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Last Thursday, June 22, the Olympia Land Use and Environment Committee reviewed the new Rental Housing Registration program with a presentation of recommendations and discussions around inspections for rental properties, guidelines, fees, and staffing needs.
Christa Lenssen, Housing Program specialist, cited RCW 59.18.125, which authorizes cities to require inspections for obtaining a business license for rental properties.
Under the program, landlords will become responsible for paying for periodic inspection services, a business license and an annual registration fee to the city.
Lenssen said she examined how the cities of Kent, Renton and Lakewood have implemented such a program. Their implementation approaches are diverse regarding property registration, inspections, and involvement of private or city inspectors.
According to Lenssen, many other cities, like Auburn, Bellingham, Pasco, Seattle, and Tacoma, have implemented similar rental property programs that would likely work in Olympia.
She said the inspection process in Olympia would be on a cycle. Property owners would be notified of the cycle and when inspections will be due for their properties.
Rental property owners will be required to register with the city and obtain an annual business license from the state. Then will then be expected to hire an inspector from a list of certified inspectors.
The inspection process will involve a checklist that covers aspects such as safety, health, and energy efficiency.
The inspector will use a pass/fail system, and the inspection information will be submitted to the city staff. Depending on the inspection results, the city will issue a certificate of compliance or notify the property owner of any deficiencies.
If the property fails the inspection, a reinspection would be conducted to ensure all issues have been satisfactorily resolved.
Under this program, Lenssen said the workgroup is looking at all rental units required to register with a proposal to exempt owner-occupied mobile homes, dorms, religious housing, houseboats, shelters, transitional housing, supported living for people with disabilities, hotels, short-term/vacation rentals, room rentals where the owner resides in the property, and exempt government and nonprofit-owned affordable housing units from fees.
The workgroup also recommends most rental units would be required to be inspected periodically.
Other recommendations include:
For this program, the workgroup looked at the inspection expenses involved for multi-unit apartment landlords. Based on her inquiries with five or six program inspectors, Lenssen said the cost range they provided for larger apartment complexes was about $25 to $35 per unit, plus travel costs.
For single-family homes or duplexes, the inspection costs would be higher. The range was about $140 to $280 plus travel costs. For reinspection, inspectors in other cities charge hourly rates at $75 per hour.
Lenssen noted that about 60 licensed home inspectors are listed in the Washington State Department of Licensing located in Thurston County.
Based on her research in other cities with rental housing registration programs and comparing the units they have in their city, Lenssen said Olympia would need a full-time coordinator to oversee inspections, licensing, and registration.
A full-time code enforcement officer would be necessary to enforce violations and ensure compliance. A part-time permit tech or administrative support staff would also be responsible for processing applications.
Lenssen recommended that the city could start with 1.5 staff in the first year, with a focus on voluntary compliance and scaling up.
"One thing that I heard from other cities was that adequate staffing for enforcement was really important to have a successful program. Other cities with similar program models have very different participation rates, depending on their enforcement capacity," Lenssen added.
The Housing Program specialist also showed tables with projected revenue on three rental property inspection fees: $20, $25, and $30 per unit.
Lenssen said the projected revenue was estimated based on compliance levels and total rental units. Staff costs were calculated based on budget figures for required positions.
Based on the tables presented at the committee meeting, high compliance rates would be necessary for the $25 fee to cover program costs. In comparison, approximately 75% compliance would cover the program costs at the $30 fee.
At a $20 fee, there would be a shortfall between the projected revenue and the estimated staffing costs.
Olympia City Manager Jay Burney cautioned the committee about the new programs, including the Rental Housing Registration program, as he emphasized the need for the program to be revenue-neutral. He said it would put a strain on the general fund.
Committee Chair Dani Madrone echoed Burney's revenue-neutral approach and suggested refining the numbers to ensure the fee covers the program costs.
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Southsoundguy
Useless bureaucracy.
Monday, June 26, 2023 Report this
pheong
landlords presently renting property with no knowledge of said properties by the city will likely continue to do so. these costs will most certainly not be passed on to tenants at twice, if not more. than the cost. the city can barely manage to enforce its code rules as it is. look at the house at the 't' of san fransico street and marion at the beginning of the nature trail. this house has at the minimum 2 tenants. think that the city will do anything differently than it has been? dog **** all over the yard, like it matters because it's never mowed, repairs done rarely or never. the neighbors have been trying for years top force code enforcement to act. HA, HA. the adjacent neighbors sold their house at a loss of tens of thousands after relatively zero action by the city. if they can't deal with this situation then they most certainly will not be able to monitor all rental properties in the environs of olympia.
Monday, June 26, 2023 Report this
AugieH
From the city's standpoint, I suspect the value of the registration program is to identify the property owners of rentals such that future (more onerous and micromanagement) regulations can be applied by the city in a targeted manner. As in Seattle, the goal, I further suspect, is to give more rights to tenants at the expense of the those of the owners.
Monday, June 26, 2023 Report this
BobJacobs
I read the staff report on this proposal for mandatory periodic inspections of rental properties, a very onerous, intrusive, expensive process for both landlords and tenants. Councilmembers talk about keeping rents low, but this will do the opposite.
I saw no mention of documented need for the program. What problems is the city council trying to solve? More tax revenue?
As to comparable cities, what is not mentioned is that most cities by far do not have such a program. Only a few of the cities with inspection programs are mentioned. Misleading.
Bob Jacobs
Tuesday, June 27, 2023 Report this
DHanig
It's not clear what problem the Council is trying to solve. Have there been extensive complaints about the condition of rental properties? If not, why establish this program?
Tuesday, June 27, 2023 Report this
sonshi
"For single-family homes or duplexes, the inspection costs would be higher. The range was about $140 to $280 plus travel costs. For reinspection, inspectors in other cities charge hourly rates at $75 per hour."
The pessimists and realists might predict many/most existing SFH/duplex landlords are going to pretend to know nothing about this new program.
Tuesday, June 27, 2023 Report this
Deadon
As a landlord of 2single family homes and a duplex ,I keep my properties in a condition that I myself would live in , my tenants are all happy and it shows in the way they keep the property ,I can assure who ever decided to follow the big cities with idea, with this so called city inspection agency with the agenda of raising more monies for God knows what is going fail miserably, a private inspection agency?give me a break, city business license,which comes with more taxes, who dreams this @#$& up , here's what's going to happen , I along with 80 percent of landlords of single family homes and duplexes will sell them only adding to the rental shortage ,the city of Olympia taxes and fees for doing anything related to building permits are completely out of touch adding 20 to 30 thousand dollars to the price of new construction, I as well as many many others will be leaving this once beautiful state for one with far less taxes and government overreach!
Wednesday, June 28, 2023 Report this
jimlazar
This is clearly a proposal being promoted by the large corporate landlords like Invitation Homes (more than 200 rentals in Thurston County) to push more small landlords out of the business.
The large landlords have full-time maintenance staff who can show up just before the inspector, while small landlords sometimes work, and need a day or two to fix a dishwasher or air conditioner. But the corporate landlords charge higher rents, and tenants pay those costs.
The result of this will be a little complicated. First, more small rental owners will sell their properties. They may go to people who are shopping for homes to buy, and that's fine, but it will reduce the supply of rental units on the market. A lower supply of rental units means higher rents.
Or they may be sold to the large corporate rental owners and commercial property managers and their investors. That means higher rents, because the corporate landlords use complex algorithms to raise rents as much and as fast as the market will bear, while small landlords usually raise rents slower for reliable tenants who pay their rent and don't abuse the property. I certainly did that with the three rentals I sold several years ago.
Finally, the small landlords who choose to keep their rentals and register and pay fees under this program will certainly raise rents for their tenants to cover the costs. That's how markets work.
So, no matter how it turns out, on a property by property basis, the result is higher rents for tenants. That seems to be the City Council's objective. Drive renters out of Olympia, and into Lacey and Tumwater which do not have these types of extra regulations and extra fees.
No wonder a developer just proposed to build 1,150 apartment units in Tumwater. Tumwater will get the property taxes for that.
Wednesday, June 28, 2023 Report this
Yeti1981
Still trying to create more "affordable" housing by making it more expensive huh?
Thursday, June 29, 2023 Report this
OlympiaUsedToBeANicePlaceToLive
We rented out our Olympia home for a number of years when transferred for work, returned when could WFH. When we leave again we will sell the place. City council seems hellbent on making things more and more expensive for small landlords. We had good tenants, gave them good rates and did not increase rent once and basically only broke even.
At the time we moved we thought we would want to settle back in Olympia, but didn't predict what a dump it would become. Crime, open drug use downtown, inability to deal with homeless problem effectively (somehow the paths in Lacey are clear). Currently looking for a better run city, and we won't be putting the house on the market this time.
Friday, June 30, 2023 Report this
sonshi
As a SFH 'landlord', the estimated first year cost with the numbers mentioned in the story would come out to around $400. That's not nothing, especially considering all it accomplishes is putting us on a list so we can be more easily targeted at will in the future for fee increases, new fees, lease analysis, making sure we rent to the right people, etc. No thanks. We are definitely going to sell it off now.
Wednesday, July 5, 2023 Report this
Yeti1981
And all costs will be passed directly on to the renter. Thus making housing even less affordable here in our community.
Wednesday, July 5, 2023 Report this