Memo- Rental Licensing OrdinanceInspections
Memorandum
To: Honorable Mayor and Members of the City Council
Copy: Rick Getschow, Jim Genellie, Craig Reid, Elizabeth Page, Kathy Magdal
From: Merwyn Larson
Date: Apri16, 2007
Subject: Rental Licensing Ordinance
Summary of Proposal:
Currently the common areas of all apartment complexes are inspected annually and about 15-20 percent of
the units in each building are inspected on a three-year cycle. The remaining 950 one and two family unit
buildings are usually inspected in connection with a complaint. With the complaint load related to these
units, a regular inspection cycle has not been implemented.
The current rental-licensing ordinance requires that licensees maintain their property in good condition
and deal with disorderly behavior of their tenants as conditions of the license. History has shown that
maintaining housing stock in good condition and effectively dealing with tenant behavior are essential for
improving neighborhood livability. Regular inspections and thorough tenant screening improves the
quality of housing, improves property values, attracts quality tenants and eventually may decrease the
incidence of criminal behavior.
In summary, this proposal calls for the increased inspection of one and two family rental dwellings and for
property owners to use a crime free lease addendum or equivalent in their tenant leases and do background
checks on prospective tenants (Level One). Increasing the license fees from $20/building and $5/unit to
$100/building and $6/unit should generate adequate revenue to fund an additional inspector to perform the
inspections.
For those property owners who voluntarily exceed the minimum Level One requirements for crime free
leases and background checks, they would be rewarded with a lower license fee structure. The following
table shows the requirements and fees for the proposed three-level program.
Level One a wired Level Two O tional Level Three O tional
2 year inspection of 1 &2 All Level One Requirements All Level Two Requirements
famil units
Use crime free lease Require property managers to Require property managers to complete
addendum or equivalent complete Phase 1 of the Crime Phases 2 & 3 of the Crime Free Multi-
Free Multi-Housin~~ Housing Prog am & maintain ongoing
certification
Criminal background 50% attendance at HAMA 75% attendance at HAMA meeting
checks on new tenants meetin
$100B1d - $6/Unit $75B1d - $5/Unit $SOBId - $4/Unit
Public Comments:
At the July 11 th Council work session, staff was directed to develop options for improving the
effectiveness of the Rental Licensing Program. At the August 22, 2006 Council Study Session, staff
brought forth ordinance amendments and was directed to meet with the stakeholders and further develop
the changes. Since then, the staff from the Inspections and Police Departments has refined the
recommendation with input from the Hopkins Apartment Managers Association, the Minnesota Multi-
Housing Association, interested property owners, apartment managers, condo associations and the general
public.
A summary of the changes was mailed to all licensed property owners/managers and they were invited to
give input at an open public meeting held on January 30, 2007. In addition the staff has continued to meet
with individuals and received letters and phone calls. The major themes that continue to be raised
include:
1. Crime free program: Many responsible rental property owners are supportive of the program because
they already do background checks and use crime free lease addendums. Some owners would like to see
minimum background acceptance criteria for applicants. Some Property owners believe that property
maintenance inspections will not reduce crime.
Response:
• Reducing crime is just one of many outcomes of increased property maintenance inspections. The
primary goal of property inspections is to preserve the existing housing stock. Quality housing stock
improves properly values, attracts quality renters and encourages home ownership. When these
outcomes are in place, criminal activity maybe reduced or forced to go elsewhere.
2. Inspections: There is strong neighborhood support for inspections. Some owners and managers suggested
that the City should consider the possibility of accepting inspections required by HUD and other
government loan programs in lieu of City rental licensing inspections. Others suggested that the City focus
more of its resources on problem properties by shortening the inspection cycle and conversely increasing
the inspection cycle up to five years for properties that consistently pass inspections.
Response:
• There is not a good understanding of how the HITD Minimum Properly Standard (MPS) compares to
the Hopkins Property Maintenance Code. Private inspection companies, sometimes located in other
states, conduct the inspections. There are both HUD Section 8 and Section 42 inspections. Section 8
inspections are conducted in the units receiving the low income assistance. The Section 42 inspections
are conducted for the Low Income Housing Tax Credit Program.
The inspections are conducted for their respective programs and not for use by other entities. There is
not a way to issue criminal or administrative citations based on observations by a private inspector.
Complaints or unresolved HUD inspection items would need to be inspected by the City and given
fiu-ther time to comply before issuing criminal or administrative citations.
A variable inspection cycle is possible, but tracking individual properties would create additional
administrative tasks. Currently only 15-20 percent of apartment buildings are inspected on a 3-year
cycle, which means that individual units are actually inspected on a 15-year cycle.
Staff is recommending that a reinspection fee be charged to property owners that cause the inspector to
return several times to reinspect the same violations. Reinspection fees could be charged for all
additional reinspections conducted following the initial inspection and the first reinspection. The
reinspections fee would shift program costs to those properties that consume excessive inspection
resources in order to achieve compliance.
3. Fee Increase: The most common complaint that the City received was that the size of the fee increase is too
large and Hopkins rental properties will not be competitive with properties in other cities. Owners of
Condominiums argued that they should be treated the same as apartments. Others suggested that Properties
with owners or property management offices on site or in the City of Hopkins should be charged reduced
license fees.
Response:
• The current fees are extremely low when compared with other cities with similar rental licensing
programs. In the worst-case scenario the license fee for asingle-family building would increase by
$6.67 per month. The license fee for an average apartment unit would increase $.64 with the smallest
increase at $0.11 and the largest increase at $2.31 per unit per month.
The inspections and administrative effort would be greater for individual rental condominiums than
apartment buildings. The revenue reduction would be approximately $23,500 if condos were treated
similar to apartments in the fee structure.
Another option for condos would be to offer a reduced rate at 80% of current proposal rates for rental
condominiums if the condo association is willing to take full responsibility for rental licensing issues
similar to an apartment management company. The proposed multi-level rate structure would be Level
one - $80, Level Two - $60, and Level Three - $40. The monthly increase in fees would be $5.00,
$3.33 and $1.67 per unit respectively for the three levels. It is expected that there would be a small
number of associations that would agree to take full responsibility for licensing issues. The revenue
reduction with adopting this option is estimated to be approximately $7,000.
Lowering fees for property owners living in the building or within a maximum radius of the City of
Hopkins has merit because they would be able to provide close supervision of the rental units.
4. The City received comments indicating that Hopkins rental properties will not be competitive with the
higher rental license fees.
Response:
As mentioned above, the increase ranges between $0.11 and $6.67 per month. For the worst case
scenario, a single family renting at $700 per month would see an increase of 1 %. The following table
shows other cities in the metro area that have similar fees in the range of what Hopkins is proposing.
The application of the rate structures may vary by city due to rate reduction incentives given for good
properties.
Per Building Fees Per Unit Fees
Brooklyn Center 100 9
Golden Valley 100 20
St. Louis Park 125 6
Minneapolis 55 19
Shoreview 100 7.50
Hopkins-Proposed 100 6
Hopkins-Current 20 5
5. There is strong support for increased rental inspections from members of the community.
Response:
For the general public that does not own residential rental property, we have found that there is good
support for increased enforcement of property maintenance codes.
A summary of the January 30~' public meeting comments and a sampling of written correspondence is attached
for your review.
Attachments:
Rental Licensing Ordinance
Public Comments
About 35 people attended the public meeting held for the purpose of providing information and
gathering input on the proposed Rental Licensing ordinance. The following are comments
presented at the meeting as well as written and verbal comments received before and after the
meeting.
Crime free program:
1. Need to get more information out about the crime free program -cost, # of hours, etc.
Copies of crime free lease addendum
2. Criminal background checks -what is the cost, how are they used
3. Environmental surveys -who does them (K Magdal) can she handle a great number of
them?
4. Already doing background checks. (Several)
5. Would like to see a $500 penalty fee for not doing background checks.
6. Background checks are private data, how are you going to make sure that they are doing
them? Suggests having on the rental application wording like: I certify to that I am doing
third party background checks on all tenants.
7. The better the condition of property, the lower the crime will be. Abetter connection
with police is needed.
8. Police sometimes give the ticket to the wrong person.
9. Would we require them to reject criminals? No, I don't think we can legally do that.
10. Is every instance of tenant misdeeds being reported to the Inspection's Department from
the Police Department? Not all police responses are being used as instances of disorderly
behavior. (3)
11. Believes there is a direct correlation between the quality of the community (tenant) and
the quality of the property.
12. Steve S. - He recommended to others that they not try to do their own background
checks. The City cannot penalize an owner for police and fire service calls.
13. I suggest that polices already in other cities be looked at so that we follow standard procedures.
I think it is a good idea that landlords add crime free lease addendum in their tenant leases.
14. I think this is a wonderful idea and an excellent tool to insure that renters chosen will be long
term and law abiding. (2)
15. Condo associations have been screening tenants and using crime free leases for many years.
They have a close working relationship with the Police Department.
16. Will need to start charging application fees.
17. Crime seems to be the issue of this ordinance. Police officers need to notify the building
inspections department to create instances. Automatically send all police nuisance reports to
building inspections.
Research:
• Find out the costs for background checks and Phase I training programs. Liz had a
survey of 4 companies with fees ranging from $20 to $SS. Out-of-state checks were on
the high end. Phase I training programs fall in the $20 to $30 range.
• Are background checks private information? No
• Resources required to perform CEPTED inspections? Most inspections could be
conducted in less than an hour, however, larger complexes could take 3-4 hours. The
total number of complexes involved is not expected to be significant.
Inspections:
1. Successful inspections -could they decrease the frequency of future inspections? Can we
give credit for good behavior?
2. Use alternative HUD, Fannie Mae and REAC (??) inspections in lieu of City inspections.
(2)
3. Change apartment inspections to a 5-year cycle if they pass inspection -this will save
city time and money. (2)
4. Owner occupant has fewer problems than an absentee landlord and is being penalized;
they should get credit for living on-site. (2)
5. Condo associations do not need inspection every two years, because neighbors are very
concerned about maintaining property values.
6. Are there any units within the city that house three or four families? (Or are they inspected on
a regular basis?)
Recommendation:
• Establish point system mentioned in revocation process. (St. Paul, Minneapolis)
Rental revocation process:
1. Question concerning the section of the ordinance regarding suspending a rental license. Is
this process fair?
2. Not comfortable with the fate of the rental license sitting with the Building Official.
3. The current license revocation process should be more detailed.
Recommendation:
• Establish weighted point system for violations and set objective thresholds for revocation
and condemnation. (St. Paul, Minneapolis)
• Clarify ordinance process language if necessary.
Fees/cost:
1. Full cost of additional inspector should not be borne by the rental properties. Property
taxes should help fund any position.
2. The license fee cost is too high. (4)
3. Doesn't like the fee, but it is a cost of doing business.
4. Fee increase is bad timing with high vacancy rate and 10% tax increase.
5. Can't raise the fees enough to pay the fees.
6. Smaller numbers of units are taking a larger hit in fees.
7. This is not a problem unique to Hopkins; other cities are doing the same thing. If the fees
are raised it will come out of the tenants' pockets.
8. Fee structure issues: condo fee structure is unfair; it should be counted as an apartment
complex because it is in the same building. (2)
9. The fee increase is a lot higher for people with fewer properties and is unfair. (2)
10. Should townhomes be treated differently?
11. Owner occupied duplex -should they be treated differently?
12. Condo associations would like to be treated similar to apartment complexes. They have
on-site management 24/7 and can impose stiff penalties for noncompliance.
13. Use the tax base to fund the program.
14. The rental license fee is the same as a city tax, which will need to be passed on to tenants.
Recommendation:
• Offer lower fee structure for owner occupied rental properties.
Defining the problem:
1. We should deal with the problem properties and not the good properties. There is no
benefit for good properties. (2)
2. Why are we pursuing this? This does not benefit me in the least.
3. Is the problem in the rental community?
4. Compare number of police calls for homeowner vs. rental properties. (3)
5. Believes that the new ordinance will not improve the quality of life.
6. Money and classes do not get rid of the problem people or prevent crimes.
7. Define the problem with some concrete evidence.
8. You are preaching to the choir; the people that show up to voice their opinions are not the
problem properties.
9. What is the city accomplishing by doing this? To prevent problem tenants.
10. The problem is that the majority of Hopkins is rental. The City should stop allowing more
rental properties. Someone stated that there is a moratorium on building apartment
complexes.
11. It is hard to attract homeowners to condos with a high percentage of rentals. They buy
properties and then rent them out. (2)
12. Research number of apartment buildings in Hopkins.
HAMA:
4. Does not feel that attending more HAMA meetings will lower crime.
5. Wants people to participate in HAMA because they want to, not because they are
required to; are we accomplishing our goal?
6. HAMA meetings are on the same day of the month as other cities, can you look into this
and make it a different day/time so that it is not a conflict.
Recommendation:
• Adjust meeting schedule to include both daytime and evening.
• Require attendance at one comprehensive two-hour continuing education per year.
Other Ideas For Improving Neighborhood Livability:
Burnsville program:
1. Consider the Burnsville program as an alternative. (2)
2. Compromise -adopt the Burnsville ordinance - it's a STAR Program, and accept
mortgage inspections or HUD inspections.
Research:
• Need more information on the alternate inspections - i.e. frequency, standards
comparison
• According to Building Official, they have not yet used HCTD or other inspections as an
alternate to City inspections. The ordinance indicates that alternate inspections can only
be accepted for the annually required common area inspections.
Recommendation:
Communitv/Neighborhood Organization Involvement
• Strengthen the neighborhood group to engage the community in identifying and follow
through in what is important to them to improve livability.
• The community needs to own the process - it will make Hopkins a better place to live.
• Encourage the public to report offenses -livability is everyone's issue.
• Code of Conduct for all neighborhoods with clear expectations i.e., no drug dealing,
loitering, public drinking, littering, neglected property, graffiti, etc.,
Miscellaneous
• Send notices to tenants and hold them responsible.
• I know some communities have the three strikes law in effect, I think that Hopkins could
benefit greatly from this policy also.
• Want to make sure that this proposal is for the entire city -and not just the Blake Road area.
All neighborhoods need to have the same understanding - so it can't be said that one area is
being targeted because of who is living there.
• I think it is an outstanding step in the right direction. As we test these waters we can increase
and update further and better solutions!
~ ~ ~ k
~~ ~ ~
/~ ~---
Minnesota Multi H using Association
1650 West 82"d Street, Suite 250, Bloomington, MN 55431
Main (952) 854-8500 Fax (952) 854-3810 Toll Free (877) 409-2534 P
Mr. Mervyn Larson
City of Hopkins
1010 First Street South
Hopkins, MN 55343
February 7, 2007
Dear Mervyn,
Thank you for the opportunity to weigh in on the proposed changes to the rental licensing
ordinance that Hopkins is considering. We greatly appreciate the efforts you have made to
include stakeholders in this important discussion.
As you and I have discussed, members of the Minnesota Multi Housing Association are
concerned about several items in this proposal:
1) The proposal is focused on crime. As business owners and residents, we're certainly
supportive of efforts to combat crime. In fact, we pay significant property taxes in order to
help fund police services - in 2006 we paid over $4 million in property taxes, of which
nearly $1.5 million went to the city. But this proposal increases fees dramatically in order to
pay for a housing inspector. We understand the idea behind the broken window theory, but
remind you that there is not a strong correlation between older properties and increased
crime. It's not logical to base a change in policy on an assumption that an additional housing
inspector will somehow stop crime.
If there is indeed a problem with crime, then the city already has the tools to deal with this
through arrest and prosecution. The problems caused by a handful of residents should not
dictate policy that negatively impacts everyone else.
2) If the issue the city is confronting is actually one of maintaining and improving housing
stock, then we encourage you to focus efforts on those properties that need work. The
current Hopkins inspector does indeed have a lot of territory to cover. It does not make sense
to add to the work load when it is already known where the problems are and that they are
limited. We also understand that the current inspector's salary is covered at least in part by
the city's general fund; it seems unfair to ask us to pay the full cost of a new position.
We believe there are better ways to address the city's concerns without requiring us to pay
for another FTE. Many properties already undergo rigorous inspections (such as is required
by HUD). One option is to cut down on the work load of the current inspector by not
requiring frequent inspections of well-run properties. Burnsville and St. Paul are two
examples of cities that have developed creative approaches to help them address their needs
while not being burdensome to properties that are well-managed. We would be delighted to
work with you on an alternative approach that helps the city meet its needs but doesn't
punish good owners.
3) The proposed new fee structure is too expensive, and will likely have unintended
consequences. Increased costs will be dealt with in one of two ways: They will be passed
along to residents who may not be able to afford increases; or more likely the money will
come from the very kinds of property improvement activities that the city would like to see,
such as fresh paint, repairing concrete, or nice landscaping.
A very high percentage (perhaps a majority) of Hopkins residents are renters. An inherent
assumption in this proposal is that renting is a bad thing, and that renters are second class
citizens or worse. On the contrary, renters in Hopkins come from all walks of life, and are
contributing members of the community -they pay taxes, they shop in Hopkins and they
participate in civic life. They are the very people who help make the community great.
Because of the high number of residents renting their homes, we encourage you to be very
aware of how these kinds of changes will impact them.
4) We also ask you to be mindful of the unique housing communities in Hopkins which,
because of their design, would be hit particularly hard under this proposal. These
communities are well-run and have few issues. The proposed funding formula would be
overly burdensome simply because their structure is different than the more typical rental
community.
5) We are concerned about requiring Crime Free Certification in order to get a break in the
proposed fee increase. Crime Free is an excellent program, but full certification (as required
in Phase 2) can be prohibitively expensive, sometimes with very little return.
We're also concerned about requiring attendance at HAMA meetings in order to get a break
in the proposed fees. We do appreciate the opportunity these meetings provide for
networking and sharing information, but we ask you to recognize that this requirement does
not take into account real life situations. Vacations, illness, and on-site emergencies are just
some of the things that can conflict with meeting attendance. In addition, many owners in
Hopkins have fulltime jobs that make it impossible to attend meetings in the middle of the
day.
6) We're not opposed to requiring lease language or a crime free addendum that helps
landlords evict tenants for certain causes. In fact, our MHA lease already allows owners to
evict. We do ask, though, that the city work closely with owners and provide timely
information about service calls made to an owner's property. Getting information quickly
helps us resolve problems immediately.
As you can see, we believe that the current proposal would present great hardship to
responsible owners and residents of Hopkins. We ask that you reconsider this approach and
work with us to develop something that will be acceptable to all parties.
-Sincerely ~
~~ + r t t{J\F `
~ ~ V~
' F ~ ~ Y
Molly Grove
Municipal Affairs Director, Minnesota Multi Housing Association
Cc: Mayor Gene Maxwell Councilmember Kristi Halverson
Councilmember Bruce Rowan Councilmember Jay Thompson
Councilmember Cheryl Youakim Rick Getschow
Jim Genellie
January 10, 2007
Response to
Proposed Changes to the
City of Hopkins
Rental License Ordinance
The following are reasons to treat Meadow Creek and Westbrooke Patio Homes each as
the equivalent of one rental community for purposes of the Hopkins Rental License
Ordinance. In other words, the following are reasons to assess rental license fees on the
basis of $100 for the community as a whole and $4 for each rental unit:
1. Crime Free Multi Housing Lease Addendum. This has been required to be a ,~
part of any rental lease since the Addendum was originally developed.
2. Criminal Background Checks. Background checks, both general and criminal,
have been required of all renters since 1991 for Meadow Creek and since 1997 for ~
Westbrooke Patio Homes.
3. Crime Free Multi Housing Program. Meadow Creek was the second
community in Hopkins to be certified as a Crime Free community, and Meadow
Creek has maintained that certification since then. Westbrooke Patio Homes is in
the process of becoming certified.
4. Hopkins Apartment Managers Association. Doug Strandness, the
property manager for Meadow Creek and the owner of the property
management firm of Dunbar Strandness, Inc., is a founding member of HAMA,
and Doug or representatives of Dunbar Strandness have attended HAMA
meetings on a regular basis. Pat Butler, the general manager for Westbrooke
Patio Homes, has played a key role in maintaining HAMA and attends HAMA
n~eeiu`igs on a regaiar 'basis.
5. Precedent for Treating Meadow Creek as One Community. For five years,
from 1995 through 2000, Meadow Creek paid the rental registration fee and
handled all the paperwork for all the rental units at Meadow Creek.
6. No Need for Every-Two-Years Inspections. The management staffs at Meadow
Creek and Westbrooke Patio Homes pay close attention to the rental units in each
community, and encourage neighbor feedback regarding rental units. Typically,
the management staffs find out very quickly if there are problems with rental
units. Neighbors normally call the Association offices if there is an issue. Rarely
is the City called. Problems are dealt with swiftly by the management staffs.
7. City Staff Look to Association Management Staff and Not to Investor
Owners. While City staff may occasionally write the owner of a rental unit, City
Meadow Creek and Westbrooke Patio Homes: Response to Proposed Changes to
City of Hopkins Rental Licensing Program
January 10, 2007 Page 2
staff routinely turns to the management staff of each association when there are
problems. This is appears to be the result of confidence on the part of City staff
that the association management staffs will deal with problems promptly. Both
associations invite and encourage contacts by City staff, and work to maintain the
trust of City staff. As a note, the management staffs of both associations are
available to residents and City staff 24-7.
8. Meadow Creek and Westbrooke Patio Homes' Rental Units Arguably
Present Less of a Potential Problem than Similar Sized Rental Communities.
At Meadow Creek and Westbrooke Patio Homes, the Association is a neutral
third party, which aggressively works to maintain standards, behavioral and
physical, within their respective communities. The Associations are more likely
to insist that problems be resolved quickly and permanently because there is no
prospect of lost rent or turnover costs for the Associations.
•
MEADOW CREEK CONDOMINIUMS
Statement of Policies as of October 1, 2006
SALES & RENTAL: Renting of Units by Individual Owners
Policy:
A member of the Association, who rents out a unit owned by him or her, must comply with the following
requirements:
1. Rental Information
a. The member must complete and forward to the Association office the Association's Rental
Information form (the required form is included as an exhibit at the end of this booklet, and a supply of
the form may be obtained by calling the Association office).
b. The member must complete and forward the form to the Association office each time a new lease
is signed, either with a new renter or a renter who is renewing their lease.
2. Form of Lease
a. The member must use the standard form of lease required by the Association unless permission is
otherwise granted by the Association.
b. The Association currently requires that members use the standard lease of the Minnesota Multi
Housing Association (MMHA) along with the Addendum to Residential Lease: Crime Free Multi-
Housing.
c. Permission may be granted by the Association to use another form of lease.
i. Permission must be obtained in writing and in advance of use of the lease, and the
Association may refuse its permission to use any proposed form of lease at its sole discretion.
ii. However, the Addendum to Residential Lease: Crime Free Multi-Housing must be used
with all leases.
d. The member must include a provision in the lease which allows representatives or agents of the
Association to enter the unit at reasonable times with notice, or to enter the unit at anytime without
notice in an emergency.
3. Screening Requirements.
a. The member must carefully screen each prospective adult renter based on their rental history.
i. The member must get a reference from, at a minimum, each prospective renter's current
and most recent prior landlord in writing.
ii. References from the two most recent prior landlords is preferred.
iii. The references must clearly indicate that each prospective renter has a history of not
. disturbing neighbors, damaging property or violating management policies.
b. Because disturbance of neighbors by renters is the most significant resident problem at Meadow
Creek, the member is to explicitly question current and prior landlords about this issue. In pursuing
this issue, the member is to specifically check on whether there is a record of disturbing neighbors with
loud music and/or disruptive parties.
c. The member must follow a procedure for verifying that the references are legitimate and not the
fabrications of unauthorized third parties. There are established rental application investigation
agencies which obtain and verify rental references. The Association can provide a list of such
agencies.
d. The member must not rent to prospective renters who cannot provide verifiable rental references.
e. It is suggested that the member also screen each prospective adult renter based on their credit
history and on their current employment.
f. Copies of all screening records must be kept and must be provided to the Association upon request.
g. In addition, when taking an application from a prospective renter, the member must have each
applicant sign a Renter Screening Authorization form (the required form is included as an exhibit at the
end of this booklet, and a supply of the form may be obtained by calling the Association office).
h. If there is later a problem with a renter, and the member cannot provide the Association with a
properly signed Renter Screening Authorization form for the renter, a fine of $100 will automatically be
assessed.
4. Communication of Association Policies
a. The member is responsible for communicating all Association policies to the member's renter or
renters.
b. The member is also responsible for ensuring that the member's renter(s) comply with all Association
policies.
5. Policy Enforcement for "Problem Renters"
a. if the renter of a member becomes a problem, it is the responsibility of the member either to
promptly resolve the problem or to promptly evict the renter.
b. The Association will forward to the owner any complaints the Association office receives regarding
any renter of the owner. However, it is the responsibility of the owner to follow up on the complaints
and to talk with the neighbors of the renter in order to determine how widespread the complaints are
and how best to resolve them.
Violationso
1. RENTAL INFORMATION: Failure to complete and forward the "Rental Information" form at the specific
request of the Association will result in a $100 fine for each new lease that is signed for which a form should
have been completed and forwarded.
2. STANDARD LEASE: Failure to use the standard form of lease required by the Association (or another form
of lease for which prior written approval has been obtained from the Association) along with the Addendum will
result in a $100 fine for each instance in which the standard form of lease and the Addendum should have
been used.
3. SCREENING: Penalty for Inadequate Screening.
a. Given that quality renters are one of the most important factors governing the success of the
Association, the Association will also assess a $250 fine against any owner and his/her unit if the unit
is rented, there are problems with the renter, and inadequate screening was done in processing the
renter's application.
b. When a serious problem develops with a renter, the Association may request copies of the unit
owner's records on the screening which was done before the unit was rented. If a review of these
records reveals that an inadequate job was done of screening the renter, the Association will assess
the $250 fine against the owner.
c. If the owner cannot or will not produce any records indicating that the renter was properly screened,
the $500 fine will automatically be assessed.
d. If an owner feels that this policy~is being applied to him/her in an unfair or inappropriate manner,
the owner may appeal the matter to the Board of Directors.
e. An owner can make such an appeal either by writing a letter to the Board stating his/her case, or
by appearing at a regular monthly meeting of the Board and presenting his/her case in person to the
Board.
4. POLICY ENFORCEMENT for "Problem Renters"
a. If in the judgment of the Association's property manager, an owner is not taking appropriate steps to
deal with problems caused by a resident to whom the owner has rented his/her unit, management will
begin assessing the owner a fine of $10 per day. The fine will accrue on a daily basis until such time
as the Association's property manager is satisfied with the steps the owner is taking to deal with the
problems caused by his/her renter.
b. if an owner feels that this policy is being applied to himiher in an unfair or inappropriate manner, the
owner may appeal the matter to the Board of Directors. An owner can make such an appeal either by
writing a letter to the Board stating his/her case, or by appearing at a regular monthly meeting of the
Board and presenting his/her case in person to the Board.
Comments: '
1. The required MMHA lease may be obtained from the Association office.
2. The Crime Free Multi-Housing Addendum is included as an exhibit at the end of this booklet, and a supply
of the form may be obtained by calling the Association office
Dear John or Jane Resident:
Recently the Hopkins City Council proposed imposing a new tax one
disguised as a rental licensing fee. Hopkins is a small city, with only 14,000 total residents. The
condominium community that you live in is orie of the largest residential communities in the city.
The city already has at least five employees who deal exclusively with housing, including a full
time housing inspector and a plumbing and electrical inspector. Any problems in rental housing
that come up can be easily handled by the existing staff. Periodic at random inspections can also
be performed as part of their duties, as well as involving police, health, and social service agencies
as needed.
Under the new ordinance, a licensing fee, or as I call it, the tenant tax, will be
imposed on your unit in the amount of $100 eachyeax! That works out to a tax surcharge of
8.33 per month. The tenant tax will be used to hire yet another city employee to inspect more
units on a regular basis instead of on an as needed basis, even though the old system worked
perfectly well. From a personal standpoint, in addition to the tax you must pay, this new
employee will be charged with inspecting your unit at least every other year. They will come
into your unit at a time that is inconvenient to you, and poke around your home looking for
broken outlets, bad smoke detectors, leaky faucets, etc. As you know, these type of problems
do not exist in your unit. Such an inspection is totally and completely a waste of your time and
an invasion of the privacy and sanctity of your home by a nosy government bureaucrat. This
inconvenience to you will be done even though you live in a unit in one of the most well run
condominiums in the state, and rent from an owner who prides himself on providing high quality
rental units with instantaneous response to any repair or safety need of the resident. Such an
inspection every other year would be a complete waste of government time, money and
resources. Do you want to pay this tenant tax to have this inconvenience and invasion?
This new tenant tax is unfair, unnecessary, and discriminatory to people who
choose to rent. It is only an excuse to increase the size of the Hopkins city bureaucracy while
contributing nothing to the public good of the community. It purports to correct a problem that
doesn't exist. If the city cannot manage to control the few bad owners that may cause problems,
possibly it should examine the quality and capabilities of its current inspection staff and make
some internal changes. I urge you to write to or call the City Council members and City
Administrator on the sheet attached to urge them not to impose the unnecessary and unfair
tenant tax.
Sincerely,
John H. Ward
City of Hopkins
Rental Licensing Proposal To Improve Neighborhood
Livability
In the spring of 2007, the City Council will be considering recommendations
to inspect one and two family dwellings on a more frequent two-year cycle
and require that rental property owners conduct background checks on
prospective tenants and use a crime free lease addendum in their tenant
leases. We would appreciate your feedback and any ideas you may have to
improve the proposal.
Comments:
V~ant to make sure that this proposal is for the entire city -and nut just the
Blake Road area. All neighborhoods need to have the same understanding - so
it can't be said that one area is being targeted because of jvho is living there.
Ideas For Improving This Rental Licensing Proposal:
Are there any units within the city that house three or four families? (Or are
they inspected on a regular basis?)
Other Ideas For Improving Neighborhood Livability:
Code of Conduct for all neighborhoods with clear expectations i.e., no drug
dealing, loitering, public drinking, littering, neglected property, graffiti, etc.,
Encourage the public to report offenses -livability is everyone's issue.
The community needs to own the process - it will make Hopkins a
better place to live.
City of Hopkins
Rental Licensing Proposal To Improve Neighborhood
Livability
In the spring of 2007, the City Council will be considering recommendations
to inspect one and two family dwellings on a more frequent two-year cycle
and require that rental property owners conduct background checks on
prospective tenants and use a crime free lease addendum in their tenant
leases. We would appreciate your feedback and any ideas you may have to
improve the proposal.
Comments:
I think it is and outstanding step in the right direction. As we test
these waters we can increase and update further and better solutions !
Ideas For Improving This Rental Licensing Proposal:
Other Ideas For Improving Neighborhood Livability:
~`
City of Hopkins
Rental Licensing Proposal To Improve Neighborhood
Livability
In the spring of 2007, the City Council will be considering recommendations
to inspect one and two family dwellings on a more frequent two-year cycle
and require that rental property owners conduct background checks on
prospective tenants and use a crime free lease addendum in their tenant
leases. We would appreciate your feedback and any ideas you may have to
improve the proposal.
Comments:
I think this is a wonderful idea and an excellent tool to insure that renters chosen
will be long term and law abiding.
Ideas For Improving This Rental Licensing Proposal:
Other Ideas For Improving Neighborhood Livability:
I know some communities have the three strikes law in effect, I think that
Hopkins could benefit greatly from this policy also.
City of Hopkins
Rental Licensing Proposal To Improve Neighborhood
Livability
In the spring of 2007, the City Council will be considering recommendations
to inspect one and two family dwellings on a more frequent two-year cycle
and require that rental property owners conduct background checks on
prospective tenants and use a crime free lease addendum in their tenant
leases. We would appreciate your feedback and any ideas you may have to
improve the proposal.
Comments:
I suggest that polices already in other cities be looked at so that we follow standard
procedures. I think it is a good idea that lar_dlords add crime free lease addendum in *,heir
tenant leases.
Ideas For Improving PI'his Rental Licensing Proposal:
I think this is a good start with
Other Ideas For Improving Neighborhood Livability:
Strengthen the neighborhood group to engage the community in identifying
and follow through in what is important to them to improve livability.
Yage 1 of Z
~J
Merwyn Larson
From: Lisa Moe [Imoe@stuartco.com]
Sent: Thursday, March 29, 2007 4:52 PM
To: Merwyn Larson
Cc: molly.grove@mmha.com
Subject: RE: Hopkins Rental Licensing Ordinance
Merwyn
Again, thank you for your time yesterday and the documents you forward to me.
I do understand many of the points you suggested yesterday -the need to have landlords maintain their
rental property, the need to minimize crime throughout the city, the need to add another staff inspector,
etc. We own and operate almost 600 units in Hopkins. Under the current program - we pay $3,190 per
year. The Level One proposal would increase our fees by 64% to $4,980 per year. At the Level Three
program - 2 of the 4 communities will pay a lower annual fee but two will pay ahigher-fee. One of these
properties is Raspberry Woods - a 6 building, 64 units Class A+ property with no deferred maintenance, no
crime and very stable property.
In thinking about our conversation and my statement to you - "there is not a direct correlation between
deferred maintenance and crime", I have an example to prove this point. We own and manage a property in
East St. Paul -this is a 30 year old property. We spend a lot of money on an annual basis to keep this
property up and running - we have always scored very well on City inspections, Fire Department inspections
and .HUD REAC inspection. However, I am constantly battling crime that comes into our property. In fact -
I now pay for off duty police officers through the ACOP program to patrol our property to help us at a
cost solely born by the property. We screen our residents, have no deferred maintenance and usually the
crime does not involved our residents.
I am all for landlords (whether it is a duplex or a large project) maintaining their property and being good
stewards of the city -but raising fees is not the only way to accomplish this.
Thank you
Lisa Moe
Stuart Companies
1050 W. 80th Street
Minneapolis, MN 55420
Direct Line 952.948-9506
Email address: ImoeC~stuartco.com
From: Merwyn Larson [maifto:mlarson@HOPKINSmn.com]
Sent: Wednesday, March 28, 2007 3:08 PM
To: Lisa Moe
Subject: Hopkins Rental Licensing Ordinance
Lisa,
Attached is the proposed ordinance and a summary sheet giving an overview of the proposal. I appreciate you
taking the time to discuss your comments and concerns with me. City staff will be meeting next week to finalize
04/05/2007
Page 2 of 2
the changes to the original proposal. The revised proposal will be presented at a Council Study Session being
held April 10, 2007, at 6:30, in the Raspberry Room in City Hall. Since this is a public meeting, you are welcome
to attend to hear the discussion of the issue by the Council.
Merwyn
Ph. 952.548.6321
Fax 952.935.1834
1010 1st St S
Hopkins, MN 55343
04/05/2007
City of ~Iopkins
1010 first Street South • ~lopkins, ~ 55343-7573 • Phone: 952-935-8474 }"ax• 952-935-1834
7Ne6 address: wzvw.hopkinsmn.com
Rental Licensing Proposal To Improve Neighborhood
Livability
In the spring of 2007, the City Council will be considering recommendations
to inspect one and two family dwellings on a more frequent two-year cycle
and require that rental property owners conduct background checks on
prospective tenants and use a crime free lease addendurri an 1,heir tenant
leases. We would appreciate your feeaback and any ideas you may have to
improve the proposal.
Comments:
Dear Mr.Larson: I have 2 units that are in different _
buildings . Thies would be ~ lame increase for onl~2 units .
My units are under manaaement_with criminal background checks.
The~_are located in Valley Park Condo.Assn._Better communication
with man~c~er_s_and owners on police calls would be more effective
Sincerer Gerald L.Partridge Phone 651-462-8758_ __
~ ~ A Mr. Gerald Partridge
Ideas For Improving This Rental Licensing Propa ~~~ 25606 Hamline Ct.
Wyoming, MN 55092
Other Ideas For Improving Neighborhood Livability:
Partnering with the Community to ~nkance the Quality of Life
• Inspire ~ educate ~ Involve ~ Communicate •
PARK AVENUE
OF WAYZATA, INC.
15210 WAYZATA BOULEVARD
WAYZATA, MN 55391-1439
-~ ` `
~~ ,
~~'~, f',
February 28, 2007
Mr. Merwyn Larson
Building Official
City of Hopkins
1010 South First Street
Hopkins, MN 55343
Re: Proposed Rental Ordinance -Auburn Renta! Townhomes
Dear Mr. Larson:
The purpose of this letter is to comment on the proposed changes to the rental license
ordinance.
We believe the proposed fee structure is grossly unfair to the townhome style building
layout at our Auburn community. It is our understanding the proposed changes will
result in fees as high as $5,816 in total or an average of $42.76 per home. This is
exorbitant compared to fees charged by,;other municipalities and compared to the City's
proposed average fee charged to conventional apartment buildings. (Ramsgate
Apartments, our neighbor, would pay an;average of $6.83 per unit:) ~,, :- -
The proposed base fee per- building -appears ~~to contemplate -,the` additional cost to
administer the inspection program for :individually owned and.,nop-contiguous rental
homes. !t is unreasonable _and unfair to ;:apply,-this :same .standard #o ~a property such as
Auburn, which _ is operated as .one rentalcommunity -own'ed~ by a single entity and
managed as a _single entity.. The :costs to administer the inspectiori program should be
no greater for Auburn than for an-apartment building with a similar number of units.
These proposed fees are particularly distressing given the high property taxes assessed
against Auburn ~ and given the fact that theowners ~ of the Auburn rental townhome
property have, over the past 22 years, demonstrated their commitment to the property
and the City of Hopkins by the manner in which the property has been maintained and
managed. Your records will show a very low occurrence of criminal activity or other
adverse issues at Auburn, due substantially to management practices in place at the
property. In addition, the property is maintained at a high level and is subject to regular
and thorough HUD inspections, as required by the property's mortgage.
The proposed fees cannot be simply passed on to the renter as they are much greater
than our competitors in Hopkins and in the surrounding municipalities. If forced to pay
these fees, the funds would come from the maintenance and improvements budget and
will result in less investment in these areas. This would be counter productive to the
City's goal of maintaining the quality of housing.
P•\PrnnPrtv Mananpmpnt\Rpsirtantial\A~ihiirnlC:ity of Hnnkinc Prnnnsprt Rental Clrrlinanr•.P ~-7R-t17 cinr:
Merwyn Larson
City of Hopkins
February 28, 2007
Page 2
The proposal calls for license fee discounts for achieving a crime free certification.
While most everyone would agree with the goals of the program, it is difficult and very
costly for a townhome community such as Auburn to achieve the certification. Based on
comments from the inspection performed by the police department, the lighting
improvements alone would be prohibitively expensive to complete with very little return,
given the history of the property.
If, in fact, a change to the current rental license/inspection program is truly needed, we
respectfully request it be done in a fair and equitable manner and not penalize or pose
hardships on those communities such as Auburn that are well run and have few issues.
Sincere) ,
~~
to arlson
uburn Rental Townhomes
Direct Dial 952 646 3522
PC/cj
P•1Prnnprtv MananpmPnt\RPSiriPntial\Aiih~irn\C:ity of Hnnkins PrnnnsPri Rental (~rttinan~P 7-7R-(T7 ~inr
Meadow Creek
Condominiums
823 Old Settlers Trail, Suite 101 • Hopkins, NIN 55343
March 28, 2007
Mr. Merwyn Larson,
Building Official
City of Hopkins
1010 First Street South
Hopkins, MN 55343-7573
Re: Proposed Changes to Rental License Ordinance
Dear Mr. Larson:
(952) 935-9565
Fax (952) 935-9269
E-mail: office C meadowcreekcondos.com
We are writing you with comments and questions about the proposed changes to the
Rental License Ordinance. As we understand the proposed changes, they can be
stunmarized as follows:
1. Rental property managers will be required to use the Crime Free Multi Housing
lease addendum, and to do criminal background checks on rental applicants.
2. Rental license fees are increased, in some cases by as much as 500%.
3. Rental property managers are given the incentive of lower license fees for
participating in the Crime Free Multi Housing program and for attending Hopkins
Apartment Managers Association meetings
The following are our comments and questions:
1. The City has not made a case for substantially higher license fees for all rental
property owners:
a. It appears that the substantially higher fees are proposed as a way to fund
the City's efforts to deal with a few problem rental property owners.
Levying a substantial increase on all owners in order to deal with a few
owners does not meet any fairness test.
b. Good rental property managers will continue to do the good things that
they are already doing: carefully screening rental applicants including
doing criminal background checks, using the Crime Free Multi Housing
lease addendum or something similar, and promptly straightening out or
evicting renters who cause problems. Bad rental property managers will
continue to not do these things. They will pay higher license fees as a
result, but nothing in comparison to what they are costing the City.
Managed by Dunbar Strandness, Inc.
~~~
MEMBER EQUAL HOUSING
OPPORTUNITY
MEADOW CREEK: Letter to Merwyn Larson
March 28, 2007
Page 2
c. The investor owners of single family homes, townhouses, condominium
units, and duplexes are singled out for particularly harsh treatment.
However, no evidence has been presented that these types of rental units
are over represented in the universe of problem rental properties.
2. The new rental license fee structure favors rental communities that have all of
their units in one massive structure over rental communities that are made up of
smaller buildings. Does the City really want to favor Hopkins Village over
Brentwood Estates? What is the fairness in that as both rental communities are
well defined, separate communities?
3. The Rental License Ordinance as it currently stands appears to have all the "teeth"
needed to deal with bad rental property managers. If the situation with Hopkins'
rental properties is worsening, there has been no explanation as to why the Rental
License Ordinance has not been aggressively used to resolve the problems with
the bad rental property managers.
4. No explanation has been given as to how large rental properties will be treated
where each unit in the property is a separate tax parcel. Raspberry Ridge and
Auburn Townhomes are properties that definitely fall into this category, and there
may be others. Will each unit be charged a license fee of $100 unless the
property managers comply with the Level Two and Three requirements?
5. No one has addressed the situation represented by Meadow Creek Condominiums
and Westbrooke Patio Homes. These two homeowner associations contain about
30% of the 696 rental units, which the City has identified as single family/condo
units. Both associations deal very aggressively with their investor owners.
Background screening and the Crime Free Multi Housing addendum already must
be employed by an investor owner, or the investor owner is heavily sanctioned by
the Association, much more heavily than anything that the City is contemplating.
If there are problems with a renter, and those problems are not quickly resolved,
the renter must promptly be evicted, or the investor owner is severely fined with
fines which escalate steadily until the investor owner does evict the renter. As a
result, renters, who are identified as problems by the associations, either change
their behavior quickly or are gone.
What is ironic about Meadow Creek Condominiums and Westbrooke Patio Homes is that
we have renters, who have been thoroughly screened (employment history, housing
history, credit history, and any criminal record), living next door to resident owners,
about whom the associations know nothing, except that they were able to come up with
the money to buy the unit. If a renter causes problems, either they mend their ways
promptly, or they are gone very quickly. If a resident owner causes problems, the most
the associations can do is to start systematically fining them until the fines, if not paid,
MEADOW CREEK: Letter to Merwyn Larson
March 28, 2007
Page 3
have grown to a level that justifies foreclosure. However, it then takes six months to get
the resident to a sheriff's sale, and then the resident owner can live in the unit for another
six months during the redemption period -and all the while that resident owner can make
life utterly miserable for their neighbors.
Meadow Creek Condominiums and Westbrooke Patio Homes have three suggestions:
1. Adopt a grading system for rental properties. Rental properties that meet the
standards would pay low rental license fees and would be seldom inspected.
Rental properties that do not meet the standards would pay very high rental
license fees, be put on probation, and be regularly inspected until all problems are
resolved to the satisfaction of the City, or until their rental licenses are revoked.
2. Calculate rental license fees based on rental communities, not buildings. Each
rental community would pay a base fee plus a fee per unit, whether the
community is a single, eight-unit building, or a large, sprawling community of
many buildings.
3. For large multi-family communities like Meadow Creek and Westbrooke, but also
like Raspberry Ridge and Auburn, treat them as one rental community even if the
physical structures are broken down into individually owned property tax parcels.
The City could have very straight forward requirements, which the management
of these communities would need to meet, in order to be treated as one rental
community for rental licensing purposes. Meadow Creek and Westbrooke do not
have a problem accepting responsibility for the behavior of their renters or the
condition of their rental units.
Thank you for your consideration. If you have any questions or would like to discuss any
of this, please do not hesitate to call Doug Strandness or Pat Butler.
Sincerely,
,r
~'
S dra Miller, Presid nt
Meadow Creek Condominiums
cc. Mayor Gene Maxwell
Richard Getschow
Douglas Strandness
Rental Licensing Fee Comparisons
O tions
Fees Tota
Revenue ev nue
Reduction'
Per Bld Per Unit
Brookl n Center 100 9 182,949
Golden Valley 100 20 200,220
St. Louis Park 125 6 107,266
Minneapolis 55 19 132,389
Shoreview 100 7.50 133,413
Hopkins Proposed Fees 100 6 122,966 0
Hopkins Altemate #1 100 6 97,166 -23,000
Hopkins Alternate #2 100 6 115,206 -7,300
Hopkins Current Fees 20 5 40,405
Assume1 FTE Inspector =$60,000 Mileage forcar = $1,200
Revenue needed =current revenue + Inspector + mileage = $101,600
Footnotes:
Proposed options for Hopkins
' Revenue reduction for Alternates as compared to the Hopkins Proposed Fees
Alt. #1 -Condos treated similar to apartment buildings with $100/$75/$50/bldg and $6/$5/$4unit
Alt. # 2 -Condo Association takes full responsibilty as the licensing contact for all rental licensing issues
Fee Structure with $80/$60/$40/bldg
April 6,2007