PUBLIC HEARING: Introduce Ordinance #16-09 Amending to the Residential Rental Licensing Program.

Purpose:

The purpose of this case is to introduce Ordinance #16-09 amending the City's residential rental licensing program. This initiative originates from the City Council's Strategic Plan. Based on an initial public engagement/workshop authorized by the City Council and subsequent Staff discussion, Staff proposes the following amendments to the program.

1. Single-Family Dwellings (detached and attached/townhome) subject to licensure (registration), but not inspection. Inspections would only occur on a complaint basis. A fee of $25 would be collected.
2. Frequency of multi-family inspection reduced to once every three (3) years
   1. Common Areas inspected
   2. Portion of individual units inspected

In addition, the City would chart out a path for future amendments, only if necessary. These options are not being recommended at this time.

1. If clusters of rental homes with exterior code violations presented itself, the City would consider adding an exterior inspection requirement.
2. If clusters of interior code violations presented itself through the complaint-based system, the City would consider adding interior inspections. This would be on a tiered/incentive-based approach, as outlined below.

As has been discussed in the past as part of this topic, the City does not believe there to be a widespread issue with rental properties in Ramsey; the goal of this program is preventative in nature. However, there are isolated issues and pockets of issues believed to be in existence. The amendments to the program would improve communication with owners/landlords and provide an additional tool in the event the owner is unresponsive to corrective needs while not creating a burdensome process both for owner and City. The proposed amendment would create a program that is still much more relaxed than the City's original program for these single-family homes.

Background

The City Council previously authorized a public engagement process to gather feedback on potential amendments to the rental licensing program. Letters went out to approximately 800 non-homesteaded homes believed to be rental properties. The City also reached out to area real estate brokers and property management companies. Of that invite list, approximately twenty (20) participated in the public comment period. The intent of that workshop was to better understand the issue at hand, but not propose any amendments at that time. The City did not want to lead with solutions until it better understood the issue. Staff found this to be a valuable exercise, as additional aspects of renting a property were discovered that were not necessarily part of the original research. The abstract nature of the initial workshop and comment period likely contributed to the relatively low response rate. It is expected that the City will receive more comments as part of the next phase, which includes reaction to an actual proposal.

A copy of the case presented to City Council on October 27, 2015 is attached to this case as background. This attachment provides important background pertinent to this case, such as an outline of our existing program, reasons cities implement such a program, and an evaluation of peer community programs.

Notification is not required at this time.

Observations:

Throughout the first phase of public comment (discuss the program with stakeholders; no amendments yet proposed), there appears to be some willingness to consider registration of rental properties that would collect important contact information above and beyond what is available in the County's Tax Database (phone number, email, alternate contact, etc.). That being said, there is still likely to be some resistance to this policy change. Required inspections continue to be the top area of concern amongst owners/landlords. Required inspections are not proposed to be added to the program for single-family homes at this time.

Considering the level of opposition to required inspections and the quality of existing housing stock, Staff believes a required inspection may be more tool than needed to solve the desired issue. The goal of the analysis has been prevention, acknowledging a wide spread nuisance or safety issue does not exist. As noted, there are pockets of issues throughout the community, but to blanket an inspection requirement may be more than what is necessary to achieve the desired goal. This issue may present itself in the future, and the City can re-evaluate the inspection requirement in the future. The City can continue to rely on its complaint-based approach for properties of concern.

As the number of individual rental properties has increased over the past decade, so has the number and quality of professional property management companies. These management companies help individual property owners with minimal experience to monitor individual properties, draft lease agreements, and provide tenant screening among other benefits. Staff believes that this is an added value to the rental community and aides the community in reaching its goal of minimizing nuisances created by rental properties. If the City Council were inclined to require an inspection, Staff would recommend tapping into this resource and perhaps license and train these companies. The City would then exempt properties working with a licensed property management company from a City inspection. This is similar to the City's septic maintenance program. Note: this is currently not included in Staff's recommended policy direction.

Staff does note existing tools the City currently has the following tools at its disposal.

• Ramsey Public Nuisance Code
• Ramsey Property Maintenance Code (condition of buildings)
• Ramsey Off-Street Parking Ordinance
• Ramsey Zoning Code
• Ramsey Building Code
• Anoka County Community Development/Housing and Redevelopment Authority
• State of Minnesota Attorney General

 
Alternatives

Alternative 1 - Adopt Ordinance #16-09 as proposed.

Alternative 2 - Adopt Ordinance #16-09 with amendments.

Alternative 3 - Recommend no amendments to the program. Only apartments and condominiums with shared, internal connections. This would not reduce the cost to apartments and condos as proposed.

This case is being handled as part of normal Staff duties.

Staff recommends adoption of the Ordinance amending the Rental Licensing Program. Details are included in the attached Ordinance and Fact Sheet. The Planning Commission was scheduled to hold the first Public Hearing on October 6. The results of that hearing were not yet available at the time of publishing of this agenda. Staff will provide an update at the meeting.