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VII.1. First Reading Ordinance Repealing Chapter 20, Article II of the Hopkins City Code regarding Truth in Housing; KearneyDecember 15, 2020 Council Report 2020-099 ORDINANCE REPLEALING CHAPTER 20, ARTICLE II OF THE HOPKINS CITY CODE REGARDING TRUTH IN HOUSING Proposed Action Staff recommends adoption of the following motion: Move to adopt for first reading Ordinance 2020- 1161 An Ordinance Repealing Chapter 20, Article II of the Hopkins City Code Regarding Truth in Housing. Overview Staff has been reviewing process improvements over the past year and evaluating the cost benefit of various services. One area there is an opportunity for efficiency with minimal impacts is by eliminating Truth in Housing Inspection requirements. Truth in Housing Evaluations are required for the sale of residential buildings with one, two, three or four dwelling units (including condos and townhouses). Private evaluators licensed by the city do the evaluations and internal staff support to assist with the inspection. These evaluations provide prospective buyers with information about the condition of the house and garage. Completed evaluation reports must be filed with the city along with a filing fee of $35.00 per evaluation. Reports are valid for one year from the date of the evaluation and are non-transferable. A new evaluation must be conducted for each sale. Any “Repair” or “Replace” items on the evaluation have to be corrected. Once the corrections are made, a City Inspector goes out to verify the work was done. These inspections have a cost to the homeowners of approximately $200 - $500 per inspection. The inspections can be stressful for both the seller, buyer of the property and staff since they can hold up home sales and are often overlooked as closing requirements. The City receives $35 per evaluation or approximately $11,000/year to supplement the cost of this service. Staff estimates the internal cost of these services to be roughly 0.7 FTE (split among multiple employees) or approximately $67,000/year. Staff has proposed temporary staffing reductions in the inspections division related to rental inspections being suspended due to COVID-19. The elimination of Truth in Housing will allow us to be able to redistribute work related to those reductions internally and better manage the impact of the temporary staffing reductions. Beyond the workload efficiencies, there will be a cost savings to homeowners during the home sale process. Staff believes the service impact to homeowners will be minimal since almost all homebuyers have a private home inspection prior to purchase. Staff will continue to monitor for any quality impacts, if any, on the City’s housing. Based on these factors, Staff is recommending removing Truth in Housing requirements outlined in City Code Chapter 20 Article II at this time. The draft ordinance has been reviewed by the City Attorney. Supporting Documents Proposed Ordinance 2020-1161 Christopher Kearney, Building Official CITY OF HOPKINS HENNEPIN COUNTY, MINNESOTA ORDINANCE NO. 2020-1161 ORDINANCE REPLEALING CHAPTER 20, ARTICLE II OF THE HOPKINS CITY CODE REGARDING TRUTH IN HOUSING THE COUNCIL OF THE CITY OF HOPKINS HEREBY ORDAINS AS FOLLOWS: SECTION 1. Hopkins City Code Chapter 20, Article II is repealed in its entirety. SECTION 2. The effective date of this ordinance shall be the date of publication. First Reading: December 15, 2020 Second Reading: January 5, 2021 Date of Publication: January 14, 2021 Date Ordinance Takes Effect: January 14, 2021 BY THE CITY COUNCIL Jason Gadd, Mayor ATTEST: ____________________________ Amy Domeier, City Clerk