9.a. Staff Report. Date: January 8, City Council. Valerie J. Barone, City Manager

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9.a Staff Report Date: January 8, 2019 To: From: Prepared by: Subject: City Council Valerie J. Barone, City Manager Joelle Fockler, MMC, City Clerk Joelle.fockler@cityofconcord.

1 9.a Staff Report Date: January 8, 2019 To: From: Prepared by: Subject: City Council Valerie J. Barone, City Manager Joelle Fockler, MMC, City Clerk (925) The Mayor will announce her appointment of two council members to a Council Ad Hoc Committee for a period of up to six months to discuss and review state and local requirements regarding tenant/landlord responsibilities, existing housing needs within the City, and develop proposed rental housing objectives and strategies for consideration by the full Council Report in Brief At its December 11, 2018, meeting, the City Council directed staff to agendize the formation and purpose of a Council Ad Hoc Committee to consider local requirements regarding tenant/landlord responsibilities, existing housing needs within the City, and develop proposed rental housing objectives and strategies. Under Council policy, the Mayor appoints ad-hoc committees. Staff is recommending an up to six month tenure for the ad hoc committee. Recommended Action The Mayor will announce her appointment of two council members to a Council Ad Hoc Committee for a period of up to six months to discuss and review state and local requirements regarding tenant/landlord responsibilities, existing housing needs within the City, and develop proposed rental housing objectives and strategies for consideration by the full Council. Background/Analysis During the consideration of the Residential Rent Review/Multi-Family Inspection Program Report to City Council on December 11, 2018, the City Council directed staff to agendize the formation and purpose of a Council Ad Hoc Committee to review state and local requirements regarding tenant/landlord responsibilities, existing housing needs Page 1 of 4

2 City Council Agenda Report Agenda Item No. 9.a January 8, 2019 within the City, and develop proposed rental housing objectives and strategies for consideration by the full Council. Per Council policy, the Mayor creates and makes appointments to ad-hoc committees. Public Contact The City Council Agenda was posted. Attachment 1. December 31, 2018, Letter from Raise the Roof Coalition Page 2 of 4

Attachment 1 December 31, 2018 Dear Mayor Obringer, Vice-Mayor McGallian, and Council Members Birsan, Hoffmeister, and Aliano, We are writing to follow-up on the Council meeting of December 11, 2018

3 Attachment 1 December 31, 2018 Dear Mayor Obringer, Vice-Mayor McGallian, and Council Members Birsan, Hoffmeister, and Aliano, We are writing to follow-up on the Council meeting of December 11, 2018 where you continued the conversation from the November 27 th Council meeting at which you assessed the effectiveness of the Rent Review Program and discussed pursuing other tenant protections in support of your constituents. We applaud the Council s decision to establish an ad hoc committee to advance conversations about meaningful tenant protections, which are so desperately needed in Concord. Thank you for this important step. As we are a little unclear about the protocols that govern ad hoc Council committees in Concord, we want to offer some input that feels important to ensure that this process has integrity: 1. We believe it is important to include Council Member Aliano on this ad hoc committee. Councilmember Aliano represents District 3, one of the areas most impacted by displacement. This would ensure members of the Monument community are represented and included in the problem-solving and policy-making process. 2. It makes sense for the Chair of the Housing and Economic Development Committee to be part of the ad hoc committee. The charge of the ad hoc committee is very much related to the purview of the HED committee. Vice-Mayor McGallian has already been engaged in conversations and research related to tenant protections for the past year. It seems inefficient to lose the knowledge he has gained through these conversations. 3. We believe it is important for the ad hoc committee be given an expeditious deadline to bring a proposal back to the full City Council. This focused approach is needed in order to build trust with the community, who have too often experienced the establishment of committees as a form of delay. As you know, the City Council conducted an extensive six-month Study Session about the housing crisis in 2016, and as recent experience shows, the succession of rising rents and evictions continues. We recommend that the ad hoc committee s findings and recommendations be delivered to full Council by the end of March Page 3 of 4

4 4. We reiterate the request that Council Member Birsan made from the dais that dissenting opinions in the ad hoc committee not signal sudden death in the committee, or in the removal of a finding or recommendation from the committee s report to the full Council. Dissent is democratic. We hope that the full Council can consider a full range of options that might emerge from the committee. 5. We believe there should be transparency and room for meaningful community engagement in the deliberative process of the ad hoc committee. We appreciate that the intent of appointing such a committee was to give it some added flexibility and to expedite the process of moving toward concrete proposals. However, these aims should not be achieved at the expense of community input, especially from those most impacted by rising rents and evictions since this is what the Council is seeking to address. There should also be transparency about which stakeholders the ad hoc committee is consulting in their research and deliberation process. We appreciate your consideration of these requests in the formation of the ad hoc committee. We know that a healthy, transparent process helps to ensure fair and effective outcomes. Thank you again for this critical step in moving toward meaningful tenant protections, which is so important for stabilizing families and our community. Sincerely, The members of the Raise the Roof Coalition: Debra Bernstein, Monument Impact Rhea Elina Laughlin, Central Regional Group of First 5 Contra Costa Margaret Hanlon-Gradie, Contra Costa Central Labor Council Alyssa Kang, California Nurses Association Bob Lane, Faith Alliance for a Moral Economy Eduardo Torres, Tenants Together Mariana Moore, Ensuring Opportunity Campaign to End Poverty in Contra Costa Kristi Laughlin, East Bay Alliance for a Sustainable Economy David Sharples, Alliance of Californians for Community Empowerment Contra Costa Page 4 of 4

5 Benched Correspondence Agenda Item No. 9.a January 8, 2019 January 3, 2019 Dear Concord City Council and Staff, We are writing to you as members of Healthy & Active Before 5, a Concord-based collaborative that works to create healthier environments for young children and their families. We are health care providers, early childhood experts, non-profit leaders, and funders who care deeply about this city and its residents. The families we serve are an integral part of this community, and Concord is the place they call home. One of our collective priorities is to create environments that support health and safety where children live, learn, and play. Unfortunately, too many families in Concord are struggling to make ends meet because of the high cost of housing and threats of eviction. The health impact of this crisis should not be ignored. As Dr. Diane Dooley, a founding member of our collaborative, stated in the Concord Housing Report, The stress that comes with housing insecurity has a profound impact on children, placing them at a higher risk for educational delays, mental health issues, low birth weight, and conditions such as asthma. We are also concerned about the housing crisis from a workforce development perspective. The whole community suffers when hard-working preschool teachers, child care providers, health care workers, and non-profit staff are not able to find secure, affordable housing. Until Concord s housing situation improves, we will continue to see fewer child care options, longer commutes, and reduced access to health care services. We know that Concord is a city that values its families, and we acknowledge the City s efforts to address this crisis. We encourage you to consider the health and well-being of your youngest and most vulnerable residents, and work towards meaningful tenant protections that will provide thousands of Concord families with the security they need to raise their children here. Together, we can ensure that all children are free to play, learn, and grow in this community. Sincerely, Members of the Healthy & Active Before 5 Executive Committee: Ruth Fernández, First 5 Contra Costa Viola Lujan,La ClÍnica Paula James, CocoKids John Jones, CocoKids Rhea Elina Laughlin, First 5 Contra Costa Cedrita Claiborne, Contra Costa Health Services Diane Dooley, Contra Costa Regional Medical Center Susan Jeong, Contra Costa Local Planning and Advisory Council for Early Care and Education Raz Moghbel, Contra Costa WIC Program Stephanie Merrell, John Muir Health Molly Bergstrom, Kaiser Permanente Katharine Mason, Contra Costa County Employment & Human Services - Community Services Bureau Healthy and Active Before 5 CocoKids 1035 Detroit Avenue, Suite 500 Concord, California facebook.com/hab45

6 To: Concord City Council January 3, 2019 Dear Councilmembers: Concord Communities Alliance is a group of Concord residents which includes homeowners, tenants, and landlords. We thank you for hearing the voices of Concordians, and we appreciate the Council s decision to establish an ad-hoc committee to draft an initial proposal for stronger protections for tenants in Concord. We are writing to voice our support for the letter you have received from Raise the Roof dated December 31, The points they make are appropriate, valid, and extremely important to the process: The committee should include the representative of District 3 (Councilmember Aliano), as this is the part of Concord with the greatest proportion of residents who have been harmed by large rent increases and no-fault evictions. The committee should include the Chair of the Housing and Economic Development Committee (Vice-Mayor McGallian). There should be an expeditious deadline to deliver a proposal by end of March The item should come back to the full Council even if there are dissenting opinions in the ad-hoc committee. The process should be transparent and encourage community engagement. In addition, we would like to add a few points for the final ordinance to those we listed in our letter of December 4, For ease of reference, our recommendations are repeated below, with added points highlighted. Rent stabilization The basic concept of rent stabilization is that rents should be allowed to maintain a reasonable rate of return on real costs, rather than allowing profit margins to shrink or grow significantly. This respects both the investments of landlords and the need of residents and the community for housing stability. 1. Rent increases should be allowed routinely to track a measure of inflation which does not itself include rent increases. E.g. Consumer Price Index (CPI) discounted by some amount to reduce the recursive effect of rents being part of CPI. (Santa Cruz has recently found that Over the last 40 years, the change in the CPI in the San Francisco Bay Area for All items less shelter was approximately 80% of the change in the CPI for All items. ) Annual increase of CPI in the Bay Area has typically been around 1-3%. Discounted to 80% to control for recursion, this would be %.

7 a. A few California cities with rent control have allowed routine annual increases of as much as 5%, regardless of inflation. We oppose such inflation-blind caps, as they allow rents to steadily increase in real terms (inflation-adjusted) in most cases, and may constrain rents to decrease in real terms in times of high inflation. These blind caps do not serve the purposes of maintaining a reasonable rate of return and ensuring housing stability. 2. Additional rent increases (above inflation) should be allowed on an ad-hoc basis to cover, via appropriate amortization, non-routine cost increases as specifically demonstrated by the landlord to a rent board (see below). E.g. property tax increases, staff wage increases, renovations and repairs. 3. The ordinance should roll back baseline rents to a date earlier than adoption of the ordinance. This is standard practice with rent stabilization laws in order to undo any last-minute spiking of rents. Rollbacks have already been upheld by California courts. We recommend the date on which Council decided to create the non-binding Residential Rent Review Panel. 4. Rent increases should be allowed only once per year per unit. 5. Compounding of rent increases should be allowed if annual increases are not made ( banking ), but with a cap of 10% at a time. 6. No rent increases should be allowed while habitability code violations are outstanding, or during assessment of a violation pursuant to report of a habitability issue. 7. Rent stabilization should not apply to tiny homes, in-law units, ADUs, or rooms. Rent board In jurisdictions adopting rent stabilization and just cause eviction policies, best practices call for the creation of a rent board to adjudicate and administer rent and eviction policies. CCA recommends replacing the existing mediation board with a fully empowered rent board based on the following principles: 1. Funded through the collection of rental unit fees; no general fund contributions. 2. Board hearing examiners for initial determinations, appealable to full board. 3. The Rent Board s decisions should be final. 4. There should fewer than a majority of members who own or manage any rental property or are real estate agents. The Rent Board should approve necessary ad-hoc rent increases, and conduct binding arbitrations and mediations with respect to rent increases and alleged wrongful eviction. Just cause Retaliatory eviction is already illegal in California. But the prohibition has been effectively meaningless in Concord so far, because a landlord need not declare any cause for an eviction. In such a case, the tenant faces the costly, difficult, and sometimes impossible task of pursuing legal action and proving the landlord had retaliatory intent.

8 The solution is to require landlords to declare a non-retaliatory cause for eviction, via a just-cause eviction ordinance. Just causes should include: No-fault cause Relocation payment required Permanent no-fault evictions should require a relocation payment by landlord to tenant. We recommend 3-4 months comparable market rent, because this amounts approximately to typical moving cost (1st+last+deposit, plus lost wages, truck rental, etc). 1. Owner move-in. 2. Withdrawal from rental market. 3. Permanent eviction as needed for major repairs. Relocation payment not required 1. Temporary eviction as needed for major repairs (per-diem expenses paid or other housing provided). 2. End of a previously-agreed temporary tenancy of less than a year in the landlord s primary residence. Cause with fault 1. Non-payment of rent after service of a 3-Day Notice to Pay or Quit. 2. The tenant is using or permitting a rental unit to be used for any illegal purpose. This includes committing any such acts within a 1,000 feet radius of the boundary line of the property. 3. Failure to give the landlord access for repairs, improvements, or showing the unit to prospective purchasers. 4. Breach of lease. 5. Refusing to agree to a new rental agreement upon expiration of the old one, if the new agreement is substantially the same as the old one. Just cause should not be required for rooms rented in the owner s residence or accessory dwelling units (ADUs) and duplexes where the owner resides in one of the units, due to the personal nature of such living arrangements. Apart from these exceptions, just cause should apply to all rental units in Concord, regardless of whether they are covered by rent stabilization. Additional protections In order to track the efficacy of the ordinance and encourage compliance, the City should require registration of residential units for rent, and reporting of rent increases and eviction notices. All units for rent to be registered with the City for owners with unit counts above a certain threshold, as a concession to the limited administrative resources of small landlords. We recommend 15 units as a high threshold.

9 All rent increases and notices of termination of tenancy must be filed with the city, and failure to file may be used as a defense in unlawful detainer actions. Councilmembers, we thank you for your willingness to take up seriously the insecurities faced by Concord families with low incomes and the instability inflicted on our wider community by volatile rents and unjust evictions. The points outlined here will bring closer to reality our city s aspiration to be a place where families come first. Sincerely, Concord Communities Alliance concordcommunitiesalliance@gmail.com

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