PD Editorial: Setting a clear direction on city's rentals

It's been 60 days since this newspaper began reporting on Santa Rosa's curious practices concerning managing surplus rental property.

These reports included news of a family staying in a city-owned home rent-free for six years while other city residences and properties were being rented, sometimes to former city employees, for between $100 and $500 a month.

Two months later, not only is it still unclear what the city plans to do about these properties, it's not evident the public even knows the full extent of the problem.

This week, the city announced that it had turned up yet another house it owns where someone has been living rent free for six years. As Staff Writer Kevin McCallum reported on Friday, the city found that it owns a 2.4-acre property on Walker Avenue that was purchased in 2007. The city bought the house and surrounding structures for $650,000 and allowed the previous owner and his family to lease the site back for the grand sum of $1 through July 2010.

Over the past three years, the city has continued to allow the tenant to live in the house rent free. Meanwhile, the tenant reportedly has been collecting rent from another family that subleases, although the contract states that no subleasing is allowed.

This news comes just three weeks after McCallum reported on a similar situation where a family was living virtually rent-free on a 3-acre piece of property on Walker Avenue they sold to the city of Santa Rosa in 2007 — for $750,000.

It's bad enough that the city bought these properties — as part of an effort to create a buffer zone around the regional wastewater treatment plant — at the peak of the market. (According to land records, one site was purchased in 2005 for $620,000 and sold to the city two years later for $130,000 more. The 2.4-acre site, meanwhile, was purchased in 2005 for $450,000 and sold to the city in 2007 for $650,000.) But what can possibly justify allowing families to stay rent free for so long, especially at a time when the city is struggling for funds to simply maintain existing programs?

City officials have their explanations. They point to staff changes including retirements and cutbacks that have shifted responsibilities and left property oversight at a minimum. Some of these properties were destined for demolition, but as budgets shrank, the demolition plans were put on the back burner.

City officials argue that it makes sense to have "caretaker" leases for these properties given that many are in disrepair and the city lacks funds to spruce them up.

But it's our guess that in this housing market the city could find responsible tenants and still be able to collect more than $500 a month.

The city needs to get a full accounting of the habitable properties it leases and then establish clear guidelines on how it will lease them, how much it will charge and how it will go about searching for tenants so as not to public employees or close friends first preference.

City Manager Kathy Millison has already gone on record saying the city shouldn't be in the business of leasing residential properties. It's a time-consuming business that comes with all sorts of costly issues including liability concerns.

There's no disputing that. Nonetheless, city officials have to properly manage the situation as it exists today, and so far we're not impressed with how that's being done.