ATTACHMENT 2
AGENDA #12
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Recommendations for a Rental Licensing Program
DATE: April 8, 2002
The attached resolution would establish guidelines for a rental licensing program, effective January 2003.
The attached ordinance would revise Chapter 9 of the Code of Ordinances to establish a program for the licensing of residential rental properties.
This memorandum reviews the issues raised to date regarding the use of a rental licensing program to improve and maintain the quality of life in neighborhoods, and administrative issues related to the establishment of a program.
Attachment 1 responds to questions and comments raised at the Council’s public forum on January 23, 2002 and Council meetings.
Attachment 2 reviews in detail the history of these discussions, which began in 1998.
Attachment 3 includes copies of letters and emails we have received on this subject.
BACKGROUND
The establishment of a rental housing program was raised in 1998 in the context of concerns regarding the effects on neighborhoods close to campus of the conversion of owner-occupied residence to rental properties and the impact on the quality of life for residents. Noise, front-yard parking, and overcrowding were often cited. Later, residents of other neighborhoods suggested that rental licensing might address their concerns as renters of housing whose owners would not maintain them in a safe, sound and sanitary manner.
Both of these perspectives are encompassed by the Town’s Comprehensive Plan adopted in 2000. The Plan recommended a 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.”
The rental licensing program is a part of a broader neighborhood protection strategy of the Comprehensive Plan. By a series of actions, the Plan seeks to implement the objective of protecting the physical and social fabric of Chapel Hill’s neighborhoods.
One of the action items is the implementation of a strategy to address the effects on neighborhoods of the conversion of owner-occupied residences to rental properties. Specific concerns of residents include housing affordability, noise, front-yard parking and effects on the physical character of neighborhoods. A multi-faceted strategy is recommended in the Comprehensive Plan to address these issues, including:
Enforcing existing regulations, such as front-yard parking restrictions in the Historic Districts, occupancy requirements and the noise ordinance;
Informing property owners and renters regarding these regulations, possibly in conjunction with a rental licensing program;
Implementing a rental licensing and inspection program to help maintain units in compliance with code requirements, and to provide a mechanism for periodic inspection and enforcement of related regulations, such as occupancy and front yard parking;
Initiating communications with student residents;
Developing design guidelines; and
Establishing a “First Option Fund” (note: the Council established a Revolving Acquisition Fund in January 2002).
Thus, the Comprehensive Plan envisions establishing a rental licensing program as an integral component of a broader approach to coordinate Town actions affecting the quality of life in existing neighborhoods.
Current Tools
The Town currently enforces the Minimum Housing Code on a complaint-driven system. There is no plan to systematically inspect every housing unit in Town on a periodic basis.
Residential parking permits are used in many neighborhoods close to campus to enable residents and their guests to park on the street near their homes. The permit program prevents campus-related parking from monopolizing all on-street parking spaces. The Parking Division of the Transportation Department provides enforcement.
Front-yard parking is regulated by the Development Ordinance in the Historic Districts. The Inspections Department provides enforcement.
The Development Ordinance also regulates the number of unrelated persons who may live in a single dwelling unit. The Inspections Department provides enforcement.
The Sanitation section of the Town Code regulates how household trash is prepared and collected. In late 2001, the Town completed its conversion of trash collection from rear yard to curbside. Since then the Solid Waste Division of the Public Works Department has been working to enforce the regulations through oral and written warnings. The Town Council recently authorized the issuance of citations to those who do not, after warning, voluntarily comply with the regulations. Civil fines of $25 would be assessed for a violation. The Solid Waste Division has had the citation books printed and is beginning use of citations this month.
The Town Council adopted a new Noise Ordinance in September 2001. It provides a clearer definition of nuisance noise and includes a protocol for enforcement through citations. The Police Department provides enforcement, and has issued an increased number of citations since the amendment of the ordinance.
The Town Code also regulates the accumulation of trash and debris and the storage of dilapidated vehicles. The Inspections Department provides enforcement.
We believe that the enforcement of each of these ordinances is improving. Over the past eleven months the Inspections Department has placed a higher priority on enforcement of Town ordinances involving community standards, in addition to enforcing the State Building Code. Enforcement of the Noise Ordinance is improving as Police officers become more familiar with the new regulations and are trained with the new noise meter. With the advent of citations for those who do not prepare their household trash and handle their trash containers correctly, we believe that better enforcement will be achieved. Nevertheless, continued improvement in enforcement of each of these sections of the Town Code and Development Ordinance and better coordination among the enforcement personnel is an on-going objective which we intend to meet.
OUTLINE OF A RENTAL LICENSING PROGRAM
We believe that a rental licensing program can strengthen the multi-faceted effort to protect the character and the stability of Town neighborhoods.
1. Applicability
· All owners of rental property, including the Town, would be required to obtain a license for each rental unit.
· Issuance of a license would require an affirmation by the owner of the rental unit that to the best of his/her knowledge the property complies with the Minimum Housing Code and with the maximum number of unrelated residents allowed by the Development Ordinance.
· Licenses would be renewed annually and owners would annually be required to pay the license fee.
Exception: If an owner were temporarily living out of Town and renting his/her unit with the intent of returning within twelve months. We believe that this exception would accommodate people such as University personnel on sabbatical who leave Town temporarily, with the intent of returning to their home within a year
Exception: The Council could also choose to exempt rental properties that are accessory apartments within owner occupied houses. The Town’s Development Ordinance defines an accessory apartment as, “a dwelling or combination of dwellings on a single zoning lot consisting of two dwelling units, provided the floor area of one of the dwelling units does not exceed 50% of the floor area of the other dwelling unit, nor is greater than 750 square feet and further provided the dwelling’s exterior design and entry locations give the dwelling the appearance of a single family dwelling”.
Comment: We recommend that both exemptions be allowed. In a university town, absences of up to a year while the home is being rented are not uncommon. Because such rentals are for limited periods, we believe that regulation would achieve little. We also believe that regulation of the rental of accessory apartments may be unnecessary, because the landlord is both known and located close to tenants. After checking our records, we find that we have never received a complaint from either a tenant or an owner in this situation. Members of the Rental Licensing Task Force have reported that it may be difficult for tenants to confront their landlords. If so, we believe it would be no easier for these tenants to report their landlord to the Inspections Department.
2. Application for a License
The application would:
Require owners to submit contact information, including: the owner’s name, mailing address, fax and telephone number.
Request that the owner provide the name, mailing address, fax and telephone number of any registered agent empowered to act for the owner. Additional contact information. would be requested (i.e. cellular phone number, pager number, email address), but this additional information would not be required.
Require annual certification from property owners that no more unrelated people live in a dwelling unit than is allowed by the Development Ordinance.
Require annual certification from property owners that his or her property meets the Town’s Minimum Housing Code.
Require payment of an annual fee.
3. Rental Duties and Tenant Information
· The Town would distribute a Rental Duties Information Sheet to owners of rental property that would:
Describe the requirements of the Minimum Housing Code and include a copy of the code.
Describe the Town regulations regarding neighborhood parking, front-yard parking, the number of unrelated persons allowed to inhabit a single dwelling unit, the noise ordinance, regulations regarding solid waste collection, and regulating trash and debris and dilapidated vehicles, by which tenants would be expected to abide.
Provide suggestions regarding how to inform one’s tenants of these requirements and to consider including wording in the lease concerning the need to meet local ordinances.
· The Town would develop means of distributing information directly to tenants.
· We believe that a landlord knowledgeable about such local ordinances can better inform his/her tenants of their responsibilities, and that tenants with such knowledge are more likely to obey such ordinances and be good neighbors.
4. Creation of a Data Base
· The information provided by the applications would be organized into a data base that would be accessible through the Town’s website.
5. Fee Schedule
· Fees would be set by the Town Council to cover the cost of the program and would be reviewed annually by the Town Council.
· The fee would be due upon submittal of the application for a license or license renewal.
· The fee schedule would be based on a scale that reduces the per-dwelling unit costs as the number of units on a single lot increases.
· We agree with the Task Force recommendation that a graduated fee schedule should be used, so that per unit fees are lower for owners of large numbers of units than for owners of just a few units. Currently, we do not know how many of the total of rental units are owned by owners of many or few units. Therefore, we cannot estimate revenue that would be generated by a graduated fee schedule. We would develop a graduated fee schedule for the second year of the program.
· For the first six months of the program, (January 1, 2003–June 30, 2003) we recommend charging a flat $10 fee for each rental unit in Town. We believe that such a fee would generate enough revenue to support the program in its start up costs and initial enforcement throughout 2002-03.
$10 9,900-10,600 $99,000-$100,600
· At this time, we do not have an accurate method for determining the number of rental units in Town. The estimate above is based on a total derived from the 2000 census, and the number of new units rental units built and occupied since April 2000, based on Building Permit data.
· We have conservatively estimated the number of rental units to be sure that enough revenue would be collected to cover program costs. Census data does not allow us to estimate the number of accessory apartments or even whether most of those units have been captured in Census data. Nor do we know now what proportion of units may not be identified or comply with the fee schedule. Therefore, we have used a range of units generating a range of revenue.
· After six months, we will have a better sense of the number of rental units in Town and will be better informed of how much we would need to collect in fees using a graduated fee schedule to cover program expenses.
· We would recommend adjustments to the fee schedule next year based on a more accurate number of rental units Town-wide so that enough revenue is generated to support the program.
6. Budget
We recommend a 2002-2003 fiscal year budget allocation of approximately $92,000 to add a Zoning Enforcement Officer, a part-time Administrative Clerk (twenty hours per week, year round), and a temporary Administrative Clerk (up to twenty hours per week for up to six months). A Zoning Enforcement Officer would: inspect rental property on a complaint basis to ensure compliance with the Minimum Housing Code, Development Ordinance and nuisance ordinances; notify owners of corrective actions necessary to comply, issue violation notices and take other measures necessary to ensure compliance. The person in this position would also work with neighborhood organizations and property owners and managers to improve communication with the Town and their understanding of relevant codes. This person would also work with the Town Attorney when legal action is required.
A part-time Administrative Clerk would provide information to the public about the licensing program and services, assist with the maintenance of the rental licensing database and with code enforcement procedures. A part-time contract Administrative Clerk would provide data entry services related to the creation of the database during some or all of the first six months of program implementation.
|
Zoning Enforcement Officer |
$38,000 (salary and benefits) |
|
Part-time Administrative Clerk |
$16,500 (salary and benefits) |
|
Temporary Contract Administrative Clerk |
$ 7,800 |
|
Reserve for Legal Expenses |
$10,000 |
|
Database System Development (software) |
$ 8,000 |
|
Computer Equipment |
$ 5,000 |
|
Office Furniture |
$ 3,000 |
|
Vehicle Expense |
$ 4,000 |
|
Total Year 1 |
$92,300 |
|
|
|
|
Year 2 Costs |
|
|
Zoning Enforcement Officer |
$38,000 (salary and benefits)* |
|
Part-time Administrative Clerk |
$16,500 (salary and benefits)* |
|
Reserve for Legal Expenses |
$10,000 |
|
Web Access Implementation |
$ 7,000 |
|
Computer Equipment |
$ 1,700 |
|
Vehicle Expense |
$ 4,000 |
|
Total Year 2 |
$77,200 |
* Salaries may be adjusted based on future Council decisions about salaries.
7. Program Implementation
If the program is approved as part of the Town’s 2002-2003 budget, we recommend that the effective date for the rental licensing program be January 2003. Between July and December 2002, we would develop an inventory of rental properties and their owners and notify property owners of the Rental Licensing Ordinance. We would also develop educational materials for both landlords and renters.
We would send rental property owners a copy of the Rental Licensing Ordinance, the Town’s Minimum Housing Code, an application form, rental duties information sheet, and information about Town policies and ordinances relevant to trash collection, noise control and parking. We would also work with the University to try to create avenues by which to educate student renters of their responsibilities. In addition, we would distribute copies of educational materials prepared by others, if available and consistent with the Town’s policies.
8. Evaluation
We recommend that the Council conduct a full evaluation of the effectiveness of the program after the first two years, so that decisions could be made about any modification needed or termination of the program. Staff evaluation would be on- going. The Council may wish to include a sunset clause in the ordinance, so that the program automatically expires a given period of time from its implementation unless the Council votes otherwise.
CONCLUSIONS
We believe that the Rental Licensing Program described above could be a useful addition to the several tools that the Town has to protect the character and stability of Chapel Hill’s neighborhoods. We list below some advantages and disadvantages.
Advantages
Disadvantages
· Diminishes the privacy of owners and agents of owners of rental units.
· Requires landlords to spend time on paperwork and to pay a fee annually.
· Requires Town to add one and one-half new positions and to implement another program.
· May increase expectations unrealistically.
We believe that the improved education of both landlords and tenants would result in rental housing being maintained to a higher standard and tenants behaving in a more neighborly manner than currently. Neighbors being able to contact owners of units whose tenants are in violation of Town ordinances may help those owners pay more attention to the types of tenants they accept and to the restrictions they include in their leases. Landlords would be less likely to ignore the Minimum Housing Code and the condition of their rental units, because they would each year need to personally affirm that to the best of their knowledge the unit meets the Minimum Housing Code.
Tenants, knowing their rights under the Minimum Housing Code and knowing the contact information for the owners of their units, would be more likely to request their landlords make needed repairs and to request inspection and investigation by the Inspections Department if the landlords do not act. Tenants would also, having been informed of their responsibilities, be more likely to comply with regulations regarding parking, noise, trash collection and the like.
The improved data would make it easier, and therefore more likely, for various Town departments to coordinate their enforcement efforts.
The funds generated by the fees would make it possible to expand the enforcement effort of the Inspections Department. Currently there is one Zoning Enforcement Officer who is responsible for enforcing the Development Ordinance, Minimum Housing Code and Town Code sections regarding accumulation of trash and debris and dilapidated vehicles. This inspector deals with all rental housing, owner occupied housing and commercial uses, including signs. As the enforcement effort has increased over the past year, the number of complaints is rising, so that it is no longer possible for this one individual to keep up with it all. If another inspector could be added to deal with rental housing, it would make it possible to improve and maintain the enforcement effort for rental housing, as well as for owner-occupied housing, businesses, offices and other commercial uses throughout the community.
On balance, we believe that the implementation of the Rental Licensing Program would help protect the character of Chapel Hill’s neighborhoods, improve housing conditions, and enhance the quality of life in neighborhoods.
RECOMMENDATIONS
Planning Board: On January 15, 2002 the Planning Board voted 7-1 to authorize proceeding with a rental licensing program (please see Attachment 4). The Planning Board noted that the proposed program in which the landlord affirms the unit is compliant is a modest start to addressing the issues raised in the Comprehensive Plan, and recommends that the Council give it a try. The Board also discussed whether eventually the community would evolve to a complete inspection program with mandatory inspections in order to maintain the existing housing stock.
Comment: We recommend that the Council review the self-certifying program in three years to evaluate its effectiveness. We believe that the program as proposed would very likely improve rental housing conditions and still keep program costs at a reasonable level. The cost of conducting systematic Town-wide inspections would be several orders of magnitude greater than this program in which owners affirm to the best of their knowledge that the units comply with the Minimum Housing Code.
Housing and Community Development Advisory Board: On January 22, 2002, the Housing and Community Development Advisory Board voted 5-0 to authorize proceeding with a rental licensing program (please see Attachment 5). The Board noted that Council should consider the following suggestions and recommendations:
(1) The definition of rental property should be clarified.
Comment: All persons meeting the Housing Code definition of “operator” and/or “owner/operator” who lease for consideration any dwelling, dwelling unit, and/or rooming house would be required to obtain a rental license.
(2) Program costs may be higher than anticipated.
Comment: Program costs are estimates, as described in the memorandum. We propose to review costs and program fees each year to determine if adjustments are necessary.
(3) There should be a sliding scale for licensing terms (i.e. every three years for multi-family apartment complexes).
Comment: In order to increase the probability of compliance with the Minimum Housing Code and other Town ordinances, we recommend that each owner annually affirm that to the best of their knowledge their units are in compliance with the regulations of the rental licensing program. Experience may show that annual reaffirmations are not necessary, but we believe that we should begin on an annual basis.
(4) There should be coordination with other departments to determine their experience with enforcement and compliance of other Town ordinances.
Comment: Town Departments affected by the rental licensing program will work together to more effectively enforce Town ordinances and efficiently resolve violations of Town ordinances. Use of the Geographic Information System may be a reliable means of combining enforcement data from several departments and to reveal patterns.
(5) Penalties for non-compliance should be clarified.
Comment: Penalties for non-compliance are defined in the Town code.
(6) Random inspections should be considered.
Comment: At this time, we recommend each owner of rental property annually affirm that to the best of their knowledge their units are in compliance with the regulations of the rental licensing program. We recommend that the Council review the program in two years to evaluate its effectiveness. The need for a random inspection process, as well as a Town-wide systematic program could be considered at that time.
That the Council adopt the attached Resolution establishing guidelines for a rental licensing program and the attached Ordinance revising Chapter 9 of the Town’s Code of Ordinances to establish a program for the licensing of residential rental properties.
ATTACHMENTS
A RESOLUTION ESTABLISHING GUIDELINES FOR A RENTAL LICENSING PROGRAM (2002-04-08/R-10)
WHEREAS, the Town’s Comprehensive Plan adopted on May 8, 2000, recommends 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”; and
WHEREAS, on June 12, 2000, the Council charged the Rental Licensing Task Force 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; and
WHEREAS, on March 26, 2001, the Rental Licensing Task Force presented recommendations for the Council’s consideration; and
WHEREAS, on January 23, 2002, the Council held a public hearing to receive citizen comments on a proposed rental licensing program;
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the following guidelines are established for a rental licensing program:
1. The operator and/or owner/operator of every dwelling, dwelling unit, or rooming unit leased for consideration shall be required to obtain a rental license.
a. Each rental license must be renewed annually.
b. Each rental license fee must be paid annually.
c. Exception: If an owner was temporarily living out of Town and renting his/her unit with the intention of returning within twelve months.
2. The Town Code will be amended to include a rental licensing ordinance.
3. An Application Form must be completed by all owners of rental properties.
4. The Town will make available a Rental Duties Information Sheet to owners of rental property.
5. A database will be created to include all of the information obtained from the applications that would track complaints.
6. For the period of January 1, 2003 through June 30, 2003, the fee for a rental license will be $10 per rental unit; except that the fee for rental dwellings and units owned by the Town of Chapel Hill shall be $0 per rental unit.
7. In two years, the Council will appoint a committee to evaluate the effectiveness of the program.
This the 8th day of April, 2002.
Amended 4-9-02.
AN ORDINANCE REVISING CHAPTER 9 OF THE CODE OF ORDINANCES OF THE TOWN OF CHAPEL HILL TO ESTABLISH A PROGRAM FOR THE LICENSING OF RESIDENTIAL RENTAL PROPERTIES (2002-04-08/O-3)
BE IT ORDAINED by the Council of the Town of Chapel Hill as follows:
Section 1. Findings and Purposes.
The Town Council does hereby find that:
1) A systematic method of collecting information on leased property would assist the Town, residents of rental properties, owners of rental properties, and owners/residents of non-rental properties in the exchange of information pertaining to the requirements of the Chapel Hill Housing Code, other regulations of the Town and the State affecting rental properties, and the names of owners or managers of rental properties where there appear to be infractions of code standards.
2) It would be consistent with the public health, safety and welfare and would be a benefit to all Town citizens to require the licensing of persons who lease any dwelling, dwelling unit, and/or rooming house that is subject to regulation under the Chapel Hill Housing Code.
3) A licensing program for rental residential properties would facilitate the enforcement, on a complaint basis, of the minimum standards of fitness for housing by requiring the dissemination of information on the Minimum Housing Code to residents.
4) The maintenance and offering for rent of residential properties is a business activity which is subject to regulation by the Town in order to promote the public health, safety and welfare, in particular, the health, safety and welfare of residents of the rental residential properties and of residents of other properties surrounding rental residential properties.
5) An enhanced program of enforcement of the minimum housing code through implementation of a rental licensing program would promote the public health, safety and welfare. .
Section 2. Chapter 9, Articles I and II, of the Town of Chapel Hill Code of Ordinances are revised by making the following amendments:
1. Section 9-1 Finding; purpose. is hereby revised by adding a third paragraph to read as follows:
“In order to establish and facilitate the enforcement of minimum standards of fitness for the initial and continued occupancy of all rental housing, this chapter establishes a system of rental licensing for all dwellings, dwelling units, and/or rooming houses leased for consideration.”
“(c) To keep a record of the results of inspections made under this chapter and an inventory of those dwellings that do not meet the minimum standards of fitness herein prescribed; and”
and replacing it with the following language:
“ (c) To keep an electronic and hard copy record accessible via the Internet and by the public upon demand of the results of inspections made under this Chapter and an inventory of those dwellings that do not meet the minimum standards of fitness prescribed herein; and”
3. Section 9-15. Duties of building inspector. is hereby revised by adding the following additional paragraphs:
“(d)To keep an electronic copy (not available via the internet), and a hard copy record of the registration of all licensed operators and operator/owners of all dwellings, dwelling units, and rooming units that are leased for consideration that will contain the following information:
(1) The identification of the dwelling unit by location;
(2) The name, address, fax and telephone numbers of the owner and operator (if applicable) who has charge, care or control of a building or part thereof in which the dwelling units are leased for consideration;
(3) An acknowledgement by the licensee that he has complied with Sec. 9-3 of the Chapel Hill Housing Code;
(4) An acknowledgment by the licensee that he has provided each occupant of a dwelling unit with a Rental Duties Information Sheet provided by the Town of Chapel Hill;
(5) An acknowledgement that the dwelling unit is in compliance with the limits in the Chapel Hill Development Ordinance on the number of unrelated individuals.
(e) To provide each licensee with two (2) copies of a Rental Duties Information Sheet containing the following information:
(1) A recital of the duties imposed upon landlords and tenants pursuant to the North Carolina Residential Rental Agreements Act;
(2) Information regarding Town of Chapel Hill policies and ordinances relevant to trash collection, noise control and parking;
(3) Information regarding the option of resolving any dispute prior to filing a complaint with the Town of Chapel Hill through mediation conducted by the Chapel Hill Dispute Settlement Center.”
(f) To provide each licensee with a copy of the Chapel Hill Minimum Housing Code.
4. Section 9-15, current subparagraph (d) is renumbered as paragraph (g).
“Sec. 9-18. License required for Leased Residential Properties.
(a) The operator of every dwelling, dwelling unit, or rooming unit leased for consideration shall pay an application fee in accordance with the schedule of fees adopted by the Chapel Hill Town Council for each fiscal year, based on the criteria established in that schedule, to obtain a license to comply with the duties imposed pursuant to Sec. 9-3 of the Chapel Hill Housing Code and each person so licensed shall provide the following information to the building inspector:
(1) The identification of the dwelling unit by location;
(2) The name, address, telephone and fax number of the operator and/or owner/operator who has charge, care or control of a building or part thereof in which the dwelling units are leased for consideration;
(3) An acknowledgement by the licensee that he has complied with Sec. 9-3 of the Chapel Hill Housing Code;
(4) An acknowledgment by the licensee that he has provided each occupant of a dwelling unit with a Rental Duties Information Sheet provided by the Town of Chapel Hill.
(5) An acknowledgement that the dwelling unit is in compliance with the limits in the Chapel Hill Development Ordinance on the number of unrelated individuals.
(b) Notwithstanding the foregoing paragraph 9-18 (a), a license shall not be required for the rental of property under the following condition:
1. The temporary rental of an owner’s principal dwelling for a period of one year or less while the owner is temporarily living out of Town. (The purpose of this exemption is to accommodate, for example, faculty of the University who have left Town on sabbatical with the intent of returning to their home within a year.)
6. Section 9-37 is hereby revised as follows:
A. By adding (a) at the beginning of the first paragraph.
B. By inserting a new second paragraph to read as follows:
“(b) It shall be unlawful for an operator and/or owner/operator of any dwelling unit, dwelling, or rooming unit leased for consideration to fail to obtain a license as provided by Sec. 9-18 of this Chapter.”
C. By adding (c) at the beginning of the next (now third) paragraph.
C. By changing the period at the end of the third paragraph to a semi-colon and adding the following language:
“provided, however, that for the first year after the effective date of the “Ordinance to Establish a Program for the Licensing of Residential Rental Properties,”(Ordinance No. 2002-4-8/O-3) , an owner/operator of any unlicensed rental property or properties who, within 30 days of notice of violation of 9-37(b), obtains the required license(s) and pays a fee equivalent to twice the otherwise applicable fee for the license(s) under Sec. 9-18 shall not be subject to additional penalties for failure to obtain the required license(s).” However, if the required license(s) is/are not obtained before the expiration of this 30 day time period, an owner/operator shall be subject to other penalties and fines as provided by this Chapter.”
D. By adding a new fourth paragraph to read as follows:
“(d) The violation of any provision of this Chapter shall also subject the offender to a civil penalty of fifty dollars ($50.00). Each day that any violation continues shall constitute a separate violation and a separate offense for the purposes of imposition of penalties. In addition to the penalties and other remedies provided, the Town Manager may institute any appropriate action or proceedings to prevent, restrain, correct or abate a violation of this Chapter.”
Section 3. This Ordinance shall be effective January 1, 2003 and shall expire June 30, 2005.
This the 8th day of April, 2002.
Amended 4-9-02.
The following questions have been raised by the citizens and by elected officials. We provide a response for each one.
1. Why has the University not been involved in the discussions of rental licensing?
The Associate Vice Chancellor for Student Services, a representative from University Student Legal Services, the founder of the University’s Carolina Rental Advocacy Group and a University Law Student were members of the Rental Licensing Task Force.
2. Will the rental licensing program increase the cost of rental housing?
As proposed, we do not believe that the rental licensing program would have a negative impact on housing affordability. If a property owner chooses to pass along the cost of a rental license to a tenant, the cost would be about $1 per month.
It is possible that the need for the owner’s annual affirmation that the rental unit meets the Minimum Housing Code would engender more maintenance and repairs, and that the owner would pass that cost on to the tenant. However, we believe that if such maintenance and repair are required to maintain the community’s housing stock, then it should be carried out.
3. How effective could a program be that includes simply an affirmation by the owner that the rental unit complies with the Minimum Housing Code?
We believe that a program in which the owner affirms that to the best of his/her knowledge the property meets the Minimum Housing Code would improve rental housing conditions and keep program costs at a reasonable level. The cost of conducting systematic Town-wide inspections would be several orders of magnitude greater than the program as proposed. We believe that the housing stock is generally in acceptable condition. Therefore, we recommend initiating the program in this manner, with the expectation that it will be successful.
The Inspections Department will continue to inspect properties on request. If we determine that the program is not working as planned, we would bring recommendations for change to the Council for its consideration.
4. How many units will benefit from this plan?
The Rental Licensing Program is proposed to apply to all rental units in Chapel Hill except for accessory apartments and units being rented temporarily. We estimate that there are approximately 10,600 rental units within the Town limits
5. What would happen to the excess revenue in the second year?
If there is excess revenue it would remain in the General Fund, and the Council could take the excess revenue into consideration in developing the budget and the fee schedule for the following fiscal year. The Council adopts fees annually and would, therefore, have an opportunity to reconsider the fees each year.
6. Will the rental licensing program fees be reduced in the second year?
Fees are adopted by the Council each year and would be reviewed annually. Fees could be reduced when the overall program costs decrease.
7. How long before the Town pays more for this plan?
We propose to evaluate the program fees each year to determine whether the fees are covering the costs of operating the program. North Carolina statutes do not allow fees to generate more funds than necessary to fund the services for which the fees are paid. The program as proposed should require fewer staff hours than a program that requires mandatory inspections of all rental units. Costs may go down after the initial start-up costs, and we believe that the additional inspector will be sufficient to provide the additional enforcement expected. Therefore we do not anticipate any substantial increase in costs beyond the initial implementation of the program.
8. How does the City of Boulder implement its program?
We have spoken with a representative from the Boulder, Colorado Department of Inspections who informed us that its program requires property owners to pay a fee of $15 per building (could mean 1 or 100 units under one roof). In addition, the penalty for not registering a unit for the program is $2,000. The representative stated that fees collected do not cover the City’s cost to operate the program. Several years ago, the City modified its program to allow general contractors, engineers and inspectors who are certified through the American Society of Home Inspectors to perform inspections for the rental licensing program. Therefore, the City has not had to use its staff to perform the inspection of rental properties. Currently, three inspectors within the City’s Inspections Department respond to violations of the City’s Ordinances and Town Code.
9. Instead of charging the owners of all rental units, could the program be funded by those that do not comply?
We have no way of predicting the number of units that will violate the conditions of the Rental Licensing Program or how many property owners will be assessed to pay fines. Therefore, we would not know at what level to set the fines in order to generate the revenue needed to support the program.
10. What tools are available to cause a sunset of this program in three years unless extension is affirmatively approved by the Council?
The Rental Licensing Program would be established through enactment of the attached Ordinance making amendments to Chapter 9 of the Town Code. The last section of the Ordinance currently states that the Ordinance shall be effective January 1, 2003 and shall expire June 30, 2005. The Council may change this date of expiration now or at a later date.
11. Which owners will step forward to participate in the program?
We propose to notify owners of rental property of the program requirements in September of 2002, including that they must comply with the program by January 1, 2003. We would use tax records to ensure that we would have as complete a list as possible of owners of rental housing. The tax records are regularly updated with the names and addresses of property owners. When the property owner does not reside at the same address as the property, we would investigate whether the property is being used as a rental unit. The address listings do have errors, but we believe that a combination of field surveys, tax listings and neighbor complaints will help us identify and notify owners of rental housing.
12. Will fraternities and sororities have to comply with the program?
No, the program would not apply to sororities and fraternities, although such buildings would still need to comply with all the other Town ordinances discussed in this memorandum.
13. Will homeowners be held to the same standards as the landlords and renters?
Homeowners would not be required to obtain a rental license (unless they rented space in their private residence) and therefore would not be required to certify that their property meets the Town’s ordinances or to pay a license fee. However, the Minimum Housing Code provisions do apply to owner-occupied property.
14. What is the recourse for a renter who lives next to a homeowner who is clearly violating the Minimum Housing Code?
Regardless of whether a residential unit is rented or owner-occupied, the Town will continue to investigate and enforce Town ordinance violations that are reported.
15. Is the Town going to require owners to notify the Town when the tenants change during the year?
No. The annual license application would contain the owner’s affirmation that to the best of his or her knowledge the unit is incompliance with Town regulations on occupancy limits on unrelated people in a single dwelling unit.
16. What would happen if a rental property owner does not register for the program?
Failure to comply with the rental licensing program following notification by the Town could result in the owner being subject to civil or criminal legal proceedings.
17. Will all complaints be investigated?
The Town would continue to investigate all complaints that appear to involve violations of specific Town ordinances.
18. What type of complaint will trigger an investigation?
The Inspections Department is responsible for responding to complaints about buildings, property use and condition. Currently the Zoning Enforcement Officer enforces the Development Ordinance, and the sections of the Code of Ordinances regarding Minimum Housing, Dilapidated Vehicles, and Trash, Debris, and Weeds. Complaints that are not ordinance violations are returned to the complainant with an explanation and dismissed. Noise complaints are resolved by the Police Department and complaints about garbage cans left at the curb are resolved by the Public Works Department. Complaints regarding residential parking permits are resolved by the Transportation Department.
19. Will Rental Licensing Program inspections be completed in a timely manner?
Our objective would be to respond to all complaints and requests with an inspection within 5 working days.
20. How will the Town determine if a complaint is legitimate?
When a complaint is received by the Inspections Department, an initial inspection is performed by the Zoning Enforcement Officer to determine whether the property is in compliance with Town ordinances. If the property is in compliance, the Zoning Enforcement Officer will inform the complainant and no further action will be taken by the Inspections Department. If the property is found to be in violation, then a complaint case file will be initiated and the complainant notified of the investigation.
21. How will complaints be investigated?
Most investigations follow the same investigation procedure in the Inspections Department. If a property does not comply with ordinance requirements, the Zoning Enforcement Officer begins the enforcement process with a courtesy notice, visit, or phone call. This notification explains the Town’s interest and gives notice that an inspector has visited the site and has determined that the property is in violation of a Town Ordinance.
22. How are residents in violation fined?
If a property continues to be in violation of a Town Ordinance following efforts to achieve voluntary compliance, then a more formal enforcement process follows. For violations of the Development Ordinance typically the Zoning Enforcement Officer mails a final written notice of violation to the owner. The owner or occupant has the right to appeal to the Board of Adjustment for relief from the enforcement decision. If no appeal is filed, the owner is notified of the initiation of penalties, and the file is given to our attorney to pursue, usually through initiation of a civil complaint to obtain compliance and recover civil penalties.
The staff generally makes effort to achieve voluntary compliance before instituting formal proceedings for violations of other ordinances as well. The specific procedures, including whether or not the Board of Adjustment has a role, will depend on the specific ordinance violation alleged.
23. What are the enforcement distinctions of Front Yard Parking, Special Use Permit, Zoning Compliance Permit, Trash and Debris, Minimum Housing, and Dilapidated Vehicles?
Most violations of the Town Ordinances constitute misdemeanors and subject a person to possible criminal proceedings and/or civil enforcement proceedings. When criminal penalties are assessed, by law the penalties collected go to support the Chapel Hill-Carrboro City Schools. The violation may also have a civil penalty or resolution such as the removal of a vehicle or demolition of a dilapidated house. When civil penalties are assessed, the penalties collected are directed to the Town’s General Fund. The Town historically enforces Town Ordinances through the civil procedures rather than criminal proceedings.
All of the following violations are enforced by the Zoning Enforcement Officer in the Inspections Department. Enforcement is complaint-driven and each case involves inspection, contacting the property owner, written notification of the violation, and response to the complainant. The resolution is in compliance with the ordinance. When a property does not comply with the ordinance following a deadline given in the violation notice, penalties begin accruing and the Town Attorney proceeds to collect the penalties.
· Front yard parking in the Historic District is a violation of the Development Ordinance Section 14.6.5.p. Front yard parking in the Historic District is typically enforced with a civil penalty of twenty five dollars per day fine, as authorized by Section 23.4 of the Development Ordinance.
· Zoning Compliance Permits and Special Use Permits are regulated by Article 19 of the Development Ordinance. Zoning Compliance Permits and Special Use Permits are enforced with a twenty five dollar per day fine, as authorized by Section 23.4 of the Development Ordinance.
· Trash and Debris accumulation in a yard is a violation of the Code of Ordinances Section 9.114. A violation can be charged as a misdemeanor with a criminal penalty of up to a five hundred dollar fine or imprisonment for not more than thirty days.
· The Minimum Housing Code is established by Chapter 9 of the Code of Ordinances. When the violation is a deteriorated or dilapidated dwelling unit, the process includes investigation, notice, final notice, a hearing, and a statement of finding of facts before proceeding to the Town Council for an ordinance ordering the dwelling to be made to comply. Minimum Housing Code violations may also be enforced as a misdemeanor with a criminal penalty of up to a five hundred dollar fine or imprisonment for not more than thirty days by Section 9.36 of the Code of Ordinances (or as a civil penalty under the attached recommended ordinance). When the Town Council adopts an ordinance recommended by the Building Inspector to remove or repair a particular property that is in violation of the Minimum Housing Code, the property owner is also subject to the costs of lien on the premises by Section 9.34 of the Code of Ordinances.
· Dilapidated Vehicles are a violation of the Code of Ordinances Section 11.26 and the enforcement includes removing and disposing of the vehicle thirty days after written notification to the property owner from the Town.
24. What would the new inspector position be responsible for when first hired?
He or she would prepare the new rental license application forms and information to notify the citizens of the ordinance requirements, as well as create a database to track the Rental Licensing Program. The new position would answer questions from the public relating to tenant and/or owner problems with rental units and would inspect property in response to the complaints of citizens, seek necessary corrective actions, and issue violation notices. The new position would assist the Town Attorney to facilitate court action if necessary and would coordinate with the Director of Inspections to complete the yearly license renewal of all units. The Inspector would also meet on a regular basis with representatives of the Police Department and the Town Attorney concerning enforcement files that are active in the Rental Licensing Program.
25. What information would be included in the database that will be created for the Rental Licensing Program?
· We recommend that the database list the following information for each rental property:
· Address of the rental property;
· Name of the property owner, and of the manager or registered agent if applicable;
· Address of the property owner, and of the manager, or registered agent if applicable;
· Telephone and fax numbers of the property owner, and of the manager, or registered agent if applicable;
· Optional additional contact information (cellular, pager, email); and
· License renewal date.
26. Who would keep the database and how would it interface with the Police Department and tracking complaints?
The Inspections Department would maintain the database t through the Zoning Enforcement Officer and the part-time clerk. The GIS software that the Town and County use, as well as the new database for the Town, will provide the reference to location and owner for other Town departments. For example, with the new database the Police Department could look up an existing address, following a citizen complaint, and learn whether the property had an active violation file with the Inspections Department. This would help with, for example, dilapidated vehicles that are moved from the street to the yard to avoid the Police Department’s enforcement, and moved from the yard to the street to avoid the Inspection Department’s enforcement.
27. Why is it necessary to create a data base when the Orange County Tax Assessor has information?
The Orange County Tax Office has a database that includes the names and addresses of all property owners, but not the other information that we would need for this program. Most importantly, the County Tax Assessor does not collect data on whether residential units are rental or owner-occupied. Nor does it indicate the number of units on a single lot beyond three. We would set up the database so that it could be used to coordinate with the Police Department, Solid Waste Division, Parking Division and other agencies to track noise, trash, parking permit and other violations of Town ordinances.
28. Why is it necessary to collect and provide to the public such detailed and private information?
Information submitted to the Town on an application becomes part of the public record and is open to public examination, even if it is not posted on the website.
The Rental Housing Task Force saw the compilation of a database and its availability to the public as an important part of its recommendations. The Task Force reported that it thought such information would make it easier for potential tenants to learn about housing, for neighbors to contact landlords whose tenants are not good neighbors and for tenants to contact landlords who do not keep their properties in standard condition. We recommend that the database be posted on the Town’s website.
In deference to the security of single occupants, we would not ask for information on the numbers of tenants in each unit. Rather, we recommend that the application include a requirement that the owner affirm that to the best of his/her knowledge no more than the maximum number allowed by law of unrelated people live in a dwelling unit covered by the license application.
29. Is the Police Department issuing citations for noise ordinance violations?
Prior to the adoption of the new ordinance in September of 2001 citations were rarely used for nuisance violations. Most of the citations that were issued for ordinance violations were issued based on the decibel level (Section 11-39 of the Code of Ordinances). These violations were easier to establish than other nuisance violations because of the objective standards in the ordinance and the use of a noise meter to gather evidence.
There are two principal reasons why few citations were issued for nuisance violations: usually the nuisance was abated after officers had issued warnings; or, the violation was determined to be a private nuisance, because only one person had complained about the noise. The enforcement policy of the Police Department, established with guidance from the Town Attorney, required that certain criteria be met before officers could cite for a nuisance violation.
Since September 1, six citations have been issued for noise violations, compared to three between January and August of 2001. We expect this enforcement trend to continue.
Though the criteria for enforcing nuisance violations are the same now as prior to the adoption of the new ordinance, the enforcement protocol is now included in the ordinance and is no longer merely a policy of the Police Department. Also, the new ordinance more clearly defines nuisance violations and gives police officers clearer guidance on when nuisance provisions can be enforced without the need for additional or corroborating witnesses. The police officers issue the citations and the court system determines the fines.
History of Discussions of a Rental Licensing Program
This attachment reviews the timeline of events leading up to the Town Council’s creation of a Rental Licensing Task Force, provides background on the Task Force process and recommendations, and summarizes recent Council actions related to the creation of a Rental Licensing Program.
TIMELINE OF EVENTS
Spring 1998
· The Council considered a proposed moratorium on development in neighborhoods near downtown.
· The Council decided against enacting a moratorium.
· The Council also put initiatives in place to further explore the neighborhood concerns that had led to the call for a moratorium.
June 15, 1998
· The Council adopted a resolution asking the Planning Board to meet with citizens of the Northside neighborhood to discuss their goals and concerns for the future of their neighborhood. Meeting held on September 10, 1998.
· The Council also asked the Historic District Commission to initiate similar conversations with residents of the Cameron/McCauley Historic District. Meeting held September 15, 1998.
October 26, 1998
· The Historic District Commission and Planning Board provided reports to the Council regarding their meetings.
· The Council received the reports and referred them to the Manager for comment.
· At the Historic District Commission’s meeting with residents of the Cameron/McCauley Historic District, and the Planning Board’s meeting with residents of the Northside neighborhood, citizens raised concerns about enforcement of existing occupancy limits on rental properties, and suggested that the Town institute a rental licensing program for landlords. At that time, the Manager stated that licensing of rental businesses may help in achieving compliance with occupancy restrictions. The Town Attorney was asked for a report on the feasibility of requiring owners of rental property to obtain a license. The Manager was asked to provide a report on how such a licensing system might be useful in addressing the issues of concern.
January 25, 1999
· The Council referred the consideration of a system to license the rental of dwelling units to the Town Manager.
February 8, 1999
· During a work session with the Council and the Historic District Commission, members of the Commission stated that overcrowding of units was an issue in addition to safety issues connected with overcrowding.
· It was also stated that residents feared that the neighborhood was being overrun with student housing and that single family buyers were being driven away.
June 14, 1999
· Information was provided to the Council on the possible licensing of rental dwelling units by the Town.
· A report outlined a number of existing Town ordinances from the Development Ordinance and the Town Code that regulate the impact of residential property on surrounding properties.
· The memorandum also suggested potential issues for the Council to discuss during its consideration of pursuing a licensing program for residential rental property in Chapel Hill. The Council considered the report and agreed to provide future direction to the staff.
November 22, 1999
· The Council received a report from the Manager about how a rental licensing program could be implemented.
· The Council agreed to hold a work session to further discuss whether and when to initiate a rental licensing program.
· The Council asked that students, investor-owners, and University representatives participate in a Work Session.
February 9, 2000
· The Council conducted a work session to discuss the idea of instituting a licensing requirement that would be associated with the rental of dwelling units
· The Council received a staff report on the topic that outlined options for the Council’s consideration.
· The Council also heard from citizens in attendance and discussed their concerns about implementing a rental licensing program in Chapel Hill. The Council instructed the Manager to bring a report in March suggesting possible next steps
March 27, 2000
· The Manager provided a staff report suggesting a process for continuing discussion of a Rental Licensing proposal.
· The Council adopted a resolution to establish a Work Group that would begin meeting in September 2000 and report to the Council in February 2001.
May 8, 2000
· The Council adopts the 2000 Comprehensive Plan for Chapel Hill, including a strategy to address the effects on neighborhoods of the conversion of owner-occupied residences to rental properties.
· The Plan recommended a multi-faceted approach, including implementation of a rental licensing and inspection program.
THE RENTAL LICENSING TASK FORCE
On June 12, 2000 the Council adopted a charge and timetable for a Rental Licensing Task Force. The charge of the Task Force was to provide the Town with recommendations whether to enact a system of licensing the rental of dwelling units in Chapel Hill and, if adopted, what form such a system would take. The Council determined the specific responsibilities of the Task Force to be:
· Considering the rental licensing proposals that have been brought to the Council;
· Identifying advantages, disadvantages, and implications associated with the proposals;
· Considering additional alternative rental licensing models; and
· Preparing a recommendation for the Council’s consideration.
The Task Force included representatives of the Town Council, the Historic Districts and the Northside neighborhood, student and administration representatives from the University, property owners and property managers.
Between November 2000 and March 2001, Council Members Edith Wiggins and Bill Strom convened five meetings of the Rental Licensing Task Force. The Task Force reviewed the rental licensing programs of Boulder, Colorado, Newark Delaware and Annapolis, Maryland, and developed an alternative rental licensing program that could apply to Chapel Hill based on North Carolina Law. The Task Force also reviewed concerns raised by citizens and landlords about rental properties and concluded that implementing a rental licensing program could achieve the objective of improving housing conditions in Chapel Hill. In an early meeting the members of the Task Force voted to support a complaint driven rental licensing program that would apply to all rental properties in Chapel Hill.
On March 26, 2001, the Rental Licensing Task Force presented five recommendations for the Council’s consideration. The Task Force recommended that the Council consider a program that would:
1. Require each rental unit in Town to be licensed;
2. Amend the Housing Code to establish a Rental Licensing Ordinance to increase the duties of the Building Inspector to include maintenance of a data base;
3. Require property owners to complete an initial application and then annually certify that their property meets the Town’s Minimum Housing Code;
4. Create a database that would include contact information for property owners and/or the registered agent; and
5. Develop a fee schedule for licenses. As recommended by the Task Force, the fee should not exceed the cost of implementing a licensing program; a graduated fee should be considered for licensees of multiple units.
SUMMARY OF RECENT ACTIVITIES
On January 14, 2002 the Council adopted a resolution to: (1) schedule a public forum for January 23, 2002 to receive citizen comments on preliminary recommendations for a rental licensing program; (2) refer the preliminary recommendation to the Housing and Community Development Advisory Board and the Planning Board for review; (3) return to the Council for consideration of an ordinance.
On January 23, 2002, the Council held a public hearing to receive citizen comments on a proposed rental licensing program. A response to comments and questions raised at the public hearing are included in this report as Attachment 1.