U+2, the Occupancy Ordinance

U+2 is the city law stating that no more than 3 unrelated people may live together. According to a new study, 78% of residents say that the law doesn’t affect them. So why should we care?

Even if this doesn’t directly affect you, there are two important reasons to repeal U+2:

1. U+2 is discriminatory against unrelated people who want to live together. Two couples can’t live in the same house. Four college students can’t live together. Four service workers working to make ends meet can’t live together. An elderly couple struggling to pay property tax can’t rent out 2 rooms. This law, intentionally or not, targets lower income earners and makes it more difficult to live in Fort Collins.

2. U+2 drives up the cost of housing. The same study, commissioned by the City, says that U+2 “increases rental demand and contributes to low vacancy rates (and thus cost increases).” Low vacancy rates impact home prices as well as rents.

By driving up rents, U+2 may have the ironic effect of attracting landlords who allow their houses to deteriorate and their tenants to become the neighborhood nuisance that U+2 is supposed to alleviate.

Oh, and then there’s Federal law:

Federal law says that, in general, landlords must allow at least two persons per bedroom. Landlords can be more restrictive only in rare instances. For example, a policy of only three persons in a two-bedroom unit might be acceptable if the landlord can prove it is truly based on the limitations of the plumbing system or some other aspect of the building’s infrastructure.
 (nolo.com)

The problem that U+2 is meant to address is neighborhood nuisance and excessive traffic and parked cars. We have nuisance codes that are effective in protecting neighborhood quality. Parking permits, car-sharing, and better transit can address the car problem. We don’t need to put landlords in violation of Federal law and tell people who they can and can’t live with.

6 thoughts on “U+2, the Occupancy Ordinance

  1. Terry L Usrey

    I represent the Avery Park Neighborhood Association Steering committee when I say WE are ground zero for U+2! Please respond to our Candidate survey when you get it.
    Further, the Corona study doesn’t provide meaningful data for U+2 consideration.
    Consider the following;
    One of the biggest takeaways from this study:
    • 42% support the occupancy ordinance, only 24% oppose it. (The rest are neutral or have no opinion).

    These clear-cut findings are reinforced by the fact that most people who reported an impact felt that the occupancy ordinance had improved the quality of life in their neighborhoods.

    The conclusion that Occupancy Ordinance is part of the cause of high rents is not supportable. Nothing in the study leads to this conclusion (remember the adage, “correlation does not imply causation”).

    The staff and consultants did not measure whether the Occupancy Ordinance caused an increase in rent in Fort Collins. The only way to analyze the impact of a policy is to examine conditions with and without the policy, not before and after, because many variables change over time.

    The study should have employed a regression analysis using time series data on rental rates, with rental unit characteristics (house or apartment, number of bedrooms, bathrooms, etc.), housing prices, population, population change, demographics, income, wages, CSU enrollment, number of STRs, and any other variables that might logically predict rental prices, including a dummy variable for pre- and post- ordinance as explanatory variables. Only this kind of analysis could reveal the effect that the ordinance has on rental prices by controlling for the effect of other variables. Looking at trend lines tells you only that—trends.

    Comparing Fort Collins to other cities does not support the conclusion either. Fort Collins’ vacancy rates were lower, and rents were higher both before the ordinance and after the ordinance. All this says is that Fort Collins is not so similar to the “comparable” cities used (Greely, Colorado Springs, Pueblo, Grand Junction). And why were these cities used for comparison? Denver and Boulder are frequently on “top 10” lists (like Fort Collins) and are experiencing similar growth and similar increased housing costs. These would be more appropriate for comparison.

    A more plausible explanation for increasing rents: purchasing a house is a substitute for renting a house. If the price of a substitute (purchased house) increases, demand for the good (rented house) will increase, and if demand increases the market price will increase. In Fort Collins, the purchase price of housing has been rising, it stands to reason that rental prices will also increase.

    One could also apply the concept of opportunity cost here: as the price of houses goes up, the opportunity cost of keeping a house and renting it, rather than selling it goes up, therefore the rental price logically goes up.

    It is noteworthy that despite the correlation between high rents and the number of STRs, the report states that they cannot conclude that STRs are the cause. Likewise, despite the apparent negative correlation between neighborhood satisfaction and occupancy violations the report concludes that this does not imply that violations are the cause of reduced satisfaction. This is true, these correlations should be explored more rigorously as well (see above).

    Reply
  2. fredkirsch Post author

    Thanks Terry. My current thinking on this complex problem is that we need a thorough study of contributors to neighborhood livability and robust community discussion. I haven’t been able to find a real study done by the City. That will be one of first priorities. I like your idea of having Avery Park be a pilot neighborhood for rental licensing too.

    Reply
  3. Curt Reynolds

    I agree that this is a more complex issue than just occupancy and how many in a bedroom.

    One of the points that seems to be largely overlooked is that the city is zoned and has a rather well-defined land-use code. Most of the areas affected by U+2 are zoned Residential Low-Density–“rooming house” isn’t a permitted use (since most landlords rent by the bedroom now, these homes are now effectively rooming houses). If the end result really is to turn houses into something else, the code should be thoughtfully amended to something with higher-density land use.

    In my view, the problems are well beyond how many people are in a house, but reside more with some of the landlords that have no pride of ownership in their properties and the tenants they sign up that don’t care about the hovel they live in. Occupancy certainly matters, but creating an ordinance that strongly regulates property conditions, dead vehicles, and tenant behavior should be the goal. The ordinance should license each property, require inspections for safety and maintenance, and specifically list the tenants–especially in areas that are not zoned for medium-density occupancy.

    I will disagree with one comment you make above:

    “We have nuisance codes that are effective in protecting neighborhood quality.”

    We certainly have codes, but enforcement is sporadic and usually not undertaken without continued vigilance by neighbors. If we’re going to have codes, they should be enforced, or they should be rescinded by the council. I’m happy to discuss this with you further.

    Thanks.

    Thanks for giving the opportunity of feedback.

    Reply
    1. fredkirsch Post author

      Thanks Curt. I agree that we should be better enforcing the nuisance codes. Maybe we need to step up penalties for repeat offenses too.

      Reply
  4. Curt Reynolds

    Fred,
    I’m disappointed that you did not respond to most of my points. If there’s a desire to change the city’s low-density residential neighborhoods to something else, this should be done head-on and honestly, not by amending a second-tier ordinance that skirts the city’s responsibility to landowners and residents who live in a neighborhood (as spelled out in the City Code’s land-use provisions).

    Please let us know you anticipate compensating landowners and residents for their reduction in quality of life based upon negating current zoning restrictions.

    Reply
  5. Fred Kirsch

    There’s no desire to change the zoning that I am aware of. If CSU keeps growing that might not be too far down the road though. I’m open to ideas for how to slow the growth of CSU.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *