Steamboat Springs - Rental Unit Licensing

A call for licensure
Gerber: Licenses would protect landlords and tenants
By Zach Fridell - Reporter Steamboat Pilot & Today
Saturday, June 28, 2008

Steamboat Springs — Jeff Gerber, the owner of the property where longtime Steamboat Springs resident David Engle died during a house fire June 15, said Friday that a rental licensing program for the city could be one way to ensure incidents such as Engle’s death do not happen again and would protect landlords from potentially expensive lawsuits.

“I think that if our town is looking for safeguards to be put in place to assist landlords and tenants with safe units, a licensing program would be helpful,” he said.

Gerber said a program similar to one used in Boulder would allow the city to inspect properties and give assurances: to tenants that their rental unit is safe, and to landlords that all requirements have been met.

“A licensing program would ensure that a problem like this won’t happen again, given that we inspected the property when we purchased it and there was a smoke detector,” he said. “A previous owner put a smoke detector there, but there was not one during the incident.”

A post-fire inspection by Fire Marshal Jay Muhme showed no smoke detectors in the house. Engle died from smoke inhalation when he fell asleep while cooking, resulting in a grease fire and small blaze.

The review process currently used in Steamboat is based around building permits, issued either when the unit is built or when part of a unit is remodeled as a secondary unit for rentals. It also entails a reassessment by Routt County assessors and will bring a higher property tax — but the price of permits and fees may be much lower than the liability homeowners could face if the housing is not up to code.

Gerber and his wife, Trigg, have owned the property at 243 Seventh St. since late 2007. The converted-garage apartment had been rented out for about 20 years. City officials urged all owners of secondary units to register when they revised city codes in 2001, but Gerber previously said he thought the unit was grandfathered in and didn’t require review.

An existing secondary unit would require a $50 fee and a building review, while a new unit would go through a series of steps to become legal.

In the absence of a rental license, Steamboat landlords are responsible for voluntary compliance.

Safety first
According to local Realtor Coleman Cook, converting his garage at 52 Spruce St. into a legal rental unit was straightforward, if expensive.

Cook renovated the upper floor of a two-story garage in 2005 to add a 550-square-foot living area, which includes one bedroom, one bath, a living area and kitchen.

“The process was very easy, and it’s been great to have,” he said. “My reasons were twofold. First, to provide a need to the city, and second, to have a nice rental income on the side.”

In order to legally build a secondary unit, homeowners must go through a process of approvals by state and county officials, beginning at the Routt County Regional Building Department.

For the Gerbers’ apartment, Dunham estimated the building permit approval process would cost $2,209, if completed this year.

That includes $1,016 of city and county tax that is a pre-payment on sales tax of locally purchased construction materials. That tax also is audited after construction is complete and homeowners may be entitled to a refund of unspent taxes from the city.

The addition of a secondary unit also will increase the assessed price of the property, increasing market value and taxes due.

Cook said his taxes were increased, but based on the average annual increases — regardless of a secondary unit — it was not a noticeable amount.

For Engle’s apartment, County Assessor Mike Kerrigan estimated the additional unit would increase the market value of the property from the current assessment of $433,080 to $487,420.

Kerrigan said the market values of properties with secondary units are adjusted whenever building permits are granted, the property is sold or if an assessor notices the property while visiting another house in the neighborhood.

“I’m training my appraisers to, when they’re looking at one property, look at two more nearby,” he said. Once the secondary unit is designated as an additional housing unit, the value is added to the house. Homeowners can appeal the adjustment if they think it is inappropriate.

“The increased value is not enough to change how the property can function as affordable housing,” Kerrigan said.

Once the assessed value of the property is raised, that also can raise the taxes. In the example of Engle’s apartment, Routt County Treasurer Jeanne Whiddon said the new assessed value would raise the tax for the landlords by $191 for the 2007-08 year, an increase of 12.5 percent.

Gerber said this incident could be a chance to prevent similar situations in the future.

“I hope that now that this question of rental units in this town has been brought to the forefront, I hope this gives all landlords and tenants a chance to look at their respective situations and see if there is anything that needs to be done to make sure everyone is comfortable and safe.”


END OF STEAMBOAT TODAY AND/OR STEAMBOAT PILOT ARTICLE (STEAMBOAT'S DAILY NEWSPAPER)
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