Guest Opinion: Citrus Heights shouldn’t punish reputable rental owners with more fees

Guest opinion column submitted by Martin Gravenstein–
I am writing as a rental property owner of 8 single-family properties, which are all in Sacramento County and 7 of which are in the City of Citrus Heights. I am concerned with the City of Citrus Heights council agenda item for the Aug. 7 meeting with the subject “Rental Housing Inspection Unit.” I was only recently made aware of the item as reported in The Sentinel, Aug. 5, 2018. I have also read Chief Lawrence’s report and the recommended resolution as linked by the article.

Related: Citrus Heights considering $500k proposal for mandatory rental inspections

According to the report, 40% of the rental units in Citrus Heights are owned by non-local entities. However, the report should have also considered what percentage of properties are not managed locally. I, for example, am one of the 40% of owners that are not local to Citrus Heights. However, all of my properties are managed locally by a reputable and professional property management company.

In fact, I incur on average over $1,000 per year in property management fees per unit, over $21,700 total in the last three years in inspections, move-in/move-out and monthly administration costs. These costs provide the tenants 24/7 phone answering and very immediate attention to any of their concerns. These fees do not include the actual cost of repairs and maintenance.

As part of those management fees, my properties are already inspected inside and out once each year with specific attention to safety and health concerns as well as livability. I receive a detailed report with photographs and recommendations for correcting any issues. It should be noted that I budget and spend 7% of my gross rental income on repairs and maintenance every year.

As the report correctly states many of these properties do have systems that are at the end of life and last year my repair and maintenance was 15% of gross rents. I recognize that not all property owners are as responsible, but I suggest those that are not, is far less than 40%.

Document: Read the staff report

In fact the report seems to indicate this very fact in that of 1,300 code enforcement calls, only 27% are for rental properties. Even disregarding that many of those calls are likely the same problem property owners, that is only 7.5% of the property owners having reported issues ((.27*1300)/4700 ). I suspect the number is far less when taking into account repeat calls and properties owned by the same owner.

In addition, the report states that the vast majority, 73%, of the code calls were for non-rental units. This is absolutely consistent with my experience.

In more than one instance, I have an adjoining owner-occupied property, where the owner is either unable or unwilling to maintain their property. In one instance, I had to incur the total cost of replacing a shared fence in order to provide my tenant with the safety and livability I promise them in their lease agreement. In another instance, the property was inherited by family members who are unable or unwilling to afford maintenance on the property and it continues to be a neighborhood eye-sore and is likely one that has had several code enforcement calls.

The proposed fee, along with the increase in the Rental Stock Fee, results in well-over a 10% increase to my property management costs with absolutely no benefit to me since I already pay to inspect my properties at 3 times the frequency suggested in the resolution. Again, this is common practice for owners that use reputable local property management.

I suggest that the council redirect Chief Lawrence to reconsider the recommendation to one that addresses 100% of the code calls and one that puts the financial burden on the violators, of all ownership types, and not the 92.5% responsible landlords of the city. Otherwise this is just another tax and not a fair fee.

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