Sentinel staff report–
The Citrus Heights City Council will hold a public hearing on Oct. 25 regarding a proposed new ordinance and fee schedule that would authorize and fund mandatory inspections of the city’s roughly 15,000 rental homes and apartments, at an annual cost of about $500,000 that would be paid for by rental property owners. The City Council previously voted 4-1 in August to direct staff to draft wording of the new ordinance, which is now set to be voted on following the hearing.
Wording of the draft ordinance shows several changes have been made since the proposal was discussed by the City Council in August, including a reduction in annual registration fees for single-family rental properties and a subsequent increase in registration fees for properties with multiple units. The ordinance also would allow any size rental property to avoid regular inspections by qualifying for “self-certification” under certain conditions, whereas city staff previously had only proposed self-certification for properties with 16 or more units.
Read the draft ordinance: click here.
The ordinance would create a Rental Housing Inspection Unit within the Police Department that would have a proposed annual operation budget of $505,450, largely to fund the addition of three full-time Code Enforcement officers and two full-time program assistants. While the City currently has a state-mandated program in place to respond to complaints from tenants about the condition of rental properties, the new program would be proactive rather than reactive — resulting in regular interior and exterior inspections of rental properties in an inspection cycle of three years.
A city staff report included in Thursday’s agenda packet says changes to the proposed ordinance were made after consulting with the Sacramento Realtors Association and the California Apartment Association (CAA), which initially had expressed some concern about the program.
Jim Lofgren, senior vice president of the CAA, told The Sentinel on Wednesday that his organization supports the ordinance as written, after compromises addressing self-certification and fees for single-family rentals were reached through several months of discussion with the City. The annual registration fees, previously proposed at a $95 flat fee for all properties, are now proposed at $65 for single-family properties, $105 for two to four units, and $140 for five or more units.
An additional increase to an existing “Rental Stock Fee” of $12 per unit would also be used to fund the new program. That fee would be raised to $17-27 per unit, depending on the number of rental units owned.
“In general, our association doesn’t like to have additional regulations and fees placed on the industry and we voiced our concerns about that,” said Lofgren. “The City did compromise with us, and because the City does want to move forward with it, we felt that this was the best compromise we could reach with the City.”
According to draft wording of the ordinance, inspections would be allowed to be rescheduled once, at no cost, but subsequent re-scheduling fees of $100 per unit would be charged. Corrective action for violations would be required within 24 hours to 120 days, depending on severity. A re-inspection fee of $470 per unit is proposed for properties found not in compliance upon re-inspection.
While the majority of current council members, have expressed support for the inspection program as a way to proactively combat blight and ensure safe living environments for tenants, opponents of the proposal argue that the inspections are an unnecessary government overreach on private property and express concern that the increased fees will result in higher rental prices.
Opponents include Councilman Bret Daniels and two Citrus Heights City Council Candidates, Porsche Middleton and Treston Shull.
From August: Citrus Heights council votes 4-1 to move forward with mandatory rental inspections
In a statement to The Sentinel, Middleton said the proposed inspection program is well-intended, but “will have unintended consequences, such as higher rents, reduction of available rental housing and shorter-term leases that will allow property owners to circumvent actually having property inspections.”
Shull said increased fees on already-high rental housing costs “will just be passed on to renters and unfairly penalize responsible owners.” He argued for a more aggressive approach to gaining compliance from irresponsible landlords, rather than imposing fees and inspections on all rental owners.
Responding to arguments about increased costs, Councilman Jeff Slowey and Vice Mayor Jeannie Bruins have both said the costs proposed are insignificant.
“I can tell you that even if they pass it along, a $10 a month increase, to someone who’s paying $14-1500 dollars or more for rental housing, it’s not going to be a deal breaker for them to stay in that home,” Bruins said during discussion about the program at an August council meeting.
From August: Citrus Heights considering $500k proposal for mandatory rental inspections
As previously reported on The Sentinel, a police staff report to the City Council in August reported there are about 15,000 rental units in Citrus Heights, which makes up approximately 55% of all housing in the city. Due to 88% of the rentals being built prior to 1990, and 44% in the 1970s, the report cited concern regarding a “lack of quality control” during the 70s and 80s, and also noted that critical components of rental units, like HVAC systems and roofing, are nearing the end of their life.
The report also cited research finding that approximately 40% of rental property owners live more than 10 miles outside the city. Of those, the report said a large portion live in the Bay Area, causing concern that such rental units are less maintained as a result of owners’ distance from the property.
Currently, police report receiving about 1,300 code enforcement-related calls a year, with roughly one-quarter of those calls being related to rental properties. With a current staff of three code enforcement officers to respond to calls, the police department says its officers are only able to be 5% proactive with their time.
According to the staff report, the new ordinance would authorize the police chief to determine the most problematic areas to be inspected first. Notification would be sent to both owners and tenants 30 days prior to inspections. Tenants would be able to reject an inspection, which several councilmembers highlighted as an important aspect of the program, but rental owners would not be able to refuse inspection if the tenant would like the property inspected.
A rental property with 15 units or less would have a minimum of one interior inspection for all units on the property within the three-year cycle. For properties with 16 or more units, at least 5% of units would be inspected once within the three-year cycle. All rental property exteriors would also be inspected at least once within the three-year cycle.
The program would exempt rental properties built within five years from inspection, and rental units subject to other governmental inspection agencies are also exempt from the proposed inspection program.
All rental units would be able to attain “self-certification.” If the property passes initial inspections and has no prior code violations, the owner can apply for self-certification in the program’s second cycle. However, these properties could still be subject to random inspections.
The City Council’s public hearing on the matter will be held during the council’s regular meeting at City Hall on Thursday, Oct. 25, at 7 p.m. The program is required to also have a second reading at the Nov. 8 council meeting, before going into effect.
If approved, the ordinance would become effective Jan. 1, 2019, with inspections beginning on July 1, 2019.
See full agenda packet: Oct. 25 City Council meeting
