SUMMARY MINUTES OF A WORK SESSION OF THE CHAPEL HILL TOWN COUNCIL ON WEDNESDAY, FEBRUARY 9, 2000 AT 4:00
P.M.
Mayor Waldorf called the meeting to order at 4:00 p.m.
Council Members in attendance
were Flicka Bateman, Joyce Brown, Kevin Foy, Lee Pavăo, Bill Strom, Jim Ward,
and Edith Wiggins. Council Member Pat Evans was absent, excused. Staff members
in attendance were Town Manager Cal Horton, Assistant Town Manager Sonna
Loewenthal, Town Attorney Ralph Karpinos, Assistant to the Manager Bill
Stockard, Planning Director Roger Waldon, and Town Clerk Joyce Smith.
Planning Director Roger Waldon said the idea of instituting a licensing requirement for rental of dwelling units in Chapel Hill first came to the Council last year for discussion. He said one of the ideas suggested was that Chapel Hill establish a procedure for licensing of rental properties similar to the privilege license issued to other types of businesses. Mr. Waldon said the concerns brought to the Council tended to come from two directions:
(1) from neighbors of rental properties concerned about too many people occupying the rental dwellings, parking, and upkeep, and the like; and
(2) from renters, concerned about the quality of the units they were renting.
Mr. Waldon said this matter was referred to the Town Attorney, and the Council had received his comments. He said the staff had given the Council some thoughts of how a rental licensing program might work in Chapel Hill, and they were included in the memorandum. Mr. Waldon said one of the key policies to the program was whether or not there would be an inspections component attached to it. He stated there were between 8,000-10,000 rental units in Town, and if an inspections program was instituted, staff would need to be hired for the inspections. Mr. Waldon added such an inspections program could be conducted on a four-year cycle or on demand.
Mr. Waldon said the Council has requested a fee schedule that would cover the costs of the program. He said the cost of an annual rental license could be somewhere between $10-$50 for each rental unit.
Mr. Waldon said the policy questions associated with consideration of a rental licensing program included:
(1) should Chapel Hill institute a rental licensing program,
(2) should there be an inspections component to it, and
(3) how vigorous and rigorous an inspection program would the Council envision.
Representatives of the work group of students and landlords present at the meeting were asked to present their report for the Council.
Lee Conner, President of the Graduate and Professional Students at UNC, said he and Nicholas Heinke, Student Body President, met with a group of landlords, some students, and Dorothy Bernholz, of Carolina Legal Services. He stated the group developed a compromise plan which reflected the concerns of the two groups of citizens. He highlighted several points:
· They did not support reducing the number of unrelated persons living together from 4 to 2.
· They preferred a system that was a complaint-driven system rather than a mandatory inspection system, with a cost of no more than $10 for the license.
· They suggested the program be called a “rental responsibility plan,” instead of “licensing.”
· The licensees would be required to provide certain data: number of units, number of bedrooms per unit, number of off-street parking spaces available per unit, number of on-street parking spaces available per unit, a statement that the Chapel Hill Housing Code has been reviewed, and there were no known Code violations.
· The fees collected would provide for a database made available to the public on demand, and included on the Town’s website, along with a copy of the Housing Code.
· Each licensee would be provided with a copy of the Chapel Hill Housing Code.
· The Town would require each licensee to include two written addenda to every written and/or oral lease that they enter into: the first, describing tenant’s rights and the second, tenant’s responsibilities.
Steve Mills, of Steve Mills Rental Properties and a representative of other landlords, stated he had participated in the student/landlord work group. He said what the group was looking for was to develop a program that worked to help the students with their rights and created a system to treat rental businesses like all other businesses in Town, with a $10 privilege license. Mr. Mills said the landlords agreed with the students and would like clarification of some items, such as occupancy ruling and how the rules would be enacted and enforced. He said there were ordinances already in place for these rules and their enforcement.
Council Member Brown asked Mr. Horton to comment on the note on page 3 that stated a copy of the Chapel Hill Housing Code was available. Mr. Karpinos said that the Chapel Hill Housing Code was part of the Code of Ordinances of the Town, which established minimum standards for houses, and was enforced by the Inspections Department.
Council Member Bateman asked what a citizen could do if a neighbor was not obeying the ordinances. Mr. Conner answered the same remedy as now, adding their plan did not change the law, but re-enforced it. Mr. Mills added that the landlord’s number would be available to citizens in order to process a complaint, and the landlord could then enforce the non-compliance. He said the enforcement part would be the most important part of the program.
Council Member Foy asked what kinds of penalties were in the present ordinances for violations of the Housing Code. Mr. Karpinos said violation of any kind of ordinance was a misdemeanor and the Town could file a complaint and go through the criminal court process, or pursue civil remedies by filing a lawsuit, seeking either monetary damages or some kind of equitable relief. He said the renter could also file a lawsuit for damages, or the landlord could sue for damages.
Council Member Strom asked if the Town would have to pay a penalty for allowing a property to be rented without obtaining a privilege license. He asked how the Town would go about revoking a person’s privilege license. Mr. Karpinos said he was not comfortable with the term “privilege license,” which was a law to generate revenue for the Town. He said his understanding of the Council’s wish to issue rental licenses was for it to be regulatory. He said if the licenses were issued they would be dealt with in terms of an ordinance, which, if violated, could be remedied by revocation of the license or court procedures.
Council Member Wiggins asked which one of the bullets on page 2 and 3 of the handout addressed the issue of who would be responsible for the number of people living in a single unit. Mr. Conner said a bullet could be included to specify the number of people who could live in a unit. He said the law presently specified the number of people allowed to live in a single unit. He felt it would be very hard to enforce.
Council Member Wiggins said she was not speaking of enforcement, she meant it should be listed as an expectation. Mr. Conner said that everyone listed on the lease would sign the lease, any other would not be considered a tenant.
Council Member Wiggins said the Council was looking for tools to address the neighborhood concerns, and it would be a stronger document if the number of people allowed in a single unit was listed along with the other responsibilities. Mr. Conner said he had no problem with adding that responsibility as a bullet, but the students did not want the allowable number to be less than four persons. Mr. Mills said he agreed, but that it was almost impossible to enforce the number of persons, since it was hard to determine who was a tenant and who was a guest. He said it was one of the expectations, and he had no problems in including it.
Council Member Wiggins said the number of people living in a single unit was a very important expectation for the Council, and it should be included.
Council Member Bateman said she agreed with Council Member Wiggins, saying this issue seemed to be the crux of the problem the neighbors were having. Mr. Mills said there was an ordinance for this problem, but the big issue was enforcement of all of the ordinances addressing these issues.
Council Member Foy asked where the Town had the authority to add the addenda to every lease. Mr. Karpinos said he would look into this question. Mr. Horton said he doubted there was authority, and the staff had not had the opportunity to review the proposal. He said that the reference to on-street parking was incorrect, that there were zero parking spaces, because all the spaces were public parking spaces. He said there were other proposals in the document that needed to be studied. Mr. Horton said the critical issue was whether or not the Town could require anything in the lease agreements.
Council Member Bateman suggested a meeting with neighbors, members of the staff, and the original group of students and landlords to look at the document. She said it could then be brought back to the Council for consideration. She said it was good that the group had met and tried to compromise on the issues, and that expanding the group to include the neighbors would be a good idea.
Mr. Conner said it was the general notion that the Town could add the addenda to the license. Mr. Horton said he doubted whether the Town would have that authority.
Mayor Waldorf questioned how much the proposal would lessen the regulatory burden.
Citizen Comments
Kathy Powell, Executive Director of the Triangle Apartment Association, said that the discussion had been about small neighborhood rental properties, rather than larger apartment complexes. She said there probably would not be a problem with a one-time licensing fee, but that the required inspections would have far-reaching implications. She pointed out that the larger apartment buildings in the area were professionally managed, and had leases that conformed to North Carolina Landlord/Tenant Law. She asked that a representative of the Apartment Association be included in the discussions.
Roger Lewis of Crosland Properties, owner of Dobbins Hill Apartments and the Meadowmont Apartments under construction, said that inspections programs for communities which are professionally managed, have well-planned parking and very clear leases, would fix non-existent problems at great cost.
Catherine Frank, a member of the Historic District Commission and a resident of the Cameron/McCauley neighborhood, said she liked the proposals that had been discussed and would like to see neighbors included in further discussions. She said the neighbors did not intend to be elitist, but would like to work together with the group to ensure that some of the issues would be solved.
Gordon Mitchell, property owner, said that tax records for every property owner in Orange County was available on CD-ROM free of charge. He said the owner was ultimately responsible for his properties even if there was an agent delegated to manage them. Mr. Mitchell said the Orange County Tax Office had a list of registered owners and their agents, and suggested adding to that record the following questions:
· Is this a rental property, or will it be rented at all during (current year).
· If yes, how many units
· List the person responsible for managing this property—name, address, and phone number(s).
Mr. Mitchell said the form could also state that without this complete information, the listing would be invalid and subject to the current penalty for late listing, or any other penalty desired. He said this would all be done without additional costs.
Carol-Ann Greenslade, Secretary of the Chapel Hill Board of Realtors and the Chair of its Political Affairs Committee, pointed out that a rental housing resolution would be opening up a “can of worms,” and had been a nightmare in New Jersey, where she had owned rental property. She read a resolution from the Chapel Hill Board of Realtors specifying their concerns that:
· A rental housing resolution would adversely impact the taxpayers of Chapel Hill and the buyers, sellers, and owners of rental properties in the real estate community.
· The Chapel Hill Board of Realtors requested that the Town Council remove Paragraph 7C and 7C-1, and any other such references, from the proposed Comprehensive Plan.
· The Chapel Hill Board of Realtors requested that the Town Council require enforcement of all existing ordinances concerning rental housing.
· Requested the Town Council to consider the publication and distribution of materials pertaining to rental law.
P.H. Craig said he agreed with both Mr. Mitchell and Ms. Greenslade, adding that he thought the Council was inviting a nightmare, and it would not help support the Council’s idea of affordable housing. He said the existing laws were adequate, and if the Council passed this rental licensing law, it would be expensive and a bureaucratic nightmare to administer. Mr. Craig said this was a college town and not Utopia.
Betsy Pringle added her agreement to the suggestions made and said she looked forward to the process proceedings, which would be helpful for renters, landlords and neighborhoods.
Edwin Caldwell commended the Council for looking into the problems brought to their attention by the neighborhoods. He said he was a property owner, but he wanted to see the community preserved. Mr. Caldwell said he has a manager, but he was a hands-on owner who treats his tenants as friends. He said that sometimes renters subcontract the units and it would be difficult to enforce whether the person who signed the lease was the person living there. Mr. Caldwell said his first concern was the Northside community, adding his property is inspected by HUD and the County, and he did not need any more inspectors.
Nancy Hoven, of United Dominion Realty Trust, a nation-wide realty rental agency, said the Town already had the database and all the information was on file at the Tax Assessors Office and a matter of public record. She said her company would be concerned about the addenda on their leases because the State and the Real Estate License Bureau regulated the leases, and there were already enough regulations on the books. Ms. Hoven said they wanted to work with the Council regarding these regulations and would be of any help they could. She said they needed a better understanding of what the Council was attempting to accomplish.
Carol Capper, a Davies Circle resident, said she supported Council Member Bateman’s suggestion that the neighbors be included in the group discussions. She said her neighborhood had become increasingly rental property and decaying homes. Ms. Capper said there was garbage and cars sprawled everywhere, and she had not found any place to register a complaint. She said a licensing board would help solve the problems.
Vivian Foushee thanked Council Member Bateman for including neighbors in the work group discussions, because her neighborhood had felt excluded. She said they needed to work together with other community groups to accomplish what needed to be done.
Gary Cardin, a resident of Pritchard Avenue and North Street, said that Hilltop Realty, which had rented out a house across the street from him, had cooperated with the neighbors who had complained about renters. He suggested that they could serve as a role model for property owners and managers. Mr. Cardin said the Council could put realtors who did not cooperate on probation, with severe penalty and required license, instead of requiring licensing of all rental property owners.
Lee Conner said the work group would welcome the inclusion of the neighbors in their discussions. He said that although the information on rental property owners was on the database, the group thought that it was easier and more accessible to have the information on the individual leases.
Council Member Brown stated she thought some good work had been accomplished by the work group and she would like to see it built upon with the inclusion of other groups. She said she would like to see something meaningful come out of this discussion. Mr. Horton said there would be value in going forth with the discussions and he and the Town Attorney could participate, as well. He said adding required provisions to the leases was a question which should be investigated, but that many of the ideas could be put into leases, along with any suggestions which might come from future meetings. Mr. Horton said there were two proposals being put forward to the Council:
· The proposal put forward by the students and the landlords essentially focused on the landlord and the tenant.
· Previously the discussions had been on more regulatory control.
Mr. Horton said that ideas from both proposals could be considered. He said there were enough ideas to merit further discussion, considering both proposals and other ideas which would be forthcoming.
Mayor Waldorf suggested that the Manager and Attorney review, for both legal and operational types of consideration, the material that the landlords and students had proposed and review the other information put forth, then bring a report back to the Council. She said the Council could then decide to ask the work group to be reconstituted, with representation from the Northside neighborhood, the Cameron-McCauley neighborhood, the Davies Circle neighborhood, and others, and from the Apartment Association.
Mayor Waldorf questioned why the Town would want to regulate the larger apartment complexes, which had resident managers. She said it was caught up in the umbrella of rental property regulation, along with the smaller rental units.
Council Member Wiggins said she thought the next step would be for the Manager and the Attorney to meet with the work group and bring back a report to the Council. She was concerned that, otherwise, the document would not reflect the neighborhood concerns.
Council Member Strom said he thought it was a good idea for the Manager and the Attorney to look at the legal aspects of the document and return with a report to the Council, so it could then give guidance to the reconvened work group.
Mr. Horton said one way to proceed would be to encourage the work group to go forward with representatives of the neighborhoods, while the Town Manager and Town Attorney reviewed the issues that they thought might be of some concern. He said after the Manager and Attorney had reported to the Council, they could then join the work group in their ongoing discussion.
Council Member Foy said he would like the discussion of the work group to include the regulatory issues discussed by the Manager and the Attorney. He said he would like the larger rental properties to be exempt, but would need to know the results of the Manager and Attorney’s research.
Council Member Brown said she had heard from two citizens on the issue, one in the type of property Council Member Foy described, and she would like a more thorough look before excluding those properties. She said the other citizen wanted the number of parking spaces included.
Council Member Ward suggested a parallel track with clarification on the legal implications along with a broader group of people to flesh out the draft proposal presented at this meeting. He said it would be helpful to hear from the Manager how the two could be blended. He asked if the Council could focus legally on the smaller rental units, in order to make it more manageable.
Mayor Waldorf said she believed that the Council should ask the Manager and the Attorney to review the material to see if there were insurmountable problems of which the Council needed to be apprised. She said if there were not insurmountable problems the Council could ask the Manager and the Attorney to meet with a representative of the students, the realtors and the Apartment Association, and several different neighborhoods, and let all these constituencies pick their own representative.
Mr. Horton said it would be difficult to set a timetable, since this was the busiest time of the year and the Council had several meetings scheduled for the next three months. He said that was why he had suggested the work group go ahead with its meetings, instead of waiting.
Council Member Wiggins said the Manager and the Attorney would be given the Council reaction to a proposal, which had no input from the neighborhoods, who had brought the problems to the Council’s attention in the first place. Mr. Horton said the points of views of the issues were different between the neighborhoods, the landlords and tenants. He said there were some issues which might have been included if neighborhoods had been invited to the discussions.
Council Member Brown asked the work group how they had formed. Mr. Conner said it was an ad hoc group formed after the Council meeting when the issue was discussed. He said it was very informal, and they would be happy to have input from the neighborhoods.
Council Member Wiggins said it would make sense for the landlords and the tenants to enlarge their group to include the neighborhoods. She said it would also make sense for the Manager and the Attorney to be a part of this group.
Council Member Foy said there had to be representation from the particular neighborhoods affected.
Council Member Bateman suggested that the Manager and the Attorney bring back a process to the Council. Mr. Horton said the staff could do that probably by the first meeting in March.
COUNCIL MEMBER BATEMAN MOVED, SECONDED BY COUNCIL MEMBER WIGGINS, TO ASK THE MANAGER TO BRING BACK TO THE COUNCIL A PROCESS RECOMMENDATION TO PROCEED WITH THE RENTAL LICENSING DISCUSSIONS. THE MOTION WAS ADOPTED UNANIMOUSLY. (8-0).
The work session was adjourned at 5:40 p.m.