Fort Collins will again consider U+2 residential occupancy changes, rental licensing program
Fort Collins is exploring changes to the city's "U+2" residential occupancy restrictions and a new mandatory rental licensing program.
If you’re feeling déjà vu, it’s warranted. The city has contemplated U+2 changes or rental licensing 10 times since 2005, when council adopted U+2 in its current iteration. But several things are different this time around, staff say, so Fort Collins could see some movement in this space over the next several years.
At a Fort Collins City Council work session Tuesday night, most of Fort Collins City Council gave staff the go-ahead to begin public engagement on three interconnected strategies adopted in the city’s Housing Strategic Plan:
Considering revisions to Fort Collins’ occupancy ordinance (aka U+2), which restricts residential occupancy to three unrelated adults.
Creation of a rental licensing and registration program that could ultimately involve mandatory health and safety inspections of rental housing.
Incentives for small landlords in areas like energy efficiency and affordable housing.
The next step, beginning in early 2022, is stakeholder engagement with landlords, renters, neighborhood groups, homeowner associations, property management companies, Realtors and others. Council will then convene with staff and decide whether to move forward with a one-year pilot program for rental licensing and revisions to occupancy limits. If the pilot program satisfies council, they could move forward with a full program rollout over another four years.
While council isn’t committed to changing U+2 or creating a rental licensing program, at least three members said they feel it’s time for a community discussion about the topics. Council isn’t considering getting rid of occupancy limits entirely, but rather tailoring the limits to “household functionality” instead of the familial unit and streamlining the process for a property owner to apply for an exception to occupancy limits.
Household functionality refers to the ways that people in the same dwelling unit interact with each other, such as sharing meals and living spaces, rather than whether they're related to each other.
More: Fort Collins has an affordable housing problem. A sweeping city plan seeks to solve it.
It's U+2, so of course there's disagreement
Mayor pro-tem Emily Francis said she thinks a policy discussion is needed for U+2 and rental licensing, regardless of whether council decides to make any changes, because community members asked for it during engagement on the Housing Strategic Plan.
“I think it’s time to have a community conversation,” she said. “It’s been (16) years. Like any good policy, we should review it. I just don’t want to put the fear out there for people who really have benefited from U+2 that we’re just dismantling the whole thing.”
On the other hand, council member Kelly Ohlson pledged to oppose any changes to U+2 “with every political breath of my body,” and council member Susan Gutowsky questioned why university students are so “fascinated” by single-family homes when there’s so much student-centric housing in the community. (Students made up an estimated 47% of U+2 violations in a 2018 survey, down from 71% in 2005.)
Ohlson added that U+2 has created “profound and positive” changes in his west-central Fort Collins neighborhood since the city began enforcing it comprehensively in 2005.
“They are perhaps the most positive results of any ordinance I have seen in the last few decades in Fort Collins,” he said.
“There is a lot of misinformation and misunderstanding of the occupancy ordinance, and changes are only supported by 24% of the population, leading with the affordable housing myth,” he added, referencing a 2018 survey of Fort Collins that also found 42% in support of U+2 and 34% taking a neutral stance.
Regarding the “affordable housing myth,” Ohlson was referencing the notion that expanding occupancy limits could decrease the cost of housing by lowering rents. While adding more renters to a unit could decrease the cost per person if the rent stays the same, proponents of U+2 predict many landlords would respond by simply raising the rent on units.
Housing: Is the Fort Collins housing market slowing? Here's what July to September sales tell us.
Efforts to revise occupancy limits in the past have been met with fierce opposition from some resident groups that credit the policy with keeping raucous parties, parking troubles and noisy neighbors out of their neighborhoods while freeing up more homes for families. Residents of the neighborhoods adjacent to Colorado State University have often called for more aggressive enforcement of U+2.
Through research of occupancy limits in peer cities and other cities in Colorado, staff found that Fort Collins’ occupancy limits are relatively strict: The most common limit was five unrelated people per household in peer cities and four to five unrelated people per household in Colorado cities.
Those who advocate for changes to occupancy limits say city nuisance code can address neighborhood livability issues like noise and parking more efficiently. They add that U+2 makes it harder for renters to access housing in a tight rental market, where rents have climbed 68% since 2011 and about 97% of units are occupied, according to city staff.
Here's what's different this time around
These are the arguments that often come up when occupancy limits rise on the council docket. So what’s different this time around? Staff, in their presentation to council and in an interview with the Coloradoan, pointed out a few changes.
The proposal of occupancy revisions along with a rental licensing program and incentives for small landlords is new. Staff think a more comprehensive discussion of renter/landlord issues could facilitate a more nuanced conversation about neighborhood livability, health and safety for renters and equitable access to housing.
Previous council coverage: Fort Collins City Council narrows scope of 1041 regulations, hears climate progress update
“It's more complicated to look at all of those things together, and it takes more time,” Housing Manager Meaghan Overton told the Coloradoan in an interview. “But I think it could help us navigate through these really tough policy decisions more successfully if we're really being intentional about how we're putting that whole piece of work together, rather than just coming to council with a yes or no decision on a policy.”
As both the median home price and rents continue to rise, an increasing portion of the community rents rather than owns their homes. That percentage is now up to 43% of housing units. About 60% of renters are cost-burdened, which means rent consumes more than 30% of their income. The increasing proportion of renters accompanies a louder state and national conversation about renters’ rights, as reflected in recent legislation from the Colorado General Assembly.
The adoption of Fort Collins’ Housing Strategic Plan, which includes a vision of safe, affordable and healthy housing for everyone in the community, represents a “paradigm shift” for the city, said Neighborhood Services Senior Manager Marcy Yoder, speaking specifically to the rental licensing aspect of the program.
“Part of that (vision) means we're going to have to change some of our strategies and the programs that we are utilizing in order to achieve that vision and goal,” Yoder said. “We know that we have some pretty unhealthy, unsafe, probably not even minimal-standard habitability units in our community, where people are afraid to report their landlords.”
The rental licensing program would seek to address that issue by requiring annual registration and inspection of rental units every four years to ensure they meet health and safety standards. Putting the onus on the city to manage inspections and enforcement rather than on the tenants to report their landlords could “equalize” the process, Yoder said.
The rental licensing program was part of a five-year roadmap staff presented to council on Tuesday. Staff proposed the following (and this is in staff’s lightly edited words):
Year 1
Explore options for adjusting occupancy code from family definitions to household functionality
As part of Land Use Code changes, evaluate a shift for extra occupancy approval from a development review process to an administrative permit process
Pilot a rental licensing program, inviting and incentivizing voluntary licensing
Finalize a fee structure that will cover program costs
Select and pilot a tracking software system
Develop landlord training to be incorporated into licensing process
Recruit, select and train third-party inspectors
Council policy decision on full program implementation
Year 2
First year of rental licensing program, involving annual renewal of rental licensing information with inspections every four years
25% of inspections would be completed in the first year, all by third-party contractors
City building inspectors would respond to complaints on rental units and ensure compliance for units that don’t pass inspection
Compliance would be voluntary
Years 3-4
Another 25% of inspections would be completed each year
Pilot landlord incentives program, beginning with health and safety issues and considering incentives related to affordable housing, energy efficiency and historic preservation
Compliance would remain voluntary
Council check-in to evaluate and adjust rental programming and occupancy issues
Year 5
Final 25% of inspections completed
Begin enforcement for properties that don’t pass inspections or aren’t in compliance with administrative components
Evaluate licensing program effectiveness, fee structure, training, etc.
Council policy decision on occupancy ordinance
Staff expects to request funding for continued work on these issues in the 2023-24 budget cycle.
Mayor Jeni Arndt said she’s optimistic about the prospect that Fort Collins can advocate for families while also being cognizant of other housing needs. She said she doesn’t see occupancy revisions as a “silver bullet” for affordability, but she added that council would be remiss if it didn’t pursue a conversation about them because housing is such a high-interest topic in the community.
“We could be more thoughtful about this,” she said, noting that Fort Collins’ population is increasing quickly while its land area isn’t. “We have to live more densely in some areas, but not all areas. Maybe we can just be a little more flexible in our thinking, in terms of one size doesn’t fit all.”
Want more details?
Coloradoan city government reporter Jacy Marmaduke live-tweets the highlights of most Fort Collins City Council meetings and work sessions — including this one! — on her Twitter, @jacymarmaduke. You don't need a Twitter account to view the tweets.
You can also view the city documents presented to council on this topic here.
Jacy Marmaduke covers government accountability for the Coloradoan. Follow her on Twitter @jacymarmaduke. Support her work and that of other Coloradoan journalists by purchasing a digital subscription today.
This article originally appeared on Fort Collins Coloradoan: Fort Collins will again consider U+2 changes, rental licensing program
