Rental Housing Program Update

On Tuesday, January 17, Council considered adoption of a Rental Housing Program intended to assure residential rental units within the city meet health and safety code standards.  The proposal included two elements: registration of all rental units, to include contact information for the owner or local property manager; and, mandatory physical inspection of all units on a 5-year cycle.  Requiring a formal license to offer properties for rent is not a component of the program at this time.  Following staff presentation, public comment, and council discussion, the item was postponed pending further outreach.

Since adoption of the Housing Strategic Plan in 2020, various strategies have been considered to address what members of council view as a hidden problem of unreported violations due to the landlord-tenant power dynamic.  Currently, Neighborhood Services conducts inspections in response to tenant-reported complaints, though does not maintain a database of such actions.  A sample of recorded violations covering the period from 2016 through 2021 lists 77 dwelling units found to be in violation of code standards, with most properties exhibiting multiple conditions.  Staff analysis suggests no clear pattern of property location nor dwelling type.

Supported by outside research, staff recommendations included establishing a new program within Neighborhood Services requiring 8.5 FTE, of which 4.5 FTE would be assigned to inspection activity and direct supervision.  Although the program is intended to be self-funded through annual inspection fees assessed to property owners, a request for $1.6M was made to establish the program and fund operations through 2024.  Formal inspections would begin in April 2024 with roughly half of the start-up costs recovered during that year.

Annual inspection fee estimates were illustrated under three scenarios: flat fee per unit ($36), flat fee per building ($71), or hybrid approach of building and unit ($53/building, $19/unit).  The third option would likely apply to larger buildings where only a sample of all units are inspected each year.  Based upon assumptions provided, we believe the cost to fully implement the program is vastly underestimated.  There are approximately 27,000 dwelling units for rent in Fort Collins, representing 40% of all residential properties.

Council discussion and public comment highlighted the angst of establishing a significant new program in the absence of more concrete evidence of a pervasive problem.  Though each member expressed a desire to assure all residents are provided access to a safe, healthy living environment, staff was not fully prepared to discuss a pilot program nor how such an approach might be implemented.  They did indicate a need for funding a database management platform that would allow for better tracking and resolution of repeat violations.

Council directed staff to seek additional input from the renter community, as well as seeking alternative suggestions from property owners that could minimize or replace the need for a city-managed program.  The Chamber strongly encourages its industry partners to come together in developing an effective private-sector solution, as it is now clear that some form of government-led program will be adopted by this Council prior to the next election cycle.

Source: Fort Collins Area Chamber of Commerce 
January 30, 2023 

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