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You are here: Home) Government) Council) Meeting Materials) February 24, 2011


RECORD OF PROCEEDING OF CITY COUNCIL

CITY OF BELLINGHAM, WASHINGTON


City Council Chambers
Thursday, February 24, 2011, 02:00 PM
Book: 65, Page: 1


Special Meeting


Called To Order The meeting was called to order by Planning and Community Development Chair Jack Weiss at 2:00 PM

Roll Call
Present:
    Jack Weiss, Council Member, First Ward
    Michael Lilliquist, Council Member, Sixth Ward
    Seth Fleetwood, Council Member, At Large
    Gene Knutson, Council Member, Second Ward

Excused:

PRESENTATION(S)
Work Session of the Planning and Community Development Committee on Rental Housing Options

Staff present: Mark Gardner, Shane Brady, Christine Burkhart, David Webster

The meeting convened at 2:00 PM.

Jack Weiss. The agenda is to get a report back on questions asked at the October 2010 meeting of the planning committee, and to discuss alternatives.

Mark Gardner reviewed the questions and answers in the memo.
    1. What are the implications of following the current business registration process for rentals? Rentals are currently exempt. The City could decide to license using the same process and software. The process may need to be modified to identify the location of each rental property. Rental businesses are not required to have annual contact with the city, so an annual reporting requirement may be needed to prevent outdated information. Digesting all information would have substantial up-front workload implications. Additional design and programming would be needed to adapt existing software to create a database that is separate from the business tax information. Regarding exemptions, a revenue threshold is not practical because we can’t verify this information. Instead, we might focus on the characteristics of the rental property and relationship between the owner and the property. For example, exemptions might be granted for an owner-occupier renting out rooms. For an attached accessory dwelling unit, the owner is required to reside in the main unit when it has an ADU. On the other hand, a detached ADU could be required to be licensed. The logic behind these exemptions is that someone residing in a property has a strong incentive to make sure that health and safety issues do not arise. Some cities allow up to one year exemption for an owner-occupier temporarily renting out a house. Also, some people have concern locally that they are unable to sell their house and must rent on a short term basis. The City could set limitations on the number of times someone could get this exemption.
    2. What would a targeted program to strengthen enforcement consist of, including civil warrants and additional targeted enforcement. A bill that passed the 2010 State Legislature authorizes civil warrants so officials can gain access to rental properties to follow up on reports of violations. A city official would need to make a sworn statement before a judge verifying that probable cause exists. The Bellingham Legal Department advises that this would be a useful tool in some instances and has recommended that a code amendment should be adopted, if the Council directs, to clarify that the City has and may use civil warrant authority for inspection of rental properties. The process is cumbersome in comparison to the criminal warrant process so it is likely to be useful mostly for extreme cases. The state has created additional barriers over those used in criminal warrants -- for example jurisdictions have to wait 5 days before seeking entry with a warrant. Regarding existing enforcement, that is shared by Police, the Fire Marshall, Planning Department and the Building Services division. The Police Department staffs emphasis patrols such as looking for wild parties each academic year. If improved tenant education and other tools were adopted to encourage tenants to report violations, this could require hiring additional staff. Without direction from Council on what specific levels of enforcement would be requested, we can’t say what the cost would be but the cost of senior enforcement officials including all employment costs and benefits, range from 90K to 120K per year.
      3. What is the purpose and utility of adding anti-retaliation language to the city code? Washington landlord-tenant law contains provisions against retaliation by owners against tenants, and by tenants against owners. There is a 90 day window within which action is considered retaliatory. There are a number of exemptions to this. Seattle, Berkeley, and San Francisco have such provisions in their city code over and above what the state requires. In Seattle the law is not being actively enforced -- there are jurisdiction issues between departments and there is a perception that the provision is not particularly effective in protecting tenants. The Bellingham Legal Department is concerned this would insert the city into a dispute, usually on the side of the tenant but occasionally on the side of the landlord, perhaps by documenting evidence of retaliation, which is not something that police normally do. The main advantage would be that this allows a city to specify or clarify tenants’ rights, but the enforcement of it may be problematic. This particular option probably does not meet the cost-benefit test as far as being an additional useful tool for the city.
        4. Provide a brief overview of what other cities are doing to provide education for tenants and rental owners. The memo includes a set of examples of websites that are renter-education oriented, in some cases educating landlords as well. Most cities also provide a brochure that contains information such as state landlord-tenant law, permitted elements in leases, tenant rights and responsibilities, lists of legal resources for tenants, city contact information for enforcement requests, and other information that may be relevant – for example the City of Bellingham has a rehab loan program that owners can qualify for.

      Gene Knutson. Does the Berkeley program have an owner certification program where the landlords fill out a form and certify themselves?

      Mark Gardner. I think that Berkeley does have some form of self-certification. I didn’t look at the program in detail, I was just looking at the range of education tools. They don’t appear to have much of a proactive system, there is some self-declaration going on. It is somewhat like Sacramento, which focuses on self-certification of compliance, with some auditing that occurs in conjunction with that.
          Regarding educational techniques Seattle requires that owners distribute educational materials annually to tenants on rights and city regulations on rentals. Other tools include using established ties to universities and other venues where renters are likely to be around. It is unlikely that the City of Bellingham has the resources for an intensive and proactive program to distribute rental information to tenants but there are a number of events we could tie into to provide educational materials. An issue associated with education efforts is that materials require regular updating to be useful, but the resources are likely to be pretty minimal. If the city required distribution of materials by rental owners there would be some costs associated with this for owners, but that is also likely to be pretty minimal if a PDF was put on the city web site. The upshot is there are a relatively simple set of tools that many cities have to help provide a level playing field of information on rights and responsibilities and Bellingham might consider these possibilities.
        5. What data are trackable in existing systems? We don’t have very good capacity to track these issues now. Regardless of what policies are adopted it make some sense to beef up our capacity to track these issues. I spoke with Planning, and Building Services, and they do have good software that is flexible, they are in the process of improving it to track code enforcement issues. Three things might be worth tracking. One is specific maintenance code violations. Second, exterior nuisances such as trash and abandoned cars. Third would be land use or building violations at rentals, such as illegal modifications of a duplex into a triplex or similar measures to increase density that is not consistent with the land use code. It might involve the City Council expressing an interest in better capacity to track rental issues, and the departments sitting down to improve the data systems to make them more flexible and able to report out on these issues. There are some issues regarding enforcement moving from department to department so this will require a number of people sitting down together to figure out how to improve tracking capacity. But it is possible, it just requires some additional effort.

      To summarize, additional tools for education and enforcement are:
        1. Improve education by creating a web page and associated brochure or set of publications on landlord-tenant law and the resources. The city could also choose to enact a requirement similar to Seattle that rental owners distribute this material annually.
        2. Enact an ordinance codifying the City’s right to seek civil warrants when conditions require an interior search of a rental unit. The City would need to adopt associated administrative procedures involving courts, police, and other enforcement personnel.
        3. Council directs the administration to request that staff improve existing code enforcement databases and reporting capacity.
        4. Add staff to improve enforcement of code violations with a particular focus on physical maintenance violations and conditions at rental properties.
        5. Use existing business registration process and software to register rental properties. In order for this process to work and not get outdated, this would require additional things over and above what the city is currently doing. And that would require additional resources in staff and likely money as well.

      Jack Weiss. I will open it up to the committee.

      Seth Fleetwood. When you were preparing this memo was the thinking that education would make it more likely that tenants would complain when they had a legitimate complaint, then the City would respond to enforce a code violation, thereby improving the quality of rentals?

      Mark Gardner. I think that was one of the intentions. I think this cuts a lot of different directions and the information should include the nuisance violations that the city has codes against, and therefore tenants would be informed of what they are not supposed to be doing. There could also be some legal information that tenants could have access to. So I think the intent is to create a level playing field by informing tenants of their rights. But I think it is important to focus on tenant responsibilities as well as provide legal resources, so I would say that is what it is about, it is broad but that is part of what I was looking at and what other cities attempt to do.

      Seth Fleetwood. For the cities that had a requirement for a website and brochure, did any research show the benefits of that approach? Do we know whether or not, say, young people who rent actually modify behavior because of the information they received?

      Mark Gardner. I don’t know, I haven’t seen any such research. I think the assumption is that whatever a city would put on its web site reinforces the existing set of tools and laws, but I didn’t get a sense that anybody had evaluated that. I would doubt you would find a large measurable response, it is really a reinforcing tool that would help some people in some instances but I didn’t get a sense that anyone was depending on it as a sole way of achieving any particular policy. It is about making it clear what a city would enforce and what tenants rights were. I do know that it is very common to hear from cities that tenants don’t know what their rights are, they don’t have time to poke around state code and I think providing that information would be a useful tool. But in terms of formal evaluations I didn’t hear of or see anything like that.

      Seth Fleetwood. I’ll just express an opinion to the committee and if people think I am wrong about this please tell me. But my instinct is to be skeptical of the education piece, at first it seems like a no-brainer, of course we want to educate people, but there is so much information out there. I think about in campaigns, there is the 4 second rule, when we get information we look at it and throw it away. We are just bombarded with information, is there any real likelihood people are going to concentrate on this particular information and be motivated to go to a web site?

      Michael Lilliquist. Let me just follow up on the education component. A lot of the education component is very little effort on our part, there may be a web site and a PDF document. As you say, people will see a piece of paper and say it does not apply to me, but then there are those who would say, this does apply to me, and if our goal here is to find those problem rentals and problem situations, then if only one out of 100 say, "this information is pertinent to me," that might be a success. That one person might notify the City and trigger the right enforcement response. So the education component may be successful if it leads to better enforcement. I’m speculating here.

      Seth Fleetwood. You are certainly right as applied to the web site idea, that would not require a lot to put information out there, and people would either benefit from it or not. But one more piece of information in the mail would not help much. My question is, and Jack, as your memorandum points out, landlords are saying don’t pick on me, we are good apples not bad apples, so why do we need this when we are doing a good job. So if this effort is more along the lines of improving rentals, then presumably the questions is how do we enforce code violations, and there are a lot of ways potentially to do that. Are there any viable ways to enforce code violations by some means other than licensing and inspection?

      Mark Gardner. To be honest all these other tools are useful, but I spent some time calling around the City of Seattle, and they have pretty much every tool including others from what Council asked me to look into, yet they are choosing to go to the next step, and what I have heard over and over again is that it is useful to have as many tools as possible. The more education we have the better and the more crack and ready to go code enforcement staff is, the better, but I did hear over and over again that many tenants are intimidated because they don’t feel comfortable going up against a landlord because that is their home. And the overall impression I got was that many cities are choosing to go to some additional levels, some are using self-certification, other are just licensing, but others are doing some sort of inspections. There is a wide variety of cities that are doing some sort of inspection, and that can range from pretty minimal such as an auditing approach, to a very robust and cumbersome program that we probably don’t want to do here. That said, the cities that tend to be most proactive and have the most information regarding rentals, tend to have the most robust programs. So I didn’t run into any cities with minimal programs where everything was going well, perhaps there were those and they didn’t even show up on a radar screen. So there may be some really small cities where everybody knows everybody and which can enforce without that tool, but it is a consistent theme. And I heard that from our own City staff, that they feel that when it comes down to a very serious issue between a landlord and a tenant, the tenants usually do not want to go up against their landlord, so they complain when they are moving out or after they have already moved out, and because of the structure of the landlord-tenant law, a city can do very little at that point unless there is a life-safety issue. These are useful tools, but it does appear that it doesn’t solve all the problems.

      Gene Knutson. Self-certification, how does that work, is it all on the backs of the landlords and then they report to the Cities? How does that work financially?

      Mark Gardner. Sacramento is the one that relies on it the most. They do have an annual fee per unit.

      Gene Knutson. It is not a license, though?

      Mark Gardner. There is different terminology, sometimes they use registration, sometimes certification, sometimes it is called a license. Sacramento does require that all units get registered, and I am trying to remember if it is every three years or annually they have to self-certify. They then have an audit inspection, they inspect a small sample so that they can make clear to owners that there is some chance -- it is very similar to a tax return, most people don’t get audited so the auditing process is not on average burdensome to an individual taxpayer but if you do get audited you know it. So it is a minimal approach but with a large consequence if people are not being honest with their self-certification form. I think that Berkeley does have something similar but Sacramento is the one that uses it the most.

      Gene Knutson. They are still using that approach.

      Mark Gardner. As far as I know they are, I am almost certain because when I last looked into it it was only about 4 or 5 months ago.

      Michael Lilliquist. I am thinking it would be good if registration/licensing/self certification etc. was one short step. Can a self-certification form be fit on one side of a paper, so that one side is, identify your businesses and your location, and the other is self-certification, and they can declare they have looked at these elements. How long is the self-certification form?

      Mark Gardner. I didn’t look at it recently but you could have a one-pager with the elements and then some backup information elsewhere, if they need to know about a safe electrical panel they can read additional information but the actual forms could be designed to be pretty minimal I would think. This form that Jack asked me to pass out fits on a legal size but it also has additional details you would not require in a self-certification program. So just in terms of paperwork reduction I would think it would be possible to do that.

      Michael Lilliquist. So I think the goal here is to identify the bad apples and increase enforcement against them but at the same time, the time and effort involved of the others to be as low as possible, a one page where you declare your business, register it, certify it, and pay a minimal fee and go on your way. The other important element is that enforcement should be on our authority and not depend on one private citizen against another private citizen. So the bad apple enforcement cannot continue to be dependent upon a tenant because as we see that is the Achilles heel in all the enforcement, particularly with the bad apples. My guess is if you have a good open landlord then the tenant will work it out with the landlord and it will never become a problem. So only the cases where enforcement is a problem, those are the cases where it is important that it be done under civil authority, not citizen v. citizen.

      Seth Fleetwood. Under that scheme which you just described, you said the tenant was not responsible for enforcement, you said we were. What would be the thing that would trigger enforcement?

      Michael Lilliquist. At this point I think we are talking about a “soft start” where it is still a complaint-driven system. So you have the case of the person who is leaving, and they fire off that complaint letter, and right now it drops dead, but instead if it fell into our laps and we checked into it, if there was legitimacy we would continue to enforce under our own authority not because the tenant was still being victimized, but because we found evidence of violations. So it would still be a complaint-driven system.

      Seth Fleetwood. We would find evidence of problems – how would we find them?

      Michael Lilliquist. I think the only way this could work would be with a soft start, we would have to first get everyone to register. And we have to develop a database. Some time in the future we would have resources for additional enforcement. This would be be the same set of rules enforced by the same city personnel in the same way as always, but eventually there will be more resources available to devote to this so we can have a targeted focus on those bad apples. But we agree to use our own resources rather than relying on citizen v. citizen and landlord-tenant laws to pursue and prosecute against these bad apples. That is what we have and it apparently is not working.

      Seth Fleetwood. It seems to me under something like that, self-certification, whatever it is called, I think having civil warrant authority in our code might be effective. I heard all the reasons why there are problems with that, but it seems to me that in those cases where we found some egregious problems it might be beneficial to have that civil warrant authority Where it was clear we’d probably succeed in finding probable cause, it would give us a real enforcement tool to complement self-certification.

      Michael Lilliquist. Perhaps you could answer this with your legal training, or maybe Mark, is a written complaint by a former tenant sufficient for probable cause? Let’s say a former occupant writes out a complaint as they leave, saying here are the problems I have had, we would then follow up on a complaint and only if they did not let us in would use the civil warrant authority. You can’t use it if they let you in, it is always your last recourse. Is a written complaint, a signed declaration, is that probable cause?

      Seth Fleetwood. I think it would be. By complaint do you mean affidavit?

      Mark Gardner. It would have to be some sort of signed sworn statement that was legally admissible as far as I know. I don’t know if legal staff are here or not.

      Shane Brady. Probable cause is very fact-specific so you could have a written statement, a lot of times police get oral statements, so the answer to the question would be yes, depending on what the person is reporting. That is the short answer. Probable cause is a very fact-specific determination.

      Michael Lilliquist. So a written statement that they think something is wrong in a unit upstairs is not probable cause, but if it is a written statement saying that in my unit I saw this, I experienced this, that might be probable cause.

      Shane Brady. It could be. Typically we would have code enforcement, Police Department, Fire Department, it depends on the violation, they would follow up and it very well could be probable cause.

      Michael Lilliquist. I guess why I am pursuing this is because if this is a targeted bad apple enforcement program it would be important for us to have step 2 if step 1 does not work. So I could imagine we might use this tool once a year or once every five years. But it is good to have step 2 if we have identified an uncooperative landlord.

      Shane Brady. So step 2 being going inside?

      Michael Lilliquist. Actually going inside with warrant authority rather than a request to come and inspect your property next Tuesday, which wouldn’t require a warrant.

      Seth Fleetwood. I was going to say that the issue as it relates to a complaint in the form of a sworn affidavit is simply whether it presents relevant, credible, reliable evidence. Certainly a tenant could do that.

      Shane Brady. Then it would be up to a judge to decide if it is probable cause or not. You would present the evidence to a judge and the judge would make that determination. That would have to be sworn testimony.

      Jack Weiss. Are there other comments on the staff report?

      Michael Lilliquist. In general I agree with some of the conclusions in the memo in the sense that adding local antiretaliatory language does not appear to be very useful, over and above the state antiretaliatory language. I think it was pointed out that business registration is a one-time affair and then there is an ongoing annual involvement with the city because they are paying B&O taxes. Since rentals don’t pay B&O, in this case we’d need to have a necessity for an annual check-in.

      Seth Fleetwood. Jack, I know you have a memo with some ideas and they are a little bit different than the notion of a self-certification process. I am wondering if, for the purposes of next steps, Mark might start putting together a framework that looks like a self-certification program, and also a framework for what you are describing. We would then have a couple of ideas around which we could organize our thoughts and then have another meeting to vet them in more detail.

      Jack Weiss. The proposal I had put together is not mutually exclusive of a self-certification component. That is certainly one element that we could consider if we choose to move forward with anything. We are going to move into the next component of the meeting which is identifying preferred options. I’m going to start it out by putting one proposal on the table and we can either address that one or we can put additional ones out like the self-certification. I want to first acknowledge a lot of the people that have been involved, this has been going on for years. There have been a lot of people that have commented to the City Council and to the Mayor about this issue pro and con. I need to acknowledge that people have a lot of feelings about this, and it is also one that can get out of hand in terms of misinformation that goes out into the community. There are many e-mails, phone calls, and letters we have received where it is clear people think we have a proposal already lined up and done. That couldn’t be further from the truth. There has never been a proposal. I am going to put one out in a second that will be the first one, and you can blast away at it if you want. To date there hasn’t been anything, and this is getting a little bit out of hand. Mark had put together an initial report to Council talking about what other cities have done, I think there was a city in Michigan that was charging $1,500 per year per unit and all of a sudden we got information that the City of Bellingham was going to charge $1,500 per unit per year and that is just not true. There are a lot of examples out there. We are not allowed to charge Business and Occupation tax on rental properties. I have received about half a dozen letters from people upset that we are going to charge business and occupation tax. It is not true, first of all we can’t do it, and second I don’t think it is a good idea. So with all that said I’m going to get into one proposal. Instead of just talking about it I am going to read through it because it will make more sense.

      Over the last few years this is what I have received as general comments:
        1. We should treat the rental industry as other businesses in town are treated, and that is to have business licenses.
        2. If licenses are to be required, keep the fees as inexpensive as possible and make sure that the collected revenues are spent for the benefit of all who pay.
        3. Most property owners who rent do a good professional job at it, with quality units offered to prospective tenants.
        4. There are substantial numbers of units with health and safety problems that require correction. Many tenants, particularly low income, fear retaliation if they complain about health and safety problems, and tenants may find it easier to move than to make a formal complaint or to enter into a dispute.
        5. Many owners and tenants would learn more about their rights and responsibilities if an educational program was established.
        6. Targeting units that often charge market rates for substandard housing will, over time, provide parity for owners who are charging the same rate for quality housing.

      I’d like to put out a proposal under the title of “Bad Apple Elimination Ordinance.” I want to put out some numbers here, but I want you to know that numbers can change, context can change, scope can certainly change.
        1. Establish a rental license program with a small annual fee. Exempt rental of one or two units where the owner also resides on the property. A fee of $2 per unit per month would generate about $360,000 annually, enough for two enforcement FTE’s plus the administrative costs plus a robust educational program for tenants and owners.
        2. An inspection program would be created first to respond to complaints, and second to conduct random inspections throughout the rental market in the City. Complaint-driven inspection would occur during the first few years. If the number of violations and citations and corrective orders decreased over time, the program would be reassessed.
        3. We would hire new code enforcement folks and they would be cross-trained to address fire code, building code, and police enforcement problems issues associated with health, safety and nuisance issues. This would complement existing code enforcement programs that we have. The city would enact a separate ordinance to allow civil infraction enforcement vs. criminal, by simple ticketing that could be used in addition to corrective orders. This is similar to a building permit, if an inspector comes out and there is something not up to code, the enforcement officer would write a simple corrective order that would say, this needs to be fixed and you have a certain amount of time to fix it.
        4. Violations must be on a prioritized list of code and nuisance violations that the City would create. Pasco’s violation list is something of a primer on health and safety issues.
        5. If the inspected unit has severe enough violations for ticketing, additional units on the same parcel would be inspected to ensure the building is safe to occupy.
        6. If allowed by law, units on other properties of the same owner or managed by the same property management company would be subject to inspection outside the random component of the inspection program. This is to address the bad apple component. If you are doing something so egregious on one parcel or on one structure, is it likely that you are doing the same thing on other parcels that you own?
        7. Property owners in need of assistance concerning tenant nuisances can provide a complaint to the City program for action. This is where the owners get something out of this as well.
        8. A robust education program would be created to disseminate rights and responsibilities for both tenants and owners.

      So, I want to put that out as an initial proposal. I think the idea of self-certification is a good component of that, that if you did set up a licensing program, at the time of licensing and paying an annual fee, you would also self-certify that your units are up to snuff and meet the basic health and safety issues.

      I can see 4 advantages of this proposal.
        1. This primarily targets the bad apples so that all housing has a minimal health and safety quality. Rents charged would be comparable for the housing quality offered. A quality rental and a slum property of the same size could be rented out for a similar price, they are getting the same revenue but they are not putting the same sort of effort into the quality of the housing. Having a program like this would separate those two types of housing out, would correct those that need to be corrected, and it would raise everything to a similar level of standard.
        2. A low license fee is proposed that is minuscule in relation to the market fluctuations in the market rent from supply and demand. In the Herald a couple of weeks ago there was an article on the vacancy rate in town of 1.6 percent, which contained statements that the rental rate might rise from between $15 and $50 a month in the next year.
        3. All rental license owners would benefit from not competing with the bad apples, and all tenants and owners would benefit from an education program on expected rights and responsibilities.

      Seth Fleetwood. So under #2 of your memo, that a rental program be created to first respond to complaints and second to conduct random inspections, at what point in time would random inspections happen?

      Jack Weiss. The way I saw it was, for the first two to three years, the people we would hire to do this would work to get at the bad apples, that will take quite awhile, and at that point a randomized inspection program would be designed and implemented.

      Seth Fleetwood. And you’ve concluded that if by some measure the complaint-driven process were successful perhaps we could reassess whether random inspections are even needed?

      Jack Weiss. Yes.

      Seth Fleetwood. And this all works on the assumption that complaints would come in, correct? And what would happen if they didn’t? It is at least conceivable that, based on what we’ve learned, there might not be complaints.

      Jack Weiss. The way I would look at it, unlike with an educational program, there would be a proactive approach to reach out to both tenants and owners to say, here is the list of the issues the City considers unacceptable health and safety concerns. If you are an owner, then fix it, if you are a tenant and you know the owner is not going to fix it, then talk to the City about submitting a formal complaint. It is a win-win in terms of lifting up the quality of housing, and if the owner knew that there were some deficiencies then they could work with the City, where they might get some help.

      Seth Fleetwood. So that is one option we were going to suggest Mark work on. One thing I would like for him to focus on would be to get a full description of what the administrative burdens would be on the landlords, because what we have heard from the landlords is that this is just one more bureaucracy that, in their view, is not needed. So one of the fair questions is whether it is in fact a big administrative burden. It might turn out to not be, but I’d like Mark to explore that so we have a very clear idea in our minds that we can then share with landlords and tenants and have a real dialogue. In addition, I’d also like to see something that looks a little like the Berkeley rental housing safety program, short of licensing with inspections. Having a couple of options before us to better reflect the range of opinions in the community is healthy thing to have.

      Michael Lilliquist. Let me outline my thinking on this. I would like to see Mark go to the next step working with City staff to turn this into ordinance form. Otherwise we’ll never be able to pass anything and the devil will be in the details. Everyone agrees that there are some rental situations that require better enforcement, even the landlord community understands that there are bad apples, and everyone seems to agree that enforcing against those bad apples would be a good idea. What people may not appreciate is that better enforcement will require better resources and some way to pay for it, which leads to me second point, which is where most of the confusion is, there are common concerns that are based primarily on misunderstandings about the money. One is that the fee will be set so high that it is really just a way of raising money, and the other concern is that there is no way we can raise enough money, that the program will be too expensive so that it can’t cover itself. So either it will raise too much money or it won’t be able to raise enough money. I think the solution is to scale the program and the fee to match each other. I think we could come up with a minimal registration and self-certification system that is one short step. We make that a requirement, and it is tied to a fee that is no bigger than necessary. $2 per month is well below the month to month, year to year market driven fluctuations. So the concern that this will reduce housing affordability and drive landlords out of the business is not reasonable when you are talking about $2 per month. It will be rolled into the price of the rental.

      Which leads me to program considerations. I think I would like to see what I am calling a “soft start,” which means we start with a complaint-driven program, and random inspections is phase 2 only if necessary after we’ve reassessed the first phase, after we have created a program and bad apple enforcement is in place. Only then would we go to phase 2, and we may never need to go to phase 2.

      Which brings me to the last component. A complaint system could be made healthier with a clear educational component. Seth you were skeptical about education, and why would a future complaint-driven system be any better than the current one -- that is the educational component. Hopefully this will help to identify and send out the message, bring out your bad apples and we will take the lead under our authority, it is not the tenant’s responsibility to stay in a bad rental situation or enter into a protracted legal proceeding or formal complaint, that the city has existing authority. Except maybe we need the civil warrant authority, we could put that in as the big hammer only at the very end of the game. I think we can go for a soft start and scale the program, not any bigger than is necessary. That’s what I would like to see brought forward in something like ordinance form.

      Jack Weiss. Can I make one follow up? Those are good points. One thing I forgot to put in there -- similar to our parking meters, any money that goes into a parking meter isn’t put into the general fund. For this, anything that we collect for rental license fees should go to an enterprise fund and be used specifically for rental issues, whether it is code enforcement, education, technical assistance to help owners -- that is where this money should be used. I agree it should be kept as low as possible.

      Gene Knutson. I want to thank Mark for all his work on this but I also want to thank Jack for finally after all these years putting a proposal on the table. I’ve been battling this since the infamous ferry terminal meeting which was either in 2004 or 20005, and we’ve gotten absolutely nowhere so I’m glad this is coming forward. And maybe, as Michael says, the self-certification could be blended into this somehow. I was just curious for the $2 per unit per month, how did you come up with the $360,000, is that with all the rental units?

      Jack Weiss. According to the American Community Survey, which is an arm of the Census, they are proclaiming that there is a little over 18,000 rental units in Bellingham. Some of it is Housing Authority units, some of it is Section 8 stuff, they have their own inspection regime, they may or may not be included in this. Certainly we would not be inspecting them because they have their own program. But if you were to assume that 15,000 units would be part of this overall program, the 15,000 times $2 per month would work out to be $360,000 per year.

      Gene Knutson. So the next move would be for Mark to go over your proposal and the self-certification idea and bring something back before we go to full Council with it.

      Jack Weiss. I think there is some other side issue associated with it too, there are startup costs, especially with the data issues and the licensing component with the finance department. This is a side issue that I wanted to ask about, within the Building Department can we red tag a rental unit now if we know there are health and safety issues?

      Christine Burkhart. Under the International Property Maintenance Code, a unit can be red tagged.

      Michael Lilliquist. What does red tagging mean?

      Christine Burkhart. It would be a correction notice, the building inspector would identify the specific items -- plumbing, electrical, structural deficiencies that must be corrected -- and also the property can be condemned by the Building Official as unfit for occupancy until these things are corrected.

      Jack Weiss. My understanding of the Fire Department’s role in multifamily housing, they do not inspect individual units, they inspect the common areas -- laundry facilities, hallways, balconies, those types of thing -- but they don’t actually go inside to inspect units.

      Mark Gardner. That is my understanding unless there is a fire or some other violation they need to follow up on.

      Seth Fleetwood. I don’t know if we need to make a motion to clarify what we think the direction to Mark is or not. He reason I mentioned Berkeley is because there is a description of it here and it sounds similar to one of the ideas we discussed so I thought it was valuable.

      Jack Weiss. I think it is perfectly fine to put competing proposals out there. The whole Council can look at that.

      Seth Fleetwood. I would move we give direction, I don’t know what level of detail we want, I’d say a framework of an ordinance. I don’t know if we want bullets to be put together as opposed to a full in depth ordinance with whereas’s -- were you thinking along those terms, were you thinking about that level of detail or simply a framework?

      Jack Weiss. I think having a good proportion of the therefores, not necessarily the whereas’s.

      Seth Fleetwood. Then I would move we direct Mark to put together a draft of your proposal and the City of Berkeley Rental Housing Safety Program, the self-certification program. I would also direct that we get a discussion of what the administrative steps would be for the landlords so we have a very clear picture of what the actual burdens would be to create either one of these programs.

      Gene Knutson. I’ll second his motion. Timeline, that is totally up to Mark. How soon could we see this?

      Mark Gardner. I would think one month to 6 weeks. I assume you are also directing other City staff? Up until this point without a specific proposal, it is unlikely the Finance Dept will figure out all the costs for changes to their software if that is indeed the best place for it. Given that we are getting down to specifics now and a broad framework of an ordinance with some options, a Berkeley type option v. a Jack Weiss type option, should I assume that the direction is for City staff to move toward really costing this out and detailing all the administrative specifics the City would need to do? That way we can come back with some real answers.

      Jack Weiss. David, is this a doable thing in terms of staff resources?

      David Webster. I know Mark has talked with Finance about the limits of our still rather antiquated business registration system, so I would want to check in the with affected departments to see if a month or 6 weeks is practical.

      Jack Weiss. That may be too optimistic.

      Michael Lilliquist. We could bifurcate this, there are the practicalities about how much and how long it would take to develop a database, and there are the practicalities about how soon a program may roll out, when registration may start. Then there is a separate thing of writing new rules or authority that can proceed on its own schedule, that may be doable in 6 weeks while the Finance Department is still working out the details 6 months from now.

      David Webster. I assume the Council would want to know a realistic cost basis for such a program. If it can’t be a program with forms downloaded into a database software program, if it has to be manually entered, there will be costs associated with that. We want to be able to provide a realistic portrait before you make any final decisions.

      Jack Weiss. It would be nice if we did establish a license program if it could all be done on-line with all the information entered by the applicants and we simply move that into a database.

      David Webster. So just there you are talking Finance, IT, Legal.

      Michael Lilliquist. We have to scale the program to fit what we can afford. If that paper system is too expensive we simply won’t entertain that idea.

      Seth Fleetwood. Rather than set a false deadline I suggest Mark come back in April and give us a review.

      Mark Gardner. I was going to say that while we can work on it piecemeal I don’t want to come back with so many questions we can’t winnow it down. I don’t know what the proper terminology would be but if you are designing abridge you talk about 20% and 60% design, and getting to 80% design may take too many departmental resources since we are not sure of the exact program structure. But if we could get to 60% design, in other words a serious first cut on some of these practical issues, since I think some of the choices will turn on the practicality of them -- so I would say a window of 2 or 3 months so we could come back with enough of the specifics answered so that the Council could say we know more or less what the staff impacts or the costs are going to be, within an order of magnitude of within 20% or whatever. I’d rather take a little more time so we can get some real clarity. If 3 months won’t do it I will still come back and report back. So if we can leave it open a little bit so we can nail down some of the specifics, that is what has been lacking, so people can clarify their expectations about possible programs knowing what the City is actually considering doing.

      Jack Weiss asked for a vote on the motion. Motion passed 4-0.

      Jack Weiss. One other thing we had talked about, probably in a regular Council committee meeting, was to bring back the political sign issue. Mark is ready to report on that. We may do that in the next meeting or two – but not on Monday. Meeting is adjourned.


      ADJOURNMENT
      There being no further business, the meeting adjourned at 3:18 PM.
      Jack Weiss, Planning Committee Chair

      ATTEST: Mark Gardner, Council Policy Analyst
      APPROVED:



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