ITEM 3.9 Rental Housing( 1
Ut�ego
TY OF
e
MINNESOTA
DEPARTMENT INFORMATION
Request for
City Council Action
QRIOINATINGDEPARTMENT
' REQUESTOR:
MEETING RATE: _
Planning
City Planner Licht
22 October 2018
�PRESENTER(s)REUIEUI%ED,BY::,
.; 'v
IT
Consent
Consent
City Administrator/Finance Director Flaherty
City Attorney MacArthur
3.9 — Rental Housing
STRATEGIC VISION
Is a strong organization that is committed to leading the community through innovative
communication.
Has proactively expanded infrastructure to responsibly provide core services.
Is committed to delivery of quality emergency service responsive to community needs and
expectations in a cost-effective manner.
X Is a social community with diverse housing, service options, and employment opportunities.
Is a distinctive, connected community known for its beauty and natural surroundings.
AGENDA ITEM DETAILS
:RECOMMENDATIQN:°`. ;
City staff and the Administrative Subcommittee recommend approval of an ordinance amending regulation
of rental housing.
.ARE YOU.SEEKING APPROVAL OF A CONTRACT? IS A P. UBLIC HEARING REQUIRED?
No No
BACKGROUND/JUSTIFICATION:' .
The City adopted licensing requirements for rental housing within the City in 2006. At the time, dwelling
units in Otsego consisted only of single family detached dwellings and townhouse dwellings. Multiple
family developments are under construction or have been approved for construction, respectively. City
staff has reviewed Title 4, Chapter 6 of the City Code regulating rental housing to determine if
modifications are needed to adapt the City's rental housing performance standards to multiple family
dwellings, as well as on-going administration of rental housing licensing, including:
■ Licenses for single family, townhouse, and condominium dwellings would be issued annually with
an inspection required every three years. This change would be effective for licenses issued after
31 December 2017 to grandfather in existing approved licenses.
■ Licenses for multiple family buildings would be issued for the premises annually with a five year
exemption for inspections. After the initial five year exemption, a schedule for annual inspection
of common areas and 20 percent of the dwelling units can be established.
■ State licensed residential care facilities such as Guardian Angels Riverview Landing would be
exempt from the requirements for a rental housing license.
The Administrative Subcommittee reviewed the proposed amendments to Title 4, Section 6 of the City
Code regulating rental housing at their meeting on 12 September 2018. The Administrative Subcommittee
supports the proposed changes to address multiple family dwellings and extending the inspection period to
three years for all other dwellings. The Administrative Subcommittee also requested that the proposed
City Code amendment be sent to landlords for review and additional comments. The comments received
were supportive of the changes to extend the licensing inspection term. The Administrative Subcommittee
at their meeting on 17 October 2018 recommended that the proposed amendment be forwarded to the
full City Council for approval.
■ Memorandum dated 12 September 2018
■ Ordinance 2018-11
POSSIBLE MOTION
PLEASE 1NORD MOTION AS YOU WOULO U EITTO APPEAR IN'TM MINUTES.`
Motion to adopt Ordinance 2018-11 amending the City Code regarding rental housing licenses.
BUDGET INFORMATION
"'FUNDING: BUDGETED:'
N/A
TP
The Planning Company
MEMORANDUM
3601 Thurston Avenue
Anoka, MN 55303
763.231.5840
TPC@PlanningCo.com
TO: Administrative Subcommittee
FROM: D. Daniel Licht, AICP
DATE: 17 October 2018
RE: Otsego — City Code; Rental Housing Licensing
TPC FILE: 101.01
BACKGROUND
The City adopted licensing requirements for rental housing within the City in 2006. At the time,
dwelling units in Otsego consisted only of single family detached dwellings and townhouse
dwellings. Multiple family developments in the form Guardian Angels Riverview Landing and
Riverbend North are under construction or have been approved for construction, respectively.
City staff has reviewed Title 4, Chapter 6 of the City Code regulating rental housing to
determine if modifications are needed to adapt the City's rental housing performance
standards to multiple family dwellings, as well as on-going administration of rental housing
licensing.
Exhibits:
■ Draft ordinance
ANALYSIS
Applicability. Section 4-6-2 of the City Code makes rental of any dwelling unit subject to the
performance standards and licensing requirements of the City Code. The application of these
requirements to the defined term of rental dwelling unit makes each single family, two-family,
townhouse, or multiple family dwelling offered for rent subject to regulating including issuance
of a license.
The main issue with the application of the rental housing provisions of the City Code to multiple
family uses within a building owned by a single entity (versus individual condominium
apartments) is it to make allowance for the premises to be licensed versus individual dwelling
units. City staff would also propose to exempt memory care or similar service type residential
facilities from the provisions of the rental housing requirements of the City Code (including
licensing).
Performance Standards. Sections 4-6-7 (Maximum Density), 4-6-8 (General Provisions), 4-6-9
(Basic Standards for Equipment and Facilities), 4-6-10 (Minimum Standards for Light and
Ventilation) of the City Code establish minimum requirements for rental dwelling units. The
writing of these standards is such so as to be applicable regardless if the rental dwelling is a
single family, two-family, townhouse, or multiple family structures. The Department of
Building Safety and our office further do not identify any additional modifications that should
be considered for functional or public safety reasons within these sections of the rental housing
regulations.
License. Section 4-6-4 of the City Code establishes a requirement for a licensed to be issued by
the City to operate a rental dwelling. The intent of the licensing requirement is to provide the
City documentation and point of contract for the owner of the rental dwelling and to ensure
that the rental dwelling is operated in accordance with established performance standards at
the time of the initial license and on an on-going basis. Licenses are issued for a one-year
period and must be renewed by the property owner.
Inspections. Section 4-6-4.D of the City Code requires an inspection by the Department of
Building Safety prior to issuance of an initial rental license as well as for each renewal. The
intent of the initial inspection is to ensure that the rental dwelling complies with the
performance standards adopted as part of the City Code. The inspection at the time of
renewal of a rental license is done to ensure that the property continues to be maintained and
operated in compliance with the City Code requirements. Section 4-6-5.A of the City Code
established the following circumstances under which the City may require additional
inspections outside of the license renewal process:
1. Such a unit has been abandoned by the owner or the owner of such unit cannot be
found.
2. The rental dwelling unit license has been suspended, revoked or denied.
Water, gas, or electric service to such unit has been discontinued as a result of
nonpayment for more than thirty (30) continuous days.
4. The unit is on a parcel of land which is on the list of delinquent taxes filed by the County
Auditor with the Court Administrator of the District Court pursuant to Minnesota
Statutes section 279.05.
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5. The City has probable cause to believe that there exists within such unit one or more
violations of the requirements of this chapter.
6. The unit of property within which the unit is located has, within the preceding six (6)
months, renewed a license after suspension or revocation.
The unit is the subject of a pending notice of the City's intent to suspend or revoke the
rental license.
The Department of Building Safety indicates that the inspections required annually for renewal
of a rental housing license identify primarily minor issues. Based on the experience of the
Department of Building Safety and the ability of the City to require an inspection if there is
cause to believe a violation of the rental housing requirements is occurring, City staff
recommends requiring an inspection for renewal of a rental housing license every three years
versus annually. The ordinance drafted by City staff would also propose to make this change
effective for licenses issued after 31 December 2017.
For multiple family buildings, requiring an annual inspection of all dwelling units may be
problematic. Based on the experience with existing single family and townhouse rental
dwellings, City staff would not anticipate major issues within individual dwelling units from
year-to-year. This assumption is further supported by both the Guardian Angels and Riverbend
North buildings being new construction that will comply with the requirements of the City Code
upon issuance of a certificate of occupancy. As such, City staff recommends establishing the
option for a rotating schedule of inspections of individual dwelling units within multiple family
buildings. Common areas would be inspected annually as part of this schedule. This approach
allows the City the opportunity to inspect each rental dwelling unit as well as to enter the
building on a general basis to evaluate overall maintenance.
Fees. The City Code establishes a $150 fee for issuance of a rental license for both the initial
license and annual renewals. The fee addresses City administration of the rental housing
license program as well as costs incurred for inspections. With the changes to the license
inspections and issuance of licenses to a multiple family building, City staff proposes the
following changes to the fee schedule:
■ License/Renewal for single family dwelling, townhouse dwelling, condominium
apartment, or multiple family building: $100.00
Inspections for single family, townhouse, or condominium apartment: $65.00 for initial
and one follow-up inspection and $65.00 per hour (one hour minimum) thereafter.
■ Inspections for multiple family building: $65.00 per hour (one hour minimum)
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CONCLUSION
The Administrative Subcommittee reviewed the proposed amendments to Title 4, Section 6 of
the City Code regulating rental housing at their meeting on 12 September 2018. The
Administrative Subcommittee supports the proposed changes to address multiple family
dwellings and extending the inspection period to three years for all dwellings. The
Administrative Subcommittee requested that the proposed City Code amendment be sent to
Guardian Angels and Riverbend North for review. City staff will forward the proposed City
Code amendment and ask any comments or questions be submitted prior to consideration of
the ordinance by the full City Council on 22 October 2018.
C. Adam Flaherty, City Administrator/Finance Director
Tami Loff, City Clerk
Andy MacArthur, City Attorney
Sandy Lindenfelser, Administrative Assistant
M
ORDINANCE NO.: 2018-11
CITY OF OTSEGO
COUNTY OF WRIGHT, MINNESOTA
AN ORDINANCE AMENDING THE CITY CODE REGARDING RENTAL HOUSING
LICENSES.
THE CITY COUNCIL OF THE CITY OF OTSEGO DOES HEREBY ORDAIN:
Section 1. Section 3-1-2.A of the City Code is hereby amended to revise the
following fees:
Rental Housing License
Title 4, Chapter 6
License Initial/Renewal
$450:90100.00
Inspections
$50.00/hour (minimum 1 heuF)
afteF 2 inspeGtinns fnr ini+i�l
linonse or ren wa4
1.Sinale Familv. Two-
$65.00, plus $65.00/hour
Family, Townhouse, or
(minimum 1 hour) after 2
Condominium Apartment
inspections for initial license or
renewal
2.Multiple Family Building
65.00/hour (minimum 1 hour)
Under Single Ownership
Section 2. Section 4-6-3 of the City Code is hereby amended to revise the
following definition:
DWELLING, MULTIPLE FAMILY (APARTMENT): A building designed with three (3) or
more dwelling units exclusively for the occupancy of three (3) or more families living
independently of each other, but sharing hallways, main entrances and exits. A two family
dwelling (duplex) shall be Gensidered and Glassified as a multiple family dwelling.
Section 3. Section 4-6-4.A of the City Code is hereby amended to read as follows:
A. License Required:
1. No person, firm, or corporation shall operate a rental dwelling unit without
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first having obtained a license to do so from the City as provided in this
Chapter.
2. Single family, two-family, townhouse, and condominium multiple family
dwelling units shall require a separate license for each dwelling unit.
3. Multiple family dwellings shall require one (1) license per principal building
as defined by the Zoning Ordinance under single ownership.
4. State licensed boarding care homes, nursing homes, and, residential care
facilities, including memory care, whether a principal use or as incorporated
within a multiple family building shall be exempt from the requirements of
this Chapter.
Section 4. Section 4-6-4.D of the City Code is hereby amended to read as follows:
D. Inspection Required:
1. No license shall be issued or renewed under this Chapter unless the rental
dwelling and its premises conform to the erdinanGes of the City Code and
the laws of the State; the City may shall require an inspection of SuGhthe
rental dwelling and premises to make that determination.
2. Single family, townhouse, and condominium dwellings: An inspection shall
be required at the time of application for an initial license and for renewal of
an existing license issued on December 31, 2017 or thereafter every three
3 ears.
3. Multiple familv dwellinas within a buildina under single ownership: An
inspection shall be required at the time of application for an initial license
and for renewal of an existing license every five (5) years from the date of
approval. For renewal of an existing license, a schedule shall be
established subject to approval of the Building Official for annual inspection
of areas of the principal building outside of the rental dwelling units and not
less than twenty (20) percent of the rental dwelling units within the premises.
4. Failure to schedule or allow such inspection shall be dealt with as provided
by Title 1, Chapter 5 of this Code.
Section 5. Section 4-6-4.E of the City Code is hereby amended to read as follows:
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E. Term Of License; Renewals:
1. Each license shall be issued annually and shall expire one (1) year following
the issuance thereof. License renewals for the following years shall be filed
not less than thirty (30) days prior to the license expiration date.
2 A licensed issued in accordance with this Chapter shall expire upon a
change in ownership of the property.
3. Application for renewal of a license issued under this Chapter shall be
submitted not less than thirty (30) days prior to the expiration of the current
license.
Section 6. This Ordinance shall become effective immediately upon its passage
and publication.
MOTION BY:
SECOND BY:
ALL IN FAVOR:
THOSE OPPOSED:
ADOPTED by the City Council of the City of Otsego this 22nd day of October,
2018.
ATTEST:
Tami Loff, City Clerk
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CITY OF OTSEGO
:T
Jessica L. Stockamp, Mayor