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CM Renter Protections 2019Renter Protection Policies Andrew Hening Director of Homeless Planning & Outreach 1 2 Just Cause Eviction Just Cause Eviction policies are intended to provide stability for households who rent by regulating the grounds for eviction. Just Cause ordinances typically identify acceptable reasons that a landlord may terminate a tenancy “for cause” (e.g. failure to pay rent, nuisance behavior), as well as other reasons a landlord could evict for “no cause” (e.g. the landlord is moving back into the unit). Just Cause ordinances fully retain the rights of landlords to terminate a lease for valid reasons, but they also help to prevent the eviction of responsible tenants, providing them with greater security and stability. 3 Mandatory Mediation Mediation is a process in which a neutral third party facilitates the negotiation of a mutually acceptable resolution to a dispute between parties. With “Mandatory” Mediation, if a triggering event occurs (e.g. rent is increased by a certain percentage), then the tenant is able to request mediation services. It is then mandatory that the landlord participates in the mediation process, but the parties cannot be compelled to reach a resolution. The goal of these programs is to facilitate constructive conversations in a neutral and accountable environment. Renter Protections Subcommittee Mayor Gary Phillips Councilmember Andrew McCullough Supervisor Dennis Rodoni David Levin, Legal Aid of Marin Scott Gerber, Property Owner Public Outreach Renters in the Canal The Marin Organizing Committee Local landlords and property owners The California Apartment Association Staff and electeds from the County The faith-based community The Marin Income Property Association The Citizen’s Advisory Committee Counterparts at other cities Community members Local social service providers Overall, the Subcommittee recommends that the City Council adopt both Just Cause Eviction & Mandatory Mediation policies. 6 7 8 County Policy Consideration for San Rafael Change Mediation Statements Penalties for violations Anti-harassment policies Failure to be in Good Faith An appeals process The spirit of mediation Too broad Duplicative of existing policy We lack administrative capacity Only required if agreement reached Narrow to "policy" violations Remove, educate on existing policies Handle through the courts Themes The City has a limited staff and financial capacity to administer these programs. Is there a way the City can leverage existing systems? What’s the real challenge we’re trying to address? 1. Which Units Are Covered by these Policies? 10 Bay Area Renter Protection Policies Jurisdiction Rent Control Mediation Eviction Policies Relocation Alameda Yes Yes Los Gatos Yes Yes Albany Yes Berkeley Yes Yes Emeryville Yes Fremont Yes Mountain View Yes Yes San Leandro Yes Yes Union City Yes Yes Concord Yes Richmond Yes Yes County of Marin Yes Yes Fairfax Yes Yes Palo Alto Yes 11 Mediation / Review Programs Jurisdiction Rent Control Mediation Eviction Policies Relocation Alameda Yes Yes Los Gatos Yes Yes Albany Yes Berkeley Yes Yes Emeryville Yes Fremont Yes Mountain View Yes Yes San Leandro Yes Yes Union City Yes Yes Concord Yes Richmond Yes Yes County of Marin Yes Yes Fairfax Yes Yes Palo Alto Yes 12 Applicability of Mediation Programs Jurisdiction Year Enacted Covered by Mediation Est. #Covered by Just Cause Est. # Alameda 2016 All rental units 13,389 All rental units 13,389 Albany 2018 All rental units 1,900 -------- Fremont 1997 All rental units 18,000 -------- San Leandro 2001 2 or more units 9,000 -------- Union City 2017 All rental units 5,400 All Rental units 5,400 Concord 2017 3 or more units 8,100 -------- Co. of Marin 2017 All rental units 8,600 3 or more units 4,600 Fairfax 2019 All rental units 385 All rental units 385 13 24,011 Housing Units 14 48% Renters 15 San Rafael Rentals by Unit Type Covering properties with 3 or more units would impact up to 68% of San Rafael renters. 16 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% 2. What Triggers Mediation? 17 Thresholds for Mediation Programs Jurisdiction Year Enacted Estimated Units Covered Threshold Alameda 2016 13,389 5% Albany 2018 1,900 5% Fremont 1997 18,000 5% San Leandro 2001 9,000 7% Union City 2017 5,700 7% Concord 2017 8,100 10% County of Marin 2017 9,900 5% Fairfax 2019 385 5% Weighted Average of Bay Area Programs 6% 18 The Price to Rent 19 $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 20 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 3. What Type of Data Can and Should We Collect, Specifically with Evictions? 21 Levels of Eviction Data 30 or 60-Day Eviction Notice Notice to Quit Unlawful Detainer Current 23 0 100 200 300 400 500 600 700 800 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Number FiledYear Annual Unlawful Detainers Filed with the Marin County Superior Court The City of San Rafael already requires businesses licenses for rental properties with three or more units (450 unduplicated ownership entities) 24 Property Information Number of Units Ownership Information Contact Information Property Management Information 4. How Much Will These Programs Cost? 25 Typical Administrative Components of these Programs and Policies 26 Triaging calls from the public Data collection Public workshops Creating and distributing collateral Managing an appeals process The mediation program itself Typical Administrative Components of these Programs and Policies 27 Triaging calls from the public Data collection Public workshops Creating and distributing collateral Managing an appeals process The mediation program itself $$$$$ 28 Contractor Rent Review Board Description: The jurisdiction contracts with an outside mediation provider (e.g. ECHO Housing, the Marin County District Attorney’s Office) Description: The City recruits for and coordinates a monthly Rent Review Board Considerations: Available local providers, cost Considerations: Staff capacity, willingness and interest of community members Cost: The cost of this approach can varies depending on the vendor. For example, the DA’s Office initially quoted the City $400 per mediation. Cost:Cities with Rent Review Boards typically have dedicated staff members working on renter protection or affordable housing issues. Staff is integral for triaging inbound requests, scheduling, and training. Types of Mediation Programs Mediation –Level of Demand Jurisdiction Type of Mediation # Units Annual Inquiries Actual Cases Case to Unit Ratio Alameda Rent Review Board 13,389 188 17 .0013 Albany Contractor (ECHO)1,900 N/A N/A N/A Fremont Rent Review Board 18,000 71 47 .0039 San Leandro Rent Review Board 9,000 175 29 .0032 Union City Contractor (ECHO)5,400 40 6 .0093 Concord Contractor (ECHO)8,100 N/A N/A N/A Co. of Marin Contractor (DA)8,600 12 6 .0007 Fairfax Contractor (DA)385 N/A N/A N/A 29 Mediation –Level of Demand Jurisdiction Type of Mediation # Units Annual Inquiries Actual Cases Case to Unit Ratio Alameda Rent Review Board 13,389 188 17 .0013 Albany Contractor (ECHO)1,900 N/A N/A N/A Fremont Rent Review Board 18,000 71 47 .0039 San Leandro Rent Review Board 9,000 175 29 .0032 Union City Contractor (ECHO)5,400 40 6 .0093 Concord Contractor (ECHO)8,100 N/A N/A N/A Co. of Marin Contractor (DA)8,600 12 6 .0007 Fairfax Contractor (DA)385 N/A N/A N/A 30 Mediation –Level of Demand Jurisdiction Type of Mediation # Units Annual Inquiries Actual Cases Case to Unit Ratio Alameda Rent Review Board 13,389 188 17 .0013 Albany Contractor (ECHO)1,900 N/A N/A N/A Fremont Rent Review Board 18,000 71 47 .0039 San Leandro Rent Review Board 9,000 175 29 .0032 Union City Contractor (ECHO)5,400 40 6 .0093 Concord Contractor (ECHO)8,100 N/A N/A N/A Co. of Marin Contractor (DA)8,600 12 6 .0007 Fairfax Contractor (DA)385 N/A N/A N/A 31 Potential Cost ALL RENTAL UNITS •11,500 total units •Net out BMR –900 •Subtotal of 10,600 •$400 DA’s Office •Union City Ratio $39,400 32 3+ RENTAL UNITS •7,800 total units •Net out BMR –900 •Subtotal of 6,900 •$400 DA’s Office •Union City Ratio $25,700 Sub- Committee Recs 1. Both ordinances will apply to properties with three or more units 2. Mediations will be triggered by a rent increase of 10% or greater during a 12- month period 3. The City will NOT maintain a registry and will NOT receive eviction notices. Could update business license. 4. There is currently no General Fund budget for this program. However, the Council could re-program up to $65,000 in the Homeless Initiatives Budget. 34 Insights & Recommendations We already have a “registry” for properties with 3 or more units through our business license process (approx. 450 unique owners) There is limited capacity to implement this program, both in terms of staff and funding. The current challenge with rent increases is stemming from a small number of owners Insights Policies apply to properties with 3 or more units Recs Mediations triggered by 10% rent increases No registry; rely on business licenses Initial funding from the Homeless Initiatives Budget FAQ: Can these policies be established as pilots? Yes.There is no reason these policies could not be established on a pilot basis and/or be viewed as iterative in nature. The County of Marin, as an example, amended their original Mediation ordinance after a few months. They established Just Cause as a two-year pilot. Almost every jurisdiction requires an annual impact report. 35 Council Questions / Public Comment 36 Frequently Asked Questions Continued 37 FAQ #1: What are the immediate impacts of these programs? 38 County of Marin 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) 39 Union City 40 Fremont 41 Alameda 42 FAQ #2: What are the long-term impacts of these policies? 43 Potential Long-Term Impacts Could constrain new housing supply Could result in existing units coming off the market (rental units becoming condos) Reduce investment in rental housing quality These trends could end up accelerating displacement What Does the Data Suggest? The Cambridge study, the Stanford SF Rent Control Study, etc. do show communities with rent control can decrease the supply of rental units. Rent control, rental restrictions, rental regulations – are these actually synonyms? Mediation programs are generally quite new –not great data yet. A USC analysis of the Stanford study found that policies actually slowed displacement These insights raise a more fundamental question of what most impacts new housing construction? Is it rent control … or is it zoning, discretionary review, building costs? Seems possible to address displacement and spur growth at the same time. FAQ #3: Do these policies –especially Just Cause –actually accelerate displacement? Probably Not.It’s important to remember the vacancy rate. The vacancy rate in Marin County is close to 3%. A healthy rate is closer to 6 or 7%. Landlords already have their choice of tenants. This is in part why the County and Marin Housing Authority had to start the Landlord Partnership Program. 46 FAQ #4: What are the economic circumstances of San Rafael’s renters? 47 48 Household Income: Renters / Owners FAQ #5: Why are we pursuing these policies? 49 50 2018-2019 Council Goals and Objectives: “Explore protections to increase rental and ownership housing affordability.” #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. 51 Prices for Renters / Owners 52 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. 53 Overpayment in Marin 54 Source: Marin Economic Forum #3 Jobs / Housing Imbalance A community’s jobs / housing balance refers to the percentage of workers who reside in the community. 55 87%of San Rafael’s workforce lives outside of the city. 56 Source: San Rafael Housing Element #4 Displacement The process through which a community’s original residents – especially low-income, working class residents –transition out of the community because of higher prices and an influx of new, higher-income households 57 58Source: UC Berkeley Urban Displacement Project #5 Homelessness Of the variety of upstream causes of homelessness, the cost of housing is the most significant. 59 60 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 61 Council Questions / Public Comment 62