SR-407-000-04 (3)
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CjED:PC:WR:dv
Council Meeting April 26, 1988
APR 2 6 lq88
Santa Monica, California
TO: Mayor and City council
FROM: City Staff
SUBJECT: Annual Report on Compliance with California Revenue
And Taxation Code Section 17274 Regarding Rental
Housing Code Enforcement for Calendar Year 1987
INTRODUCTION
The purpose of this report is to present the Building and Safety
Division's rental housing code enforcement activities as required
by California Revenue and Taxation Code section 17274 and
recommend that city Council accept and file this required report.
BACKGROUND
Section 17274 of the California Revenue and Tax Code (attachment
A) outlines a procedure under which regulatory agencies report to
the Franchise Tax Board the names and addresses of (City of Santa
Monica) owners of substandard rental housing who fail to make
necessary repairs to bring the property into compliance with
health, safety and building codes within a specified period of
time. The Franchise Tax Board is required to deny income tax
deductions to owners of these properties until the regulatory
agency determines that the substandard housing has been brought
to a condition of compliance. The statute also requires that a
report be filed by each regulatory agency with its local
legislature by July 1 of each year, advising of the status of
enforcement activities initiated under this program during the
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b-~
APR 2 b 1988
.
.
prior calendar year. This is the fifth annual report filed
regarding Santa Monica's housing code enforcement activities.
ANALYSIS
The Building and Safety Division staff has reviewed the City's
records of rental housing code complaints and enforcement
activities during 1987. A summary of Santa Monica's rental
housing enforcement activities is presented (attached Table 1)
for the period 1979-1987. A total of 1,112 complaints or
referrals regarding housing code violations were received and
processed by the City staff during this nine year period.
Subsequent inspections resulted in a total of 50 properties being
cited as having substandard units. All but 3 of the citations
issued through calendar year 1987 have been resolved without the
need to invoke the provisions of section 17274. These 3 cases
are in the City Attorney's Office for processing. Table 2
attached presents information for 1987 compliance activities in a
specific format required by statute.
BUDGET/FINANCIAL IMPACT
There is no financial impact related to the filing of this
report.
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RECOMMENDATION
It is the staff's recommendation that the City Council receive
and file this report as the calendar year 1987 report required by
Revenue and Taxation Code section 17274 for Santa Monica.
Prepared by: Peggy Curran, Director
W.D. Rome, Building Officer
Department of Community & Economic Development
Attachments: A) California Revenue & Taxation Code section 17274
Table 1- Summary of Rental Housing Code
Enforcement Activities, 1979-1987
Table 2- Santa Monica 1987 Information Pursuant
Revenue & Taxation Code Section 17274
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"t.tl~" .~pea.1~ b1 SlaU.1985! .f:.,159t p.
.;~.~ ~'alIded b1'Sta.ts.19U. t:. cu, po .
,~ (~ 10 dayQN Rnices.and homeovmer'.a uemp-
, '1,.1>- ......r..t-I..r... ded.....~I~ ror ~...I...... IUa of home.
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'1"i'2'lL . 'Suhatuc!ard hOWlIng; . Interest, laxes, depredation or amortIzation paId or incurred in
-~i!:,',\" " . .t......bl. "ear wJth relpect to renlaJ Lncorne nond e-ducUbnlly
, :,,"".i{~-if~tWith.sb.ndin~ any other provisions in this part to the contrary, In the caJ e of a t.aXfJllyer who
. aerives rental mC<:lme from substandard housmg located in tJUs BUlte, no deduction shall be allowed
for 1DteJ'est, taxea. depreciation, or amor1.i1.abon paid or lIlcurred In the taxable year WI:.!1 respC<:t La
. thllUbatandard housing, exeept as pl"OVlded 1Il 3ubdlV1.SIOD (e)
(6) '''SUbstandard hOUlin~' mt!lJl.!,!!! bouaiDg which (1) hu be<ln determined by a state or tocal
government regulatory agency to violate ~t.nle law or local codes deahng with healdl, safety, or
buDding; and (2) after vrntten notice cf vlClat.Jon by the regulaLary agency, speclfymg the apphcabill
tyotthis lection, haa not been brought to a condi~lOn or compl:.ance with:n sue months after the date
of the ll.otiee or the time prescribed 1Il the li:)tlCC, wl\lchcycr pcnod 1.8 later, or on WhJL~l good !~lllh
e!torta tor compliance have not been corn-nenccJ :1<; Getermlned by the regulatory u~ency The
reEU1&tory agency may, for good enusc 8hnwn, cxtcf1d the- compliance cate pre9cnbcd III a violatlon
uotice.
. (c:) When the period specified iD subdl\"~JOn (b) has expired wIthout compliance, the regulatory
agency .hall maillD the taxpayer a oouce of noncomplIance The notice of noncompliance shall be In
.. lauch fom and shan include such infonnatJO"l 1U! fT',ay be prcscnbed by the F'r-anchlSe Tax Board, shall
be maned by certified mail to the taxpayer II t the Lax payer's last known address, and shall adVise the
taxpayer (1) of an intent to notify ilie Frnnchlse Tax Board of the DOncomphance wlLhm 10 days
unJea. an appeal is filed, (2) where an appeal mny be flied, and (3) or a general description oC the tax
.consequences or the filmg with the Frunchu.e Tax Board Appeals shall be made to t~e same body
and m the lame manner as appeals from other nctlOns of the regulatory agency If no appeal IS
mad. within 10 day. or after dinposltlon of the nppeal If the rcg\.lIatDry agency IS sustained, the
flgu1atory ageney shall noWy the FranchIse T!I.X Board or the noncompliance, No deductIOn shall be
allowed for the items provided in subdiVISion (a) from the date of the notice of noncompliance until
the -date the regulatory agency detennmes that t.he substandard hOUSing has been bruught to a
~DdiUon ot compliance. The n!g1J!al.')ry agency shall mail La the FranchISe Tax Board and the
taxpayer a notiee of compliance, which notl::e shal! be II: s~ch forf'l and I~clude such l~.rormatlon as
may be prescribed by the Franchise Tax llonrd In the event tile period of noncompli.L"ce does not
cover an entire taxable year, the deductJol's shall De de'llcd u~ tJJC rate of one-twelfth 'or each full
. month during the period of noncompliance
,. ~ the propertyu owned.by morc than one owner or If rccon!ed Litle is In the name of :1 fIctitIOUS
'Ownet,.tbe notice requirements provided In subdlv:Slon (b) and U',:s subd]\'lsLOn shall be satIsfied (or
. each owner H the notices are mailed to one owner or to the fictJtJous name owner at tile address
appurini OD the latest available property tax bill However, nouces made pursu.lnt to thIS
lubdiviaion shall not relieve the n!gulawry agency from furnlshwg taxpayer IdeDtlf]ca~jl)n Inform a
liOD required to implement Uus section to the FranchISe Tax Board
Cd) For the purposes of this section, a notice oC DODCOmpllaoce shall not be mJ.'led by the
regulatory agency to the Franchise Tax Board if any of the fo]]oWlnK occur;
(1) The nntal hOUSing was rendered substandard solely by N!ason of ea.rtl1quake, floodJ or other
Datural disuter exeept where the condition remainS for more thnn three years afler the disaster
. . .
:
(2)~'1b. owner of the rental housing has secured financing to bnng the housing into compliance
wltb tho.e !aWl or oodes which have been violated, cauatng the housing to be ciasstfled as
aublta.lul&ld. and has commenced replllr& or olhcr work oecessnry to bnng the hOUSing l.Ilt.o
compUanee:
. c!~t Owner o! rental bowing ~hich is not within the meanmg of hOUSing accomf'lodation as
: y lubd.lvulon Cd) ot Section 35805 of the HealLi and Safety Code has att.cmpr..ed to
.J:; Jo~': rU1an~thtoh brin~ !h! hOUSing Into comphance With those lAws or codes wh,ch have
' . I . ' eausulg --!. OUSU1a to be c'lassllied as substandard. and
.~(~.... ,.0. indIcate dol~Uon. by amondment
' . 83
S 17274
. ~ 7, lmet eft. July 8, 19S5
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,~ !,-t7214 REVENUE AND TAXATION
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(B) The financing fa denied solely because the hl)\I'1ll'~' L" lncnted In n neighborhood or gcognph'cal
area In which f"manciaJ institutions do not pl'Ovld(, fmanCI'l1{ for rchnbll:t....tJOn of any such hou<,lng
(e) ThIs IeCtiOD does DOt. apply to deductJons from lnCOPle denved from property rendered
substandard &olely by reason of a change in applicable Bbte or local hOUSing standards unless the
violations cauae lubBtantial danger to the occupants of the property. as dctenmned by the regula tory
. ,.: ,. agacy wbleb baa lerved notice of violation pursuant to BubdlV18lOn (b)
(l) The owner of rental housing found to be lD noncompliance shall, upon total or partlal d1vestltu.re
of Interest In the property, immediately notify the regulatory agency of the name and address of the
~OD 01' persona to whom the property has been Bold or other.vUH~ transferred and the date of the
&ali' or tranafereDee.
.(g) 111 July! of each year, the regulatory agency lIhall report to the appropriate legilllative body of
ita jurildictioD' all of the following inforrnabnn, for th~ lm~cedmg calendar year, ~gardm~ lts
activitSet to aecure eode enforcement, which shall ~ pubbc lIlfonnatJon
.: (1) Ttlellumber of written notices of vlolatJoD Ul.Sued for 6ubst.'1ndard d\l.'ellingo under BuboJV1.!.oIon
{b)... ' '
(2) ~ Ilamber. of violations complied willi Vflt.~Jn the pcnoo prescnbed 111 SUbdlV\.'!lon (b)
. .(3) The number of DOtiees of noncompliance wue<:! pun;ua.nt to Bubdlv15lon (c)
(4) Thellumber of appealJ from those notices pursuant to 8ubdlV1Sion (c)
..)....... ..
~ f~~~~,; ;~ ~ The IllIiDber of auecessfuJ appeals by owners
::. (6) 'I'h~ Dumber of notices of noncompliance maIled to the Frnnchl'lc Tax Board pursuant to
. :. IUbdJviI!oD (c:). '. , ,
. ('l) The Dumber.of eases in which a notice of noncompliance was not sent pursuant to · . ·
-bdiviaioD (d). .
. (B) '!'be DuDmer of extensions for compliance granted pursuant to BubdJvision (b) and the mean
'; ':- " ~~~~~.:.! the extensions.
(9) ~ mea.!'erage length of time from the issuance of B notice of violation to the mailing of a
~ otDODCOmpliaDCI to the Franehiae Tax Board where the notIce 18 actually sent to the FranchLSe
Tax Board. ..
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" ~<..,>' ~'(10) ~~~ of eases where compliance is achieved after a notice of noncompliance has been
, mailed ~ UUJ Ft&nchise Tax Board.
'. ,'''QI) ~'~~ of Instances of disallowance of tU deductions by the Franchise Tax Board
ruultmK. from referrall made by the regulatory agency This Lll!onnation may be riled In a
. .~pple~taI ~rt i;s ,u~lfyeara u it becomes available.
, , (Addecl1)7 Statl-1983, Co 488, p. , f 29, imd. eft. July 28, 1983, Amended by Stats 1983, C 1] 02,
P. -, I 21.5, UJ'geney, eff. Sept. ZT, 1983; Stat!, 1985, c 106, p. , ~ 128.)
"-' '. ,". ,.lIUcfMftd7M7lt a.ppliccbls in computation oftcIesfor taxable yea,.. begHtntng on or
. .. ~ ttftIrJ4fL '1,-1983,'ff note under I 1 '!0!4. 5
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- ISII3 J-n.l-....t. Substituted as the end or subd (a)
.....bdiYis1oa (1)" tor "aubdivislon (c)". and made non,ub-
llantive chaaac:a Ihrou&houc the IeCtlOIl
UU A.--"-tDt. Made DOQJ~batantJ"e ch.anle, lo
maatala u.. cocS&
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D-n1ulloa Former J 17299 added by So.u 197<4. c 238,
r 44l ~ I, amended by SUlS 1978, C 1286, P <4196, ~ 1,
~\.I" I q''} c 29~ p IOao ~ 20. Stau 1980, C 426, P ~6Q.
I 4
;' ~~2'15. A.baulonrne~t tea; tax recoupment fe-ea: nondeductibility
" ID eQmpu~ taxable mcome, .no deduction BhAII be nllou'ed for any of the !oIlowmg
, (~). Abudoament leu paId under Section 51061 or 5IOn of the Government Code
'CA:::J'i: l'ICOupmeat tHl paid under Section 5] 142 of the Go\'crnment Code,
.' ' . . '7 S~ta.19B3. eo <488. p.. . f 29, imd. err. July 28, 198.3.)
" '1~~21~J '~.c:-.: f 17299.1,' AM-t by Sl&!.I197., c
4 ro -. .. llllleftdad II)' 5ta...197". c. 2~', P 606, f 5, SlaU 1976 c 176, P JH, f 12 2 So.u 1971 IS)
n 1575, f 19 '. c . p
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