105 inspections have been completed, with another 100 inspections scheduled over the next 2 months. The feedback from homeowners, tenants and neighboring property owners has been more positive than not. There have been many instances when a homeowner was not aware of the condition of the home due to the resident not reporting broken items or lease violations. More common issues include, but are not limited to, the following:

Smoke detectors and CO detectors missing or not working
Nonworking electrical outlets
Rodent issues or domestic animal urine/fecal throughout the home
Broken windows - may not open or broken glass
Egress windows are bolted shut so they do not open 
Mold issues
Water leaks under sinks - causing mold, rotten wood, leaking through the ceiling
Dryer vents not connected or not vented properly
Gas leaks
collapsing/rotting decks
Water leaking onto extension cords
Flammable items stored/piled around the water heater
Temperature pressure relief valves on the water heaters leak 

Rental License Fees and Code
There have been some concerns regarding the cost of a rental license and if there are ways to reduce the fees. The cost of a license was discussed at previous City Council work sessions in 2023. The adopted fees reflect City Council's desire to fully fund the program through fees, rather than subsidize the program. The 2024 Fees and Rate schedule is attached for your review. The fees are based on a tiered system associated with the level of participation in the Crime Free Housing Program (see attached city code page 4 and Division 3, page 7)). For example, for a single family or townhome, the annual rental license fee is $400. If the homeowner chooses to participate in the Crime Free Housing Program, the fee could be reduced by 10% for phase II ($360 each year) or reduced by 25% for phase III participation ($300 each year). Each phase's requirements are described in the attached city code, Division 3. Crime Free Housing (pages 7 - 8).  Staff is confident that if all rental property owners participated in the phase III crime free rental housing program, that would mean a $300 annual rental license fee would barely cover the costs of the program. The fees cover not only staff's time spent on inspections and administration, but also the staff time of the Police and Fire Departments to offer the required crime-free housing class and monthly resident training classes. 

Staff have heard from homeowners about the current fees. Some support the fees, others stated the fees are too high. For example, 2 homeowners have single family rentals in Anoka and Maple Grove. Anoka's rental housing program does not fund itself and requires additional general funds to operate. In Anoka, a new license fee is $500; an annual renewal is $110 and inspections are conducted annually. In Maple Grove, the annual license fee is $570 and inspections are conducted every 3 years; I'm unsure if the Maple Grove program funds itself.
Generally, there are a wide range of license fees across the metro area. The fees come down to whether the municipality would like the program to fund itself entirely or rely on support from the general fund.

Rental license fees generated cover the cost of the program. This includes staff (inspections/enforcement, police, administration), equipment, a future inspections vehicle, equipment, etc.

Planning Division and Police Department

Discuss the Rental Housing Inspection Program and provide staff with direction, if needed, about immediate or future changes to the fees and/or program requirements.