Loading...
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: 1 • 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: 2 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. 3 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). 4 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. . 5 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.