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HomeMy WebLinkAboutCM Rental Discrimination____________________________________________________________________________________ FOR CITY CLERK ONLY Council Meeting: 10/01/2018 Disposition: Accepted report and provided direction to staff Agenda Item No: 7.a Meeting Date: October 1, 2018 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: City Manager’s Office Prepared by: Andrew Hening, Director of Homeless Planning & Outreach City Manager Approval: ______________ TOPIC: RENTAL DISCRIMINATION SUBJECT: PROVIDE FEEDBACK ON A DRAFT ORDINANCE ADDRESSING RENTAL HOUSING SOURCE OF INCOME DISCRIMINATION RECOMMENDATION: Accept Information Report and Provide Direction to Staff. BACKGROUND: In November of 2016, the Marin County Board of Supervisors adopted a Source of Income Fair Housing Ordinance intended to eliminate limitations in the provision of rental housing merely because a family, Veteran, or other renter receives third party rental assistance, such as a Housing Choice Voucher (Section 8), a Veterans Affairs Supportive Housing (VASH) Voucher, a Housing for People with AIDS Voucher, or the Shelter Plus Care Voucher. The County has asked that individual cities consider the adoption of a similar ordinance to create consistent rental opportunities throughout Marin, regardless of a renter’s source of income. ANALYSIS: When someone pays rent for a room, apartment, or house, there are a variety of ways in which they might source the revenue for that expense. They could use income from a job, a pension, disability or social security payments, money from a friend or parent, child support payments, or alimony payments. They may also receive rental assistance from the government or some other third party resource. In 1968 Congress passed the Fair Housing Act, which was intended to protect buyers and renters from seller or landlord discrimination. Its primary prohibition makes it unlawful to refuse to sell to, rent to, or negotiate with any person because of that person's inclusion in a protected class. In 1974, Congress passed the Community Development Act, which created the Housing Choice Voucher (Section 8). Housing vouchers are not free housing. Voucher recipients are required to pay 30% of their income towards their housing expenses, and the voucher covers the rest. The goal of the voucher program was two-fold. First, it was an opportunity to move away from the public housing model, wherein the government built and managed housing units. Chronically underfunded, these facilities often fell into disrepair and resulted in concentrations of poverty and crime. Second, the Fair Housing Act was passed in response to extensive and pervasive discrimination in the SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2 housing market. Redlining, for example, was a government-endorsed policy that allowed financial lenders to deny home loans and insurance to people because they lived in “financially risk y areas.” The Federal Housing Administration (FHA) set the industry standards for what type of mortgages the federal government would insure. Without ever showing proof, the FHA claimed that integrated neighborhoods would reduce home values, which would in turn increase mortgage. As a result, the FHA deemed neighborhoods with racially restrictive convenants as safer investments, effectively blocking people of color from moving to more affluent communities, even if they had the resources to do so (Source: Color of Law). Housing vouchers were seen as a way to affirmatively further fair housing because rental assistance would give people the opportunity to move out of public housing and/or neighborhoods that had been subject to redlining. This vision for using vouchers to reverse the impacts of past housing discrimination only works if people with vouchers actually have a meaningful choice in a community’s overall rental market. 50 years after the passage of the Fair Housing Act, housing discrimination persists in our community. To substantiate the need for source of income protections, the Marin Housing Authority reported to the Marin County Board of Supervisors that between January 1, 2014 and August 31, 2016 a total of 2,194 Housing Choice rental subsidy vouchers were issued to low-income Marin households. Nearly half were unable to find landlords in the county willing to accept their vouchers and, as a result, lo st their vouchers. Rental listings advertising “no Section 8” were found to be common in Marin. As of September 2018, this practice still persists in San Rafael. Current state law prohibits housing discrimination based on a person’s source of income (California Government Code Section 12921), but case law has established that California’s source of income discrimination law does not protect individuals or families with third party rental subsidies because rental payments do not qualify as a source of income when they are paid directly to the landlord (i.e. the third party provider pays the landlord directly, rather than the payment going to the tenant and then the tenant paying the landlord). State law, however, does not preempt municipalities from adopting a distinct Fair Housing Ordinance that recognizes third-party housing subsidies or vouchers as a source of income. The County of Marin, the Town of Fairfax, and the City of Novato have all passed source of income ordinances to protect renters from potential discrimination. The proposed ordinance, modeled after these other communities, would prohibit the following activities related to source of income: A. To interrupt, terminate, or refuse to initiate any transaction in real property because of a tenant’s source of income. B. To include in the terms or conditions of a transaction in real property any discriminating clause, condition or restriction due to the tenant’s source of income. C. To refuse or restrict facilities, services, repairs or improvements because of the tenant’s source of income. D. To make, print, publish, advertise, or disseminate any notice, statement or advertisement with respect to a transaction in real property that indicates preference, limitation or discrimination based on source of income. Importantly, the proposed ordinance would not prevent or hinder property owners and landlords from screening renters and retaining freedom of choice based on other factors such as total income, credit scores, rental history, references, etc. However, the source of income ordinance also establishes that an income requirement can only be applied to the tenant’s portion of the rent if they receive a third party SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 3 subsidy. For programs like Section 8, the federal government establishes market-rate payment standards for vouchers (see Exhibit 1 for the Marin Housing Authority’s current payment standards). The voucher holder contributes 30% of their income, and the voucher covers the rest up to the payment standard. Exhibit 1 – Marin Housing Authority’s Current Payment Standards Enforcement of the ordinance would occur thorough civil injunctive action. If a tenant believes the ordinance has been violated, they may seek redress through the courts. In addition, local civil rights advocacy agencies such as Legal Aide of Marin and Fair Housing Advocates of Northern California have committed to monitor and contact housing providers that are inconsistent with the ordinance based on complaints received. PUBLIC OUTREACH: A courtesy notice (included as Attachment 2) was sent to the following organizations: Marin County Community Development Agency, the Marin County Housing Authority, the League of Women Voters, EDEN Housing, Marin Environmental Housing Collaborative, Sustainable Marin, Sustainable San Rafael, Fair Housing of Marin, Marin Builders Association, Public Advocates, Inc., Legal Aid of Marin, Marin Association of Realtors, Community Action Marin, Canal Alliance, the San Rafael Chamber of Commerce, the Downtown San Rafael Business Improvement District, Marin Continuum of Housing, the Housing Crisis Action Group, Aging Action Initiative, the Homeless Policy Steering Committee, Ritter Center, St. Vincent’s, Homeward Bound, Buckelew Programs, the Marin Center for Independent Living, the Marin Organizing Committee, and the Federation of San Rafael Neighborhoods. FISCAL IMPACT: There is no fiscal impact associated with this report. OPTIONS: Staff is requesting feedback on the proposed source of income ordinance. In addition to the overall direction of this regulation, staff is seeking feedback on the following two policy questions: 1. 10.98.010 – Purpose. Do we want to explicitly say we are prohibiting all discrimination based on any source of income in general (e.g. child support, disability payments), or do we want to SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 4 more narrowly say we are prohibiting “discrimination on the basis of tenants’ participation in third party rental assistance programs”? 2. 10.98.050 – Exceptions. Do we want this ordinance to apply to all rental housing in San Rafael, or do we want to create an exception for certain types of units, for example, an owner-occupied single family residence that rents out a room? The current draft ordinance exempts “any housing unit in which the owner or any member of his/her family occupies one of the living units and it is necessary for the owner to use either a bathroom or kitchen facility common with the prospective tenant(s).” It does not, however, exempt units on the property that have their own entrance and facilities, even if the overall property is owner-occupied (e.g. a junior second unit, an accessory dwelling unit). The County of Marin originally passed their source of income ordinance with the owner-occupied exception; however, within six months they amended the ordinance to remove the exception. They cited the following two reasons. First, “the elimination of this exception is intended to simplify the process for understanding and determining Ordinance applicability.” Additionally, “in Marin, accessory dwelling units, junior accessory dwelling units, and room rentals are the principal form of new housing stock that is likely to be affordable to low- and moderate-income households.” In other words, insofar as these types of units are meant to address the broader affordable housing crisis, exempting them from the ordinance could undermine this long-term goal. RECOMMENDED ACTION: Provide comments and feedback to staff. ATTACHMENTS: 1. Draft Source of Income Ordinance. 2. Courtesy Notice ORDINANCE NO. XXXXX AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL AMENDING THE SAN RAFAEL MUNICIPAL CODE BY ADDING NEW CHAPTER 10.98 RENTAL HOUSING SOURCE OF INCOME DISCRIMINATION THE CITY COUNCIL OF SAN RAFAEL DOES ORDAIN AS FOLLOWS DIVISION 1. FINDINGS. WHEREAS, It is unlawful under federal and state statutes to restrict housing choice on the basis of race, color, disability, religion, sex, familial status, national origin, sexual orientation, marital status, ancestry, age, and source of income; and WHEREAS, the City of San Rafael is committed to providing and preserving fair and affordable housing for all income levels; and WHEREAS, the City of San Rafael wants to increase the availability of housing to all income levels and eliminate any limitations in the provision of housing, including discrimination based on a person’s source of income; and WHEREAS, the Marin Housing Authority, which administers the Housing Voucher Programs including the Housing Choice Voucher Program, also known as “Section 8,” and the Veterans Affairs Supportive Housing Voucher Program reports a shortage of landlords participating in the program; and WHEREAS, this shortage may reflect discrimination against tenants with Housing vouchers; and WHEREAS, discrimination against housing voucher holders significantly reduces the stock of rental housing that is available to them; and WHEREAS, California Government Code §12921 prohibits housing discrimination based on source of income as defined by §12955(p)(1), which does not protect Housing Choice voucher holders as established by case law (SABI v. Sterling, 183 Cal.App.4th 916 (2010)); and WHEREAS, California and federal law further requires the County to identify impediments to providing affordable housing and to develop strategies for removing those impediments; and WHEREAS, the City from time to time receives funding from the County to support its affordable housing initiatives; and WHEREAS, in order to fulfill its commitment to fair housing, to increase affordable housing opportunities, and to fulfill its legal obligations it is necessary to prohibit housing discrimination based on source of income. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN RAFAEL DOES HEREBY ORDAIN AS FOLLOWS: DIVISION 2. MUNICIPAL CODE AMENDMENT Chapter 10.98 - RENTAL HOUSING SOURCE OF INCOME DISCRIMINATION 10.98.010 - Purpose. It is the purpose and intent of the City of San Rafael in enacting this section that source of income-based discrimination does not occur in rental housing. This section does not intend to restrict or limit operational aspects of rental housing management, such as establishment of tenant rules, security requirements or other landlord/tenant conditions not related to sources of income or financial discrimination. 10.98.020 - Definitions. For purposes of this section, the following definitions shall apply: a. “Source of income” as used in this chapter means all lawful sources of income and/or all payments from a rental assistance program, homeless assistance program, security deposit assistance program or housing subsidy program, provided such funds are not paid directly to the tenant. b. “Person” means any individual, firm, corporation, or other organization or group of persons however organized. 10.98.030 - Prohibited Activity. It is unlawful for any person to do any of the following related to the rental of real property for residential use as wholly or partially based on source of income, as defined herein: A. To interrupt, terminate, or fail or refuse to initiate or conduct any transaction in real property, including, but not limited to, the rental thereof; to require different terms for such transaction; or falsely to represent that an interest in real property is not available for transaction; B. To include in the terms or conditions of a transaction in real property any discriminating clause, condition or restriction due to source of income; C. To refuse or restrict facilities, services, repairs or improvements for any tenant or lessee; D. To make, print, publish, advertise, or disseminate in any way, or cause to be made, printed or published, advertised or disseminated in any way, any notice, statement or advertisement with respect to a transaction in real property, or with respect to financing related to any such transaction, which unlawfully indicates preference, limitation or discrimination based on source of income. E. It is unlawful for any person to use a financial or income standard for the rental of housing that does either of the following: 1. Fails to account for any rental payments or portions of rental payments that will be made by other individuals or organizations, including by a rental assistance program, homeless assistance program, security deposit assistance program or housing subsidy program, on the same basis as rental payments to be made directly by the tenant or prospective tenant; 2. Fails to account for the aggregate income of persons residing together or proposing to reside together or an aggregate income of tenants or prospective tenants and their cosigners or proposed cosigners on the same basis as the aggregate income of married persons residing together or proposing to reside together, so long as legal occupancy limits are not exceeded. 10.98.040 - Exceptions. A. Nothing in this chapter shall be construed to apply to the rental or leasing of any housing unit in which the owner or any member of his/her family occupies one of the living units and it is necessary for the owner to use either a bathroom or kitchen facility common with the prospective tenant(s). B. Nothing in this section shall be deemed to permit any rental or occupancy of any dwelling unit or commercial space otherwise prohibited by law. C. Nothing in this chapter shall be construed to prohibit a requirement for a guarantor or cosigner based on amount of income or credit worthiness. 10.98.050 - Civil injunctive relief. Any aggrieved person may enforce the provisions of this section by means of a civil injunctive action. Any person who commits, or proposes to commit, an act in violation of this section may be enjoined therefrom by any court of competent jurisdiction. An action for injunction under this section may be brought by any aggrieved person, by county counsel, the district attorney, the City attorney, or by any person or entity which will fairly and adequately represent the interests of the protected class. 10.98.060 - Civil liability. Any person who violates any of the provisions of this section or who aids in the violation of any provisions of this section is liable for, and the court must award to the individual whose rights are violated, three times the amount of special and general damages, or, in the case of unlawful discrimination in the rental of a unit, three times the amount of one month’s rent that the landlord charges for the unit in question. The court may award in addition thereto not less than two hundred dollars ($200.00) but not more than four hundred ($400.00), together with attorney’s fees, costs of action, and punitive damages. Civil actions filed pursuant to this section must be filed within one year of the alleged discriminatory acts. 10.98.070 - Criminal penalty. Any person who violates any provision of this chapter shall be deemed guilty of a misdemeanor and upon conviction thereof shall be punished by a fine of not more than one thousand dollars ($1,000.00) or by imprisonment in the county jail for a period not exceeding six months, or both. DIVISION 3. CALIFORNIA ENVIRONMENTAL QUALITY ACT. This Ordinance is exempt from the California Environmental Quality Act (“CEQA”) pursuant to the State CEQA Guidelines, since it can be seen with certainty that there is no possibility that this Ordinance or its implementation would have a significant effect on the environment (14 Cal. Code Regs. Section 15061(b)(3)). DIVISION 4. PUBLICATION; EFFECTIVE DATE This Ordinance shall be published once in full before its final passage in a newspaper of general circulation published and circulated in the City of San Rafael, County of Marin, State of California and shall be in full force and effect 30 days after its final passage. ________________________________ GARY O. PHILLIPS, Mayor ATTEST: ___________________________ LINDSAY LARA, City Clerk The foregoing Ordinance No. _____ was read and introduced at a regular meeting of the City Council of the City of San Rafael on the ______ day of _______, 2018, and was ordered passed to print by the following vote, to wit: AYES: Councilmembers: NOES: Councilmembers: ABSENT: Councilmembers: and will come up for adoption as an Ordinance of the City of San Rafael at a regular meeting of the City Council to be held on the ______ day of _________________, 2018. ________________________________ LINDSAY LARA, City Clerk NOTICE OF PUBLIC MEETING – CITY COUNCIL You are invited to attend the City Council meeting on the following proposed project: PROJECT: RENTER PROTECTION- DRAFT ORDINANCE FOR SOURCE OF INCOME DISCRIMINATION - Presentation on and discussion of a draft “source of income discrimination” ordinance, which would prohibit a landlord from explicitly refusing to accept governme ntal funding sources from a potential tenant (e.g., Section 8 voucher). This topic is scheduled as a follow-up discussion to the City Council’s general housing discussion on August 20, 2018; File No.: P18-010. State law (California Environmental Quality Act) requires that this project be reviewed to determine if a study of potential environmental effects is required. It has been determined that this project, which is an informational report, will have no physical impact on the environment . Therefore, the discussion is classified as a planning study, which qualifies for a Statutory Exemption from the provisions of the California Environmental Quality Act Guidelines under 14 CRR Section 15262. MEETING DATE/TIME/LOCATION: Monday, October 1, 2018, 7:00 p.m. City Council Chambers, 1400 Fifth Ave at D St, San Rafael, CA FOR MORE INFORMATION: Contact Andrew Hening, Director of Homeless Planning & Outreach at (415) 485-3055 or Andrew.hening@cityofsanrafael.org. Mr. Hening’s office is located at City Hall, 3rd floor, which is open from 8:30 a.m. to 4:30 p.m. on Monday through Thursday, and from 8:30 a.m. to 1:30 p.m. on Friday. You can also view the staff report after 5:00 p.m. on the Friday before the meeting at http://www.cityofsanrafael.org/meetings. WHAT WILL HAPPEN: You can comment on the source of income discrimination topic and draft ordinance. The City Council will consider all public testimony. The City Council will be requested to provide direction on moving forward with an ordinance, which will require a scheduled public hearing. IF YOU WANT TO COMMENT: You can send written correspondence by email to the address above, or by mail/hand delivery to the City of San Rafael, 1400 5th Avenue, San Rafael, CA 94901. At the above time and place, all written correspondence received will be noted and all interested parties will be heard. If you challenge in court the matter described above, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered at, or prior to, the above referenced public hearing (Government Code Section 65009 (b) (2)). Judicial review of an administrative decision of the City Council must be filed with the Court not later than the 90th day following the date of the Council’s decision. (Code of Civil Procedure Section 1094.6) Sign Language and interpretation and assistive listening devices may be requested by calling (415) 485-3085 (voice) or (415) 485-3198 (TDD) at least 72 hours in advance. Copies of documents are available in accessible formats upon request. Public transportation to City Hall is available through Golden Gate Transit, Line 22 or 23. Para-transit is available by calling Whistlestop Wheels at (415) 454-0964. To allow individuals with environmental illness or multiple chemical sensitivity to attend the meeting/hearing, individuals are requested to refrain from wearing scented products. NOTICE OF PUBLIC MEETING – CITY COUNCIL You are invited to attend the City Council meeting on the following proposed project: PROJECT: RENTER PROTECTION- DRAFT ORDINANCE FOR SOURCE OF INCOME DISCRIMINATION - Presentation on and discussion of a draft “source of income discrimination” ordinance, which would prohibit a landlord from explicitly refusing to accept governmental funding sources from a potential tenant (e.g., Section 8 voucher). This topic is scheduled as a follow-up discussion to the City Council’s general housing discussion on August 20, 2018; File No.: P18-010. State law (California Environmental Quality Act) requires that this project be reviewed to determine if a study of potential environmental effects is required. It has been determined that this project, which is an informational report, will have no physical impact on the environment. Therefore, the discussion is classified as a planning study, which qualifies for a Statutory Exemption from the provisions of the California Environmental Quality Act Guidelines under 14 CRR Section 15262. MEETING DATE/TIME/LOCATION: Monday, October 1, 2018, 7:00 p.m. City Council Chambers, 1400 Fifth Ave at D St, San Rafael, CA FOR MORE INFORMATION: Contact Andrew Hening, Director of Homeless Planning & Outreach at (415) 485-3055 or Andrew.hening@cityofsanrafael.org. Mr. Hening’s office is located at City Hall, 3rd floor, which is open from 8:30 a.m. to 4:30 p.m. on Monday through Thursday, and from 8:30 a.m. to 1:30 p.m. on Friday. You can also view the staff report after 5:00 p.m. on the Friday before the meeting at http://www.cityofsanrafael.org/meetings. WHAT WILL HAPPEN: You can comment on the source of income discrimination topic and draft ordinance. The City Council will consider all public testimony. The City Council will be requested to provide direction on moving forward with an ordinance, which will require a schedule d public hearing. IF YOU WANT TO COMMENT: You can send written correspondence by email to the address above, or by mail/hand delivery to the Community Development Department, Planning Division, City of San Rafael, 1400 5 th Avenue, San Rafael, CA 94901. At the above time and place, all written correspondence received will be noted and all interested parties will be heard. If you challenge in court the matter described above, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered at, or prior to, the above referenced public hearing (Government Code Section 65009 (b) (2)). Judicial review of an administrative decision of the City Council must be filed with the Court not later than the 90th day following the date of the Council’s decision. (Code of Civil Procedure Section 1094.6) Sign Language and interpretation and assistive listening devices may be requested by calling (415) 485-3085 (voice) or (415) 485-3198 (TDD) at least 72 hours in advance. Copies of documents are available in accessible formats upon request. Public transportation to City Hall is available through Golden Gate Transit, Line 22 or 23. Para-transit is available by calling Whistlestop Wheels at (415) 454-0964. To allow individuals with environmental illness or multiple chemical sensitivity to attend the meeting/hearing, individuals are requested to refrain from wearing scented products. Community Development Department 1400 5th Avenue San Rafael, CA 94901 «PROP_ID» «NAME» «ADDRESS» «CITY», «STATE» «ZIP4» «Next Record» PUBLIC NOTICE REGARDING A PROPOSED PROJECT IN YOUR NEIGHBORHOOD Community Development Department 1400 5th Avenue San Rafael, CA 94901 «PROP_ID» «NAME» «ADDRESS» «CITY», «STATE» «ZIP4» PUBLIC NOTICE REGARDING A PROPOSED PROJECT IN YOUR NEIGHBORHOOD