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eity eouncil Meeting 7-19-90 Santa Monica, California
t 109,'- OU(
STAFF REPORT
TO: Mayor and eity council
Rent Control Board
FROM: eity Attorney
SUBJECT: Rent control Reform Ballot Measures
On June 12, 1990, the eity eouncil directed the eity
Attorney's office to prepare a ballot measure amending the Rent
Control Law to provide for rent adjustments for vacant units with
historic low rents and for vacant units upon certification of
completion of specified maintenance. The Rent Control Board
submitted comments to the eity Council regarding the proposed
ballot measure.
We have prepared three versions of ballot measure language,
which are attached. Proposal 1 reflects the Mayor's original
proposal. proposal 2 reflects the Rent Control Board's proposal.
Proposal 3 reflects the eity Attorney's proposed language.
One of the principal differences between the city
Attorney's proposal and the other two proposals is that the
"no-Ellis pledge" has been eliminated. In our opinion, the city
cannot lawfully compel landlords to give up rights conferred by
state law in order to receive increased rents.
The attached chart compares the principal features of the
three proposals. In addition, under separate cover, the Rent
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eontrol Reform Working Group appointed by the eity Manager at the
direction of the eity Council will be forwarding their comments
to you on the Mayor and Rent eontrol Board proposals.
Finally, the eity Attorney's office has prepared language
amending the Rent Control Law with regard to mobilehomes. In
Hall v. eity of Santa Barbara, 833 F.2d 1270 (9th Cir. 1986),
cert. denied, U.S. , 108 S.ct. 1120 (1988), plaintiffs
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challenged Santa Barbara's rent control law governing mobilehome
parks. Santa Barbara's law, in relevant part, regulated the
amount of rent that mobilehome park owners could charge for the
spaces in the park. Further, under ealifornia law, mobilehome
park operators are generally required to allow tenants to sell
their mobilehomes on site, i. e. , tenants cannot be forced to
remove their mobilehomes upon sale. See eivil Code section
798.73. Thus, the net result of these two laws was to enable
existing tenants to sell their mobilehomes on site, with the new
purchasers taking over the seller's mobilehome space at
controlled rental rates. Plaintiffs alleged that the tenants'
right to reside in a rent controlled rnobilehorne park,
transferable to others through sale of the tenants' mobilehomes
had a market value; that this right was traded on the open
market; and that these tenants were reaping a monetary windfall
by selling this right. Id. at 1276-77. In short, tenants were
able to sell their homes for a higher price because of rent
control. The court concluded that if these allegations were
established, Santa Barbara's law would violate the Fifth
Amendment of the United states Constitution, entitling park
operators to receive just compensation for the taking of this
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property interest. On remand to the trial court, the plaintiffs
successfully established the above-facts and were awarded damages
for this constitutional violation.
A number of cities in ealifornia have adopted mobilehome
vacancy decontrol in response to the Hall decision. However,
this office does not believe that such an approach is the only
way to foreclose damage exposure from a Hall challenge. For that
reason, we have prepared language that requires the Rent Control
Board to adopt conforming regulations within 120 days of the date
of adoption of the Section.
RECOMMENDATION
It is respectfully recommended that the eity council and
the Rent eontrol Board discuss the proposals prepared by the eity
Attorney's Office.
PREPARED BY: Robert M. Myers, City Attorney
Laurie Lieberman, Deputy eity Attorney
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Proposal 1: Mayor Zane's Proposal
PROPOSAL BY THE CITY eOUNCIL OF THE eITY OF SANTA MONIeA
TO BE SUBMITTED TO THE VOTERS
OF A PROPOSED AMENDMENT TO THE eHARTER
OF THE eITY OF SANTA MONICA, eALIFORNIA
section 1816 is added to the eity Charter of the eity of
Santa Monica as follows:
section 1816. Below ThreshOld
Rents.
(a) Definitions. For purposes of
this Section, the following words or
phrases shall have the following meanings.
(1) Below Threshold Rents.
Rents below 90% of the average rent for
units, categorized by number of bedrooms,
which have been withdrawn from the rental
housing market pursuant to the Ellis Act
as of May 1, 1990.
(2) Threshold Rents. Rents
at 90% of the average rent for units,
categorized by number of bedrooms, which
have been withdrawn from the rental
housing market pursuant to the Ellis Act
as of May 1, 1990.
(3) Voluntary Vacancy. For
purposes of this section, voluntary
vacancy shall mean a vacant unit which has
been vacated voluntarily by a tenant or
vacated as a result of a lawful eviction
for nonpayment of rent. A vacancy created
when an owner or relative who obtained
possession of a unit pursuant to eity
Charter Section 1806 (h) after April 1,
1990 vacates that unit shall not be
considered a voluntary vacancy. A vacancy
that occurs within two years of the filing
of a Notice of Intent to Withdraw
Residential Rental Units pursuant to
Government Code Section 7060 et seq. shall
not be considered a voluntary vacancy. A
vacancy that occurs following the
withdrawal of residential rental units
pursuant to Government eode Section 7060
et seq. shall not be considered a
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voluntary vacancy. A vacancy which is the
result of harassment by a landlord shall
not be considered a voluntary vacancy.
(b) Allowable Below Threshold
Rent Adlustment. Upon voluntary vacancy,
the maximum allowable rent on a unit with
a below threshold rent shall be permitted
to be adjusted up to the threshold rent
level. Subsequent to an allowable below
threshold rent adjustment, a controlled
rental unit shall be eligible for general
adjustments and individual adjustments
authorized by the Rent eontrol Board.
(c) eonditions of Below Threshold
Rent Adjustment. A below threshold rent
adjustment shall be authorized by the Rent
Control Board only after a landlord
executes an agreement approved by the Rent
Control Board waiving his or her rights to
wi thdraw the unit from the rental housing
market pursuant to Government eode 7060 et
seq. for a ten (10) year period. --
(d) Implementinq Requlations.
The Rent Control Board shall adopt interim
regulations to implement a below threshold
rent adjustment procedure consistent with
this Section by December 6, 1990. The
Rent Control Board shall adopt permanent
implementing regulations by July 1, 1991.
Section 1817 is added to the City eharter of the eity of
Santa Monica as follows:
Section 1817. Rent Adjustment Upon
Vacancy.
(a) Definitions. For purposes of
this Section, the following words or
phrases shall have the fOllowing meaning:
Voluntary Vacancy. For
purposes of this section, voluntary
vacancy shall mean a vacant unit which has
been vacated voluntarily by a tenant or
vacated as a result of a lawful eviction
for nonpayment of rent. A vacancy created
when an owner or relative who obtained
possession of a unit pursuant to City
eharter Section 1806(h) after April 1,
1990 vacates that unit shall not be
considered a voluntary vacancy. A vacancy
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that occurs within two years of the filing
of a Notice of Intent to Withdraw
Residential Rental Units pursuant to
Government eode section 7060 et seq. shall
not be considered a voluntary vacancy. A
vacancy that occurs following the
withdrawal of residential rental units
pursuant to Government eode Section 7060
et seq. shall not be considered a
voluntary vacancy. A vacancy which is the
result of harassment by a landlord shall
not be considered a voluntary vacancy.
(b) Allowable Vacancy Rent
Adjustment. Upon voluntary vacancy, a
landlord shall be permitted to increase
the then existing maximum allowable rent
for a controlled rental unit by twenty
percent ( 20%) or $75.00, whichever is
greater. However, no more than one
vacancy increase shall be permitted for a
particular unit within a twenty-four (24)
month period.
(c) Conditions of Vacancy Rent
Adjustment. The Rent eontrol Board shall
authorize a vacancy rent adjustment only
upon certification that a landlord has
painted the unit and cleaned or replaced
carpets, floor coverings and window
coverings, and that all appliances
provided by the landlord are in working
order, unless it is demonstrated that such
maintenance has been performed within the
previous six (6) months or it is
demonstrated that such maintenance is
unnecessary. If window or wall coverings,
carpet or floor coverings are more than
seven (7) years old, they shall be
replaced unless it is demonstrated that
replacement is not necessary.
(d) Implementinq Requlations.
The Rent Control Board shall adopt
regulations to implement a vacancy rent
adjustment procedure consistent with this
Section by March 6, 1991.
ll603ajhpc
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Proposal 2: Rent eontrol Board Proposal
PROPOSAL BY THE eITY eOUNeIL OF THE CITY OF SANTA MONIeA
TO BE SUBMITTED TO THE VOTERS
OF A PROPOSED AMENDMENT TO THE eHARTER
OF THE eITY OF SANTA MONIeA, eALIFORNIA
Section 1816 is added to the eity Charter of the city of
Santa Monica as follows:
Section 1816. Below Threshold Rents.
(a) Definitions. For purposes of
this section, the following words or
phrases shall have the following meanings.
(1) Below Threshold Rents.
Rents below levels which are affordable to
pouseholds with incomes at or below 60% of
the Los Angeles/Long Beach (Los Angeles
eounty) Statistical Area median income,
adjusted by family size, as published by
the U.S. Department of Housing and Urban
Development.
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(2) Threshold Rents. Rents
at levels which are affordable to
households with incomes at or below 60% of
the Los Angeles/Long Beach (LOS Angeles
County) statistical Area median income,
adjusted by family size, as published by
the u.S. Department of Housing and Urban
Development.
(3) Voluntary Vacancy. For
purposes of this section, voluntary
vacancy shall mean a vacant unit which has
been vacated voluntarily by a tenant or
vacated as a result of a lawful eviction
for nonpayment of rent. A vacancy created
when an owner or relative who obtained
possession of a unit pursuant to city
Charter Section 1806 (h) after April 1,
1990 vacates that unit shall not be
considered a voluntary vacancy. A
vacancy that occurs within two years of
the filing of a Notice of Intent to
Withdraw Residential Rental Units pursuant
to Government eode section 7060 et seq.
shall not be considered a voluntary
vacancy. A vacancy that occurs following
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the withdrawal of residential rental units
pursuant to Government eode Section 7060
et seq. shall not be considered a
voluntary vacancy. A vacancy which is the
result of harassment by a landlord shall
not be considered a voluntary vacancy.
(b) Allowable Below Threshold Rent
Adiustment. Upon voluntary vacancy, the
maximum allowable rent on a unit with
below threshold rent shall be permitted to
be adjusted up to the threshold rent
level. Subsequent to an allowable below
average rent adjustment, a controlled
rental unit shall be eligible for general
adjustments and individual adjustments
authorized by the Rent Control Board.
(c) Conditions of Below Threshold
Rent Adiustment.
(1) A below threshold rent
adjustment shall be authorized by the Rent
eontrol Board only after a landlord
executes an agreement approved by the Rent
eontrol Board waiving his or her rights to
withdraw the unit from the rental housing
market pursuant to Government eode 7060 et
seq. for a ten (10) year period.
(2) Within an individual
building, the second of every group of
three vacant units shall initially be
rented to a household whose income is at
or below eighty percent (80%) of the Los
Angeles/Long Beach (Los Angeles eounty)
Statistical Area median income, adjusted
by family size, as published by the U.s.
Department of Housing and Urban
Development.
(d) Implementing Requlations. The
Rent eontrol Board shall adopt interim
regulations to implement a below threshold
rent adjustment procedure consistent with
this Section by December 6, 1990. The
Rent eontrol Board shall adopt permanent
implementing regulations by July 1, 1991.
section 1817 is added to the eity eharter of the city of
Santa Monica as follows:
Section 1817. Rent Adjustment Upon
Vacancy.
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(a) Definitions. For purposes of
this Section, the following words or
phrases shall have the following meaning:
Voluntary Vacancy. For
purposes of this section, voluntary
vacancy shall mean a vacant unit which has
been vacated voluntarily by a tenant or
vacated as a result of a lawful eviction
for nonpayment of rent. A vacancy created
when an owner or relative who obtained
possession of a unit pursuant to City
Charter Section 1806(h) after April I,
1990 vacates that unit shall not be
considered a voluntary vacancy. A
vacancy that occurs within two years of
the filing of a Notice of Intent to
withdraw Residential Rental Units pursuant
to Government eode section 7060 et seq.
shall not be considered a voluntary
vacancy. A vacancy that occurs following
the withdrawal of residential rental units
pursuant to Government eode section 7060
et seq. shall not be considered a
voluntary vacancy. A vacancy which is the
result of harassment by a landlord shall
not be considered a voluntary vacancy.
(b) Allowable Vacancy Rent
Adiustment. Upon the first voluntary
vacancy after November 6, 1990, a landlord
shall be permitted to increase the then
existing maximum allowable rent for a
controlled rental unit by a maximum of
twenty percent (20%) or $75.00, whichever
is greater. No more than one vacancy
increase shall be permitted for a
particular unit within a five year period.
Upon each subsequent voluntary vacancy for
a particular unit, so long as such vacancy
does not occur within five years of the
prior vacancy, a landlord shall be
permitted to increase the then existing
maximum allowable rent for a controlled
rental unit by a maximum of ten percent
(10%) .
(e) eonditions of Vacancy Rent
Adjustment. The Rent Control Board shall
authorize a vacancy rent adjustment only
upon certification that a landlord has
painted the unit and cleaned or replaced
carpets, floor coverings and window
coverings, and that all appliances
provided by the landlord are in working
order, unless it is demonstrated that such
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e e
maintenance has been performed within the
previous six (6) months or it is
demonstrated that such maintenance is
unnecessary. If window or wall coverings,
carpet or floor coverings are more than
seven (7) years old, they shall be
replaced unless it is demonstrated that
replacement is not necessary.
(d) Relationship Between Rent
Adjustment on Vacancy and Below
ThresholdRent Adiustment. A vacant unit
which is eligible for a below threshold
rent adjustment pursuant to section 1816
shall also be eligible for a vacancy rent
adjustment pursuant to this section.
(e) Implementing Regulations. The
Rent Control Board shall adopt regulations
to implement a vacancy rent adjustment
procedure consistent with this section by
March 1, 1991.
ll603cjhpc
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Proposal 3: City Attorney's Proposal
PROPOSAL BY THE eITY eOUNerL OF THE eITY OF SANTA MONreA
TO BE SUBMITTED TO THE VOTERS
OF A PROPOSED AMENDMENT TO THE CHARTER
OF THE CITY OF SANTA MONreA, eALIFORNIA
Section 1816 of the eity eharter of the eity of Santa Monica
is amended to read as follows:
section 1816. Below Threshold
Rents.
(a) Definitions. For purposes of
this Section, the following words or
phrases shall have the following meanings.
(1) Below Threshold Rents.
Rents below the threshold levels set forth
as follows:
Below
Threshold
Unit size Rents
o bedroom (single) $400
1 bedroom $525
2 bedroom $675
3 bedroom $800
4 bedroom $825
(2) Threshold Rents. Rents
at the threshold levels set forth above in
subsection (a) (1) of this Section.
(3) voluntary Vacancy. For
purposes of this section, voluntary
vacancy shall mean a vacant unit which has
been vacated voluntarily by a tenant or
vacated as a result of a lawful eviction
for nonpayment of rent. A vacancy created
when an owner or relative who obtained
possession of a unit pursuant to eity
Charter Section 1806 (h) after April 1,
1990 vacates that unit shall not be
considered a voluntary vacancy. A vacancy
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. .
that occurs within two years of the filing
of a Notice of Intent to Withdraw
Residential Rental Units pursuant to
Government eode Section 7060 et seq. shall
not be considered a voluntary vacancy. A
vacancy that occurs following the
withdrawal of residential rental units
pursuant to Government Code section 7060
et seq. shall not be considered a
voluntary vacancy. A vacancy which is the
result of harassment by a landlord shall
not be considered a voluntary vacancy.
(b) Rent Adjustment for Controlled
units with Below Threshold Rents. Upon
voluntary vacancy, the maximum allowable
rent on a controlled rental unit with a
below threshold rent shall be permitted
to be adjusted to the threshold rent
level.
(c) Subsequent Rent Adiustments.
Subsequent to an allowable below
thresholdrent adjustment, a controlled
rental unit shall be eligible for general
adjustments and individual adjustments
authorized by the Rent eontrol Board.
(d) Reporting Requirements. The
Board may establ ish reporting requirements
for below threshold rent adjustments by
regulation.
Section 1817 is added to the city Charter of the city of
Santa Monica as follows:
Section 1817. Rent Adiustment Upon
Vacancy.
(a) Allowable Vacancy Rent
Adiustment. Upon voluntary vacancy, a
landlord shall be permitted to increase
the then existing maximum allowable rent
for a controlled rental unit by twenty
percent (20% ) or $75.00, whichever is
greater. However, no more than one
vacancy increase shall be permitted for a
particular unit within a forty-eight (48)
month period.
(b) voluntary Vacancy. For
purposes of this section, voluntary
vacancy shall mean a vacant unit which has
been vacated voluntarily by a tenant or
vacated as a result of a lawful eviction
for nonpayment of rent. A vacancy created
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. .
when an owner or relative who obtained
possession of a unit pursuant to city
Charter section 1806 (h) after April 1,
1990 vacates that unit shall not be
considered a voluntary vacancy. A vacancy
that occurs within two years of the filing
of a Notice of Intent to Withdraw
Residential Rental Units pursuant to
Government Code Section 7060 et seq. shall
not be considered a voluntary vacancy. A
vacancy that occurs following the
withdrawal of residential rental units
pursuant to Government eode section 7060
et seq. shall not be considered a
voluntary vacancy. A vacancy which is the
result of harassment by a landlord shall
not be considered a voluntary vacancy.
(c) Conditions of Vacancy Rent
Adjustment. The Rent eontrol Board shall
authorize a vacancy rent adjustment only
upon certification that a landlord has
painted the unit and cleaned or replaced
carpets, floor coverings and window
coverings, and that all appliances
provided by the landlord are in working
order, unless it is demonstrated that such
maintenance has been performed within the
previous six (6) months or it is
demonstrated that such maintenance is
unnecessary. If window or wall coverings,
carpet or floor coverings are more than
seven (7) years old, they shall be
replaced unless it is demonstrated that
replacement is not necessary.
(d) Relationship Between Rent
Adjustment on Vacancy and Below Threshold
Rent Adiustment. If I upon vacancy, the
rent on a unit is raised to the threshold
rent level pursuant to Section 1816, the
unit shall not be eligible for a vacancy
rent adjustment pursuant to this section
until a subsequent vacancy occurs.
(e) Implementing Regulations.
The Rent eontrol Board shall adopt
regulations to implement a vacancy rent
adjustment procedure consistent with this
section by March 1, 1991.
1l603bjhpc
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Mobilehome provisions
PROPOSAL BY THE eITY eOUNeIL OF THE eITY OF SANTA MONIeA
TO BE SUBMITTED TO THE VOTERS
OF A PROPOSED AMENDMENT TO THE eHARTER
OF THE CITY OF SANTA MONIeA, eALIFORNIA
section 1818 is added to the eity Charter of the city of
Santa Monica to read as follows:
SECTION 1818. Mobilehomes. within
120 days of the date of adoption of this
Section, the Board shall adopt regulations
applicable to mobilehome and trailer parks
to bring this Article into conformity with
the decision of the Ninth circuit Court of
Appeals in Hall v. ei ty of Santa Barbara,
833 F.2d 1270 (9th eir. 1986) . The Board
shall consider all available alternatives
to securing compliance with the court's
decision while best protecting the
interests of tenants. The Board is
empowered, in furtherance of the purposes
of this Section, to regulate the resale
price of mobilehomes and trailers as an
alternative to increasing the controlled
rent upon resale of a mob i lehome or
trailer.
1l603djhpc
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THRESHOLD RENT PROGRAMS
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