Fort Collins postpones starting a rental registration, inspection program

Fort Collins City Council has postponed implementing a new rental registration and inspection program after discussing concerns about the cost of the program and whether there's truly a need for a new inspection program.

At Tuesday's City Council meeting, city staff presented a proposed rental regulation plan that involved two elements: a rental registration program requiring landlords to register their rental properties with the city and a five-year inspection program that would require most units to be inspected for “minimum life, health and safety standards” every five years.

Staff presented the program as a way to meet goals outlined in the city’s Housing Strategic Plan, which was implemented in 2021 and outlines ways to achieve the “ambitious vision that everyone in Fort Collins has healthy, stable housing they can afford.” The plan stated that “housing policies have not consistently addressed housing stability and healthy housing, especially for people who rent.”

Currently, the city uses a complaint-based inspection system: Renters can request a habitability inspection and if violations are found and the landlord doesn't make required improvements, the landlord can face fines.

Over the last three years, there have been 270 violations — meaning there was an inspection and violation identified, not just a complaint — filed with the city. Marcy Yoder, neighborhood services manager, who presented the plan to council, said the city doesn't currently track the number of complaints due to the need for a better system.

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“We know that safe and stable housing provides a foundation that allows individuals and families and entire communities to thrive,” Meaghan Overton, housing manager for the city, who presented alongside Yoder, told council. “So that healthy, safe, stable housing can have a positive impact on health, on economic security, educational attainment, and the overall stability of families and communities.”

Yoder said the program aimed to address concerns from renters about the lack of proactive inspections and concerns from landlords about added fees associated with rental regulation and inspection.

Yoder and Overton outlined potential downsides for the program, including increased rents due to program and compliance costs, potential renter displacement and an additional cost burden on those the city categorizes as "smaller landlords," meaning landlords who lease just one or a few properties.

Program cost was expected to be $1.6 million over the next two years, a number that gave pause to some council members. The funding request would pay for the initial outlay for the program, hiring staff, purchasing software and funding program activities and engagement. They expect the program would recover the full cost after five years and, depending on when it’s implemented, could partially recover startup costs.

In discussion, Mayor Jeni Arndt said she couldn’t support the implementation of the full program right now due to concerns about the size of the program, the city’s ability to inspect all rental properties and the “robust” ask from the general fund amid council considering asking taxpayers for more money in the fall.

“I'm trying to weigh out the financials here,” Arndt said to staff. “… I'm concerned about starting a whole new robust city program now. I would go for registration, but (not) the full inspection and licensure.” Arndt later said she wants to see staff try smaller options to ensure quality living for renters before jumping into a program, saying, “I don't think delaying it and trying everything else first is going to have a bad impact.”

Council members Shirley Peel and Tricia Canonico also said they wanted to support the program and protect renters but wouldn’t be voting to implement it now due to concerns about the inspection portion and the costs, respectively.

Mayor pro-tem Emily Francis said she understood the concern that inspections may be “too far” but that it is their role to protect renters, especially as the community of renters grows in Fort Collins. She added that it’s hard to get a full picture of the violation issue on a complaint-based system.

“I think we really need to address renter stability and the health of our housing. I don't know how we do that without inspections,” Francis said, though she ultimately supported postponing the decision and having more work done on the proposal.

Council member Kelly Ohlson expressed frustration that this program wouldn’t pass, saying “I think it's one of our main jobs to look out for the most vulnerable among us. And housing is about as basic as you get.”

He also acknowledged that “there's always unanswered questions” with proposed programs but said the “beauty of local government is that you can change it on a dime, you can improve it on a dime.”

Ohlson said he found the costs reasonable, the concept of inspections is not a government overreach — which some public commenters suggested — and the program proposal was complete.

After council's decision to postpone, Overton told the Coloradoan they are "looking forward to continuing the conversation ... a work session on options for a rental housing program will give us a chance to dig deeper into some potential alternatives before coming back to council for another hearing."

Ultimately, council voted 6-1 — with Ohlson dissenting — to postpone the program and asked staff to come back to them at a work session with an option exploring just the rental registration program and possibly other ways to address the issue of violations.

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What does the city have in place for renters now?

Recent data from the city shows that about 40% of housing units are rented, meaning a “pretty significant portion of the city’s population” is currently renting, according to Overton.

In the past, staff, community members and previous councils have expressed concern that the city doesn’t have a program requiring proactive rental inspections to serve the high percentage of renters, but a complaint-based rental inspection system.

Under the current complaint-based system, violations have been reported across all six City Council districts and most frequently have to do with electrical issues or a lack of smoke or carbon monoxide alarms.

Other types of violations include window issues, plumbing issues, HVAC issues, pests or general maintenance, according to the city.

While the complaint-based system is meant to give renters a space to voice concerns and have them addressed, Overton said they’ve heard through the engagement process that the program “doesn't necessarily address the power dynamics faced by tenants.”

“We've heard (they) sometimes fear retaliation, increased rental payments, damage to relationships with property owners or eviction if they report concern,” Overton said.

In the engagement process, the city also heard from landlords and property managers. Many of them worried about the cost of the program, had a lack of trust in the city and were worried “that mandatory rental registration/licensing may not be an effective way to address substandard units,” according to city documents.

Around 20 landlords or property managers spoke to the issue Tuesday at council, the vast majority of whom asked city leadership to either pause the program or remove it totally from consideration, many because of the concerns listed above.

One landlord who spoke said she didn’t believe the city had enough data to support the implementation of a full rental registration and inspection program.

“All renters deserve safe and habitable housing, and bad landlords should be held accountable for their actions,” the speaker said. “However, I do not believe the city showed the data to support the rental licensing program, nor will a one-time-every-five-years inspection program significantly improve the habitability or the safety of that housing. Creating a 1-plus-million-dollar program to address a data gap is poor governance.”

The city will still host an information session on the rental regulation program at 6 p.m. Thursday, Jan. 26, on Zoom.

Overton said they will also work to conduct more outreach in the community ahead of the work session with council. As of Thursday, the date for a work session had not been set.

Molly Bohannon covers city government for the Coloradoan. Follow her on Twitter @molboha or contact her at mbohannon@coloradoan.com. 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 rental registration, inspection program on back burner