ACTION REQUESTED:
Title
Communication from the City Manager and the Community Development Director with a Request to ADOPT an ORDINANCE Amending CHAPTER 5 of the CODE of the City of Peoria Pertaining to REGISTRATION OF RESIDENTIAL PROPERTIES and INSPECTIONS OF DWELLINGS.
Body
BACKGROUND:
Additional data requests were discussed at the August 14, 2018 Council meeting. A response to those requests will be presented at the September 25, 2018 Council meeting.
At this time, staff is requesting that only certain sections of this communication be approved at the September 25, 2018 meeting. Staff continues to have productive meetings with various local groups on other sections of the overall communication and will bring further amendments back to Council over the next few months.
The Community Development Department has been working on changes related to Chapter 5 of the City of Peoria Code to improve the condition of rental property throughout the City of Peoria in order to preserve property values and stability in our neighborhoods, reduce blight, and improve living conditions for tenants.
Staff has already made multiple changes throughout the year to improve the condition of our neighborhoods. A new notification system was created to allow property owners to receive notices via text and email if they have an abate or work order issued at their property. While this does not excuse the code violation or citation, it does prevent the property owner from having a work order completed and billed accordingly. The notification system data is online and has a mapping function for residents to see which properties have received environmental citations, environmental work orders, and abate notices within a certain time period and mile range of a specific address. In addition, the Department has focused strongly on educational efforts and positive reinforcement to maintain compliance. The changes outlined below will continue to improve on the momentum already established.
The Department is shifting toward a focused deterrence strategy to hold habitual property offenders accountable while rewarding the majority of all rental property owners in the City of Peoria who do not contribute to blight and neighborhood decline. This is a similar strategy to the Don’t Shoot program managed by the Peoria Police Department. Nuisance landlords in the City of Peoria can cause major problems for neighborhoods and should be held accountable for their actions.
The Department looked at Code Enforcement actions for 2017 and the first part of 2018 to see where/what type of parcels a majority of the enforcement work was taking place:
|
|
Total Number of Parcels |
Percent of Total Parcels |
Code Enforcement Actions |
Percent of Total Actions |
|
Owner Occupied Parcels |
25462 |
53% |
7760 |
28% |
|
Non-Owner Occupied Parcels |
14422 |
30% |
16329 |
59% |
|
Vacant Parcels |
3833 |
8% |
1813 |
7% |
|
Abandoned Parcels |
1525 |
3% |
1455 |
5% |
|
Exempt Parcels |
2443 |
5% |
400 |
1% |
As the above table indicates, 59% of all code enforcement actions took place at residential zoned parcels identified by the Assessor’s Officer as “Non-Owner Occupied”, while those parcels only make up 30% of all residentially zoned parcels. The data shows that non-owner occupied properties take up a disproportional and large majority of staff time in terms of enforcement activity. The proposed changes outlined below look to hold accountable those property owners who time and again allow their property and their tenants to cause blight in our neighborhoods.
Additional changes below are meant to combat property owners only maintaining their property to the minimum standard by raising what the City of Peoria sees as a minimum and acceptable standard in our neighborhoods. It is important for the City of Peoria to set clear standards about the condition of rental property and make sure those standards are understood by the tenant and property owner.
In 2009, the City Council of Peoria changed the registration requirement to an annual registration. The registration fee was created not as an incentive for having good non-owner occupied property, but as a fee for simply owning non-owner occupied property. In 2011, the City Council raised the registration fee but offered a discount to property owners who attended a two-hour educational seminar hosted by the Community Development Department. In 2018 about 86% of all properties registered received the discounted rate. Multiple topics have been discussed at great lengths including tenant rights, fair housing law, property maintenance requirements, the nuisance abatement process, building safety, and the legal eviction process. The educational seminar has achieved the goal of providing a baseline of education for landlords and property owners. At this time, staff feels that the educational seminar is no longer effective and offers the following changes to the registration program. The current fee structure generates about $900,000 annually for the City of Peoria general fund.
1) Discounted Registration Fee (REQUEST TO HOLD THIS SECTION AT THIS TIME)
If a property owner meets the following conditions, they would be eligible to receive the discounted rate of $75 per property without having to attend the annual training:
- the property owner does not owe the City of Peoria any outstanding funds for any reason, including but not limited to fines, fees, utility bills and back taxes. This would not include special service payments, current economic development loans, mortgages and other similar payments.
- the property owner has not received a judgement or default related to a Chapter 5 code violation via the City of Peoria Hearing Officer within the previous calendar year.
- the property owner has not received a judgement or default related to Criminal Housing Management via the City of Peoria Hearing Officer within the previous calendar year.
- Any judgment entered in Circuit or Federal Court in a suit brought forth by the City of Peoria.
If any of the above conditions are not met by the property owner on any properties owned, the property owner will be required to attend the educational seminar in order to receive a discounted rate of $125 per property. Having the stipulation apply to property owners will prevent someone from allowing one of their properties to deteriorate while still maintaining other property in a different part of the City. If the property owner chooses not to attend the seminar, they will be required to pay $250 per property. The changes to the program will allow staff to develop an educational agenda more tailored to landlords and property owners who have had code violations. With these changes, the educational seminar will address the landlords who contribute to blight in our neighborhoods. It also offers an incentive to property owners to proactively maintain their property and rewards them for being a responsible property owner.
2) Licensed Broker Verification (REQUEST TO HOLD THIS SECTION AT THIS TIME)
In addition, the property owner, registered State of Illinois business agent, or State of Illinois licensed property manager can attend on behalf of the property owner. If the deed holder is not attending, they need to have the property agent or manager’s information on record with the City of Peoria thirty days prior to the educational seminar.
The Community Development Department staff has met with the Peoria Area Association of Realtor’s about the state requirements around property management. Through discussion with PAAR and other local property managers, it has been brought to the City of Peoria’s attention that the following activities in the City of Peoria require you to be a State of Illinois licensed broker per state statute: (If you own the property or are a registered agent of the business that owns the property, this is not a requirement and not applicable.)
• rents or leases real estate
• offer to . . . rent, or lease real estate
• negotiates, offers, attempts or agrees to . . . rent or lease real estate
• lists, offers, attempts, or agrees to list real estate for...lease
• supervises the collection, offer, attempt, or agreement to collect rent for the use of real estate
• advertises or represents himself or herself as being engaged in the business of...renting or leasing real estate
• assists or directs in procuring or referring of leads or prospects, intended to result in the . . . lease, or rental of real estate
• assists or directs in the negotiation of any transaction intended to result in the . . . lease, or rental of real estate
The City of Peoria has never had a policy of asking for the license information on designated agents or property managers in the City of Peoria. Property owners and registered business agents are exempt from this requirement. The Department is proposing changing the ordinance language to require an agent to have an active State of Illinois license as required if the owner does not live in or operate an office in the tri-county area. The current ordinance has the requirement of a local agent but does not mention the State of Illinois license. License information will be required at time of registration and if the property is in front of the Hearing Officer and the agent is representing the owner. Failure to have a licensed registered agent will void the registration and the owner will be subject to the fine for failure to register. In addition, the City will work with PAAR to work with the State of Illinois on holding those doing this work accountable without the proper license in the future.
Staff is going through an intensive process to identify properties in the City of Peoria that have not registered as required by the ordinance. Staff has worked with the Assessor’s Office to identify a list of properties tagged as non-owner occupied in their system but not registered with the City of Peoria. Staff estimates there are about 1,000 to 1,500 properties that fit his criteria. In addition, the Assessor’s Office will be identifying properties that are registered with the City of Peoria and still claiming the homestead exemption for property tax purposes.
3) Rental Property Self-Inspection (REQUEST TO HOLD THIS SECTION AT THIS TIME)
In addition to the changes to the registration requirement, staff proposes modifying the self-inspection process required between landlords and tenants. Starting in 2009, landlords were required to complete a city provided self-inspection checklist with each tenant prior to moving in and annually. Due to staffing cuts in the Code Enforcement Division, rental property in Peoria cannot be proactively inspected. As a result of staff reductions, the self-inspection process was created to assist tenants with problematic landlords and ensure that rental properties are in compliance. In addition, it provides an extra layer of accountability for tenants who ruin properties and then report the violations to Code Enforcement to retaliate against a landlord. This information may also be used as part of criminal or civil charges against tenants who purposely damage property.
Staff is proposing the following modifications to the self-inspection checklist:
- All completed forms must be submitted annually to the City of Peoria as part of the registration process. The Department will explore if this can also be done electronically with the new software being implemented at the end of 2018.
- After landlords and tenants sign off on the complete self-inspection form, the form must be posted inside the residential property and inside each individual unit of multi-unit buildings.
- Landlords will be required to disclose to all tenants and prospective tenants if they have a current administrative hearing officer case for Chapter 5 violations or if they have had a case at the property within the last twelve months on the self-inspection form.
- Landlords are also required to provide all tenants with a City provided tenant rights and responsibility pamphlet provided as part of the self-inspection form.
- The self-inspection form will be modified to include language about who is responsible for cooking appliances. (Refrigerator, Stove, Microwave, etc.)
4) Residential Rehabilitation Agreement Process & Extension of Hearing Dates (REQUEST TO APPROVE THIS SECTION AT THIS TIME)
In addition to the changes to the self-inspection process, the Community Development Department staff will be making minor adjustments to the enforcement of Chapter 5 Code requirements related to the Hearing Officer process. If a violation is found at a residential property (owner occupied or non-owner occupied), the property owner will have the ability to enter into a residential rehab agreement with the City of Peoria. Properties that enter into an agreement and maintain compliance with the agreement will not be entered into the hearing officer process.
The program will be designed as follows:
- City of Peoria identifies violations at the property. All violations are recorded and a notice is created offering the owner two options: contact the Code Enforcement Officer and enter into a rehab agreement, or the City of Peoria will issue a Hearing Officer Notice.
- Properties with interior violations based on a complaint from a tenant will not be eligible for the rehab program.
- Property owners must present a written plan to the City of Peoria Community Development Department within two weeks of receiving the letter. Failure to meet this deadline will result in a Hearing Officer notice. The plan must include:
o Detailed work scope and timeline of project.
o Plan to address all interior and exterior code violations
o Plan must not have a completion date later than 180 days for owners located within 30 miles of City Hall.
o Plan must not have a completion date later than ninety days for owners located 30 miles outside of City Hall.
- Property owners must agree to walk through the property with a Code Enforcement Inspector and a Building Inspector before work is to commence (if requested by staff).
- Property owner agrees to pull applicable permits.
- Property owner may not owe the City of Peoria any money (including back taxes).
- Property owner agrees to be responsible for all environmental issues at the property.
- Property owner agrees to have front porch light on at the property at night and install an alley light if applicable (if property is going to be vacant).
- Property must be legally registered with the City of Peoria as non-owner occupied.
- Property owner agrees to make sure house numbers are legally placed on the structure.
- If the property owner breaches the terms of the agreement, the property will be put into the Hearing Officer process with an administrative fee of $500.
- Property will not be placed into the Hearing Officer process as long as progress is being made on the property and the work agreement is followed.
- Property will be placed into the Hearing Officer if the entire property is not brought up to code by the end of the agreed upon timeline per the work plan. There are no exceptions. No extensions will be granted.
- The City will publish a list of properties with agreements so residents are aware of renovations occurring. The list will include contact information for the property owner and the full work scope.
A copy of the administrative hearing officer notice will be sent to the property to inform any tenants of the administrative hearing date and advise them to contact the Code Enforcement Office if they have concerns about additional violations at the property that are not being addressed by the landlord.
The current administrative hearing officer process allows housing cases to be continued in thirty day increments. This is an inefficient process for Code Enforcement staff, the Legal Department staff and property owners alike. Code Enforcement Inspectors will be requesting hearing dates with all of the work being completed in sixty days.
The timeline would be as follows:
- Initial Inspection is completed at the property. Residential Rehab option is presented to the owner giving them 14 days to respond.
- If the property owner declines or no response is provided, the property is put into the Hearing Officer Process with the first hearing date set thirty-five days from the notice (as currently required by ordinance).
- During the hearing, the work scope and process is explained to the property owner and the case is continued sixty days with the work scope requiring all violations to be corrected.
- If the work scope is completed, the case will be dismissed at the next hearing. (The owner will not have to appear.) If the work scope is not completed, a $100 re-inspection fee will be assessed based on the current ordinance language and the property owner will be given thirty days to complete the work scope. If progress is being made but the work is not complete, the Hearing Officer can offer additional extensions in thirty day increments with a $100 re-inspection fee applicable for all future hearings to defray staff and administrative costs.
With these changes, property owners would have over 100 days to bring the property into compliance before re-inspection fees are applied. Property owners would also have the option of avoiding the Hearing Officer Process altogether by agreeing to enter into a residential rehab agreement with the City of Peoria. The above process will eliminate unnecessary re-inspections by Code Enforcement Staff and allow them to address additional properties. In addition, it will allow the Legal Department to focus additional time on collection efforts for those who refuse to adhere to the established City of Peoria ordinances and create blight in our neighborhoods.
After cases are closed, the Finance Department will receive the file and invoice the property owner for the re-inspection fees. In addition, they will ensure that the property owner does not owe the City of Peoria any additional funds. If the property owner fails to pay the invoice within thirty days, the file will be sent to the Legal Department who will turn the file over to a collection agency. If the collection agency is unable to recover the funds, a lien will be placed on the property. All of the liens will be placed on the property tax bill for the following year. In addition, multiple departments will collaborate to create a handout to be included with all notices detailing the collection process to encourage compliance.
The attached ordinance amendment will allow cases that are brought before the Hearing Officer to be extended for greater than the current 25-day maximum. This will allow the City, property owner, and Hearing Officer more flexibility in determining the appropriate amount of time to make repairs between hearings.
FINANCIAL IMPACT: Holding property owners accountable in the City of Peoria improves neighborhood conditions and property values. The change in the registration process is projected to be revenue neutral but puts more weight on code violators. Last year about 800 properties registered by paying the entire $150 fee and not attending the class to get the discount. They likely would be eligible for the discount this year. The revenue would likely be offset by those who are required to attend the training and pay a higher amount.
NEIGHBORHOOD CONCERNS: Neighborhoods are supportive of efforts to hold code violators accountable for their actions.
IMPACT IF APPROVED: Code changes would go into effect.
IMPACT IF DENIED: Code changes would not go into effect and current structure of non-owned occupied registration would remain.
ALTERNATIVES: NA
EEO CERTIFICATION NUMBER:
WHICH OF THE GOALS IDENTIFIED IN THE COUNCIL’S 2017 - 2032 STRATEGIC PLAN DOES THIS RECOMMENDATION ADVANCE?
1. Grow Peoria
2. Beautiful Peoria
3. Safe Peoria
WHICH CRITICAL SUCCESS FACTOR(S) FROM THE COMPREHENSIVE PLAN DOES THIS RECOMMENDATION IMPLEMENT?
1. Reinvest in neighborhoods.
2. Have an efficient government.
3. Keep taxes and fees competitive.
DEPARTMENT: Community Development