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CM Rental Housing Ordinances PPTRental Housing Regulations: 1st Readings Andrew Hening Director of Homeless Planning & Outreach 1 2 2018-2019 Council Goals and Objectives: “Explore protections to increase rental and ownership housing affordability.” To -Date August 20, 2018 -Community Development Director’s “Housing Overview” Report December 17, 2018 –Passed Source of Income Discrimination Ordinance February 4, 2019 –Introduced “Just Cause” and “Mandatory Mediation” policies The Council formed an ad hoc Rental Housing Subcommittee May 6, 2019 –Presented initial rental housing policy recommendations 4 Rental Housing Dispute Ordinance 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. 5 Cause Required for Eviction Ordinance 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. Overall, the Subcommittee recommends that the City Council adopt both a Cause for Eviction Ordinance & a Rental Housing Dispute Ordinance. 6 May 6 th Policy Questions Which units are covered by these policies? What triggers a mediation? What type of eviction data can and should we collect? How do we pay for these programs? Rental Housing Subcommittee Mayor Gary Phillips Councilmember Andrew McCullough Supervisor Dennis Rodoni David Levin, Legal Aid of Marin Scott Gerber, Property Owner & Agent Omar Carrera, Canal Alliance Final Rec’s 1. The Rental Housing Dispute Ordinance will apply to all units. Cause for Eviction will apply to properties with three or more units. Government units are exempted from both. 2. Mediations will be triggered by a rent increase of 5% or greater during a 12-month period 3. The City will NOT maintain a landlord registry and will NOT receive eviction notices. 4. Fund a one-year pilot with $40,000 of a budgeted $66,000 in the FY19-20 Homeless Initiatives Budget. Council Questions / Public Comment 10 State Policy 11 AB 1482 The California Assembly just passed a statewide rent-cap proposal; still needs to clear the Senate Would apply to most properties not covered by local rent control ordinances —including rented single family homes and condos in cities with rent control. Rent increases would be capped at 7% plus the annual increase in the cost of living. Exempts properties that are less than 10 years old. A recent statewide poll in late March / early April found that 66% of California voters and 72% of Bay Area voters supported a rent cap of 5% plus an annual cost-of-living increase. Cost Projection 13 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 14 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 15 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 16 3+ RENTAL UNITS •7,800 total units •Net out BMR –900 •Subtotal of 6,900 •$400 DA’s Office •Union City Ratio $25,700 # of Units Covered 17 24,011 Housing Units 18 48% Renters 19 San Rafael Rentals by Unit Type Covering properties with 3 or more units would impact up to 68% of San Rafael renters. 20 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% Unintended Consequences 21 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; A USC analysis of the Stanford study found that policies actually slowed displacement Rent control, rental restrictions, rental regulations – are these actually synonyms? Mediation programs are generally quite new –not great data yet. 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. 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. Council Questions / Public Comment 24