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sr-120611-7b10 City o City Council Report Santa Monica' City Council Meeting: December 6, 2011 Agenda Item: -7- B To: Mayor and City Council From: Marsha Jones Moutrie; City Attorney Subject: Ordinance for First Reading Amending Relocation and Tenant Harassment Ordinances and Related Information Requested By Council Recommended Action Staff recommends that City Council introduce for first reading the attached ordinance increasing permanent relocation benefit amounts; expanding the eligibility of households with seniors, children or disabled for increased benefits, and extending tenant harassment protections to all tenants covered by just cause eviction rules. Executive Summary At its meeting of September 13, 2011, Council directed staff to draft an ordinance 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. That ordinance is attached. This report also addresses certain questions posed by Council at the September 13 meeting related to relocation benefits and other matters of landlord- tenant relations. 1 Background City law requires landlords to pay permanent relocation benefits to tenants who are evicted in certain situations including Ellis Act withdrawals and owner- occupancies. Council last increased the amounts of these benefits (other than annual CPI increases) in 2007. Discussion Changes to Relocation and Tenant Harassment Ordinances The attached proposed ordinance would amend the City's rules for permanent relocation assistance for residential tenants in several respects. It would also expand the definition of tenants who are protected under the City's tenant harassment ordinance. And it would correct certain code references. The proposed changes are as follows: 1. Increase amount of permanent relocation benefits The proposed new amounts are as follows: # of Bedrooms Proposed regular relocation assistance Proposed relocation assistance for households with seniors, children or disabled 0 $7,800 $8,900 1 12,050 13,850 2+ 16,300 18,750 2. Change The Eligibility Criteria For Higher Benefits Under existing law, to be eligible for higher relocation benefits due to seniors, 2 children, or disabled tenants, the tenancy must have been in place since November 1999. The proposed ordinance as requested by Council would remove the date requirement and apply the increased benefits to all such households. 3. Amend The Existing Ordinance To Reflect New Code Sections The proposed ordinance corrects several inaccurate code section references in 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 is amended to reference Charter Sections 1806(a)(8) and (9), and 2304(a)(8) and (9). The proposed ordinance also changes the term "remove" to "withdraw" in Municipal Code Section 4.36.020(a)(3) to clarify that, in the wake of Measure RR, all tenants whose units are withdrawn from rental use are eligible for benefits regardless of rent control status. 4. Extend Tenant Harassment Protections To All Just Cause Tenants Under existing law, only units under rent control are included. The proposed ordinance extends the protections of the tenant harassment ordinance to all tenants with just cause eviction protections, a group recently made larger by the passage of Measure RR. Additional questions posed by Council 1. Domestic partners. Council inquired whether the protections of domestic 3 partnership might be extended to non -rent controlled tenants in the wake of Measure RR. That change is unnecessary because Municipal Code Chapter 4.60 already covers all tenants regardless of rent control status 2. Interruption of housing services. Council inquired about extending the protections of Municipal Code Section 4.32.100(a) (regarding disruptions of housing services) to non -rent controlled tenants. That section already prohibits housing service disruptions with respect to all tenants regardless of rent control status. So, the change is unnecessary. 3. Relocation procedure. Council inquired as to the procedures that follow a permanent relocation, with a concern of property owners re- renting units at market rates after paying the required benefits to the outgoing tenant. The two most common such scenarios are when the owner withdraws the property from the rental market under the Ellis Act and owner occupancies. A third scenario is when the owner otherwise withdraws a unit from residential rental use, as allowed by the Ellis Act. As to Ellis evictions, state law mandates the procedures and limits the potential penalties against owners who re -rent vacated units within various times following the eviction. The Rent Control Board already has adopted regulations consistent with the state law requirements and staff does not believe that additional tenant protections could be adopted. 4. Disclosures regarding condominium status. Council inquired whether the City could require additional disclosure to incoming tenants as to a unit's potential status as a condominium, due to a concern that tenants may be charged by the property owner for condominium assessments the following year. Staff is not aware of any legal requirement that tenant pay such fees; and if an owner seeks to charge them, the requirement should be addressed in the written lease. Nor is staff aware of such assessments on tenants taking place. If this problem exists, the City could use its police power to address it, but it would be advisable to do so only upon a record. 5. Temporary relocation per diem amounts. Council inquired whether the current per diem amounts required for temporary relocation expenses are adequate in light of current expenses for temporary housing and related costs. These per diem amounts are adjusted annually for inflation by the percentage change in the Consumer Price Index as required by Municipal Code section 4.36.100(d). Council can also periodically establish new rates pursuant to section 4.36.100(d). The rates were last set (apart from CPI increases) in 2007. Staff is not aware of any current shortcomings in these amounts in light of the CPI adjustments, and believes that most of the costs have remained relatively flat over the past four years. Alternatives As to the criteria for higher relocation benefits, Council could consider restricting them to tenancies in place as of the effective date of this ordinance. However, at its September 13, 2011 meeting Council voted to expand eligibility to all protected classes of tenants regardless of move -in date. R Financial Impacts & Budget Actions There are no likely financial impacts from the ordinance options being considered. The fees in question are paid directly from property owners to vacating tenants. Prepared by: Adam Radinsky, Head, Consumer Protection Unit Approved: Mar a Jone's outrie City orny Attachments: Proposed Ordinance 0 Forwarded to Council: Rod Gould City Manager City Council Meeting: December 6, 2011 Santa Monica, California ORDINANCE NUMBER (CCS) (City Council Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA AMENDING CHAPTERS 4.36 AND 4.56 OF THE SANTA MONICA MUNICIPAL CODE TO INCREASE PERMANENT RELOCATION BENEFITS; CHANGE ELIGIBILITY REQUIREMENTS FOR RELOCATION ENHANCEMENTS; EXTEND TENANT HARASSMENT PROTECTIONS TO ALL TENANTS COVERED BY JUST CAUSE EVICTION RULES; AND CORRECT CERTAIN CODE SECTION REFERENCES WHEREAS, Santa Monica has not increased its permanent relocation benefit amounts (other than for cost of living increases) since 2007, during which time rent levels in the City have increased and vacancies have decreased; and WHEREAS, Council wishes to extend additional permanent relocation benefits to households with seniors, disabled, and children tenants regardless of their date of occupancy because these households are particularly vulnerable; and WHEREAS, certain code section references in the permanent relocation ordinance are outdated and inaccurate; and WHEREAS, Measure RR has extended just cause eviction protections to most residential tenants in the City regardless of rent control status; and 1 WHEREAS, certain non -rent controlled tenants are therefore newly subject to potential unlawful harassment for the purpose of forcing them to vacate their units; and WHEREAS, Council wishes to extend tenant harassment protections to all tenants in the City who have just cause eviction protections, regardless of their rent control status. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY ORDAIN AS FOLLOWS: Municipal Code Section 4.36.020 is amended to read as follows: 4.36.020 When relocation fee required. (a) A relocation fee shall be paid in accordance with the provisions of this Chapter by any landlord who terminates or causes the termination of a tenancy for any of the following reasons: (1) The landlord seeks to withdraw all rental housing units from the rental housing market as provided in Government Code Sections 7060 et seq. (2) The landlord seeks to recover possession of a rental housing unit pursuant to Section s 1806(a)(8), 1806(a)(9), 2304(a)(8), or 2304(a)(9) of the City Charter. (3) The landlord seeks to recover possession to demolish or otherwise Yemoove withdraw a rental housing unit from residential rental housing use, including units that were illegally converted to residential use, after having obtained all proper permits from the City, if any such permits are required. (b) A relocation fee shall be paid in accordance with the provisions of this Chapter to a displaced tenant who serves a landlord with a notice to terminate tenancy FA after having received written notice from either the landlord or the Santa Monica Rent Control Board that the landlord has filed a Notice of Intent to Withdraw Residential Rental Units pursuant to Government Code Section 7060.4 and Santa Monica Rent Control Board Regulation 16002(a) or an Application for Removal Permit pursuant to Santa Monica Charter Section 1803(t). (c) The fee required by this Chapter shall be due and payable to a displaced tenant whether or not the landlord actually utilizes the rental housing unit for the purposes stated in the notice of eviction. Municipal Code Section 4.36.040 is amended to read as follows: 4.36.040 Amount of relocation fee. The amount of the permanent relocation fee payable pursuant to the provisions of this Chapter shall be established in accordance with the following formula: 1998 2011 relocation fee adjusted for inflation by the percentage change in the rent of primary residence component of the CPI -W Index for the Los Angeles /Riverside /Orange County area, as published by the United States Department of Labor, Bureau of Labor Statistics, between Marsh 1990 November 2011 and the July 1st preceding the date of vacancy rounded to the nearest fifty dollars. This amount shall be updated annually commencing on July 1, 2DO7 2012 and on July 1 st of each year thereafter. (a) The 4998 2011 relocation fee established pursuant to Ordinance 1615CGS follows: and determined' according to the size of the retail housing unit, was as 3 Apartment size 2011 relocation amount 2011 augmented amount Sin le or studio 7 800 8 900 One bedroom 12 050 111850 Two or more bedrooms $16,300 $18,750 (b) If a tenant is evicted from more than one rental housing unit on a property, the tenant shall not be entitled to receive separate relocation fees for each rental housing unit. The tenant shall receive a single relocation fee based on the combined total number of bedrooms in the rental housing units from which the tenant is being evicted. If one of the rental housing units is a bachelor or single unit, it shall be counted as a one bedroom unit for purposes of determining the amount of the relocation fee (e.g., a tenant who is evicted from a bachelor rental housing unit and a one bedroom rental housing unit would receive relocation benefits for a two bedroom unit). (c) If the rental housing unit from which the tenant is being evicted is furnished, two hundred fifty dollars shall be deducted from the amount set forth in subsection (a) of this Section. For purposes of this subsection, a rental housing unit shall be considered to be furnished if the landlord has provided substantial furnishings in each occupied room of the rental housing unit. (d) If one or more of the displaced tenants is a senior citizen or disabled person, or is a tenant with whom a minor child resides, and the displaced tenaRt(6) ^^^ ,pied *"° ... 0 shall be added te the amount an augmented amount shall be paid as set forth in subsection (a) of this Section. The amount added pursuant to this subsection shall be adjusted annually pursuant to the formula specified above commencing on July 1, 2012, and each July 1st thereafter. (e) Any tenant still in possession of a rental unit after the relocation amounts have been updated pursuant to this Section, shall be entitled to the updated relocation amounts even if the landlord commenced the termination of the tenancy prior to the update. In the event that a landlord has already complied with the provisions of Section 4.36.060 based on the relocation amounts previously in effect, but has not yet received a written request from a tenant for distribution of the fee pursuant to Section 4.36.070, the landlord shall place in escrow the additional amount of relocation fee required by this Section within five working days of the effective date of the updated amount. Municipal Code Section 4.56.010 is amended to read as follows: 4.56.010 Definitions. (a) Fraud. Intentional misrepresentation, deceit or concealment of a material fact. (b) Housing Service. Housing services include, but are not limited to, hot and cold water, heat, electricity, gas, refrigeration, elevator service, window shades and screens, storage, kitchen, bath and laundry facilities and privileges, janitor services, refuse removal, furnishings, telephone, parking, effective waterproofing and weather protection, painting, and any other benefit, privilege or facility that has been provided by the landlord to the tenant with use or occupancy of any rental housing unit. Services to a rental housing unit shall include a proportionate part of services provided to common facilities of the building in which the rental housing unit is contained. (c) Landlord. An owner, lessor, sublessor, or any other person entitled to receive rent for the use and occupancy of any rental housing unit, or an agent, representative or successor of any of the foregoing. (d) Malice. An intent to vex, annoy, harass or injure another person. (e) Rental Housing Agreement. An agreement, oral or written or implied, between a landlord and tenant for use or occupancy of a rental housing unit and for housing services. (f) Rental Housing Unit. A housing unit in the City that constitutes either a controlled rental unit pursuant to City Charter Section 1800 et seq. jincluding a room in a single - family home, hotel or motel, rooming house or apartment, single - family home, mobile home or mobile home space, trailer or trailer space); or a rental unit pursuant to City Charter Section 2300 et seq. (g) Tenant. A tenant, subtenant, lessee, sublessee or any other person entitled under the terms of a rental housing agreement to the use or occupancy of any rental housing unit. SECTION 1. Any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. SECTION 2. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any 9 court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 3. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within 15 days after its adoption. This Ordinance shall become effective 30 days from its adoption. _••:• _.gip • • :u la / LM MA SHA NES MO `TRIE City ttor 7