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INFORMATION: June 18, 1984
\\03-oVI
~ R.cA-
INFo .
Santa Mon1ca, CalIfornIa
JUN 1 9 t9S4
TO:
Mayor and CIty Councll
FROM:
CIty Staff
SUBJECT:
Three Month City
ImplementatIon of
Amendment (TORCA)
Staff
Tenant
Preparaton Period for
OwnershIp RIghts Charter
Introduction
ThIS report outlInes a plannIng process to be undertaken by the
CIty Manager's OffIce and Department of CommunIty and EconomlC
Development to Implement recently passed ProposItIon X - Tenant
OwnershIp RIghts Charter Amendment (TORCA).
Background
On June 5, 1984, the voters of Santa MonIca approved passage of a
Charter Amendment 1ntended to allow converS1on of rental unIts to
tenant ownershIp.
Bas1cally, TORCA wIll allow converSIon from rental unIts to
condoml ni urns (or cooperat 1 ves) by owners of such propert les, if
the unIts are offered for sale to present tenants.
There are a
varIety of protectlons for tenants In regard to converSIon
actIvItIes, 1.e. offerIng prIce optIon per1od, rIght of tenancy
In the event of sale to others and so on.
There 1S a mechanIsm
prov1ded for purchase SUbSIdy for low/moderate and mIddle Income
fam1l1es.
IORcft INFo
JUN 1 9 1984
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INFORMATION: June 18, 1984
Santa Monlca, CalIfornIa
Most sImply put, the terms are:
1. owner must have consent for converSIon from at least two-
thIrds of the tenants.
2, owner must have a signed Intent-to-purchase agreement from
51% of the tenants for applIcatIon to move through CIty
processes.
3. owner must hold offering prIce to all tenants for a perIod of
two years.
4. non-purchased unIts remaIn subJect to rent control.
5. unI ts purchased by non-tenants must be occupIed by eXIstIng
tenants and are subJect to rent control.
6. owner must pay a one-tIme "conversIon tax" for each sold unIt
In an amount equal to one year1s rent of the unIt.
7. proceeds from the converSIon tax are to be used to create a
yet-to-be deSIgned subSIdy 9rogram for low/moderate lncome
tenants and posslbly for mIddle Income tenants as tIme goes
on. Only admInIstratIve costs of the SUbSIdy program can be
covered from these fees.
8. applIcatIon fees for the converSIon process are ca?ped at
$500 per applIcatIon and no other plannIng & zonIng tract map
fees or any other fees can be charged, IrrespectIve of actual
proceSSIng costs.
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INFORMATION: June 18, 1984
Santa Mon~ca, Callfornla
AnalYSIS
There has been a moratorlum on condom1nium converS1ons 1n Santa
Monlca Slnce April, 1981.
ConverSlon approvals prior to the
moratorlum averaged around 20 proJects per year w~th an average
of 13 unlts per project.
Staff IntervIews wIth real estate
profeSSIonals suggest an estImate of 10-20 proJects In the f1rst
year of the TORCA inIt~atlon, wIth smaller numbers In the
followlng years.
Because of this moratorIum and the establlshment of Rent Control
In
Santa
Monlca,
It
is
not
really possIble
to estImate
Immediately what the market for
converSIons Wlll
be,
and
consequently what the appllcatlon proceSSIng workload wlll be.
TORCA leglslatlon requlres a houslng SUbSIdy to be put 1n place.
A host of admInIstratlve and POllCY concerns need to be addressed
In
order
for
Santa
MonIca
to
respond
profeSSIonally
and
efflClently to the leg1slatlon.
Therefore, staff recommends that a three month preparatIon perIod
be InItIated.
Durlng thIS perIod staff WIll reVlew, evaluate and
des Ign procedures detaIled De low to Implemen t the legIs la t 1 on.
Appll ca tl ons, gu Idellnes, relevant forms and procedures WIll be
avaIlable to the publlC no later than October 15, 1984.
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INFORMATION: June 18, 1984
Santa MonIca, CalIfornIa
?roposed Work Plan
1. General PlannIn9 and Overall Issues IdentIfIcatIon
The experIence of other localitIes wIll be briefly reviewed
and evaluated In order to explore and clarIfy Issues WhICh
are relevant to the Santa MonIca legIslatIon.
The amendment
Itself WIll be analyzed and questions and 1ssues WhICh need
clarlfIcat10n WIll be 1dentifIed, dIscussed and resolved.
Volume estImates WIll be drawn for program deSIgn purposes,
and legal requIrements of the CIty under the legIslatIon WIll
be evaluated 1n order to deSIgn sy~tem procedures Wh1Ch
1ncorporate reqUISIte protectIons.
2. AdmInIstratIve DeSIgn of CIty Procedures
CIty
admInIstratIve
processes
that
eXIst
such
as
the
subdIVISIon process WIll be reVIewed.
ReVISIons reqUIred by
TORCA WIll be suggested.
A manual or gUIde to the new
processes WIll be drafted and work process flow charts and
tImelInes WIll be produced.
A speCIfIC TORCA process WIll be des1gned to complement the
C1ty'S subdIVISIon process.
Interdepartmental functIonal
r21atIonshlps will be IdentIfIed, procedures evaluated and
TORCA respons1bllItIes WIll be approprIately aSSIgned wIth1n
the
CIty.
An
applIcatIon
kIt WIll
be
prepared
WIth
InstructIons and Intake proceSSIng tIme tables.
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INFORMATION: June 18, 1984
Santa MonIca, Callfornla
3. Regulatory Issues
ReVIew of the pollcles and reqUIrements of present agenCIes
WhIch regulate the transactlons wlll be undertaken.
Some of
the
agenCIes
and procedures
to be
evaluated
are
the
CalIfornIa Department of Real Estate; the Coastal Commlsslon;
Rent
Control
Board;
BUlldlng
Code
prOVIsIons
and
the
Subdivlslon
Map
Act
process;
and
other
governmental
regulatory processes.
From the analysIs of these regulatory
processes, TORCA regulatory plans WIll evolve.
4. Data Management Systems
The analysIs
of
the
legISlatIve and the admlnstratlve
procedures,
durIng the preparatIon perlod, WIll dIctate
levels of data collectIon and program monItorIng for TORCA.
An evaluatIon WIll be made of eXIstIng data base and ltS
utIlIty for thIS program.
A system of data collectIon and
retrIeval WIll be deSIgned
to meet the needs of the
legIslatIon,
staff
monItorIng
and
publIC
InformatIon
reqUIrements.
5. Tenant/Landlord InformatIon
The needs of constItuent communItIes for informatIon WIll be
ldentlfled.
A publIC InformatIon plan WIll be prepared and
WIll Include TORCA AdmInIstratIve hand-outs, brochures, kIts
and other relevant materlals.
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INFORMATION: June 18, 1984 Santa MonIca, CalIfornia
As a part of the process, the need for a technIcal support
capacIty WIll be evaluated and the desIrabIlIty of assIsting
a limited number of model proJects will be assessed.
6. SUbSld~ program
An analysI s of the need for, and form of, the SUbSIdy as
requIred by the legIslatIon for low/moderate and middle
Income famIlies wIll be made. AlternatIve subsidy mechanIsms
WIll be set forth.
POlICY goals for these alternatIves will
be identIfIed, admInIstratIve frameworks wIll be presented,
and crIterIa for choosIng among the alternatives will be
offered.
An analysIS of the applIcabilIty of differing
financIng mechanIsms wIll be discussed.
ProcessIng and
procedures for subs ldy wIll .ae cons Idered and an evaluatIon
of the potentIal role(s) of non-profit groups, wIthIn the
system, WIll be consIdered.
7. EstImated Pro9ram Costs
An estImated annual budget WIll be prepared to cover the CIty
staff activItIes and work products assocIated wIth the plan
outl ined above.
The costs wIll be those needed to support
the admInistratIon of the TORCA program by the CIty.
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INFORMATION: June 18, 1984
Santa MonIca, CalIfornIa
Work Plan Process
Deputy C~ty Manager Lynne Barrette wIll manage thIS three month
process, wIth the assistance of Rusty Fllnton, ASSIstant to the
Director of C/ED, who wIll prepare the work plan for presentatIon
to the CouncIl in October.
The Manager1s offIce wIll convene a
CI ty staff workl ng group and wi 11 assIgn responSl b ill tIes to
execu te the proposed work plan.
OutSIde contract consultants
WIll be asked to work wIth the group as necessary.
To prOVIde addItIonal expertIse and InformatIon to the working
group the Manager I s of f 1 ce WIll per Iodlcally convene meetl ngs
wIth people from the communIty who are concerned wIth these
Issues.
These meetIngs WIll be open to all those who are
Interested.
TImetable
A tImetable for thIS preparatIon perIod, conclud~ng In October,
IS attached In ExhIbIt IIAlI.
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INFORMATION: June 18, 1984
Santa MonIca, CalIfornIa
ConclUSIon
The addItIonal dollar amounts WhICh wIll be needed to cover
actIvIty
durIng
the
preparatIon
perIod
are
Included
for
conslderaton as part of the FY84-85 Budget. A staff report WIll
be forwarded to CIty CouncIl at the meetIng of June 26, 1984.
Prepared by: Rusty Fllnton, AssIstant to the DIrector
Mark TIgan, DIrector
AdmInistratIon DIvIsIon
Department of CommunIty and EconomIC Development
Attachments: ExhIbIt A
IIX
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