HomeMy WebLinkAboutCM Renter Protections PPTRenter Protection Policies
Andrew Hening
Director of Homeless Planning & Outreach
1
Why We
Are Here
2018-2019 Council Goals and Objectives: “Explore
protections to increase rental and ownership
housing affordability.”
8/20/18 “Housing Update”:Council directed staff
to work on a number of policy options for future
Council consideration.
12/18/18: The City Council passed a Source of
Income Ordinance to prevent discrimination in
the rental housing market.
The County of Marin has explored, vetted, and
adopted a variety of rental protections, providing
a possible template for other jurisdictions.
During public comment at recent Council
meetings, community members have been asking
the City Council to consider additional renter
protection policies.
Mandatory
Mediation
3
Mediation:
What Is It?
Mediation is a process in which a neutral third
party facilitates the negotiation of a mutually
acceptable resolution to a dispute between
parties.
Mediation programs commonly apply voluntary,
private and informal processes.
If the parties involved come to an agreement, a
settlement agreement can be prepared that will
bind the parties.
However, the parties may not come to an
agreement and then there is no “resolution” to
comply with.
The mediator will not make a decision for the
parties unless the parties have specifically agreed
to such a process
Mediation -1 of 9
Mandatory
Mediation:
What Is It?
A variety of Bay Area communities, including
Concord, Palo Alto, Union City, and the County of
Marin, have adopted “Mandatory Mediation”
programs to help renters.
With “Mandatory” Mediation, if a triggering
event occurs, then the tenant and/or landlord
can request mediation services.
Triggering events could include: a 10% rent
increase (Concord), a 7% rent increase (Union
City), a 5% rent increase (County of Marin), rent
increases plus repairs and maintenance (Palo Alto)
The “mandatory” aspect of the program is that
parties agree to participate throughout the
process in “good-faith,” but parties cannot be
compelled to reach a resolution.
The goal of these programs is to facilitate
constructive conversations in a neutral and
accountable environment.
Mediation -2 of 9
The County’s Program
As when the City Council adopted a
“Source of Income” Ordinance, it is
staff’s overall recommendation that the
City consider the ordinance adopted by
the County of Marin when crafting a
policy for the City of San Rafael.
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Mandatory
Mediation:
Eligibility
The ordinance applies to all residential dwelling units. A
residential dwelling unit may be defined generally as
spaces containing a separate bathroom, kitchen, and
living area.
EXCEPTIONS -Residential dwelling units owned or
operated by a government agency, units that are
restricted for affordable housing
Tenant’s receipt of one or more notices that individually
or cumulatively increase rent more than 5% within any
12-month period.
Any eligible Tenant or Landlord may request Mediation
services
Tenant must be provided notice of their rights: within 30
days of enactment of the ordinance; when entering a
new lease agreement; when renewing a lease or rental
agreement; when providing notice of a rent increase
Mediation -3 of 9
Mandatory
Mediation:
Process
Part 1
STEP 1 –Landlord notices Tenant about their right
to request mediation services.
STEP 2 -Mediation services may be requested
within ten calendar days following the notice of a
rent increase that is greater than 5% during a 12-
month period of time.
STEP 3 -Within 10 calendar days of receipt of a
complete request, a Mediator shall be assigned to
the case (the District Attorney’s Consumer
Protection unit is providing mediation services)
STEP 4 -Within 2 calendar days, Mediator to
provide notice of Mediation to Landlord and
Tenant.
STEP 5 -Mediation must conclude within 30 days
unless parties agree otherwise.
Mediation -4 of 9
Mandatory
Mediation:
Process
Part 2
Both parties must participate in “Good Faith.”
Landlord must refrain from any harassment or
other prohibited activity (the County ordinance
duplicates or clarifies 12 existing rights under
State law)
The Tenant must abide by the terms of the lease
or rental agreement and pay all lawful rent owed.
The goal of the mediation is for both parties to
meet face-to-face to discuss how the rent increase
impacts them.
The mediation could result in a deferred rent
increase, a lower rent increase, a longer lease,
additional housing services, or no change.
Mediation -5 of 9
Impact To-Date
Month # Cases Eligible Outcome
Feb 2018 1 0 ---
March 2018 3 1 Agreement Reached
April 2018 1 1 NO Agreement Reached
May 2018 1 1 NO Agreement Reached
June 2018 1 1 Agreement Reached
July 2018 1 0
Aug 2018 2 1 Agreement Reached
Sept 2018 0 0
Oct 2018 1 0
Nov 2018 0 0
Dec 2018 1 1 Agreement Reached
TOTAL 12 6 (or 50%)4 Agreements Reached (or 33% of total)
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Mandatory
Mediation:
Admin &
Enforcement
for San
Rafael
The City does not offer in-house mediation
services. Therefore, the City would need to
contract with a local provider, such as the District
Attorney’s Consumer Protection Unit.
There would be a front-end effort by staff to
develop marketing and educational materials.
There would also be going monitoring on data and
impact.
Any inbound questions or requests would be
directed to the Director of Homeless Planning &
Outreach.
If the ordinance is violated, any aggrieved person
may seek civil remedy. This is similar to San
Rafael’s Source of Income Ordinance.
Mediation -6 of 9
Mandatory
Mediation:
Cost Part 1
For the County of Marin’s ordinance, the District
Attorney’s Consumer Protection Unit provides
mediations as an “in-house” service.
Because these mediations are done as face-to-
face conversations, there is more time involved
(on average 5-10 hours).
The DA’s Office has offered to provide San Rafael
with up to 25 mediations per year for a base rate
of $10,000 per year. Each additional mediation
would cost the City $400.
Mediation -7 of 9
Mandatory
Mediation:
Cost Part 2
Staff projects there will be significantly more
than 25 mediations per year.
#1 San Rafael has approximately 50% more rental
units than the County of Marin, which would
automatically increase our baseline (12 in the
County to 18 in San Rafael)
#2 The passage of Just Cause could help to ease
concerns about requesting a mediation, thus
encouraging more requests.
#3 If every unit in a building receives a triggering
rent increase, every household has a right to
request an individual mediation.
#4 In fiscal year 2018-19, there have been 68
rental units affected by 40%+ rent increases (that
would have cost the City $27,200). There are
presumably many more that experienced
increases over 5%.
Mediation -8 of 9
Mandatory
Mediation:
Downsides &
Challenges
Outcomes are not guaranteed or binding
This would be a new, currently unfunded cost to
the City.
In 2018, average rent increases were below the
5% threshold.
Communities that create numeric thresholds
might unintentionally anchor price increases
closer to that number.
Some communities observe an uptick in rent
increases and evictions prior to the
implementation of these policies.
Mediation -10 of 10
The Price to Rent
15
$1,800
$1,928
$2,268
$2,510 $2,586
$2,740
$2,874 $2,883
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
2011 2012 2013 2014 2015 2016 2017 2018
Source: Rent Jungle
% Change in Rent Prices
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7%
18%
11%
3%
6%
5%
0%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2012 2013 2014 2015 2016 2017 2018
Source: Rent Jungle
FAQ: Does Mandatory
Mediation limit a landlord’s
ability to raise rent?
No.The ordinance requires only that for
certain rent increases a landlord or tenant
could, upon request of either party, be
required to engage in a sincere, facilitated
conversation about that rent increase. Any
agreements resulting from the mediation will
be voluntarily undertaken.
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FAQ: Does Mandatory
Mediation occur anytime there
is a 5% or greater rent increase?
No.The ordinance requires that Landlords
notify Tenants of their right to request
mediation services. However, the Landlord or
Tenant must take the initiative to request this
service.
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Just Cause
Eviction
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Evictions in
California
Under California law, landlords have the legal right to
terminate a periodic tenancy without reason so long as they
furnish the tenant proper written notice of termination.
A residential tenant living in a home for less than one year
must be provided with at least 30-days’ written notice. A
residential tenant living in a home for one year or more must
be provided with at least 60-days’ written notice.
Landlords can also serve tenants with a three-day written
eviction notice for any cause consistent with the California
Code of Civil Procedure §1161, such as non-payment of rent
or violation of a covenant in the lease
If the Tenant does not vacate the unit at the end of the
noticed lease term, the Landlord issues a “notice to vacate”
or “note to quit.” If the Tenant does not vacate after issuance
of notice to quit, the landlord files an unlawful detainer
action in court.
The Ellis Act allows Californians to withdraw their property
from the residential rental market.
Just Cause -1 of 8
Just Cause:
What Is It?
Just Cause policies are intended to provide stability for
households who rent by regulating the grounds for eviction,
typically by prohibiting termination of a residential tenancy
without expressly stating the reason.
Just Cause has been adopted by a variety of cities in
California -Emeryville, San Diego, Union City, and the County
of Marin. Just Cause is one of the ten recommendations in
the CASA Compact.
Acceptable reasons for eviction under Just Cause are often
divided into two categories: “For Cause” and “No Fault.”
Examples of eviction For Cause include failure to pay rent,
illegal activity in the unit, nuisance activities, tenant fails to
allow landlord access to the unit, or other material violations
of a rental agreement.
Examples of No Fault evictions include situations when an
owner or relative moves into the unit or when the owner
removes the unit from the rental market under the Ellis Act
(Just Cause can stipulate longer noticing)
Just Cause -2 of 8
The County’s Program
As when the City Council adopted a
“Source of Income” Ordinance, it is
staff’s overall recommendation that the
City consider the ordinance adopted by
the County of Marin when crafting a
policy for the City of San Rafael.
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Just Cause:
Eligibility
Just Cause generally applies to all properties
located in the unincorporated areas of Marin
that have at least 3 dwelling units.
EXCEPTION –Accessory Dwelling Units;
Junior Accessory Dwelling Units
EXCEPTION –Units located in affordable
housing complexes
EXCEPTION –Units owned, operated, or
directly subsidized for affordability by the
government.
EXCEPTION –Units occupied by on-site
property managers
Just Cause -3 of 8
San Rafael Rents by Unit Type
Adopting the County of Marin’s 3+ unit rule
would cover up to 68% of San Rafael renters.
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Unit Type Estimated
Households
Margin of
Error
% of Total
Renters
1, detached 1,998 +/-298 18%
1, attached 655 +/-158 6%
2 711 +/-208 6%
3 or 4 891 +/-225 8%
5 to 9 1,645 +/-346 15%
10 to 19 1,782 +/-348 16%
20 to 49 1,670 +/-273 15%
50 or more 1,478 +/-278 13%
Mobile home 71 +/-66 1%
Boat, RV, van, etc.66 +/-78 1%
Just Cause:
Process
STEP 1 –Obtain all necessary licenses and
permits for the operation of a rental unit.
STEP 2 –Complete Notice of Termination
Form and deliver to the Tenant.
STEP 3 –Submit an accurate copy of the
Notice of Termination to the County within
10 calendar days of delivering the notice(s)
to tenants.
STEP 4 –If the Tenant does not vacate the
unit on or before the intended final date of
tenancy, consult an attorney regarding a
potential unlawful detainer action in court.
Just Cause -4 of 8
“For Cause”“No Fault”
-Failure to pay rent
-Breach of rental contract
-Nuisance behaviors
-Threat of a violent crime
-Tenant use of the unit for
illegal activities
-Landlord will permanently
remove the unit from the
rental market
-Landlord or family will
move into the unit
-Landlord will make
substantial repairs that
cannot be completed while
the unit is occupied
Just Cause:
Registry &
Data
Collection
To -date, there has not been robust data on the
number of evictions that are occurring in Marin.
Just Cause -5 of 8
Levels of Eviction Data
30 or 60-Day
Eviction Notice
Notice to Quit
Unlawful
Detainer
Current
Just Cause:
Registry &
Data
Collection
To -date, there has not been robust data on the
number of evictions that are occurring in Marin.
The County of Marin used Just Cause as a way to
create a registry for properties with 3 or more
units.
The registry is hosted online to reduce the
administrative burden on staff and landlords.
The County is collecting ownership information,
rent data, and eviction data on an annual basis.
Do NOT collect identifying information about the
tenants. Identifying information about landlords
will NOT be made public.
Just Cause -6 of 8
Just Cause:
Admin &
Enforcement
for San
Rafael
Civil remedy available through the court.
Landlords are required to have a valid business
license. San Rafael already requires landlords with
3 or more units to have a business license
(approximately 530 current licenses issued).
Landlords would need to complete information in
the registry. The County of Marin could potentially
host this service for us.
Landlords would need to provide a copy of any
termination notice to the City. Any inbound
questions or requests are currently being directed
to the Director of Homeless Planning & Outreach.
There would be a front-end effort by staff to
develop marketing and educational materials, as
well as an ongoing effort to monitor impact.
Just Cause -7 of 8
Just Cause:
Downsides &
Challenges
Just Cause regulations might discourage
investment in rental property, thereby increasing
operating costs and rental prices.
Could make it more difficult to remove
problematic tenants.
Landlords have expressed concern that could
foretell future rent stabilization policies.
Existing State Law already provides some
protections for renters from arbitrary or
unreasonable evictions. For example, State law
prohibits renters from being evicted in retaliation
for filing health and safety claims.
Just Cause -8 of 8
FAQ: Does Just Cause limit a landlord’s
ability to increase rent?
NO.
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Summary &
Next Steps
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Staff’s Summation
1.Important to view these two policies together
2.Mandatory Mediation is not a panacea to stop increasing rents, but it does
create a sense of “face-to-face accountability.”
3.Even though Mandatory Mediation is a helpful resource, and even though there
are State laws protecting Tenants, renters still fear retaliation
4.Just Cause provides more stability that if you’re a good tenant, you can use the
services available to you
5.Just Cause does potentially create more steps for challenging tenants
6.Overall, these policies are a way to provide more affordability and stability in the
rental housing market without overly burdening property owners.
7.Further legal input from the City Attorney’s Office is needed
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Questions for Council
1.Do you support Mandatory Mediation and Just Cause?
2.If yes, are there any significant ways in which you want
to depart from what the County has done?
3.The only direct cost for implementing these policies is
the cost of mediation services; however, there will be a
indirect cost with regard to staff time. How does the
Council want to allocate resources?
4.Would the Council want to create an ad-hoc City Council
Subcommittee to finalize the policy recommendations?
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Public Outreach
1.Informational presentation tonight
▪Advertised in Snapshot and the Homeless Initiatives
newsletter
▪Courtesy notice (40 organizations, including the Marin
Rental Property Association )
2.Community meeting in the Canal, conducted in
Spanish, attended by over 100 residents –
unanimous support
3.The California Apartment Association has submitted
a letter to the City in opposition.
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Questions &
Public
Comment
37
Appendix
38
FAQ: Can a Landlord ask a Tenant to
leave at the end of their lease term?
Landlords can remove a tenant at any time for one of the
reasons enumerated in the Just Cause Ordinance. Without
cause, you may not ask your tenant to leave when their lease
term ends. Unless you offer to renew the rental agreement,
or propose new lease terms, your existing lease will default
into continuing on a month-to-month basis. If you offer to
renew the lease, or change the terms of it, your tenant
retains the right to reject it. In this instance, you do not need
to file a Notice of Termination with the County. Your tenant
will be expected to vacate the unit at the end of their lease.
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Prohited Activities under State
Law
•Interrupting, failing to provide, or threatening to interrupt or fail to provide any housing service under a lease or
rental agreement, including but not limited to utility services and other amenities and services agreed to by
contract;
•Failing to perform repairs or maintenance required by contract or by State, or County housing, health, or safety
laws;
•Failing to exercise due diligence to complete repairs and maintenance once undertaken, including the failure to
follow industry-appropriate safety standards and protocols;
•Abusing or otherwise improperly using landlord’s right to access the property;
•Removing personal property of the tenant(s) from the dwelling unit;
•Influencing or attempting to influence the tenant(s) to vacate the unit by means of fraud, intimidation, or coercion
(including but not limited to threats based on immigration status in violation of California Civil Code section
1940.3);
•Offering payment or any other consideration, in return for the tenant(s) vacating the dwelling unit, more often
than once every six months;
•Threatening the tenant(s) by word or gesture with physical harm;
•Interfering with the tenants(s) right to quiet use and enjoyment of the dwelling unit;
•Refusing to accept or acknowledge receipt of lawful rent from the tenant(s);
•Interfering with the tenant(s) right to privacy;
•Requesting information that violates the tenant(s) right to privacy;
•Repeating other acts or omissions of such significance as to substantially interfere with or disturb the tenant(s)
comfort, repose, peace, or quiet enjoyment, and that cause, are likely to cause, or are intended to cause the
tenant(s) to vacate the dwelling unit; or
•Retaliating against the tenant(s) for the tenant(s) exercise of rights under the ordinance or State or federal law.
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#1 Difficulty Becoming
Property Owners
If more of a household’s income is
directed towards increasingly expensive
rents, while at the same time the cost of
becoming an owner also continues to
rise, it becomes increasingly difficult for
renters to become owners.
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Prices for Renters / Owners
42
Source: County of Marin
#2 Overpayment
Housing overpayment, as defined by the
state and federal government, refers to
spending more than 30% of income on
housing.
43
Overpayment in Marin
44
Source: Marin Economic Forum
#3 Low Vacancy
A low vacancy rate may indicate that
households are having difficulty in
finding housing that is affordable,
leading to housing overpayment
and/or overcrowding.
45
A healthy vacancy
rate is 6 to 7%.
Marin’s rate is 3%
46
Source: County of Marin
#4 Jobs / Housing
Imbalance
A community’s jobs / housing
balance refers to the percentage of
workers who reside in the
community.
47
87%of San Rafael’s
workforce lives
outside of the city.
48
Source: San Rafael Housing Element
#5 Homelessness
Of the variety of upstream causes of
homelessness, the cost of housing is
the most significant.
49
50
42%
26%
20%19%
13%
0%
10%
20%
30%
40%
50%
Economic Substance Use Mental Health Personal
Relationships
Physical Health
Primary Cause of Homelessness
67%65%
46%
34%33%
0%
20%
40%
60%
80%
Rental Assistance More Affordable
Housing
Money for Moving
Costs
Transportation Help Finding an
Apartment
Assistance Needed to Obtain Permanent Housing