SR 09-13-2011 8C~_
;tYo, City Council Report
Santa Monica
City Council Meeting: September 13, 2011
Agenda Item:
To: Mayor and City Council
From: Marsha Jones Moutrie, City Attorney
Subject: Information and Recommendations Regarding Potential Changes to
Relocation Assistance and Tenant Harassment Ordinances
Recommended Action
Staff recommends that City Council direct the preparation of ordinances for first reading
that would:
1) increase permanent relocation benefits;
2) change the eligibility requirements for the permanent relocation enhancement for
seniors, disabled and families with children;
3) correct certain code section references in the relocation ordinance;
4) extend tenant harassment protections to all tenants covered by just cause
eviction rules.
Executive Summary
Council directed staff to explore the issues raised in the Rent Control Board's
Memorandum to Council dated February 22, 2011 regarding possible changes to the
permanent relocation ordinance and tenant harassment ordinance (Attachment A); and
return with recommendations and suggested potential changes for Council
consideration.
This report discusses the Rent Control Board's recommendations and outlines
proposed changes to the permanent relocation and tenant harassment ordinances. The
report describes the options available to Council in those areas and recommends that
Council direct staff to prepare the ordinances. Staff anticipates returning with the
ordinances promptly.
Background
At its meeting of March 8. 2011, Council directed staff to explore the recommendations
of the Rent Control Board in its memo to Council of February 22, 2011, which were as
follows:
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• Increasing the amounts of permanent relocation benefits across the board;
• Expanding the eligibility of enhanced relocation amounts for seniors, disabled
and families with children by removing the requirement that the tenancy have
been in place since before November 17, 1999;
• Providing relocation benefits for tenants evicted in three-units-or-less properties
that have an owner occupancy exemption from rent control;
• Expanding the tenant harassment ordinance to include all tenants subject to just
cause eviction.
Discussion
Increasing Levels Of Permanent Relocation Benefits
In 2007 Council last considered the possibility of raising the required amounts of
permanent relocation benefits (other than the arinual CPI increases). Council concluded
then that Santa Monica's relocation benefits were on par with the other two rent
controlled jurisdictions of the region, Los Angeles and West Hollywood. After that, those
cities both increased their relocation benefit levels substantially. The increases were
based on rising rents, dwindling vacancies, and a concern that the number of Ellis Act
evictions was rising. .Santa Monica's current maximum relocation amounts are thus
substantially lower than those of the other two cities, as reflected in the Rent Control
staff report. Meanwhile, Santa Monica's market rents are among the highest in the
region. (Attachment B.)
Rent Control staff's methodology in calculating the proposed new relocation levels
appears sound. Staff collapsed the current five tiers of apartment size into three:
studios, one bedroom, and two or more bedrooms. This is logical since two thirds of
local apartments are one bedroom or less, and the vast majority are two bedrooms or
less. In calculating amounts staff utilized the same methodology used by Los Angeles
and West Hollywood, i.e., disparity in rent amounts between controlled and market
levels. The proposed new amounts are as follows:
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Apt
size Proposed regular
relocation assistance Proposed qualified
relocation assistance
0 $7,800 $8,900
1 12,050 13,850
2+ 16,300 18,750
The proposed new permanent relocation amounts would put Santa Monica again on par
with Los Angeles and West Hollywood and provide increased assistance to displaced
tenants in light of increased market rents in the area.
Changing The Criteria For Eligibility For Higher Benefits
Rent Control staff also recommended removing the current requirement that seniors,
disabled, and families with children must have occupied their unit since November 17,
1999 (when vacancy control was still in effect). They reasoned that the proposed new
relocation levels are based in part on market rate maximum allowable rents and not
based exclusively on controlled rents as before.
Staff's potential concern is that, if there is no date cutoff for the enhanced benefits, there
may be a disincentive (at least perceived) to rent to seniors, disabled or families with
children in the future, given the higher relocation benefits. However, it is not clear
whether or to what extent this factor would affect landlords' rental decisions in practice.
One alternative to the Rent Control proposal would be to require occupancy as of the
effective date of the newly amended ordinance to receive enhanced benefits. That
would remove any disincentive for future rentals to affected tenant groups, while
including many more tenants in eligibility.
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Extending Benefits To Tenants In Smaller Exempt Properties
Rent Control Staff also recommends providing relocation benefits to tenants who are
evicted from properties with three units or less that have been exempted from rent
control due to an owner occupancy. Rent Control staff is concerned that the Board
must approve demolition permits on such properties, thus the tenants remaining after an
owner-occupancy are subject to good cause eviction even in the wake of Measure RR.
(The Board retains jurisdiction over these exempted properties since the exemption is
conditional.)
City Attorney staff believes that non-rent controlled tenants are already protected by the
existing relocation ordinance. Municipal Code Section 4.36.020(a)(3) includes evictions
for demolition and other removals from the rental market, as triggering permanent
relocation benefits. This is regardless of rent control status. Likewise, tenants who are
evicted under the Ellis Act are already entitled to relocation benefits regardless of their
rent control status. However, Rent Control staff notes that "remove" as used in Section
4.36.020(a)(3) is a term of art specific to rent control and could be read as limiting
eligibility to rent controlled tenants. One way to assure the intended full coverage (if that
is .what Council decides) would be to change the word "remove" to "withdraw," which
would also conform with the term used in new Charter Section 2304(a)(9).
Amending The Existing Ordinance To Reflect New Code Sections
Although it is not part of the Rent Control Board's recommendations, staff suggests that
Council amend Municipal Code Section 4.36.020(a)(2) to reflect the current and correct
sections of the City Charter for evictions that trigger permanent relocation. Specifically,
Municipal Code Section 4.36.020 should be amended to reference Charter Sections
1806(a)(8) and (g), and 2304(a)(8) and (g).
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Extending Tenant Harassment Protections To AlI Just Cause Tenants
Rent Control Board staff recommends extending the protections of the tenant
harassment ordinance to all tenants with just cause eviction protections. Currently only
uriits under rent control are included.
The original intent of the harassment ordinance was to discourage unlawful acts by
property owners intended to create vacancies and thereby capitalize on vacancy
decontrol. Under this reasoning, market rate tenants in non-controlled units who are
newly brought under just. cause through Charter Article 23, would need no extra
protections since their rent can be raised at will. However, Rent Control staff has
identified several reasons why these tenants should also be covered by the harassment
ordinance.
First, many tenants, though not in controlled units, still are covered by various rent
limits, such as those in Section Eight programs and deed restricted units. Owners might
have an incentive to remove. such tenants for financial or other reasons, but be unable
to do so in light of Measure RR. Thus, added harassment protections would seem a
good idea in this setting.
Second, even market rate tenants who report chronic code violations, for example, are
sometimes subject to harassment and an owner incentive to remove them. Again, with
just cause protections in place, these tenants would be good candidates for the extra
protections of the harassment ordinance.
Third, tenants generally may be subject to harassment for other reasons, and in need of
greater protections, in the wake of just cause. Any tenant who an owrier would like to
get rid of, but legally cannot, is a potential target for harassment.
Staff recommends that Council consider extending the harassment ordinance to all
tenants in units subject to just cause protections. .
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Alternatives
As to relocation levels, Council could consider a lesser increase; or retaining the
existing tiers for number of bedrooms. As to the criteria for higher benefits, Council
could consider changing the eligibility date to the effective date of this ordinance.
Financial Impacts & Budget Actions
No likely financial impacts from ordinance options being considered. The fees in
question are paid directly from property owners to vacating tenants and do not affect the
City's finances.
Prepared by: Adam Radinsky, Head, Consumer Protection Unit
Approved: Forwarded to Council:
~~~ ~ ~~~
Mars a ones utrie Rod Gould
City Atto ney City Manager
Attachments:
A. RentControl Board's Memorandum To Council
B. Rent Control Board's staff report
6
Recommended Expansion of Relocation Assistance and Tenant Harassment Protections
briefly discusses the work of the Ellis Task Force. This year, the report includes brief
anecdotal information about how the displaced tenants have been impacted. The Rent
Control Board thought you would find this report interesting as you consider their
recommendations on the expansion of relocation assistance.
Thank you for your consideration.
Attachments
cc: .Santa Monica Rent Control Board Commissioners
Rod Gould, City Manager
Marsha Moutrie, City Attorney
ATTACHMENT B
SANTA MONICA RENT CONTROL BOARD
STAFF REPORT
TO: Commissioners
FROM: Hakhamanesh Mortezaie, Staff Attorney
RE: Expansion of Reloca#iori Assistance and Tenant Harassment Protections
FOR: Board Meeting of February 10, 2011
Introduction
On July 22, 2010, the Santa Monica City Council placed on the ballot Measure RR.
The Measure incorporated the Board's May 24, 2010 recommendations to the City
Council for an amendment to the Gliarter to expand just cause eviction protections to
all tenants in multi-family properties in the City of Santa Monica, to require written
warnings to tenants to cure conduct before it.results in grounds for eviction and to
expand owner occupancy eviction protections to senior, disabled and terminally ill
tenants. The Santa Monica electorate approved Measure RR in the November 2,
2010 election. The Measure became effective on December 17, 2010.
Tho Board's May 24, 2010 recommendations to the City Council also included a
recommendation to increase and expand relocation assistance beyond that which is
currently provided under the Santa Monica Municipal Code. Since amendment of the
City's relocation provisions did not require an amendment of the Charter, the Council.
did not incorporate these recommendations into Measure RR. With the enactment of
Measure RR, staff respectfully submits this report to suggest recommendations for
the increase and- expansion of the City's relocation assistance provisions and tenant
harassment protections.'
The recommendations contained herein would increase the relocation fees in
evictions far owner occupancy or removal from the market. -They apply to tenants of
rent-controlled units, and tenants who established their tenancy prior to an owner
occupied exemption from rent control. The proposed increases reflect the changes
to the City's rent levels that have occurred since the adoption of the 1990 relocation
amounts, which are the basis of the current relocation fees. Since the passage of
Measure RR, the Board has also received inquiries from tenants.in non-controlled
units about their eligibility for relocation if they are evicted for owner occupancy. The
City Council may also wish to consider the basis and applicability of any relocation
fee to tenants in non-controlled units. Board staff are available to meet with City staff
to discuss any recommendations approved and submitted by the Board to the City
Council for consideration.
Staff Report -February 10, 2011
Expansion of Relocation Assistance and Tenant Harassment Protections
Discussion
1. Increase and Expansion of the City's Relocation Assistance Requirements
Santa Monica Municipal Code chapter 4.36 provides relocation assistance to tenants
in rout-controlled units in specified no-fault evict4oris permitted under the Santa
Monica Rent Control Law (Santa Monica City Charter Article XVIII, "RCL"}. The
current relocation amounts reflect a 1990 fee annually adjusted for inflation. The
1990 amouht was based on the difference between the average Maximum Allowable
Rent (MAR) in arent-controlled unit and the average market rent. The 1990 amount
reflected a Santa Monica with a more affordable rental stock predicated on the
controls on increases in renfeffectuated by the 1979-RCL..
In 1995, the California Legislature adopted the Costa Hawkins Law, which eliminated
the RCL's vacancy control provisions. Costa Hawkins allows landlords to raise rent-
controlled rents to market upon the vacancy of units. As a result, every year has
witnessed a deterioration of the affordability of the City's rental, housing for new
tenants. The Board's 2009 Market Rent Report found that none of the median rents
for units that have received market rate increases are affordable to a family even
making 100% of median income.
Before Costa Hawkins, there were nearly 13,000 units affordable to new tenants with
less than 100% of median income. Today, there are only approximately 2,000 units
affordable to these tenants. The elimination of vacancy control has resulted in 58%
of rent-controlled units being rented at market rates. The significant increase in
market rents has impacted neighborhood stability. Most market rent units have
turned over at least twice in the 11 years since Costa Hawkins eliminated vacancy
control. Tenants evicted from their rent-controlled Santa Monica apartments have a
dramatically diminished chance of affording the rent at a new tenancy in their own
city.
Despite the fact that Santa Monica market rents are among the highest, if not the
highest, in the region, the City's relocation assistance amounts are the lowest among
the region's three principal rent control jurisdictions.
Jurisdiction Minimum
Relocation
Amount Maximum
Relocation
Amount
Los An eles $7,300 $18 300
West Holl wood $5,100 $17,000
Santa Monica $5,650 $11,550
Staff Report -February 10, 2011
Expansion of Relocatjon Assistance and Tenant Harassment Protections
Staff recommends amendment of the City's relocation assistance amounts to reflect
this city's high cost of market rents for new tenancies. The recommended amounts
below allow Santa Monica tenants evicted from their units through no fault of their
own to have an extended period of housing stability in their own city. The amounts
below are based on 30-36 months of rental disparity between the average MAR and
the average market rent plus security deposit, with the higher amount for qualified
tenants.
Disparity
between Proposed Proposed
Pre Average Regular Qualitieds
.Costa MAR and Tenant Tenant % of
Apt Hawkins Market Average Market 30 mos. 36 mos. Security Relocation Relocation Total
Size MARs Rents MARz Rent Disparity Disparity DeposiN Assistance4 Assistance< Unlts~
0 $ 703 $1,141 $ 957 $184 $ 5,520 $ 6,624 $2,282 $ 7,800 $ 8,900 15%
1 799 1,514 1,214 300 9,000 10,800 3,028 12,050 13,850 52%
2+ 1,024 2,000 1,590 410 12,300 14,760 4,000 16,300 18,750 33%
Currently, the City's relocation assistance is based on MARs for vacancy controlled
units and therefore provides higher relocation assistance to tenants who are senior,
disabled or who have a minor child residing with them if their tenancy was
established prior to the elimination of vacancy control in.1999. The proposed
relocation assistance above, however, is based on an average MAR calculated from
the weighted average of vacancy controlled MARs and market rent MARS in the
rental housing stock. -Accordingly, staff recommends higher relocation assistance to
qualified tenants who are defined as households with seniors, persons with
disabilities and minors, regardless of the date on which they commenced their
tenancy..
In its May 24, 2010 meeting, the Board also recommended that relocation assistance
be provided to tenants evicted in a 3-unit-or-less property that has an owner occupied
exemption from the RCL. The enactment of Measure RR provided just cause
eviction,protections to these tenants. Staff, therefore, recommends that the proposed
relocation assistance also be provided to tenants who established their #enancy prior
to an owner occupied exemption from the RCL and who are subject to an eviction for
~ Board 2009 Market Rent Report.
z Weighted average of Pre Costa Hawkiris MARs and Market Rent based on their percentage of
controlled units in the Board 2009 Market Rent Report.
' Consistent with the current relocation ordinance, security deposit is based on two times the market
rent to provide the displaced tenant with first and last month rent at a new tenancy.
° Rounded to the nearest $50 multiple.
s Qualified tenant to be defined as any household which includes a senior citizen, a person with.
disability or a minor child.
Staff Report -February 10, 2011
Expansion of Relocation Assistance and Tenant Harassment Protections
withdrawal of units from the rental market pursuant to Santa Monica City Charter
Article.XXlll Section 2304(a)(9).
2. Tenant Harassment
Santa Monica Municipal Code chapter 4.56 prohibits landlords from malicious
conduct which constitutes tenant harassment. The Code's definition of tenant
harassment includes failure to perform repairs, interruption or termination of housing
services, intimidation, and threat of physical harm and discrimination when done with
malice. The chapter, however, only applies to rental units subject to the RCL.
Measure RR extended the RCL's just cause eviction protections to tenants in non-
rent-controlled multi-family properties. Accordingly, staff recommends amendment of
the definition of rehtal housing unit in section 4.56.010(f) to include both units subject
to the RCL and units subject to Santa Monica City Charter Article'XXIII.
Recommeridation
Staff recommends that the Board direct staff to forward this report to the City Council
and request that they draft ordinances to accomplish the stated objectives.