Committee recommends tenant protection ordinance to council, emphasizes urgency
By SARA HALL
The Housing and Human Services Committee this week unanimously agreed to recommend that City Council develop a tenant protection ordinance and forwarded a draft document to use an example for possible language.
The HHSC voted 8-0 Wednesday (May 24) to recommend to council that the ordinance cover the committee members’ key issues: Greater relocation assistance; 60-day noticing requirements (with scope of work and permits attached if the reason for eviction is a major remodel); that permits are actually pulled if the reason is a major remodel; the duration that an owner has to live in a unit if the reason is owner move-in is two to three years; allowing the right of first refusal for a displaced tenant and that the minimum level of rehab work required to be considered a remodel is identified.
The motion for approval also included an emphasis that the city ordinance go beyond the state law, be put into effect soon (ideally over the next several weeks), and that it reflect both the appropriate ways in which landlords should function as well as encourage potential investors to invest in apartments in Laguna Beach.
There was also some confusion about what the direction that council previously gave regarding a potential ordinance.
Council did direct staff to look into the matter, Housing Program Coordinator Jennifer Savage confirmed. They anticipate meeting with Mayor Bob Whalen and that he would return to council with an update at the end of summer or early fall.
That’s not soon enough, several committee members agreed.
“Honestly, that’s disappointing,” said committee member Jacquie Schaefgen. “I think that doesn’t really fit the need of being an emergency ordinance.”
They could ask, as a group, that the council consider this sooner, she suggested.
Committee member Joe Hanauer was also in favor of urging the council to act soon.
“And the reason for that is twofold: One is to save rental units at these price points and the second is not to create some unintended consequences,” he said. “I think we should express that (to council).”
It’s going to be known that a potential ordinance is being floated and the committee’s effort to get ahead of the issue to help prevent people from getting evicted.
“I think that’s a reason, honestly, why a lot of the towns are looking at it as an emergency ordinance, understanding that sense of urgency,” Schaefgen said. “We’re losing housing by the day.”
Chair Laura Sauers also mentioned the concern that once the council starts talking about a potential ordinance it could trigger evictions.
“I think the only thing we can do is create a sense of urgency,” she said. “If this is going to be discussed and become an ordinance, it needs to be done quickly so we don’t see a wave of individuals moving out.”
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Photo by Scott Brashier
A city committee is recommending council develop a draft emergency ordinance aimed at protecting renters in Laguna Beach
They also want to ensure that it doesn’t sound like the city is “attacking” local landlords, Sauers said.
“This isn’t the committee against landlords in town, but we do need to recognize that this is extreme circumstances and that it is part of our charge to preserve middle income and affordable housing in our town,” Sauers said. “By providing some of these protections, our hope is that when people have to move, they can still land in another rental in Laguna Beach instead of leaving town, which is what’s happening at a rapid rate.”
If the ordinance goes too far, investors will just avoid building in Laguna Beach, Hanauer pointed out. It’s already difficult because there’s so much red tape, he added.
“I think it’s really critical that this committee…on the one hand wants to protect existing units, but on the other hand wants to encourage new units. And we don’t want the city to become stigmatized as anti-investor, anti-landlord, etc.,” Hanauer said. “I think it’s important that we express to the council that, whatever we do, we walk that tightrope that on the one hand wanting to make sure the landowners function the way they should, but on the other hand want to make sure that we let people know that this is a place that you should invest in apartments.”
The issue has been a topic of discussion for several months for the committee, who have been working to address it.
After residents spoke at the January 25 meeting during public comment, the issue was placed on the committee’s February 22 agenda for further discussion. At that time, the group agreed to add it to their workplan and discuss it in more detail for potential future action at their April meeting. On April 26, the committee agreed to present their report on a possible draft emergency/urgency eviction and tenant protection ordinance to the council.
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The Tenant Protection Act is meant to protect renters from unjust evictions and unfair rent increases. Under TPA, a landlord must have a valid reason to evict a tenant. As outlined in the act, these reasons include if the tenant is at fault, like not paying rent or breaking the lease terms, and if the tenant is not at fault, like an owner or relative move in (if the lease allows), selling the property, or to demolish or substantially remodel a unit.
As protections that were enacted due to COVID-19 have been rolled back, many landlords have taken the opportunity to raise rents aggressively and find loopholes in the act, like using the no-fault “substantial remodel” clause written in the California State statute to evict long-time tenants. They say they are planning major repairs in order to evict their tenants, but can take years to actually pull the permits. Current state law also allows property owners to switch the reason for eviction, for example, from substantial remodel to owner move in. A number of cities have either amended rental ordinances or created emergency ordinances to address the problem.
Senate Bill 567, Termination of tenancy: no-fault just causes: gross rental rate increases, authored by State Senator Maria Elena Durazo (D-Los Angeles), was recently submitted to the Senate judiciary committee and covers a lot of what the committee has discussed. The proposed bill “builds on existing law to better protect California’s low-income renters from unjust evictions and exorbitant rent increases,” according to a statement from several organizations sponsoring the bill.
As written, the bill will close loopholes in the Tenant Protection Act that allow for “rampant abuse of the no-fault just causes for eviction, expand the population of protected tenants, limit allowable rent increases to a more reasonable cap, and provide mechanisms for accountability and enforcement,” the statement reads.
It’s a great effort, committee members noted at previous meetings, but it will take some time to go through the process and actually be implemented, if it even passes.
The state has a pending legislation that basically covers some of the same issues as the ordinance, said Cody Engle (who was joining virtually and speaking as a member of the public, not a committee member). It is the hope that by the end of the year, or shortly thereafter, the state code would take effect. This could be a protective measure for local renters in the meantime.
“This is an urgent issue,” Engle said.
The draft ordinance that has been provided to the committee is an example of the kind of ordinance Laguna Beach could adopt, he explained.
“At previous meetings, the committee has discussed the urgency of providing some type of protection to existing residents who have been evicted as a result of no-fault evictions,” while the landlords claim to be making major remodels without actually taking any actual action to do the remodel work, Engle explained, and the draft document tackles those concerns and can be used as a starting point for the city. “I would not view this (draft) ordinance as being a definitive of offering.”
It is modeled on Long Beach’s and covers the areas of concern in no-fault eviction, which are: Is the remodel actually going to occur? Is the owner or the immediate family the owner actually going to move into the unit or units? And the issue of compensation for tenants being evicted due to no-fault.
The committee should also consider submitting commentary to the council that would enumerate the issues that should be covered and attach the draft as an example of what an ordinance might look like, Engle suggested.
It’s an example of what an ordinance could look like, Hanauer agreed.
“The purview of the committee – in my view, other people may feel differently – is not to write ordinances, but to suggest to the council what this…(committee) believes should be in an ordinance, if in fact the council elects to do an ordinance,” he said.
And, in this particular case, recommend to the council that it develop an official ordinance. There are ordinances from numerous other cities that Laguna Beach can look toward as examples, he added.
There are several variables to consider when drafting an ordinance for the city, Hanauer said.
“It’s important that if a landlord cancels a lease because they are planning a major remodel that they actually pull a permit, that they do a major remodel, that (noticing) is more than 30 days,” he said. “There may be more, but those are the variables that we’d want to make sure that if we, if the city, has an ordinance that provides for factors beyond the state, the 2021 state law, that these are things that they sort of think about.”
The committee discussed specifying that evidence of a major remodel be required.
The draft includes adequate language, Hanauer said, so the committee members don’t need to provide much more commentary on the issue, but they should confirm that the council is aware that some landlords try to do a work-around the just cause by saying there will be a remodel project, but not actually do any work. They should specifically point out the language to the council to ensure they’re comfortable with it, he added.
The ordinance should identify the minimum level of rehab work required to be considered a remodel, Schaefgen agreed. The actual amount is up to council about what seems to be substantial. In the draft document it’s recommended that repairs/remodel cost no less than 10 times the amount of monthly rent, per unit (where work is being performed).
Schaefgen also recommended that termination notices to tenants for substantial remodel are required to include copies of permits, reasonably detailed information regarding the scope of the remodeling work and why it requires the tenant to vacate.
Hanauer also thought that noticing requirements aren’t covered as thoroughly as he thought they should be. Current state law requires 30 days’ notice. Adding another 30 days allows people the time to find appropriate new housing.
“That really does give people an opportunity to know that it’s going to happen and have a lot more time than people usually take and get some relocation assistance,” Hanauer said.
Hanauer suggested the committee consider recommending that the city provide relocation assistance beyond what the state offers. The state, as he interprets it, provides two months’ worth: The last month of rent free and the cash equivalent of one month of rent.
Schaefgen also agreed with requiring greater relocation assistance. At least two months would be appropriate, she added.
There was also agreement along committee members to add a right of first refusal for the tenant to return to the unit once it’s remodeled.
When the just cause is for owner move-in, the draft document recommends that the unit is used as the owner’s principal residence for a period of at least 36 consecutive months commencing within three months of vacancy and that no other reasonably comparable unit in the building is vacant.
“I personally don’t think that that’s too much,” Schaefgen said. “I think something substantial would be a good thing.”
It could also be two years, she suggested. Only requiring one year is not enough, Schaefgen said. They could just take it off the market for that time period and get around the requirement.
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Sara Hall covers City Hall and is a regular contributor to Stu News Laguna.