HOUSING QUALITY TASK FORCE REPORT AND === RECOMMENDATIONS |_ JUNE 24, 2022Understanding the Rochester Housing Landscape The task force approached the question of housing quality by first reviewing Rochester and Monroe County housing studies that have been conducted since 2018, The task force drew in particular upon the City's 2018 Housing Market Study and the 2021 Mechanics of Monroe County Rental Market study, conducted by CZP LLC, and the Rochester 2034 comprehensive plan, A full list of studies and data informing the task force's work appears in Appendix C. Looking across these studies and the knowledge base of its members, the task force developed an understanding of Rochester's housing ecosystem to inform its work. It recognized a housing stock that is predominantly older, with nearly half of units dating from before 1940, and 90 percent older than 1978, when lead was banned in paint. This consists predominantly of single- family through four-family houses (64 percent of units), with the remainder in larger buildings. The older stock, combined with a 36 percent decline in Rochester's population from 1950-2010, contributed to an oversupply of housing units and existing home values well below the cost of new construction. This kept housing costs low by national standards, but contributed to substantial deferred maintenance, especially in lower-demand areas of the city, and little new construction. Even today, very litle new construction is profitable in Rochester without subsidy. The challenges of older stock and deferred maintenance are compounded by high poverty rates in much of the city. The city's median income of $37,395 (2020) was 42 percent below the national median, and represented a 20 percent decline in constant dollars from the year 2000. For the 40 percent of city residents making less than $20,000, affordable rent by the commonly used standard of 30 percent of income would be $500 or less, an amount that fails to meet the cost to own and maintain nearly any type of housing unit High poverty rates are one of many factors contributing to Rochester's low homeownership rate of 36 percent. The city’s number of owner-occupant households decreased by 35 percent from 1970 through 2019, accounting for its entire net loss of households over this period. Poverty also factors prominently into the city's eviction filing rate, which averaged 8,284 per year from 2015 through 2019. in the lowest demand 30 percent of areas within the city, nearly three quarters of households are housing cost burdened. Eviction rates in these areas are generally three to four times those of high-demand areas. Defining Quality Housing Task force members were asked to describe what quality housing meant to them. As a baseline, members broadly felt that quality housing must be free of physical and environmental hazards, and pest infestations. They also noted that building mechanical systems should function properly and efficiently. Matters of safety, including smoke and CO alarms, lead safety, and absence of code violations, along with cleanliness, were also considered basic requirements of quality housing. Beyond these basic requirements, members felt that quality housing derived from quality workmanship, finishes that were in good condition and updated when needed, and general aesthetic appeal. There was a sense that “you know it when you see it,” and that quality rental housing was housing that owners themselves would want to live in. Some members felt that newer housing correlated with better quality, and some cited considerations beyond the state of the property itself, such as a safe neighborhood and good landlorditenant relations, Housing Quality Task Force Report and Recommendation + Page 2‘Scope of the Recommendations Housing is a basic need of people, a source of aesthetic and emotional value, a defining component of the built environment, and a large and complex economic sector. Addressing all of the issues involved with housing would surpass the task force's charge and its deadline of 90, business days. The membership therefore chose to focus on issues that are most proximate to housing quality, that can be impacted through local action, and that offer high return on effort and expenditure in a reasonable amount of time. As a result, some bigger picture concerns like poverty reduction, evictions, and homeownership are addressed only insofar as they pertain to this focused approach to housing quality. However, there is broad agreement among the task force membership that significantly reducing poverty would make a bigger difference than anything else the City, or society, can do to improve housing quality The following are the task force's recommendations to improve the condition of Rochester's existing housing stock, add new supply of quality housing, and incentivize landlord and tenant actions that improve housing quality Recommendations Code Enforcement 1) Increase staffing of code enforcement and develop improved systems to focus resources on the biggest problems. Use increased staff and data analysis to improve training and consistency, respond to complaints, and accelerate closure of violations, issuance of fines, and adjudication. Develop meaningful code enforcement KPIs. 2) Establish a dedicated Housing Attorney in the City Law Department. This attomey can bring enforcement cases in the Municipal Code Violations Bureau and Housing Court, and better coordinate with Housing Court and tenant attomeys on matters of habitabilty, pattems of retaliation, and landlord and tenant accountability. Seek contempt sanctions for landlords and tenants who fail to comply with court-ordered actions. 3) Dedicate a cross-functional team across City departments to target habitually non- compliant landlords and long outstanding C of O and code violation cases (‘worst of the worst") for additional fines, adjudication, and enforcement. Fines should be added to taxes and proceed to foreclosure, receivership, and contempt filings when applicable. Aggregate units for receivership and direct them to responsible owners identified by City scoring system, 4) Implement a property owner/manager scoring system by the end of 2022 and make the system publically available and searchable on the City's website. Scoring property owners and managers will improve tenants’ ability to make informed choices, reward good housing providers, focus enforcement on poor performers (including a potential “worst of the worst" list), and allow the City to create preferential benefits for responsible owners/managers. This could include an incentive-based certificate of occupancy program that requires more frequent inspections for low-scoring properties but not high- scoring properties. Housing Quality Task Force Report and Recommendation + Page 42) Fund repair and improvement grants and loans to both owner-occupants and high scoring landlords in low-income areas. Evaluate how to increase funding available per housing unit for housing providers creating high quality housing for income-eligible residents. Lack of payback and appreciation discourage expensive repairs and improvements in challenged areas. Targeted funding can reduce the risk of not recouping these investments for both owner-occupants and landlords, in exchange for a period of required occupancy or rent affordability. Work with financial institutions to create favorable lending products for quality rehabilitation projects. 3) Scale up the RENEW program, a local backbone model that integrates across multiple housing agencies, services, and funding streams to provide “whole-house" rehab that improves housing quality and sustainability. Increase the pool of flexible funding that RENEW has available to braid with other housing rehab and quality initiatives in the community, expand the program's reach to serve low-income tenants as welll as low- income owner-occupants, and ensure that healthy, age-friendly, and green/energy efficient housing remains central to its approach. Increase Supply of Quality Housing 1) Provide incentives for new construction and substantial rehab to generate new units for homeownership. Provide subsidy for developers who build new construction or rehab an existing vacant property in formerly redlined areas, 2) Encourage the expansion of high quality residential and mixed-use housing supply — both income-qualified and market rate — by implementing the Zoning Alignment Project (ZAP) in accordance with the Rochester 2034 Comprehensive Plan, to expand housing choices across the city and focus density along transit corridors. Improving Communication and Education 1) Leverage the City's upcoming website overhaul to expand functionality and content to inform, educate and engage all stakeholders related to housing quality. In the meantime, incorporate Housing Quality Task Force recommendations, updates, and additional resources into content on existing City website. Include links to landlord and tenant rights and responsibilities and other educational materials (Housing Council, Monroe County tenant education program, etc.), C of O and code information, rehab grants, and RENEW and NYSERDA incentive programs. 2) Develop 1:1 marketing materials for inclusion in established mailings to property owners, increasing awareness of and encouraging participation in informational courses, such as the Housing Council's Operating Rental Property course and Landlord Ambassador program, Housing Quality Task Force Report and Recommendation + Page 6Appendix B ~ Community Groups Consulted by The Task Force Affordable Housing Providers Rochester Housing Coalition Greater Rochester Area Realtors New American Advisory Council City-Wide Tenant Union of Rochester Tenant Defense Fund Appendix C ~ Studies And Data Relied Upon by the Task Force 2018 Rochester Housing Market Study Rochester 2034 Comprehensive Plan 2011-2019 Eviction Data Analysis 2020 Analysis of the Impediments to Fair Housing 2020 Confronting Racial Covenants in Monroe County 2021 Buy the Block Legislation (RUB! Recommendation) 2021 Commission on Racial & Structural Equity (RASE) Report 2021 Mechanics of Monroe County Rental Market 2021 Harvard Small Landlords COVID Study 2021 Housing Trust Fund Blueprint Report 2021 Reparations & UBI (RUB!) Committee Report 2018 Rochester Transit-Supporting Corridors Study 2020 US Census Housing Quality Task Force Report and Recommendation + Page 8