Does anyone believe the city of Santa Rosa belongs in the real estate business?
We certainly don't, and the city's lax management of its holdings only reinforces our view.
Santa Rosa, like most cities, faces familiar challenges — rising costs, decaying streets, untended parks, a sluggish economy. And, like other cities, Santa Rosa is perpetually hunting for revenue.
Before housing prices started climbing again over the past year, many investors bought up distressed properties and converted them to rentals, hoping for a steady income stream.
The city's real estate holdings include at least five residential rentals.
However, as digging by Staff Writer Kevin McCallum has shown, these properties aren't providing a stream of revenue, steady or otherwise. Moreover, it appears that no one at City Hall is keeping track of these houses.
For one house, the city hasn't collect any rent in the past three years. And the total paid over six years is $3, barely enough to pay for a cup of coffee.
The city acquired the house and surrounding acreage on Walker Avenue for $750,000 in 2007 to expand a buffer around the sewage treatment plant. As part of the deal, the sellers were allowed to stay for three years for $1 a year. When the time was up, the city didn't revisit the lease, and the family stayed.
"When we focus on our core services, sometimes things get missed," City Manager Kathy Millison said. "And this is one of the things that got missed."
Also missing are any clear policies for managing the properties and finding tenants.
Two of the city-owned rentals are leased at low rates to city employees.
A house acquired along with property for a possible park in Roseland is going for $100 a month, and a house on a large Occidental Road property rents for $500 a month. It's not clear how widely the city advertised those properties or another on the Roseland park land that is rented for $200 a month to a man without any known ties to the city.
The last of the five rentals is inside Howarth Park, a location that offers little privacy. That house was advertised on Craigslist in 2011, and the tenant pays $1,000 a month.
Asked about the below-market rents, Assistant City Manager Jennifer Phillips described the two Roseland houses as "uninhabitable" when they were purchased. Walker Avenue tenant Kimberly Ortiz says that house has rats, dry rot and mold.
"It's not like we're taking advantage," she said. "We're living in a dump."
Would the city allow "uninhabitable" conditions in a privately owned rental? We think not. Its properties should be held to the same standards.
Before the Great Recession, the city had a general services department to manage its property holdings. Individual departments are now responsible for administering the leases, Millison said, but it hasn't been "on the top of anyone's list for active management."
She wants to get the city out of the residential rental business. We're sold on that idea.