SR-07-22-2014-4ACity of
City Council Report
Santa Moniese
City Council Meeting: July 22, 2014
Agenda Item: 4--A
To: Mayor and City Council
From: Marsha Jones Moutrie, City Attorney
Subject: Update On Status And Enforcement Of City's Tenant Harassment
Ordinance
Recommended Action
Staff recommends that the City Council review and comment on the current state of the
City's Tenant Harassment Ordinance ("THO"), staff's enforcement procedures for the
law, and proposed future actions by staff to educate the public and increase compliance
described in this report.
Executive Summary
This report is an update for Council on the THO and how the law is administered and
enforced by City staff. The THO has been an effective tool for preventing and
redressing abuses by certain landlords who have sought to force low -rent tenants out in
order to capitalize on vacancy decontrol. Currently, however, the rebounding real estate
market, rising rents, and a steady supply of new owners have created greater incentives
to evict below-market tenants. Staff does not recommend any modifications to the THO
or changes in enforcement practices. Rather, the most important next step will be
educating the public both tenants and property owners — about the requirements of
the law and staff's availability to help administer and enforce it.
Background
Santa Monica's Tenant Harassment Ordinance (S.M.M.C. sections 4.56.010-040) was
adopted in October 1995 in the wake of statewide vacancy decontrol, to protect
residential tenants from abuses by property owners intended to cause tenants to vacate
their units to make room for new, market -rent tenants. The THO prohibits twelve
different kinds of wrongful actions by landlords when performed with malice, i.e., an
intent to annoy or harass the tenant. It contains civil and criminal remedies and can be
enforced by the City, the tenant, or any other person.
1
At its meeting on April 8 2014, Council directed the City Attorney's Office to address
responses to the office's presentation on tenant harassment at the April 10, 2014 Rent
Control Board ("Rent Board") meeting; and to return to Council with recommendations
on how the City might better prevent or prosecute tenant harassment.
At the April Rent Board meeting, concerns were expressed by members of the public
that tenants are being evicted in larger numbers under the Ellis Act and other
sometimes improper forms of eviction; and that tenants facing an unlawful detainer case
feel they have no recourse if that case is baseless and brought in bad faith. Members of
the Board expressed concern that some tenants are fearful to come forward and
register harassment complaints with the City; that staff may not be learning about
certain harassment cases; and that the public needs more education about the THO.
At the Rent Board meeting and other public discussions during the past few months,
two main concerns have been raised that relate to Council's current direction to staff.
First, there is a belief by some individuals that the THO needs to be strengthened to
better protect tenants or that staff's enforcement of the law needs to be improved.
Second, there is a perception that evictions and harassment of tenants are on the rise
and that better protection of tenants' rights is needed.
Discussion
The THO And Its Enforcement
The THO prohibits twelve different acts by property owners, when committed with
malice. The law was intended to help prevent wrongful behavior by unscrupulous
property owners who would try to coerce rent -controlled tenants to vacate so that they
could re -rent the units at market rates. The twelve prohibited acts are:
Interrupt, terminate or fail to provide housing services required by contract or by
State, County or local housing, health or safety laws;
® Fail to perform legally required repairs and maintenance;
2
® Fail to exercise due diligence in completing repairs and maintenance once
undertaken;
® Abuse the landlord's right of access into a rental housing unit;
® Abuse the tenant with words which are offensive and inherently likely to provoke an
immediate violent reaction;
® Influence or attempt to influence a tenant to vacate a rental housing unit through
fraud, intimidation or coercion;
® Threaten the tenant, by word or gesture, with physical harm;
® Violate any law which prohibits discrimination based on specified classifications;
® Take action to terminate any tenancy including service of any notice to quit or other
eviction notice or bring any action to recover possession of a rental housing unit
based upon facts which the landlord has no reasonable cause to believe to be true
or upon a legal theory which is untenable under the facts known to the landlord;
• Interfere with a tenant's right to quiet use and enjoyment of a rental housing unit as
that right is defined by California law;
® Refuse to acknowledge receipt of a tenant's lawful rent payment;
® Interfere with a tenant's right to privacy.
The THO has been amended several times in the past fifteen years to add the last three
categories of violations listed above, in response to specific forms of harassment that
had not previously been covered. Staff is not aware of any tenant harassment
protections currently in other jurisdictions that would be helpful here but are missing
from the THO.
One of the most discussed provisions of the THO is subsection 4.56.020(i), which
prohibits baseless eviction actions. After the California Supreme Court's decision in
Action Apartment Assn. v. City of Santa Monica, the section now requires that, if an
owner brings a legal action to remove the tenant, the tenant must first prevail in that
case before the landlord can be liable for harassment. There has been some
misunderstanding as to staff's ability to enforce this rule. Once a tenant prevails in the
3
eviction case, the City can pursue a possible harassment claim against the owner for
baseless eviction under subsection (i). Additionally, if there are other forms of tenant
harassment that occur while the eviction case is still pending, staff can potentially
address those in the meantime. However, staff can address the wrongful eviction itself
only if and when the tenant prevails in the legal case.
The current inquiry into staff's handling of THO complaints was initially prompted by
complaints from three tenants from three different properties in the City. Each tenant
took issue with the handling of their cases by City Attorney staff. However, all three
cases were given substantial attention and effort by staff including legal action and
lengthy negotiations which led to positive results for tenants in all three cases. Two of
those cases involved large properties where the landlords agreed to settlements that
stopped patterns of harassment and benefitted dozens of tenants.
Nevertheless, in the wake of the Rent Board's inquiry and some public discussion of the
subject, staff revisited its protocols for investigating and responding to allegations of
tenant harassment. Every tenant contact to the City Attorney's Office inquiring about
possible harassment — ranging from casual telephone calls to formal written complaints
— is given serious attention and, when appropriate, a thorough investigation. In cases
involving potential tenant harassment or fair housing, staff attempts to ascertain the
positions of all sides in a dispute. Staff attempts to resolve cases informally when
appropriate; when necessary, staff pursues litigation. Staff also publicizes the results of
most substantial cases in order to help deter other misconduct and to educate the public
about their rights and responsibilities. Tenant complaints that raise problems outside the
THO are addressed by staff or referred to the right agency. Examples of such problems
include tenants facing eviction, eligibility for affordable housing, and code enforcement
issues.
%l
Staff is not aware of a need to alter this investigative system; to the contrary, a
significant amount of time and energy is devoted to fully hearing and addressing these
frequent contacts from tenants.
Perceived Rise In Evictions And Harassment
The second area in which concerns have been raised is the perceived increase in
evictions, including unlawful ones, and a general increase in tenant harassment.
City Attorney staff has received the following numbers of tenant harassment complaints
in the past five fiscal years:
Formal housing complaints received by City Attorney:
Fiscal year
Tenant
harassment
Housing
discrimination
Tenant
relocation
Total
2009 10
28
16
16
60
2010-11
34
14
5
49
2011 12
36
11
4
51
2012-13
68*
33
3
104
2013-14
61
18
9
88
*Includes 32 complaints filed in one property -wide case involving a 60 -unit complex.
The 2012-13 numbers are somewhat misleading since nearly half of the harassment
complaints that year stemmed from one case. However, the numbers for the current
fiscal year reflect a clear increase over previous years. Staff believes there are two
possible reasons for this increase. One is the increased awareness and public
discussion about tenant harassment in recent months. The other is a combination of
economic factors that have resulted in increased incentives to remove below-market
tenants. These factors include a rising real estate market and rising rental values in the
City.
5
For example, the median new (market) rental values for two-bedroom apartments in the
City have gone up nearly 25% in the past three years, according to the Rent Board's
2013 Annual Report:
Year
Median new rent for 2 -
bedroom apt. (approx.)
2010
$2,000
2011
$2,200
2012
$2,265
2013
$2,495
In this economic climate, apartment owners have renewed incentive to remove lower -
rent tenants so that they can charge market rents. In one recent case, staff learned of a
landlord who offered more than two times the legally required relocation payment to
tenants if they would vacate their units. Such offers are legal, but they can violate the
law if they are accompanied by baseless threats or other efforts to intimidate tenants
into leaving.
It is important to note that the current rise in the number of harassment complaints,
does not necessarily equate with more violations of the law. Many tenants have filed
complaints based on their evictions, although there was nothing illegal about the
evictions. In all, of the 45 tenant harassment complaints processed by staff in the past
year, 30 involved complaints about owner conduct that did not implicate the THO. One
such category of complaints is disputes between neighboring tenants. Others include
repair or maintenance issues (without malice, failure to repair does not violate the THO)
and security deposit disputes.
Another factor that has caused problems in recent years is the increase in transfers of
ownership. Many new owners are unfamiliar with the tenant protection laws of the City.
They often require careful attention — and in some cases, direct legal action — to assure
0
their compliance. Two such cases resulted in some of the most sweeping settlements
obtained by the City Attorney under the THO. At a 60 -unit property on Fourth Street,
more than half of the tenants complained that the new owner engaged in a pattern of
harassment designed to encourage tenant to vacate. Legal staff from Rent Control and
the City Attorney's Office met with the tenants to explain their rights under local law.
After a lengthy investigation and negotiations with the owners and their attorney, staff
obtained a settlement under which the new owners rescinded unfair new house rules,
hired a tenant liaison to deal with ongoing construction issues, and instituted strict new
protocols for addressing tenant complaints. Likewise, at a 49 -unit property on Second
Street, the building's Section 8 tenants claimed that the new owner was targeting them
with harassment and providing managers incentives to remove tenants. Staff obtained a
comprehensive settlement and program of reform at the property that remedied all of
the claimed problems.
As to the perceived rise in recent evictions, it is not clear that there has been an
increase. To the contrary, the total number of evictions recorded by Rent Control has
remained fairly constant in recent years, averaging between 59 and 106 each year
since 2009 except for 2011 when there was a drop to 58. Nor has the number of Ellis
Act evictions shown a recent rise. Rather, the number of units withdrawn under Ellis
actually fell from 41 units in 2012, to 29 units in 2013.
However, staff is aware of individual cases where Ellised properties are alleged to be
re -rented (presumably at far higher rates) after controlled -rent tenants have been
evicted. Such cases are unusually difficult to investigate and prove. Staff from multiple
departments are continuing to monitor Ellised properties and are considering ways to
establish violations when they occur.
Concerned over recent evictions, City Council approved funding at the June 24 Council
meeting for an additional Legal Aid attorney position to focus specifically on eviction and
harassment issues in Santa Monica.
Il
Rent Board and City Attorney staff confirm that the vast majority of City landlords follow
the law. One positive indication is the steady number of incoming calls to both
departments from owners and property managers asking for guidance on the law. Still,
when landlords act unlawfully the results are disruptive and sometimes traumatic for the
tenants involved.
Plans For Upcoming Community Outreach
Although the THO and its enforcement mechanisms appear to be robust, staff wants to
assure that as many local residents as possible are aware of the law and the City's
related services. To that end, staff from Rent Board and the City Attorney's Office plan
the following outreach efforts in the near future:
• Sending a fact sheet and summary of the THO written by City Attorney staff
along with this summer's citywide mailing from the Rent Control Board, which will
go to all owners and tenants in controlled units in the City;
• Conducting a citywide forum on tenant harassment and related issues, to be held
this fall in the Pico neighborhood; and
® Meeting with the Police Department's Neighborhood Resource Officers to
explore ways to educate the public on housing rights issues and improve
community awareness of City services in this area.
City Attorney staff also will closely monitor local eviction cases, both for potential
individual violations of law and also for patterns of misconduct that may warrant
legislative action.
Alternatives
Council could consider whether to amend the THO to increase protections for tenants.
For example, some have mentioned eliminating the malice requirement of the law since
that is a common obstacle to proving some potential cases. Staff does not recommend
L
altering the malice requirement since it has proven an important safeguard for law-
abiding property owners who have no intent to force tenants out. It also was a key
component of the law when an appellate court upheld the THO against a constitutional
challenge.
Financial Impacts & Budget Actions
There is no immediate financial impact or budget action necessary as a result of this
update to Council on the current state of the City's Tenant and Harassment Ordinance.
Prepared by: Adam Radinsky, Head, Consumer Protection Unit
roved: Forwarded to Council:
N
Rod Gould
City Manager