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SR-9-B (39) 98 PCD:SF:PC - f:\ppd\share\ccreport\1995\tenant DEe 1 2 1995 COUNCIL MEETING: November 28, 1995 Santa Monica, California TO: Mayor and City Council FROM: City staff SUBJECT: Recommendation to Direct the City Attorney to Prepare an Ordinance Clarifying the Issue of Owner Obligation to Pay the Cost of Temporary Accommodations to Tenants Displaced as a Result of Owner Compliance with Retrofitting obligations Imposed by the potentially Hazardous structures Ordinance (Ordinance 1748 (CCS)). INTRODUCTION This staff report recommends that the city council direct the City Attorney to prepare an Ordinance clarifying the issue of owner obligation to pay the cost of temporary accommodations for tenants displaced as a result of owner compliance with retrofitting obligations imposed by the potentially hazardous structures ordinance (Ordinance 1748 (CCS) ) . BACKGROUND On June 21, 1994 the City Council adopted Ordinance #1748 which requires owners of certain types of potentially hazardous buildings to retrofit their buildings in order to prevent damage due to future earthquakes. The ordinance was adopted in response to damage patterns to certain buildings from the January 17, 1994 Northridge earthquake. One type of building that must be retrofitted per the ordinance are non-ductile concrete buildings. 1 98 - DEe 1 2 1995 Retrofitting of non-ductile concrete buildings often requires the displacement of the tenants during the retrofitting process. The City has approximately 70 non-ductile concrete buildings, of which approximately 1/3 are residential. In some circumstances the Municipal Code requires owners of residential buildings to pay the cost of temporary accommodations when tenants are displaced. Specifically, Municipal Code section 4.36.100 provides as follows: "If a landlord is required to recover possession of a rental housing unit in order to comply with housing, health, or safety laws of the State of California or the City of Santa Monica, or if a tenant is required to vacate a unit upon the order of any government officer or agency, the landlord shall be responsible for the reasonable cost of temporary accommodations for the displaced tenant necessitated by such recovery of possession until such time as the tenant is restored to possession." If, however, the dlsplacement and relocation of the tenant is the result of an earthquake, the owner is not obligated to pay for temporary accommodations. This exemption is stated in Section 4.36.120(b) as follows: "Section 4.36.100 shall not be applicable if the displacement and relocation of the tenant is the result of a fire not caused by the landlord, earthquake or other natural disaster. 11 Thus, when tenants have been displaced because of the necessity to do earthquake repair work to a structure, owners have not been obligated to pay temporary accommodation benefits to tenants. 2 However, this is the first time the issue of whether owners should be exempt from paying temporary accommodations when tenant displacement is not due to earthquake repair, but to the need to comply with earthquake retrofitting requirements imposed by Ordinance 1748 (CCS) has come to the attention of the city. Both 4.36.100 and 4.36.120 were adopted before the retrofitting requirements which were developed in the wake of the Northridge earthquake. Whether tenant displacement in this context should be interpreted as "the result of a[n] . . . earthquake" pursuant to 4.36.120 has not been addressed. The first instance where this issue arises is at 201 Ocean Avenue at the Ocean Towers building. The Ocean Towers project consists of two building both 16 stories tall. The first of the two buildings to be retrofitted is the palisades building with 157 total residential units, of which 41 are occupied by tenants of owners of the units. It is estimated that the construction process will take approximately one year for each building, with approximately six months required for earthquake repairs, and approximately SlX months required for retrofitting. The construction will be phased for the two buildings for a total two year construction period for the site. Both projects will require the displacement of the tenants. It is clear that the owner(s) of Ocean Towers are exempt from paying temporary accommodation costs for the six months required 3 - ---- --- for earthquake repairs. However, depending upon the interpretation of Chapter 4.36 of the Municipal Code, the owner(s) of the building may be required to pay relocation benefits to the tenants during the six months required for retrofitting the building under Ordinance #1748(CCS). staff is asking the council to direct the city Attorney to draft an amendment to the Municipal Code to clarify this issue. POLICY OPTIONS This issue is a policy matter, and there are several options available to the city Council. Each would include an amendment to 4.36.100 or 4.36.120 to clarify owner obligations. The options include: 1) Require the property owner to pay the cost of temporary accommodations to tenants displaced by retrofitting construction arising from owner compliance with Ordinance 1748 (CCS) for the full period of displacement. 2) Do not require the owner to pay the cost of temporary accommodations to tenants displaced by retrofitting construction arising from owner compliance with Ordinance 1748 (CCS) . 3) Require property owners to pay the cost of temporary accommodations to tenants displaced by retrofitting construction arising from owner compliance with Ordinance 1748 (CCS) only when displacement exceeded a specific period of time. 4) Require property owners to provide a moving allowance, cost of storage, or other displacement costs to tenants displaced by retrofitting construction arising from owner compliance with Ordinance 1748(CCS) at the time of displacement or after displacement had exceeded a period of time. 4 staff is recommending the third alternative as a fair approach to the situation. The adopted retrofitting ordinance requires compliance by property owners, and it seems unfair to require property owners to retrofit their buildings, and pay the cost of temporary accommodations In order to comply with a City requirement. However, requiring temporary accommodation payments after 180 days for low rise buildings (less than five stories tall) and 270 days for high rise buildings (five stories or taller), with 270 days and 360 days respectively if asbestos removal is required, would provide incentive to the property owner to complete the retrofitting in a timely manner and expeditiously allow for tenants to return to their units. To not have any owner obligation to pay temporary accommodation benefits could result in no incentive for the property owner to complete the proj ect and allow tenants to move back in to their units. The time periods selected were based upon an average length of time a retrofit project would be expected to take, based upon information provided by Building and Safety Division staff, contractors and experts in earthquake retrofitting. It is recommended that there be separate time periods based upon the size of the building, since there is a direct proportion of effort based upon the height of the building. Asbestos removal is also a timely consideration that should be factored into the length of time for retrofitting a building. 5 BUDGET/FINANCIAL IMPACT The recommendation in this report will not have a budget or fiscal impact to the city. The retrofitting requirements have been previously adopted by the city Council in Ordinance #1748. This staff report addresses the policy question as to the appropriateness of relocation benefits in buildings that must be retrofitted, and therefore will not have a budget or fiscal impact to the city. RECOMMENDATION It is recommended that the city council direct the city Attorney to prepared an ordinance clarifying the issue of owner obligation to pay the cost of temporary accommodations to tenants displaced as a result of owner compliance with the retrofitting obligations imposed by the potentially hazardous structures ordinance (Ordinance 1748(CCS). Prepared by: Suzanne Frick, Director Paul Casey, Assistant to the Director Planning and Community Development Department 6