Los Angeles t~~rïment

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1 -l ~ ~... COMPLIANCE OIVISIQ: Los Angeles t~~rïment Antonia R. Vilaraigosa. Mayor Mercedes Marquez. General Manager lz00 w. 7th Slreet 1st H. Los Angeles. CA tel fax RENT HOTLINE: BEiliSS March 15, 2007 Council File: Council District: Cityide Contact Person & Ext: Hakha Mortezaie, (213) 808~855i Roberto Aldape, (213) The Honorable Members of the City Council 200 North Spring Street Los Angeles, CA Attention: Alan Alietti, Legislative Assistant COUNCIL RULE 38 COMMENTS TO DRAFT ORDINANCE AMENDING SECTIONS 12.95,47.06,47.07, AND OF THE LOS ANGELES MUNICIPAL CODE RELATING TO AN IMPROVED TENANT RELOCATION ASSISTANCE PROGRAM In accordance with Council Rule 38, the City Attorney's Office requested the Los Angeles Housing Department (LAHD) to review the draft ordinance amending sections 12,95,47,06,47,07, and of the Los Angeles Municipal Code. This ordinance wil create an improved tenant relocation assistance program by increasing the amount of relocation assistance payments, clarifies the timing of when relocation assistance is provided, increases the amount of the rental housing production fee, creates a fee and establishes the relocation assistance service provider program to provide relocation assistance to the tenants, and requires the provision of relocation assistance prior to issuance of a demolition permit. LAHD has completed its review and concurs with the language presented by the City Attorney. In conjunction with the introduction of this ordinance, LAHD submits the attached basis for the calculation of the administrative fees proposed in the ordinance. Attached also please find the basis for the calculation of the relocation payment amounts proposed in the ordinance.

2 Council Rule 38 Comments to Draft Ordinance RE : Tenant Relocation Assistance Program Page 2 Prepared by: H KHAMANESH MORTEZA Director of Compliance Reviewed by: ~ ~ /fvv~ M.~. ROBERTÓ ALDAPE Assistant General Manager Reviewed by: Approved by: OLANDA CHAVEZ Executive Officer RCEDES MÁRQUEZ eneral Manager Cc: The Honorable Antonio Villaraigosa c/o June Lagmay, Legislative Coordinator The Office of the City Attorney c/o Sharon Siefort Cardenas, Esq.

3 Demolition Permit Processing, Relocation Services Monitoring, & Dispute Resolution Administrative Fee Calculations Calculation Factors MA I/HI-I Salary, fully burdened CT Salary, fully burdened Annual $ 104,375 $ Monthly $ 8,698 $ $ 5,397 $ Hourly Hearing Offcer # of Properties Demolished, 2005 # of Units Demolished, 2005 Average # Units/Propert Hearing fee Report Fee Total/Case $ 200 $ 200 $ , (based upon LAHD data after reconcilliation with LADBS; LADBS data alone does not include duplexes and multiple SFD's). Demolition Permit Processing Task Staff % Applied Assigned Per Mitl\ltèsper Task Cost/Unit Pre-Clearance Consultation - via phone & at counter 100% MAl Property 20 $ Dissemination of forms - via mail, fax & at counter 100% CT Property 15 $ Application Intake - Research ownership & property data, 100% CT Property 45 $ 3.97 database input, file set-up 4 Collect proof of relocation payments by LL 100% MAl Unit 15 $ Process Clearance in PCIS 100% MAl Property 15 $ Mail Correspondence, database entry, & filing 100% CT Property 20 $ Respond to Phone Inquiries from landlords & tenants Send Notice to T enants who have not met with subcontractor regarding LL's claim of relocation amount 100% MAl Unit 20 $ % MAl Unit 20 $ 3.35 Subtotal for Demolition Permit Monitoring $ Demo Perit. Relo Services-Disputes - updated.xls 1 of 3 3/

4 Demolition Permit Processing, Relocation Services Monitoring, & Dispute Resolution Administrative Fee Calculations Calculation Factors MA I/HI- Salary, fully burdened CT Salary, fully burdened Annual $ 104,375 $ 64,761 Monthly $ 8,698 $ $ 5,397 $ Hourly Hearing Officer # of Properties Demolished, 2005 # of Units Demolished, 2005 Average # Units/Propert Hearing fee Report Fee Total/Case $ 200 $ 200 $ , (based upon LAHD data after,econeilliation with LAD8S; LADBS data alone does not include duplexes and multipie SFD's). Relocation Monitoring Staff Minutes per Task % Applied Assigned Per Task CóstlUnit Set-up Referral File & database entry, send letter of introduction of 100% CT Property 60 relocation contractor $ Referral of Propert to Relocation Agency 100% CT Property 20 $ Contract Monitoring - review monthly reports, process monthly 100% MAl Property 30 $ 4.27 invoices, & track disbursements 4 Respond to Phone InqUiries from contractor, landlords, & tenants 100% MAl Unit 20 $ Prepare case for referral to City Attorney for non-pymt of relocation 10% HI-I Unit 120 $ amount Review subcontractor reports of tenant interviews and determination 100% MAl Unit 20 $ of relocation amounts Subtotal for Relocation Monitoring $ Demo Permit- Relo Services-isputes - updated_jds 20f3 3/

5 Demolition Permit Processing, Relocation Services Monitoring, & Dispute Resolution Administrative Fee Calculations Calculation Factors MA l /HI-I Salary, fully burdened CT Salary, fully burdened Hearing Officer # of Properties Demolished, 2005 # of Units Demolished, 2005 Average # Units/Propert Annual Monthly Hourly $ 104,375 $ 8,698 $ $ 64,761 $ 5,397 $ Hearing fee Report Fee Total/Case $ 200 $ 200 $ , (based upon LAHD data after reconcilliation with LADBS; LADBS data alone does not include duplexes and muitiple SFD's). Dispute Resolution Task Staff % Applied Assigned Per Minutes per Task Cost/Unit Set-up files for dispute investigations 25% CT Unit 20 $ Mall request for income verification to tenant 25% CT Unit 20 $ Set-up hearing files, schedule hearing, & maii notices 25% CT Unit 120 $ Staff support at hearing 25% CT Unit 60 $ 7.7B 5 Tranlation at hearing 10% CT Unit 60 $ Mail decisions to parties and update records 25% CT Unit 30 $ Investigate landlord claim and review tenant evidence 25% HI-I Unit 60 $ Prepare staff report 25% HI-t Unit 120 $ Represent department at hearing 25% HI-I Unit 60 $ Conduct hearing 25% Hearing Offcer Hearing flat fee $ Subtotal for Dispute Resolution $ Copy of Demo Permrt- Relo Services-Disputes - updted.xls 3 of 3 3/15/2007

6 I COMPREHENSIVE RELOCATION PACKAGE Al RELOCATION PAYMENT The Housing, Community and Economic Development Committee of the City Council of Los Angeles (HCED) has recommended approval of differing relocation payments based upon the length of tenancy, the status of a tenant as a "qualified tenant," and a tenant's income. The proposed relocation amounts are higher for long term tenants. The great majority of tenants in the City of Los Angeles reside in rent stabilized units. The average rent in these units has an impact on the rent for all rental units. Displacement of long term tenants results in a significantly higher rent increase for their replacement units. The impact of displacement is less on tenants who have resided in their unit for less than five years. The rent differential for a tenant with less than five years tenancy is smaller because vacancy decontrol typically restored their unit's rent to market rate at the onset of their tenancy. Relocation amounts, therefore, are higher for long term tenants. The proposed relocation amounts are also higher for low income tenants. The significant increase in rent caused by displacement has a disproportionate impact on the low-income tenant. Below are the basis for the calculations of the different relocation payments: Relocation Payment - Regular Tenant with less than 5 years tenancy ",,", ii,' Mioont First Month's Rent' $1,430 Last Month's Rent' $1,430 Average Rental Rate' ($1,430) Average RSO Rental Rate'h ($760) Difference in Rental Rate ($1,430 - $760) = $670 Difference in the Rental Rate for 6 months ($670x6) $4,020 Relocation payment for regular tenant with les. than 5 years tenancy $ 6,880 * MFP Yieldstar data. Average rental rate for Los Angeles (2nd quarter 2006) ** Data for RSO propertes was collected frm Landlord Declarations submittd to LAHD for the period of 11/05-11/06.

7 Lump Sum Relocation Payment - Qualified Tenant with less than 5 years tenancy" Calculition FactorS Amount First Month's Rent $1,430 Last Month's Rent' $1,430 Average Rental Rate' ($1,430) Average RSO Rental Rate'" ($760) Oifference in Rental Rate ($1,430 - $760) = $670 Difference in the Rental Rate tor 18 months ($670x6) $12,060 Relocation payment for qualified tenant with less than 5 years tenancy $14,920 ~ MFP Yieldstar data. Average rental rate for Los Angeles (2M quarter 2006)..Accrdíng LAMe, tenants with "Specîal Protecton" are those that fall within any of the following criteria: over the age of 62; handicapped as defined in Section of the California Health and Safety Code; disabled as defined in Section 223 of the United States Social Security Act; residing with one or more minor dependent children; resident of a low to moderate cost housing unit. ** Data for RSO propertes was collected from landlord Declarations submitted to LAHD for the period of 11/05.11/06. Relocation Payment for Regular Tenant with at least 5 years tenancy or a Regular Tenant whose Income is below 80% AMI Calculatibh!FactorS.... AmoUnt Moving Cost (average cost of moving per LAHD suoley) $1,000 Average Rental Rate' ($1,430) Average RSO Rental Rate'" ($760) Difference in Rental Rate ($1,430 - $760) = $670 Difference in the Rental Rate for 12 months ($670x12) $8,040 Total relocation payment for tenant with special protection $9,040 * MFP Yieldstardata. Average rental rate for Los Angeles (2nd quarter 2006)..Accrding LAMC, qualifed tenants are those that fall within any of the following criteria: over the age of 62; handicapped as defined in Section of the California Health and Safety Code; disabled as defined in Section 223 of the United States Social Security Act residing with one or more minor dependent children;.. Data for RSO properties was collectd frm Landlord Declarations submittd to LAHD for the period of 11/05-11/06. 2

8 Relocation Payment for Qualified Tenant with at least 5 years tenancy or a Qualified Tenant whose income is below 80% AMI Câlcúlatioh Factors. Amount Moving Cost (average cost of moving per LAHO survey) $1000 Average Rental Rate' ($1,430) Average RSO Rental Rate'" ($760) Difference in Rental Rate ($1,430 - $760) = $670 Difference in the Rental Rate for 24 months ($670x24) $16,080 Total relocation payment for tenant with special protection $17,080. MFP Yie\dstar data. Average rental rate for Los Angeles (2nd quarter 2006) MAccrding LAMe, qualifed tenants are those that fat! within any of the following criteria: over the age of 62; handicapped as defined in Secon of the California Health and Safety Code; disabled as defined in Section 223 of the United States Social Security Act; residing with one or more minor dependent children; l- Data for RSO propertes was collectd from Landlord Declarations submitt to LAHD for the period of 11/05-11/06. Bl RELOCATION SERVICES Relocation services wil be offered through a contracted service provider. The estimated cost of these services is $400 per regular tenant and $640 per tenant with special protection. A regular tenant will receive an initial interview to identify needs and develop a plan for replacement housing, supportive services during the tenant's active search such as bi-weekly referrals to vacant units (for up to 3 months), relocation check processing and distribution, and a closing interview to determine the outcome of the housing replacement search. Tenants with special protection will receive additional assistance to identify alternative housing options, assistance with paperwork and coordination with government or private agencies, and transportation assistance with the housing search. LAHD contacted a local relocation service provider to obtain sample fee schedules (see below) for the services described. Relocation Services Contractor Fee Schedule - Regular Tenant Calculation Factors. Amount Fee for a Regular Tenant- A maximum of 5 hours per case $400 Total contractor fee for a regular tenant $400 Relocation Services Contractor Fee Schedule - Tenant with Special Protection CalcuiafionFâctör: Amount Fee for a Regular Tenant- A maximum of 5 hours per case $400 Additional Assistance - A maximum of 3 hours per case $240 Total contractor fee for a tenant with special protection $640 3