AGENDA #5b

MEMORANDUM

TO:                  Mayor and Town Council

FROM:            W. Calvin Horton, Town Manager

SUBJECT:       Update on the Rental Licensing Program

DATE:             January 12, 2004

The purpose of this memorandum is to provide the Council with a status report on the Rental Licensing Program. 

BACKGROUND

• The Town’s Comprehensive Plan, adopted on May 8, 2000, and includes a provision that the Council implement a rental licensing program as a tool that “could help to protect the character and the stability of the Town’s residential neighborhoods, while assuring renters that licensed rental units meet minimum housing standards”. 

• On June 12, 2000, the Council established a Rental Licensing Task Force and charged the Committee to provide the Council with recommendations about whether to enact a system of licensing the rental of dwelling units in Chapel Hill, and what form such a system would take.

• On March 26, 2001, the Rental Licensing Task Force presented recommendations for the Council’s consideration. 

• On January 14, 2002, we provided the Council with a report that evaluated the recommendations of the Task Force and the Council approved a process for implementing a rental licensing program.

• On January 23, 2002, the Council held a public hearing to receive citizen comments on a proposed rental licensing program.

• On April 8, 2002, the Council adopted a resolution that established guidelines for the Rental Licensing Program, and adopted an ordinance to establish a program for the licensing of residential rental properties.

• On June 23, 2003 we provided the Council with an update on the first year operation of the program.

• On August 25, 2003 the Council adopted a resolution that exempted non-profit organizations that offer low-income subsidized rental housing from the rental license fee, but not from the other requirements of the Rental Licensing Program.

• On October 15, 2003 we mailed Rental Licensing Program renewal notices for the period of July 1, 2003 through June 30, 2004. 

DISCUSSION

The 2003-04 Inspections Department budget authorized costs of $75,000 for the Rental Licensing Program with expected revenues of $75,000. 

In May 2003 there were 7,508 units registered in compliance with the Rental Licensing Program; license fees totaled $77,000.  As of December 30, 2003 licenses have been renewed for 6,678 and fees collected to date total $66,783.00.  Late notices will be mailed to delinquent license holders January 15, 2004.

We believe that continued property record review, field survey, and reports by citizens provide an accurate inventory of rental units.  We continue to monitor public records, advertising of rental units, and make field surveys, and believe that the number of rental units will change little except as units are constructed, converted, or demolished.

RENTAL LICENSE RECORDS DETAIL TOTALS

Billed Owners November ‘03	805
Owners (Jan. 7, 2004)	812
Billed Dwelling Units November ‘03	7,508
Dwelling Units (Jan. 7, 2004)	7,840
Dwelling Units Paid/Licensed  (Jan. 7, 2004)	6,678

The table below displays the types and numbers of complaints received by the Inspections Department, including those that are rental housing specific, during the first year that the Rental Housing Program has been in operation.

RESIDENTIAL COMPLAINTS RECEIVED JULY 1, 2002–JUNE 30, 2003

Inspections Department Complaint Classification	Total	Rental Specific	Percentage specific to Rental Licensing Program
Private Property	77	42	54%
Zoning	42	14	33%
Signs	310	208	67%
Total	429	264	62%

CONCLUSION

The Rental Licensing Task Force recommended that the Council reconvene the Task Force in three years to evaluate the effectiveness of the complaint-driven-program and determine whether to consider implementing a mandatory system of inspections for all rental units.  The Rental Licensing Program is scheduled to expire June 30, 2005, absent other action by the Council.  We have contacted the UNC Master of Public Administration Program and submitted a proposal to request that a group of students evaluate the effectiveness of the Rental Licensing Program.  If the Rental Licensing evaluation proposal is accepted the results of the students’ study will be available to Council prior to our next status report in January 2005.

ATTACHMENTS

1. April 8, 2002 Recommendations for the Rental Licensing Program (p. 4).
2. June 23, 2003 update on Rental Licensing Program (p. 30).
3. August 25, 2003 Memorandum to Council (p. 33).