City of Richmond Just Cause Eviction Policy Options City Council Meeting June 23, 2015
OVERVIEW I. Background I. Existing Policies and Programs II. Existing Fees III. Housing Element Data II. Community Engagement III. Policy Options A-D 2
BACKGROUND 3
CALIFORNIA STATE POLICY Eviction Notices 30 or 60-day advance notice for no-fault Just Cause for Eviction policy mandates that landlords can only evict a tenant with just cause Three day notice for at-fault eviction (Code of Civil Procedure Section 1161(2)-(4)) Retaliatory and Discriminatory Evictions Prohibited (Code of Civil Procedure Section 1942.5., Fair Housing Act) Advance notice of Rent Increase (Code of Civil Procedure 827(b)) 4
CALIFORNIA STATE POLICY (CON T) Costa-Hawkins Rental Housing Act (California Code of Civil Procedure 1954.50-1954.535) Exempts the following units from rent controls: Units with a certificate of occupancy issued after February 1, 1995 Single-family homes Condominium units sold separately to a purchaser for value Establishes vacancy decontrol 5
RICHMOND S CURRENT ORDINANCE Richmond Municipal Code (R.M.C.) 7.105: Eviction control on residential property in foreclosure Adopted June 16, 2009 Applies to rental residential units on properties in foreclosure Specifies 12 grounds for eviction Notice requirements Relocation fee may be required Prohibits retaliatory and constructive eviction 6
CURRENT FEES PAID BY LANDLORDS* Annual Business License Tax $235.10 per parcel number Annual Fire Inspection Fee: per building 1-5 units: $112 6-14: $205 15-99: $251 100-249: $504 250+: $838 Residential occupancies with 20 or more complexes must have annual and mid-year review inspections in addition to attending a fire safety training session Richmond Rental Inspection Program (next slide) *does not include utility taxes or fees 7
CURRENT FEES PAID BY LANDLORDS (CON T) Richmond Rental Inspection Program Fee Structure # Units Owned YEAR 1 Inspections/ Registration YEAR 2 Registration Only YEAR 3 Registration Only TOTAL -- Cost per year 1 $150 $75 $0 $225 = $75 per year 2 $150 + $150 $75 $0 $375 = $125 per year 3 or more $150 per unit charge on 20% of total Units + $75 Source: Planning and Building Services $75 $75 $375 = $125 per year 8
RICHMOND HOUSEHOLD TENURE Tenure Richmond 2010 Contra Costa County 2010 Households % of Total Households % of Total Owner 18,659 51.7% 251,904 67.1% Renter 17,434 48.3% 123,460 32.9% Total 36,093 375,364 Source: City of Richmond 5 th Cycle Housing Element Update (2015-2023) p. 17 9
RICHMOND HOUSING STOCK BY UNIT TYPE Units in Structure Richmond 2009-2013 Estimates Number % of Total Single-family detached 22,774 56.7% Single-family attached 2,732 6.8% Duplex 2,457 6.1% 3 or 4 units 3,732 9.3% 5 to 9 units 2,389 5.9% 10 to 19 units 2,718 6.8% 20 or more units 3,268 8.1% Mobile home 69 0.2% Other (RVs, Vans, Boats, etc.) 30 0.1% Total 40,169 100% Source: City of Richmond 5 th Cycle Housing Element Update (2015-2023) p. 22 10
RICHMOND HOUSING STOCK BY YEAR BUILT Year Built Built 1939 or earlier Richmond 2008-2010 Estimates Number Percentage Accumulated Percentage 4,662 11.6% 11.6% Built 1940 to 1949 7,879 19.6% 31.3% Built 1950 to 1959 6,906 17.2% 48.5% Built 1960 to 1969 5,565 13.9% 62.3% Built 1970 to 1979 3,223 8.0% 70.4% Built 1980 to 1989 5,132 12.8% 83.2% Built 1990 to 1999 2,936 7.3% 90.5% Built 2000 to 2004 2,052 5.1% 95.6% Built 2005 or later 1,761 4.4% 100.0% Total 40,116 100% 11 Source: City of Richmond 5 th Cycle Housing Element Update (2015-2023) p. 22
RICHMOND OVERPAYING HOUSEHOLDS Owner Households (2009-2013 Estimate) Renter Households (2009-2013 Estimate) Total Household Income Overpaying Households Percent Overpaying Households Percent Overpaying Households Percent Less than $20,000 1,047 14.8% 4,041 40.7% 5,088 30.0% $20,000 - $34,999 1,013 14.3% 2,770 27.9% 3,783 22.3% $35,000 - $49,999 1,293 18.3% 1,794 18.1% 3,087 18.2% $50,000 - $74,999 1,517 21.5% 1,182 11.9% 2,699 15.9% $75,000 or more 2,192 31.0% 130 1.3% 2,322 13.7% Total 7,062 100% 9,917 100% 16,979 100% Percent of Household Type 38.9% 54.9% 46.8% Note: An overpaying household is a household which pays 30% or more of its household income on housing costs Source: City of Richmond 5 th Cycle Housing Element Update (2015-2023) p. 28 12
RICHMOND & CONTRA COSTA COUNTY 2010 & 2013 HOUSEHOLD MEDIAN INCOME $120,000 OWNER HOUSEHOLDS RENTER HOUSEHOLDS $100,000 $80,000 $60,000 $76,650 $102,869 $80,410 $101,324 Richmond Contra Costa County $40,000 $20,000 $34,252 $48,626 $41,890 $46,901 $0 2010 2013 2010 2013 Source: 2010 and 2013 ACS 1-year estimates, Table S2503 Numbers adjusted for inflation to 2013 dollars to reflect real (vs. nominal) change ACS is an estimate; Error bars denote 99.9% confidence ranges based on the average CPI index for San Francisco Oakland San Jose area 13
COMMUNITY ENGAGEMENT
COMMUNITY MEETING COMMENTS AND CONCERNS Eviction protection is needed for both tenants and property owners Rental units are in poor condition Rent control is needed, especially for those with special needs Rising rents, stagnant incomes Increased education, outreach and transparency is needed for all groups and policies Concerns about the unintended consequences of Just Cause for Eviction and Rent Control Deterred investment Tenants occupying units indefinitely Property owners expressing that they have not raised rents in years Survived recession, now seeing a return Many remaining questions about the applicability and effects of rent control and just cause policy 15
INFORMATIONAL INTERVIEWS Stephen Barton, Ph.D. Steve Hernandez, San Leandro Housing Specialist Theresa Karr, California Apartment Association Yvette Neukian, City Attorney, City of Glendale Leah Simon- Weisberg, Tenants Together Eli Moore, Haas Institute Jay Kelekian, Berkeley Rent Stabilization Board Adam Poe, Bay Area Legal Aid Jeff Wright, Real Estate Consultant 16
POLICY OPTIONS 17
POLICY OPTION RESEARCH Enhanced Monitoring and Community Education Standalone Just Cause for Eviction Ordinance Rent Mediation Board Ordinance Rent Control and Just Cause for Eviction 18
COMMON ELEMENTS ACROSS CASE STUDY JURISDICTIONS Rental assistance programs Referral to Legal Assistance Tenant/Landlord Mediation Condominium Conversion Ordinance Many overlapping Just Causes for Eviction 19
HOW TO READ THE PIE CHARTS Tasks Components City Department(s) 20
OPTION A: SUMMARY A: Enhanced monitoring and community education Monitor established metrics in rental housing market Rental Prices (RealFacts, Craigslist, Zillow, Padmapper) Vacancy Rates Housing Costs as a Percentage of Household Income Evictions and use of legal services regarding rent/eviction issues Increase outreach and expand community education efforts Outreach materials that inform tenants and landlords of their rights and noticing requirements regarding rent increases and termination or tenancy Contract with Bay Area Legal Aid so that Richmond residents who normally don t qualify for their services can be helped Richmond Rental Inspection Program Proceeding with Phase 2 21
OPTION A: STAFFING Monitor established metrics with assistance from the Finance Department Create and distribute educational materials Subscribe to RealFacts ($500 annually) Monitoring & Service Provision Housing and Community Development (+1.0 FTE) Planning and Building Services (+1.0 FTE) Proceed with implementation of Rental Inspection Program Phase 2 Monitor Rental Inspection Program to adjust fees if necessary Coordinate a contract with Bay Area Legal Aid (~$20,000) Contract with Third Party City Manager s Office Disclaimer: The corresponding time commitment estimates are based on current averages and/or predictions of future staff time requirements. Actual time commitments will depend on market conditions, efficiency, and staff s level of expertise and familiarity with programs and processes. If implemented, staff should monitor their individual involvement and report back to City Council in six months to assess feasibility. FTE Estimates provided by the City of Richmond Planning and Building Department and HCD Division 22
OPTION B: SUMMARY B: Just Cause for Eviction Ordinance + OPTION A Expand the scope of existing ordinance: Existing: Eviction Control on Residential Property in Foreclosure (R.M.C. 7.105) New: Expand to apply to most residential rental units This would NOT apply to: Transient occupancies Government-owned or federally subsidized housing Institutional facilities Housing cooperatives Rooms rented to boarders where landlord shares bathroom or kitchen with tenants Increases noticing requirements landlords must state reason for eviction May also require the provision of relocation assistance All components in Option A e.g. Glendale, San Diego Standalone Just Cause Eviction Ordinance 23
OPTION B: STAFFING Monitor established metrics with assistance from the Finance Department Create and distribute educational materials Subscribe to RealFacts ($500 annually) Housing & Community Development (+1.0 FTE) Monitoring & Service Provision Planning & Building Services (+1.0 FTE) Proceed with implementation of Rental Inspection Program Phase 2 Monitor Rental Inspection Program to adjust fees if necessary Contract with Third Party, Expand the scope of existing ordinance Expand the scope of existing ordinance Coordinate a contract with Bay Area Legal Aid (~$20,000) Draft Amended Ordinance and notices City Manager s Office City Attorney s Office Review Ordinance and notices to ensure compliance with State and Federal regulations 24
OPTION C: SUMMARY C: Rent mediation board ordinance + Option A Ordinance establishes: Rent Mediation Board Contract with third party legal service to ensure that an attorney can attend hearings Rent Review Board Hearings ONLY applicable to: RENT INCREASES of a specified amount or frequency on properties with specified number of units Rent Review Program Provides a forum for rent disputes (e.g. Gardena, San Leandro) Contract with a third party to provide mediation services between landlords and tenants All components from Option A Exempted units would include: Those statutorily exempt per Costa-Hawkins Rental Housing Act Other properties at discretion of City Council 25
OPTION C: STAFFING Monitor established metrics with assistance from the Finance Department Create and distribute educational materials Subscribe to RealFacts ($500 annually) Refer cases to ECHO and schedule hearings before Rent Mediation Board 1 Housing and Community Development (+2.0 FTE) Monitoring & Service Provision Planning and Building Services (+1.0 FTE) Proceed with implementation of Rental Inspection Program Phase 2 Monitor Rental Inspection Program to adjust fees if necessary Coordinate a contract with Bay Area Legal Aid (~$20,000) Coordinate a contract with the Eden Council for Hope and Opportunity (ECHO) estimated $30,000 annually Draft original Ordinance and notices Contract with Third Party, Draft New Ordinance City Manager s Office Review New Ordinance City Attorney s Office Review Ordinance and notices to ensure compliance with State and Federal regulations Coordinate a contract with third party legal representative (estimated minimum 10-15 hours per month at $300-$350/hour) 26
OPTION D: SUMMARY D: Rent control + Option A + Option B Rent Control Ordinance and Rent Control Board e.g. Santa Monica, Berkeley, East Palo Alto, Hayward Allows annual rent increases of up to 100% of the Consumer Price Index for the SF Oakland San Jose Region or an amount determined by the City Council Establishes allowed pass-throughs, such as portions of the registration fee, utility bill increases, and bond measures that may be passed on to the tenant Section specifying Just Causes for Eviction (Option B) Establish penalties for noncompliance Properties exempt from rent regulation per Costa-Hawkins Rental Housing Act Possible Additional exemptions: Owner-occupied buildings with three or fewer units (e.g. Santa Monica) Units currently owned by an individual landlord who owns five or fewer units within City limits (e.g. Hayward) Other exemptions as determined by City Council Contract with third party to provide tenant/landlord mediation services All components of Option A and B 27
OPTION D: STAFFING Oversee fiscal, personnel, contract administration, labor relations, public relations, research, planning and policy development activities of the Board Provide direct support to elected Rent Control Board Perform administrative tasks such as record-keeping and clerical responsibilities for the Board and Executive Director IT staff maintain the unit database, generate reports, maintain the website Billing Coordinator to issue registration fees Executive Director (Finance, IT, Administration) 6.0 FTE General Council (Attorney) 1.0 FTE Advise the Board on legal matters Represent Board in litigation Prepare and publish reports to analyze issues presented during hearings Appear at public meetings Represent Board s interest in State Legislature Hearing Department Manager Public Information Manager Schedule hearings, send notices, conduct investigations Conduct hearings, evaluate evidence, issue written decisions based on evidence Coordinate with third party mediation and arbitration service provider Coordinate with Building and Safety department to encourage owners to adequately maintain rent controlled units 2.0 FTE 2.0 FTE Respond to questions from the public Inform the public about Rent Control Law through newsletters, annual report and a website Initial processing of forms filed by tenants and landlords Research current lawful rent levels See pages 25-29 of Santa Monica 2015/2016 operating budget: http://www.smgov.net/uploadedfiles/departments/rent_control/reports/budget_reports/adopted_budget_2015-16.pdf 28
SUMMARY Option A Option B Staff Time +2.0 FTE Plus City Manager s Office staff time +2.0 FTE Plus City Manager s Office and City Attorney s Office staff time Example Necessary Third Party Contract(s) Legal Assistance: ~$20,000 Legal Assistance: ~$20,000 Estimated Staff Costs $193,684 230,549 $193,684 - $230,549 Option C +3.0 FTE Plus City Manager s Office and City Attorney s Office staff time Legal Assistance: ~$20,000 Mediation: ~$30,000 Legal Representation: ~10-15 hours per month at $300-$350 per hour ($36 - $63K annually) $351,292- $472,471 Option D +7-11 FTE Plus City Manager s Office and City Attorney s Office staff time Mediation and Arbitration: ~$25,000 $1,646,065- $2,245,171 Applicable unit estimates are based on initial staff analysis and shall be verified by a third party consultant upon receipt of additional direction to staff. Does not include units rented to transient guests, all condominiums, housing cooperatives, institutional facilities, and rooms rented to boarders where the landlords 29 lives with tenants).
THANK YOU Bill Lindsay Richmond City Manager (510) 620-6512 Bill_lindsay@ci.richmond.ca.us www.ci.richmond.ca.us/housingupdate 30