OGDEN, UTAH A CASE STUDY FOR: THE BETTER LANDLORD PROGRAM

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1 OGDEN, UTAH A CASE STUDY FOR: THE BETTER LANDLORD PROGRAM

2 OGDEN, UTAH: A CASE STUDY The Better Landlord Program can: Reduce Crime Strengthen Neighborhoods Increase Revenue and Property Values Lower Utilization of City Resources EXECUTIVE SUMMARY The City of Ogden Utah, population 84,000, was once known for crime filled neighborhoods with theft, violence, and graffiti. Property values remained low because of declining neighborhoods, rundown properties, and low rent. City police and fire services were overly busy. In 2004, Ogden City instituted the Better Landlord Program, which has contributed to lower crime rates, improved property values, increased revenue to the city, and decreased utilization of police and fire services. HISTORICAL CRIME RATE For years, Ogden had higher crime rates than other communities in Utah. Higher crime rates existed because Ogden had the lowest rent in the area and landlords were not performing any screening of tenants. This attracted more parolees to the area, which then brought more of their friends and family to the area, who also had criminal tendencies. Recidivism was around 70% in the first four years of their release, bringing increased crime to these neighborhoods. Additionally, Ogden was once a prominent railroad town, which brought a higher proportion of transient residents to Ogden without ties to the community. These newcomers often found their way to criminal activity. A few of these new citizens committed highly publicized gruesome murders in the mid 1970 s that brought a lasting negative public perception of the City. DOWNWARD SPIRAL The higher crime rate caused a downward spiral in property values and investment. As crime increased, many good citizens left for the suburbs or other cities, leaving their properties to become rentals or to even sit vacant. This prompted more good citizens to leave. Inner-city Ogden was particularly hard-hit by this cycle of decline. Pedestrian traffic almost disappeared in the evenings for fear of criminal activity at a time of day when retail establishments and restaurants expect high traffic. Neighboring cities benefitted from the lost retail traffic in Ogden s central business corridors. With the depressed real estate market, very little new developments were being considered, causing overall real estate to age.

3 ASSESSING THE PROBLEM When Better Landlord founder, Matthew Godfrey, was elected Ogden s Mayor in 2000, he investigated the impact that city rental properties were having on municipal services. Rental properties in general were a much larger drain on city services than corresponding owner occupied properties. It was also demonstrated that many rental properties were not properly maintained, causing blight and safety concerns to citizens. Poorly managed rentals harbored increased criminal activity. Change was needed in order to pull out from the downward spiral. ENACTING CHANGE In 2004, Ogden City instituted the Better Landlord Program. It is a key tool to bring about change in the City s rental market. It offers every landlord a choice. Landlords can either choose higher licensing fees or they can choose to voluntarily participate in the program. Participation leads to improved management practices, thereby qualifying them for reduced licensing fees as a reward for operating responsibly. Ogden City ensures they comply with the program by requiring landlords to participate in training classes that encourage landlords to screen out criminals, maintain properties according to code, and perform routine inspections to ensure tenants and properties remain in compliance. If landlords fail to perform these requirements they are dropped from the program and charged a higher fee. With either choice landlords make, the City benefits. It is an ingenious and powerful program that encourages the private sector to partner with the City in solving problems. RESULTS The Ogden Landlord program has led to outstanding results, benefitting renters, landlords and the city. Renters benefited by having safer and well-maintained rental options, law abiding citizens for neighbors, and family friendly neighborhoods to live in. Landlords experienced higher profits from leasing to better tenants, benefited from higher property values and income from being in a good rental market, and enjoyed being part of a network of motivated landlords. Ogden City enjoyed Reduced Crime, Increased Property Taxes, Higher Licensing Revenue, Lower Utilization of City Resources, and Improved Property Values. This case study will provide proof of the five benefit claims to Ogden City. REDUCED CRIME The crime rate, as demonstrated in the table to the right, equals the total number of crime incidents per 1,000 persons in Ogden City. Data figures were taken from the FBI s Uniform Crime Reports. Since 2004, the 5-year results showed a substantial decrease in crime.

4 INCREASED PROPERTY TAXES The Better Landlord Program in Ogden helped lead to higher property tax revenue. Prior to the implementation of the program, tax revenue increased by an average of 2.06% per year. After the program was implemented, tax revenue increased by an average of 6.55% per year. This increase in revenue happened during a period when the tax rate fell by 1.83%. If it wasn t for a state law prohibiting new revenues for increased valuations, the tax revenue increase since the implementation of the program would have been even higher. HIGHER LICENSING REVENUE Ogden City s Better Landlord program was implemented in In the following year, 2005, business license revenue increased by 29%. Year Tax Appropriation Tax Rate % Chng 1997 $8, % 1998 $8, % % 1999 $9, % 4.88% 2000 $9, % 4.13% 2001 $9, % % 2002 $9, % 3.37% 2.06% * 2003 $15, % 2004 $17, % 9.70% 2005 $18, % 4.14% 2006 $19, % 6.72% 2007 $18, % % 2008 $20, % 10.76% 5- Year Avg 6- Year Avg 2009 $22, % 13.40% 6.55% * Excluded from averages, because of the addition of RDA property. LOWER UTILIZATION OF CITY RESOURCES The overall fire and police budgets increased from 2004 to 2009 in part because of cost of living adjustments but also due to a conscious decision to allocate more resources to proactive policing and fire work. Because the Better Landlord program reduced calls for service, more resources were able to be dedicated to these proactive initiatives. IMPROVED PROPERTY VALUES Quarterly property values for zip code 84401, as measured by average sales price, are shown in the graph to the right. For the 5-year period beginning in 2004, property values increased significantly even in the midst of a stagnant real estate market.

5 AFTER BETTER LANDLORD PROGRAM Our firm provides a complete turn-key approach for implementing the Better Landlord program in your city. The implementation process includes three interconnected components. MUNICIPAL SERVICES STUDY BEFORE An analysis of municipal services can determine the disproportionate financial impact rentals impose on city services when compared to owner occupied properties. A detailed study is essential for providing cities and towns with the reliable data needed to support the calculation of fair fees on rental properties. These additional fees can help provide new revenue to support city services. IMPLEMENTATION Specific ordinances will need to be adopted for cities and towns to enact the Better Landlord Program. Our firm reviews ordinances from numerous cities and can walk communities through the merits of the several options available. Other forms and procedures are also available in template form to help communities implement this program. Our firm can also assist with system implementation. ONGOING TRAINING Our team has years of experience in property management and instruction to help train landlords on best practices. It is through standardized training that landlords learn tenant screening skills, property maintenance requirements, and best management principles. By adhering to this training, landlords are helping communities decrease crime, improve neighborhoods, and lower utilization of city resources.

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