Report Prepared by: Scott McBride, City Manager
Title
SUBJECT: Accept the Report on a Potential Rental Registry Program and Provide Direction
REPORT IN BRIEF
Considers accepting the report on a potential rental registry program and provide direction.
RECOMMENDATION
Accept the report on a potential rental registry program and provide direction to staff.
Body
CITY COUNCIL PRIORITIES
2024-25 Merced City Council Goals and Priorities, Quality of Life, Goal #5 (6) Explore potential rental inspection policies to uphold housing standards and safeguard the rights of residents in rental accommodation.
DISCUSSION
Background
The Merced City Council has established a goal to explore potential rental inspection policies. As part of City Council Business, Council Members Boyle and Smith requested that this item be brought forward for discussion and potential action.
The purpose of this administrative report was not to provide draft ordinances for discussion but to create a platform for discussion by the city council. In advance of the council meeting, staff has not conducted outreach to property owners, property managers, tenants, or others that may potentially be affected by enacting either a registry or inspection program. However, depending on direction from the council these steps can be initiated. This topic has been discussed by prior city council’s and the public participated in those meetings.
The terms rental registry and rental inspection are often used interchangeably but they are different. A rental registry is simply that, a database of rental units within the city.
A rental inspection program can be a proactive or reactive approach to address potential health and safety concerns within a residential unit. Most often a registry is the backbone that leads to other programs including inspections.
To provide some explanation on the scale of the number of potential unit’s staff has utilized published US Census data. The City’s housing stock is comprised of approximately 22,208 units with 57% being rental units. Based on these figures, the total number of rental units is approximately 17,500. That can be further broken down by single family (12,500) and multifamily (5,000).
The Merced City Council has previously considered several variations of proposed ordinances that would implement an inspection program or a combination registry and inspection program. Staff can provide the prior examples as well as examples from other communities should the council wish to consider discussion or provide direction to prepare an ordinance for consideration and possible action.
Current Services Provided by the City
It should be noted the city already has a code enforcement program that can respond to concerns over health and safety code issues within a residential unit. This information is taken directly from the City’s Web Site under Code Enforcement.
Housing and Dangerous Buildings
Code Enforcement enforces City and State mandated codes relating to residential and commercial structures that are dangerous, substandard, blighted, or vacant. Building owners are legally required to maintain their buildings and property to the standards set forth in the City Housing, Dangerous Building and Property Maintenance Codes.
City and State Codes also mandate that tenants or other persons who are in control of a property, building, residence, apartment or parcel of land are legally required to maintain their living, common areas, yards and lots in a safe and clean condition.
Common Code Violations include:
• Plumbing, electrical, mechanical hazards creating a danger to human health.
• Lack of heat in a dwelling unit.
• Lack of running water.
• Lack of electrical service.
• Lack of care, cleanliness, or sanitary conditions.
• Mechanical equipment not maintained in accordance with the manufacture’s specifications.
• Excessive infestation of rodents, cockroaches and other vector violations.
• Unsafe electrical conditions which present a clear and present danger of fire or electrocution.
• Defective or inadequate weather protection of exterior walls.
• Ceilings, roofs, vertical supports or other horizontal supports that sag, split or buckle.
• Accumulation of inoperable or unlicensed vehicles stored on private property.
• Major repairs of vehicles in drive or on lawn of private property
In addition to this service the Merced Fire Department conducts annual inspections of the building exterior and site issues for certain multifamily locations. This information is taken directly from the City of Merced Web Site, Fire Department, Inspection Programs:
The Fire Inspection Program is the backbone of fire prevention in the city. The majority of inspections are performed by firefighters and the more complex inspections are performed by inspectors assigned to the Fire Prevention Division.
Fire Inspections are divided into either the designated type of inspection or the geographical region of the inspection.
Inspections performed annually include public assemblies (places where more than 49 people gather), schools, day-care facilities, residential care facilities, multiple-unit residential buildings, nursing homes and other institutional facilities. Senate Bill 1205 requires an annual inspection of:
• Educational Group E Occupancies
o Public / Private Schools, used by more than six persons at any one time for educational purposes through the 12th grade.
• Residential Group R Occupancies
o Occupancies containing sleeping units, and include hotels, motels, condominiums, apartments (three units or more), etc.
o Residential Care Facilities (residents or clients having a range of needs, including those related to custodial care, mobility impairments, cognitive disabilities, etc.). These residents may also be non-ambulatory or bedridden.
Each year the required SB 1205 report is provided to the City Council and made available to the public on the department’s web page.
Research and Outreach
Staff has contacted other cities that implement either a registry and/or inspection program. They include Modesto and Fresno. The Police Chief has been the lead. Based on contacts with City of Modesto they are not actively implementing these types of programs. We have made attempts to schedule a tour with the City of Fresno but as of the time of this admin report those meetings are not scheduled.
Based on verbal feedback from both agencies they have indicated that these programs are not self-sufficient, they require funding from other funding areas.
The City of Fresno does have an anti-slum and blight team (ASET) that does the following;
The Anti-Slum Enforcement Team (ASET) is dedicated to battling urban blight and improving the lives of City residents by encouraging voluntary code compliance and initiating legal proceedings focusing on the worst violators of housing health and safety laws. ASET will seek to obtain compliance through intensive and focused code enforcement efforts, including expedited and through civil litigation and potentially criminal prosecution of the worst offenders, but not burdening property owners who are complying with the law and providing safe and habitable housing. The mission of ASET is to increase the stock of habitable rental housing by pursuing violators to obtain code compliance.
The City of Fresno does publish a quarterly report showing current progress against properties that have come to the attention of the program. It’s available to the public on their program web page. That kind of public reporting creates is an incentive for landlords to stay off of the list.
The City of Merced currently has a code enforcement task force that acts in a similar manner. This group is composed of representatives from the City Attorney’s Office, Police Department - Code Enforcement, and Inspections - Building. This group operates in a similar way to Fresno’s team. Our group also takes on nonresidential properties.
IMPACT ON CITY RESOURCES
City Staff members met to analyze the resources it would take to initiate a proactive rental inspection program. Our budget estimate is approximately $720,000 annually in staff time. This factored in two full time code enforcement officers $245,000 - fully loaded costs, a dedicated administrative analyst $120,000, 1.5 development services techs $140,000, a part time building inspector $70,000, and half for a PD Sargent to oversee operations $145,000. Other overhead and indirect costs were approximately $180,000 annually resulting in a total program cost of $900,000. There would be start-up costs for vehicles, mobile devices, and other materials with a cost of approximately $150,000.
Given the number of rental units involved it was noted that the two dedicated inspectors would cover 8 to 10 per day. These inspections tend to take time and there is significant documentation and other coordination that goes along with each physical inspection. The total number of inspections that could be completed in a year is in the range of 2,000 to 2,600. That number may not be practical due to follow up inspections. We factored in 260 total working days per year however it’s not likely all those days will have two available inspectors since this does not take into consideration vacation time, holidays, training, sick days, and other factors. The actual number of days is more in line with 200.
To calculate a break-even cost using a per inspection basis, 2,000 inspections per year, the cost would be $450 each. Should council want to proceed in creating this type of program, staff would need direction on the initial funding source to get the program up and running. There could be phased in approaches as well.
Both Modesto and Fresno have an inspection fee of $100 per unit. Neither have a cost to register the rental units. Other agencies do have registry programs that require an annual fee. This could potentially create additional revenue to reduce the inspection fees.
A registry program can be administered by an outside consultant or with staff. Staff has met with one consultant that provides a variety of services to public agencies. Their method for creating the initial registry is proprietary. They utilize various methods to create a registry list and make contact with owners and managers to gain compliance and ensure fees are collected. In their experience the registry can be an effective tool to obtain more information such as emergency contacts, property management contacts, and in some cases tenant self-registration can be included. An area that would need further discussion is the availability of this list as a public record subject to PRA requests.
ATTACHMENTS
1. Presentation