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HomeMy WebLinkAbout2023.04.19 HCMMINUTES OF THE PROCEEDINGS OF THE HOUSING COMMISSION OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND STATE OF MINNESOTA REGULAR SESSION APRIL 19, 2023 CALL TO ORDER The Brooklyn Center Housing Commission was called to order by Staff Liaison Jesse Anderson at 7:10 p.m. MEETINGATTENDEES Commissioner Michael Donnelly Commissioner Gretchen Enger Commissioner Jerry Gayflor Commissioner Elizabeth Riel Commissioner Hashep Seka-Nygaard — Not Present - Unexcused Commissioner Florence Williams — Not Present - Excused City Staff present: Staff Liaison Jesse Anderson and City Council Liaison Kris Lawrence - Anderson. Also present: None. WELCOMEAND INTRODUCTIONS The Commissioners introduced themselves. APPROVAL OFAGENDA This item was not addressed. ELECTIONS — CHAIR Staff Liaison Jesse Anderson gave an overview of the responsibilities of the Chair and Vice Chair. The Chair is a meeting facilitator, and Vice Chair serves in the Chair's absence. The Housing Commission doesn't tend to have many items to vote on except for recommendations to the Council. The Commission also reviews appeals, but there have only been two in the past 14 years. The Commission has also recommended clean-up events to the Council. The Housing Commission meeting is less formal than a City Council meeting. There was a motion by Commissioner Gayflor and seconded by Commissioner Riel to recommend Commissioner Enger as the Chair. Commissioner Enger accepted the nomination. The motion passed. 4/19/23 Councilmember Lawrence -Anderson offered to be a resource for Chair Enger. She noted a number of programs have arisen from ELECTIONS — VICE CHAIR There was a motion by Commissioner Gayflor and seconded by Chair Enger to recommend Commissioner Donnelly as the Chair. Commissioner Donnelly accepted the nomination. The motion passed. S UMMAR Y OF HO USING COMMISSION D UTIES This item was addressed during item Elections — Chair after the item Approval of Agenda. ELECTIONS — CHAIR This item was addressed after the item Approval of Agenda. ELECTIONS — VICE CHAIR This item was addressed after the item Elections — Chair which was addressed after the item Approval of Agenda. DISCUSS RENTAL LICENSING ORDINANCE - RENTAL PROGRAM OVERVIEW Staff Liaison Jesse Anderson gave an overview of the rental program. There is a four -tier structure of licensing in Brooklyn Center. A license is required when a unit is not owner -occupied. After a license is granted, there is a required inspection. The tiered structure is performance -based, and each tier has different requirements. A license cannot move up to another tier unless they meet all of the current tiers requirements, have no violations, and successfully complete an inspection in a particular timeline. Mr. Anderson explained system was last modified in 2010, and it is intended to promote quality assurance. Additionally, it is meant to reward landlords for quality rental services and to provide extra attention to lower -performing rentals. Chair Enger asked if all rentals start at the 6-month level and work their way up. Mr. Anderson said that is not the case, and that is part of the discussion at hand. Chair Enger asked for more information on the violations related to police calls. Mr. Anderson explained validated police calls are an example of what can be used to count violations. Different amounts of validated police calls count against license levels in different ways. The validated police calls haven't impacted properties in a while, mostly because those with several validated police calls are already at the 6-month license level. Vice Chair Donnelly stated it is unfair to punish project management companies with large properties based on only a couple of bad actors. Also, there are only two main property management companies in Brooklyn Center. There has to be a way to shut down properties managed by companies with consistent issues. His concerns relate to both tenant protection efforts 4/ 19/23 -2- and maintenance. Mr. Anderson explained it is uncommon for the property management companies to have several code violations during each six-month period. Vice Chair Donnelly stated the tiered program has to have more consequences for consistently low -performing apartments. Mr. Anderson stated the license doesn't get renewed if they don't pass an inspection. He added there aren't high -quality materials required by the ordinance. For example, the carpet doesn't have to be stain -free or new because those things don't pose a hazard. Similarly, a kitchen cabinet that isn't fixed well is still fixed; craftmanship is not a consideration. Brooklyn Center uses the international property maintenance code. Commissioner Gayflor suggested a property with consistent code violations have repercussions for the management company and/or not renew the license. Mr. Anderson stated the property can obtain their license if they fix the violations before the inspection. Vice Chair Donnelly stated that doesn't seem to be true because the same property continues to receive multiple complaints from tenants. Commissioner Gayflor provided some examples of concerns expressed by property owners. There have been complaints about the dumpsters not being emptied regularly. Mr. Anderson confirmed it is a violation, but the violation is resolved by emptying the dumpster. Commissioner Gayflor stated there are issues with potholes at certain properties. Mr. Anderson stated it is the role of the City to maintain City roads, and they would repair potholes if notified. If it is a private road, it is the responsibility of the property owner. Chair Enger asked how violations are discovered by Staff. Mr. Anderson stated Staff receives complaints from community members and also does regular property inspections. Vice Chair Donnelly asked if Staff has specific numbers on the violations by each property. Mr. Anderson explained the violations are included in each City Council packet. Licenses are handled on a rolling basis, so there are renewals each Council meeting. Vice Chair Donnelly stated the same properties that are having repeated violations are the same ones that are retaliating against tenants and committing other tenant right violations. Councilmember Lawrence -Anderson noted the Council has been considering how long a property can be as a Type IV before they don't receive another renewal. There is another category of tenant protection rights. Councilmember Lawrence -Anderson explained the topic to be discussed based on the current agenda relates to initial licenses. As of right now, an initial license is automatically a Type II license. However, there have been issues with a newer rental property called Sonder House, but they only required inspections every two years. On the other hand, putting a new rental as a Type IV automatically could be cost -prohibitive to promoting new rentals in the City. The Housing Commission is meant to discuss the initial license process. 4/19/23 -3- Mr. Anderson added Staff has been directed by Council to assess additional tenant protection right issues, and that will be relayed to the Housing Commission in the future. Staff is working on collecting survey results regarding the 2022 tenant protection ordinance. Mr. Anderson noted code enforcement and licensing non -renewal can be another discussion. DISCUSS RENTAL LICENSING ORDINANCE - DISCUSS ORDINANCE LANGUAGE RELATING TO INITIAL LICENSE TYPE Mr. Anderson stated new licenses are considered, "Properties that have legally not been required to have a rental license due to new construction or a change from owner -occupied to rental will qualify for a Type II License. Properties found operating without a valid rental license from the City or failing to meet City Code requirements or that have been the subject of enforcement actions such as criminal prosecution or civil penalties for violation of this Chapter, will only qualify for a Type III License." Mr. Anderson explained new rentals cannot receive Type I licenses or a Type IV license. Mr. Anderson noted there are different rules for multi -family new construction. Rental license inspection is done during the Certificate of Occupancy inspection with the Building Official. The Building Official goes into every unit and common area and does an inspection for building code and maintenance code violations. In order for a Certificate of Occupancy to be issues all of the violations need to be corrected. And exception is that exterior items that cannot be completed due to weather or does not impact the interior occupancy of the property. There has been no single- family new construction converted to rental. Mr. Anderson stated Sonder House has 127 units and has a Type II rental license. When they received their license, there were zero violations. Their renewal is due. Sonder Point has 143 units and also has a Type II license. They have not paid for their renewal fee, and when they received their license, there were zero violations. A rental property must submit renewal fee 90 days before the rental expiration date. An expired license doesn't require that the landlord evict the current tenant. Instead, it would not allow them to add a new tenant. Mr. Anderson noted Sanctuary's current license is a Type I, and they have received 27 violations. As of March, they hadn't paid their renewal fee. It is very few violations for a property with 158 units, likely because it is a highly -regulated senior living facility. There were 6 police calls for service, and they don't count domestic violence calls or medical calls. Mr. Anderson added Maranantha has 34 units, and they had 16 violations going into their latest license. They have a Type I license. Maranantha is also a facility for seniors. Mr. Anderson explained the Housing Commission could consider reducing the initial license to a shorter tier. However, after the 1-year period, it is likely that the property will be able to obtain a 3-year license based on property code violations. Alternatively, they could add a new provision to the ordinance that if property management continues to allow the property to have excessive police calls, criminal activity, disturbances in violation of Chapter 12-911, additional requirements can be made to the license such as 24-hour security, security cameras, lighting improvements, speed bumps, parking attendant, and so on. 4/19/23 -4- Councilmember Lawrence -Anderson noted the item was brought to the Council due to issues with Sonder House. She asked if it is legal to have a provision related to quality of life. Another option for the initial license is to grant a 1-year license for the first three years. The City knew Sonder House had some red flags, and the Commission could consider an ordinance that would trigger requirements if the rental is shown to be low -performing. She added it would be difficult to quantify quality of life. Mr. Anderson explained when the ordinance was original adopted, the soundest legal approach was to base the tiers on something like police calls. A certain amount of qualified police calls after a time period during the licensure could trigger additional requirements. Councilmember Lawrence -Anderson suggested using the inspection time to identify problem units. Mr. Anderson stated there is a separate ordinance that handles individual units and is done with a crime prevention specialist. Councilmember Lawrence -Anderson stated once the new crime prevention specialist is hired, they would be willing to discuss that ordinance further with Mr. Anderson. Vice Chair Connelly asked what power a property manager has to remove a problem tenant. For example, if a majority of the police calls are tied to one unit, it is unfair for the property manager to be penalized due to the actions of one tenant. Mr. Anderson stated anyone below Type I licensure is required to use the Crime -Free Housing Addendum where they could terminate a lease if there are certain police interactions. Vice Chair Connelly asked how long it would take for the tenant to leave in that scenario. Mr. Anderson stated the landlord has to provide a 30-day notice before filing the eviction notice, but he wasn't aware of the timeline for the courts to handle the eviction. The timeline likely varies. Chair Enger pointed out code violations are another consideration on top of police calls. New construction properties aren't as well-done in comparison to previous decades. She stated she would like to know what other cities are doing with new construction rental licenses. The six- month check -in after an initial license sounds like a good idea, but there likely won't be too many maintenance violations after only six months. Mr. Anderson agreed maintenance violations wouldn't show up at six months into a new construction. He noted there is a difference between maintenance and code violations. Any time there was a report of a code violation, the City goes out to inspect the property. However, there isn't an inspection related to police calls prior to the end of the two-year license for new construction rentals. Vice Chair Donnelly asked if the City can require rental properties have security cameras and the like before allowing tenants. Mr. Anderson noted Staff and the Council are actually talking about malting similar security efforts as a prerequisite for rental properties. Councilmember Lawrence -Anderson pointed out the City doesn't want to discourage any rental properties. However, it is still a consideration. Certain properties may be working to improve their tenants after initially getting the building filled by increasing credit checks, background 4/19/23 -5- checks, and the like. The six-month quality of life check -in could happen to intercept issues with security. From there, the landlord could work with City Staff and law enforcement to create a mitigation plan. Vice Chair Donnelly agreed a six-month check -in on a two-year lease could help prevent future police calls and decrease the burden on the property manager to implement requirements at a lower licensure level down the line. Mr. Anderson stated the City can require a background check, but they can't require what the property manager does with it. The City could require a mitigation plan and include solutions to some of their issues. However, there is a limit to what the City can require, and the City Attorneys would have to look into that for them. Vice Chair Donnelly added it would be beneficial for the property manager to make use of the background check. Councilmember Lawrence -Anderson explained the property managers tend to learn the hard way once they have tenants that aren't paying their rent or are increasing the violation count. If the City gets market -rate housing, there needs to be more provisions in place to prevent another situation like Sonder House. She noted she had a lot of notes and feedback for Sonder House when the development was considered by the Council such as playground placement and cameras, but it wasn't enough apparently. Chair Enger asked if the City can require certain security efforts of newly -built rentals such as security personnel and cameras. Mr. Anderson stated the City Council has to be careful about why they deny a project, because there is risk of the City being sued if there is insignificant or poor reasoning. Mr. Anderson stated he will look into an option for a 6-month check -in for new licenses and report back to the Housing Commission with his findings. Vice Chair Donnelly asked if the City can't require a new construction rental have certain security measures, how can they do it after six months. Mr. Anderson stated the City would have a basis after the six -months if there are issues that arise during an inspection. Mr. Anderson stated there is a certain privately -owned site that has started the steps to have multiple housing units intended for veterans. That development could only be considered on the basis of maintenance and code requirements. Chair Enger stated the Council can make certain requests of a property owner, but they don't have to follow through with it. Councilmember Lawrence -Anderson explained the ordinance could have a provision that states there will be a six-month check -in to review service calls and other aspects of an inspection. At that time, the City could require measures be taken by the property manager. Mr. Anderson reiterated he will look into an option for a 6-month check -in for new licenses and report back to the Housing Commission with his findings. 4/19/23 -6- WANGSTAD COMMONS OVERVIEW Staff Liaison Jesse Anderson gave an overview of Wangstad Commons. The development has already been considered by the Planning Commission, and the next step is for the City Council to review the project. The Housing Commission has the opportunity to provide additional comments for Council consideration. Chair Enger asked for the location of the proposed project. Mr. Anderson stated the location is near the Fire Station on 615t Avenue and Brooklyn Boulevard. It is also near the Sanctuary. Mr. Anderson stated the Council is acting on the preliminary and final plat, a site and building plan, a Planned Unit Development (PUD) amendment, rezoning, and a comprehensive plan amendment. He showed images of the proposed site. The City purchased the four lots 2023-2019. There was a previous preliminary development agreement, but the developer did not follow through. Mr. Anderson explained JO Properties proposed a project for 83-88 units of multi -family housing in 2020. In February 2020, the City Council issued letter of support for HC grant application, and EDA issued Preliminary Development Agreement. During May 2020, City Council issued a letter of support for Metropolitan Council grant application. Then the applicant received a grant from Metropolitan Council in June 2020. Mr. Anderson noted a project update is provided to City Council in March 2021, which contemplated further reduced 54-units of multi -family. Revised plans were provided, which outlined expanded green space and community amenities and unit mix is updated to increase likelihood of MHFA funding. In June of 2021, the EDA approved a resolution supporting use of Tax Increment Financing (TIF) an in advance of the developer's application to MHFA. An Option Agreement and term sheet were also approved by resolution and the applicant began community engagement process with LISC. Then in June 2021, the applicant received word from MHFA that initial application was unsuccessful. Mr. Anderson stated the developer resubmitted an application to MHFA in July 2022. In December 2022, the developer received approval of the MHFA LIHTC application for Wangstad Commons project with 54 units. Mr. Anderson stated in 2023, the applicant began regular meetings with City Staff to revise plan sets according to new Unified Development Ordinance (UDO). In March 2023, a Work Session was help to work through certain financing gaps and direction was requested as to options for minimizing financial project gap. Based on the feedback provided, Staff has begun preparing a formal TIF agreement based on revised terms and creation of a new TIF district. Mr. Anderson showed the site and building plan. All 54 of the units will be at affordability bands between 30 and 60 percent Area Median Income (AMI). There will be a mix of two-, three-, and four -bedroom units. There will be around 9 units with three bedrooms and five units with four bedrooms. 4/19/23 -7- Councilmember Lawrence -Anderson pointed out it is difficult to find larger rental properties such as the three- and four -bedrooms. Also, the AMI guidelines will help lower -income families access the larger units. Commissioner Riel asked for more information on the AMI. Councilmember Lawrence -Anderson explained if the AMI is $100,000, the units in the development would have to be less than $60,000 for all units. Affordable units are considered as costing less than 25 percent of one's take-home pay. Deeply affordable units are those 30 percent AMI or lower. The household size also plays into the calculations. Mr. Anderson explained there are also different metrics and applications of the calculations when it comes to the various housing programs in Brooklyn Center and Hennepin County. Vice Chair Donnelly asked if Mr. Anderson has a breakdown of all housing in Brooklyn Center based on AMI percentages. Mr. Anderson stated there are few income -restricted units in the City, but the rest are market -rate housing. There is also naturally -occurring affordable housing (NOAH) in Brooklyn Center. However, he doesn't know everyone's rent prices, so he would be unable to compute City-wide metrics. Mr. Anderson asked for the Commissioners to provide him with any comments they would like to see included in the recommendation to City Council regarding Wangstad Commons. Chair Enger asked for updates on two houses near the Legion. Mr. Anderson explained the developer ran out of funding to complete the project, and he cannot receive funding unless he shows completion of the project. The funder is trying to foreclose the property. The land was previously owned by the Economic Development Authority, and the current owner was supposed to add in parking, landscaping, infrastructure, and the like. Councilmember Lawrence -Anderson asked if the City could buy back the property and put in the necessary infrastructure to then sell it at market value. Mr. Anderson stated there would still be issues with a foreclosure, and it would make more sense for the City to get involved after the foreclosure process is complete, but that will take around one year. Chair Enger pointed out the Opportunity Site's entrepreneurial market has been cut in half. She asked if there were additional updates. Mr. Anderson added there were also supposed to be four residential buildings, two of which were affordable, but there will now only be two buildings, one of which is affordable. Once ground is broken. It will take about two years to build. Vice Chair Donnelly asked if the developer has any concerns about the happenings with Shingle Creels. Mr. Anderson stated the developer doesn't have any concerns with Shingle Creek. The developer recently built a similar project in Columbia Heights that filled up very quickly. The Columbia Heights building is called The Ratio. Councilmember Lawrence -Anderson noted she toured The Ratio, and it is very well-done. CITY COUNCIL LIAISON REPORT 4/19/23 -8- City Council Liaison Lawrence -Anderson suggested she skip the report for the current meeting. The Housing Commission can determine what items she should present to the Housing Commission at the next Housing Commission meeting. OTHER BUSINESS - FUTURE DISCUSSION ITEMS FOR HOUSING COMMISSION There was no other business addressed by the Commission. ADJOURNMENT There was a motion by Commissioner Riel and seconded by Vice Chair Donnelly to adjourn the meeting. The motion passed. The Brooklyn Center Housing Commission adjourned at 9:16 p.m. L \ / C=\ 1 l` ' Chair E�ger 4/19/23 -9-