Form revised February 6, 2008

Form revised February 4, 2010

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Planning and Development	Karen White/615-0097	Kristi Beattie/684-5266

Legislation Title:

An ordinance relating to residential rental property registration and inspections, adding a new Chapter 6.4 to the Seattle Municipal Code and providing for an effective date of October 1, 2011.

· Summary of the Legislation:

The bill would create a licensing requirement for residential rental housing, and establish a testing and registration requirement for qualified private housing inspectors.

· Background: (Include brief description of the purpose and context of legislation and include record of previous legislation and funding history, if applicable):

The bill would create a licensing requirement for residential rental housing that would require rental units to be inspected every three years to determine whether they meet Seattle’s maintenance standards and whether there are other conditions present that may endanger the health or safety of tenants. If such problems exist, they would have to be fixed before a rental housing license could be obtained or renewed. If code violations were discovered by the Department of Planning and Development (DPD) as a result of a complaint-response inspection, then there would be authority to require the landlord to have annual inspections for the next two years to demonstrate the units were being maintained to code standards; after two years, the units would revert to a three-year inspection requirement.

The rental housing licenses would be issued by the Department of Executive Administration (DEA). A licensing fee would be charged that would be set to recover program start up costs and the ongoing costs of administering the licensing program. The fee would be set in a separately adopted ordinance. DEA would maintain rental housing license information and enforce the licensing requirement.

The legislation also would require private housing inspectors who perform these inspections to register with the City; in order to register, they would have to pass a test to demonstrate adequate knowledge of Seattle’s Housing Code as well as provide proof of professional training and certification or licensing. Allowable professional credentials would include at least one of the following:

· A.A.C.E. Property Maintenance and Housing Inspector certification,

· I.C.C. Property Maintenance and Housing Inspector certification, or I.C.C. Residential Building Code Inspector certification, or

· Washington State license as a home inspector.

Inspectors would have to pass a test on the Seattle Housing Code and Building Maintenance Code and renew their registration annually; in addition, they would have to pass the code test every three years. DPD would develop the test and administer it or arrange for third party test administration. DPD would maintain records of registered inspectors’ identifying information, credentials, test results and registration fee payment.

The inspector registration fee would be set to cover program start up costs and ongoing costs of the registration program administration. The fee would be defined and adopted in the annual DPD fee ordinance.

Start up costs for the program would include: retaining an educational consultant to assist with inspector test development and design; developing a database of inspectors’ registration information; programming for the business licensing data system (SLIM); developing a database to track specific housing units for which a rental housing business license has been issued, as well as renewals and expirations; and designing forms and other materials. Some of these costs would be covered in existing budget authority, others would require new appropriations.

Ongoing program costs would include staffing for: processing rental housing license applications and renewals; updating a database for tracking housing units and their associated rental housing licenses and expiration dates; administering and grading inspector tests, notifying applicants of results, maintaining a database of registered inspectors, and notifying inspectors when their registrations are due to lapse; and investigating violations and enforcement. Ongoing costs would also include postage expenses.

The ordinance would take effect in October 2011. Inspector testing and registration would occur in advance of the deadline for landlords to obtain a rental housing business license to allow time for the qualified inspectors to perform the required inspections. The deadline for having a rental housing license would therefore be April 1, 2012.

· Please check one of the following:

____ This legislation does not have any financial implications. (Stop here and delete the remainder of this document prior to saving and printing.)

_X__ This legislation has financial implications. (Please complete all relevant sections that follow.)

As noted above, implementation of this ordinance will result in both one-time start-up costs and ongoing program implementation and administration costs for both DPD and DEA, occurring in 2011 and beyond, which are expected to be fully recovered through licensing fee revenues. Additional information about additional appropriation authority, revenues, and position requests will be forthcoming in the 2011-2012 Budget submittal for DPD and DEA. No additional appropriation or position authority is requested for 2010.

Fees would be set at a level to recover program costs; when actual fees are adopted they may be designed to recover the startup costs over a longer period of time, not in the first year of the program. This would result in departments initially drawing down fund balance and gradually recovering the startup costs over time. The DEA rental housing license fee would be set in a separately adopted ordinance. DPD would adopt the inspector registration fee in its annual fee ordinance as part of the budget process.

· What is the financial cost of not implementing the legislation? (Estimate the costs to the City of not implementing the legislation, including estimated costs to maintain or expand an existing facility or the cost avoidance due to replacement of an existing facility, potential conflicts with regulatory requirements, or other potential costs if the legislation is not implemented.)

There would be no significant financial cost from not implementing the legislation, however this legislation is necessary to allow the City to implement an effective rental inspection program as a result.

· Does this legislation affect any departments besides the originating department? If so, please list the affected department(s), the nature of the impact (financial, operational, etc)., and indicate which staff members in the other department(s) are aware of this Bill.

This legislation affects the Department of Executive Administration. Contact is Denise Movius, Director of Revenue and Licensing. The operation impact is related to: issuance of business licenses, license renewals, and enforcement of licensing requirement.

· What are the possible alternatives to the legislation that could achieve the same or similar objectives? (Include any potential alternatives to the proposed legislation, such as reducing fee-supported activities, identifying outside funding sources for fee-supported activities, etc.)

The City could adopt a licensing and inspection program and use City inspectors rather than private inspectors.

· Is the legislation subject to public hearing requirements: (If yes, what public hearings have been held to date, and/or what plans are in place to hold a public hearing(s) in the future.

· Other Issues (including long-term implications of the legislation):

None.