Nichols: Managing the impact of neighborhood rental properties

The City of College Station is experiencing almost unprecedented growth stemming largely from the expansion of enrollment and research and development budgets at our institutions of higher education. These changes bring many opportunities for business development, employment, new retail experiences, and expanded regional and national recognition.

They also bring many challenges. We live with, and try to adapt to, the pressures of increasing traffic congestion and the transition of many commercial and residential neighborhoods.

The rapid expansion of rental properties into neighborhoods zoned for “single families” and long thought to be designed mainly for traditional owner-occupancy is the focus of intense current discussion by many residents and rental property owners. In College Station, the definition of permitted occupancy in what are designated as “Suburban Residential” and related similar zones is “no more than four unrelated individuals.”

Economic forces are driving the market demand for properties in these zoning districts, particularly in close proximity to the campus, to the point where the value for rental exceeds the value that is consistent with what many traditional owner-occupants are willing or able to pay. Investment opportunities exist and attract offers on residential properties to be converted to rental use.

Three Levels of Rental Regulation

The city manages the impact of rental properties in suburban residential zones at several levels. As I have listened to citizens and property owners/managers, and reviewed the issues with city staff, I have found it useful to categorize the levels of regulation involved in our management of the issue into three categories: registration, use, and behaviors.

Rental Registration: Owners of single-family and duplex rental properties are required by ordinance to annually register the property with the City of College Station. Rental properties which exist in “multi-family residential zones” are not required to be registered as those zones are specifically designed to provide the infrastructure to support the dense rental use.

The purpose of the registration ordinance, adopted in 2008, is to document the existence of rental properties, to establish a local contact for emergency purposes, and to use both the local contact and the owner contact information for on-going communication. Most important, by having data on the number and location of properties serving as rentals, the city is in a better position to plan and deliver services to all residents. The current rental registration ordinance is being reviewed to help staff to more efficiently assure that rental units (“single-family” and duplex only) are registered and to make enforcement of this requirement more efficient.

The rental registration requirement is part of the city’s business regulations. The focus of the revision is to redesign this ordinance to allow for an administrative process to be used in case of failure to register so that citations can be written and enforced more efficiently. In addition, the registration process should assure that property owners, managers and renters understand the zoning regulations and the expectations of all property owners in residential areas.

Use regulated by zoning: Once a rental property is registered, we need to consider the requirement of the residential zoning district in which it is located. Cities use zoning to distinguish and separate different uses of property to reduce conflicts among neighboring property owners. College Station has 31 different zoning districts ranging from rural to urban with many distinctions in between for commercial, office, mixed-use, residential, etc. In General Suburban, Restricted Suburban and similar zones, the use is limited to residential with “no more than four unrelated occupants” permitted in one residential unit.

Property owners are entirely within their rights to rent property in these zoning districts as long as they do not exceed this numerical limit. It should be noted that homeowners associations (HOAs) may have more restrictive limits, and in some areas deed restrictions may also address rental issues. HOA rules and deed restrictions are private property matters and are enforced by private action. The city has no role in the enforcement of these private covenants.

But the city does have the responsibility of enforcement of its zoning regulations. As noted , the first step in the process is registration, but enforcing the use aspect of the zoning ordinance is equally important. Unlike rental registration, which is a business ordinance, zoning regulation is incorporated in the Unified Development Ordinance (UDO) and is enforced with criminal penalties.

Many of the older registered rental units were built as traditional family-occupied homes that were later converted to rental purposes with little change in floor plan, or external design such as driveways and yards. With the greatly increased demand, we see residential properties being purchased where the old single-family home is torn down and new structures built specifically for the rental market, including such features as a bathroom for every separately locked bedroom, and more parking and common spaces designed with student use in mind. Many of these properties are rented on a “bedroom basis” to each of the occupants.

College Station is being challenged in various neighborhoods with claims that rental properties, particularly these new structures, are being rented to more than four occupants, thus breaching the zoning regulation.

It is important to recognize that the limit of number of unrelated individuals living in a rental unit is an effort by the city to reduce the conflict among uses within a zone. That is the main purpose of zoning. These traditional residential neighborhoods were not designed with the infrastructure necessary to support this new use.

The College Station City Charter states that it exists “… to accomplish any lawful purpose for the advancement of the interest, welfare, health, morals, comfort, safety and convenience of the city and its inhabitants…”  In addition, the first vision statement in the council’s current Strategic Plan states the goal of “Ensuring safe, tranquil, clean and healthy neighborhoods with enduring character.” Zoning and its enforcement is one key element in assuring that the city is delivering on this charter mandate and vision.

Behaviors Expected of All Residents: The third level of regulation addresses the behavior (for the lack of a better term) of residents, both owner-occupants and renters, which reflect the common standards consistent with modern urban and suburban living. College Station has numerous codes that address such items as parking on the grass, failure to maintain property, tall grass, failure to properly manage trash receptacles, loud parties, on-street parking, etc. This level of regulation is where “the rubber meets the road” and such rules are scattered throughout our code of ordinances.

It is expected that all citizens would treat their neighbors with respect and provide for the common good of the neighborhood. But in our society, it is logical that values and concerns differ among individuals, including those which define common community standards.

The city, charged with considering the health, safety and welfare of the entire community, adopts regulations that are designed to represent the common interests of citizens as can best be done by an elected body of citizen representatives. These regulations include, but go beyond, the obvious police and fire regulations to encompass the topics noted at the beginning of this section. Regulations in all areas are regularly reviewed and updated to maintain relevance to current and expected citizen concerns, technology and enforcement capabilities. But regulation of behaviors can be managed more efficiently if the zoning regulations that determine commonality of “use” are clearly delineated and maintained.

Efficient and Effective Enforcement

As stated at the outset, the review of our rental registration ordinance represents the fundamental issue. The effort is all about compliance and encouragement that all rental properties in residential zones be documented. It is hoped that planned changes will improve the efficiency and effectiveness of this documentation process.

With success in this area, the foundation can be laid to better document cases where the rental use is inconsistent with the law. Further examination of our zoning ordinance will likely be needed to provide the tools that code enforcement officers can use to efficiently determine if a violation has occurred and provide evidence sufficient for prosecution. In recent years, the code enforcement budget has been significantly reduced, and this will have to be addressed by the council if we expect to make significant progress.

Education of property owners, managers and renters is a high priority as part of the solution. The need for enforcement of use (more than four unrelated) and behaviors can be reduced if we can reach all parties to the rental contract regarding community expectations and the law. The city is examining more avenues to reach decision makers at each of these levels and the community at large. This component of the solution to such a multi-faceted problem may not be as expensive as code enforcement, but certainly is a complex process and deserving of the best efforts we can make.

I welcome your comments and feedback as we continue our discussion of this important issue. Citizen engagement and input is the bedrock of local government.