Task force members butt heads on curtailing rental inspections

by Jordan Green

Task force members butt heads on curtailing rental inspections

New railing has been installed on the porch of this house offered for rent by KAC Realty on Hertford Street in the Glenwood neighborhood, which has been cited with two RUCO violations. (photo by Jordan Green)

A task force set up to recommend changes to Greensboro’s model rental housing inspection ordinance faces uncertainty after its first meeting, with a representative of the city’s neighborhood associations making it clear she will oppose any compromise.

Members of a task force to evaluate the city’s Rental Unit Certificate of Occupancy, or RUCO program met at the offices of Triad Real Estate and Building Industries Coalition, or TREBIC on July 21.

Donna Newton, advisor to the Greensboro Neighborhood Congress, said RUCO proponents had already met representatives of the real estate industry halfway two years ago. “We have already compromised when we went from full-on inspections to sampling,” she said. “A ‘trust-me’ system — ‘We’re going to do everything right, and everything’s going to be fine’ — is not believable.”

Jeff Sims, a member of the RUCO Advisory Board who serves on the task force, suggested during the meeting that at least some city council members would like the task force to bring them a recommendation to scale back the program. Ideally for the real estate industry, the task force would quietly craft a recommendation and the city council would approve it, while publicly deferring to the task force’s expertise and avoiding having its fingerprints on the policy itself.

“City council is looking at us to give them a recommendation,” Sims said. “We’re the smart folks. We’ve been living and breathing this. We need to give them something different than what we’re doing.”

Newton disputed the statement. Lisa Dellinger, who chairs the task force, said, “It’s also come to our attention that there is a movement on city council to….” Sims finished her sentence: “Go to a complaint-based system, and even, in some quiet corners, to do away with it altogether.”

Dellinger, who is the property manager for Koury Corp., represents TREBIC on the RUCO Advisory Board, which hears and determines appeals to citations by city inspection staff.

Over the course of Greensboro’s 2009 municipal election, individuals employed by companies represented by TREBIC poured $29,370 into the campaigns of victorious city council candidates. Victorious candidates received a total of $3,500 from Koury Corp. and $1,600 from the Greensboro Landlords Association, which also enjoys institutional representation on both the RUCO Advisory

Board and the task force. Campaign contributions from individuals employed in real estate and development far and away lead other sectors.

A YES! Weekly analysis found that almost one in five dollars received by the campaigns of victorious candidates came from contributors associated with TREBIC, and more than one in three dollars came from individuals employed in real estate and development, not counting attorneys, bankers and investors who work in real estate.

Newton’s objections put council members interested in weakening regulation of rental housing in an awkward spot. If the council were to approve changes over her protests, it would likely invoke the ire of the neighborhood congress’ extensive and politically engaged constituency, and imperil the reelection of offending members in 2011.

“I think there is enough interest that we could muster substantial visible support for RUCO, if necessary,” Newton said after the meeting.

Mayor Pro Tem Nancy Vaughan, who expressed interest during the budget process in replacing the current proactive inspection program with a complaintdriven system, has since backed off.

“Quite a few people have called and said that renters are afraid of the complaint-driven system due to possible landlord retribution, and if we go to a complaint-only system it will be obvious to the landlord why they are being inspected,” she said.

Vaughan added that she hadn’t “anticipated the huge firestorm that this created.”

“It was mentioned during our budget discussion when everything was on the table,” she said. “It’s not just that RUCO was singled out. RUCO was mentioned with the 20 other items that we were talking about.”

Advocates for proactive rental housing inspections received a surprise gift with the appearance of Greensboro Assistant Fire Marshal David Lindsay, who had to obtain permission from Dellinger to speak at the meeting.

“You would probably consider me a RUCO advocate,” Lindsay said. “I’m also probably an advocate for some type of proactive process. Our inspection process [for commercial properties] is very proactive. We do inspect 100

percent of commercial properties. If we were to change our inspection process for commercial properties to a reactive, complaint-based program, it would be a huge disaster for a number of reasons. And I don’t think it would be successful on account of tenants and people that work for business owners who would not come forward. They would be fearful that they would lose their job, their livelihood or whatever the case may be.

“Seventy-eight percent of structure fires occur in single-family houses and duplexes,” Lindsay continued. “Those are the structures that we can’t inspect as trained fire inspectors. So we can’t influence that number. At the same time, 86 percent of the civilian fire deaths that occur, occur in single-family homes.”

The job of inspecting single-family rental units, along with apartment complexes, currently falls to the city’s inspection division, headed by Dan Reynolds.

Reynolds handed out a summary of housingcode violations recorded by his office in the first six months of this year. Violations described as “fire protection systems” ranked fifth, with 121 cited. By far, exterior structural deficiencies ranked the highest, with 989, fol lowed by interior structural deficiencies (598) and electrical equipment violations (326).

“It’s no secret that my constituency would like to see this program go away,” said Marlene Sanford, president of the TREBIC. “When you talk to them about why they hate the program or what problems they have with the program, it boils down to the proactive nature of it, going and spending public- and private-sector resources on the 93 percent, or whatever it is, of properties that pass on the first time that we really don’t need to be putting resources into.

“I think I can sell them on a compromise between keeping it as it is and getting rid of it altogether and going back to a complaint system,” she added, “if we turn it into an ordinance that targets the substandard units, and targets them hard and hits them frequently. And spend the resources that way…. The proactive inspections are a problem for my industry.”

City inspectors acknowledge that although the program requires every rental unit in the city to obtain a rental unit certificate of occupancy, or RUCO, many rental properties remain uninspected, including homes that recently changed over from owner-occupied to rentals and properties annexed into the city in the past couple years. Problems have also been identified at some units that hold valid certificates. For example, JT Hairston Memorial Apartments received a certificate in 2007, but children in some units have had to stay with extended family members or friends because of a bedbug infestation in the past six months.

The notion that an effective program could ignore properties that aren’t already inspected, and instead exclusively target those already identified as substandard faces skepticism.

“You really think you know where all the substandard properties are?” Newton asked.

“In our minds, the program has been phenomenally successful,” she said. “We have tremendously reduced complaints.”

While representative of the real estate and rental industry have made no secret of the fact that they find proactive inspections to be cumbersome and intrusive, the push from council to reevaluate the program has been articulated as a desire to reduce administrative costs.

Sims alluded to that in his remarks.

“In the current budget environment for us to spend time and money looking at properties that meet the basic requirements, we may want to retool that,” he said.

The cost of staffing the minimum housing and RUCO program has decreased from a high of $736,736 in 2007-2008 to $547,454 in the current budget year, according to a report released by the city. The number of complaints has dropped from 2,340 in 2002-2003 to 459 in 2009-2010, while the number of identified substandard units has declined over the same period from 1,186 to 705.

Vaughan said despite the fact that the overall cost of the program has decreased, she is concerned that the annual cost per units inspected has gone up. Only 2,421 units were inspected and certified in 2009-2010, compared to 11,810 in 2007-2008, when staff was scrambling to meet a deadline.

Task force members disagreed on whether the city could save money by eliminating or modifying the RUCO program. Newton said she was told by Engineering & Inspections Director Butch Simmons that if RUCO were eliminated the administrative costs would remain the same because staff would still have to respond to complaints, adding, “The cost argument is not applicable.”

Sanford responded, “It’s disingenuous to say this program costs no money.”

Reynolds also championed the program. The city council “told us to put this in place, and we weren’t getting any more money” when the program was inaugurated, he said. “I don’t know how you could get any more effective program than this.”

Early in the meeting, remarks by Newton that the RUCO Advisory Board should include more “representation from people who do not profit from rental property” caused distress among her counterparts in the real estate industry. Reynolds said he receives questions about the board makeup “quite often,” handing out a roster that delineated the members’ ties.

There are currently vacancies on the 15-member board in District 1, District 4 and at-large. Sims issued a challenge: “It just takes a tenant to step up and say, ‘I’m a concerned citizen, I want to be on the RUCO Board.’” Dellinger indicated that she doesn’t believe she and other RUCO Board members with ties to the real estate industry have a conflict of interest.

“I have 37-and-a-half years in this industry,” she said. “I represent multi-family and single-family homes. I don’t stand to profit by anything personally. And I’ve been the TREBIC representative, and TREBIC is not profiting. There’s no money going back in their pocket.”

Newton responded, “While you don’t stand to profit personally from a particular rental property, Lisa — and I think you’ve served well on this committee — that is who pays your bills.”

I’m representing TREBIC,” Dellinger said. “I’m not representing Koury.”

“But TREBIC represents landlords who do profit from rental property,” Newton replied.

The next task force meeting is scheduled for Friday at 8:30 a.m. at TREBIC’s offices, but it remains uncertain what the members will have to talk about.

Almost two hours into the first meeting, the sound of Reynolds’ pen tapping was conspicuous amidst the silence of deadlock.