Title
Staff Report for a Resolution Approving the Annual Rent Review Program Evaluation for July 2014 - June 2015
Staffreport
SUMMARY AND RECOMMENDATIONS
The Rent Review Program is a useful resource for both landlords and tenants who seek information, facilitation, and compromise on proposed rent increases. The program is utilized by the community to provide a rent dispute forum for tenants and landlords and is applicable to multi-family residential properties of three (3) units or more as well as mobile homes if a tenant rents the mobile housing unit.
Staff recommends that the City Council review and approve the Annual Rent Review Program Evaluation for July 2014 through June 2015.
BACKGROUND
Title IV, Chapter 32, Article 5, section 4-32-500 of the City’s Municipal Code requires that an annual review of the Rent Review Program be prepared by the Rent Review Board (Board) for the City Council. Since May 2001, the Rent Review Program has been an integral part of the City’s comprehensive housing services. The Rent Review Program has proven to serve as a helpful resource for landlords and tenants that seek information and resolution regarding lawful and reasonable rent increases.
The Board consists of five (5) City Council-appointed positions. The Board composition includes: two (2) tenants, two (2) landlords, and one (1) homeowner representative.
In March 2015, the City amended San Leandro Municipal Code Section 1-3-1400 to permit both landlord rent review board members to reside outside the City of San Leandro. This ensured that the City had a full five-member Rent Review Board.
ECHO Housing is a full service and nonprofit housing counseling organization that provides fair housing and tenant-landlord counseling services for the City. Since FY 2013-14, due to the elimination of redevelopment agencies which necessitated staff reductions, the City has outsourced the Rent Review Program’s administration to ECHO Housing. ECHO Housing staff continue to be instrumental in processing the renters’ rent review request applications, communicating with the landlords to obtain their rent review response forms, facilitating the Rent Review Board hearings, and educating both tenants and landlords about the City’s Rent Review Ordinance.
Summary of Facts
From July 1, 2014 through June 30, 2015, ECHO Housing and City staff addressed 75 tenant and 20 landlord inquiries for a total of 95 inquiries relating to the City's policies on rent increases and its Rent Review Program, including 65 renters who applied for Rent Review Board hearings. Of these 65 hearing requests:
• 5 (or 8%) cases were ineligible for a rent review hearing;
• 4 (or 6%) cases were scheduled for a hearing (after June 30, 2015);
• 17 (or 26%) cases were settled without a hearing;
• 13 (or 20%) cases were settled prior to a schedule hearing; and
• 26 (or 40%) cases were heard by the Rent Review Board.
Of the 26 cases heard by the Rent Review Board:
• 12 (or 46%) cases were settled mutually;
• 6 (or 23%) cases were dismissed;
• 7 (or 27%) cases were settled after the rent review process concluded; and
• 1 (or 4%) case was not resolved (tenant did not accept the landlord’s negotiated offer)
Proposed Changes to the Rent Review Ordinance
As part of the Rent Review Program Ordinance, the Board must assess the program’s effectiveness each year. With rents and Rent Review Board applications rising over the last 15 months, City Council directed staff to re-assess and update the Ordinance, including clarifying and streamlining the application and hearing process. City Council also instructed staff to publicly outreach to local renters and landlords to gain feedback on the existing Ordinance and proposed changes to it. Some of the proposed changes were also based on administration and implementation experiences of both City and ECHO Housing staff.
The Rent Review Board supported the majority of the proposed amendments to the Ordinance, but formally approved specific amendments to the Ordinance that they recommended the City Council adopt.
The Board approved the following four recommendations to the proposed Ordinance amendments:
1) Revise the definition of "Base Rent" to include renter's insurance and implementation of the Ratio Utility Billing System and revised the "Required Notice" to include habitability as required by law.
2) Raise the $75 rent increase threshold to $100.
3) Revise the definition of "Residential Property" in order to allow duplexes that are tenant-occupied to be eligible for rent review.
4) Prohibit a landlord for raising rents for a period of one year if the landlord does not appear without good cause at a Rent Review Board hearing.
The Board unanimously approved Items 1-3 above, but were split (3 ayes, 2 no) on Item 4. Staff has incorporated Items 1-3 into the final draft Ordinance amendments for City Council review on December 7, 2015 (although the inclusion of renters insurance as base rent under Item 1 was not included because it would be problematic to administer). Staff did not include Item 4 because as the dissenting Board member noted there could be potential litigation to freeze a rent increase for 12 months based on a landlord’s non-showing without good cause at a Board hearing. Since the Ordinance was adopted in 2001, there has only been one instance when a landlord failed to appear at his rent review board hearing.
Previous Actions
The Rent Review Ordinance was adopted April 2001. The Municipal Code was amended in March 2002, October 2003, July 2005, and March 2015.
Board/Commission Review and Actions
At its November 17, 2015 Rent Review Board Meeting, the Rent Review Board unanimously approved the Annual Rent Review Program Evaluation, with recommended modifications to the Rent Review Board Ordinance Amendments, and instructed City staff to forward the evaluation to City Council for review and approval.
ATTACHMENT
Attachment to Resolution
• Rent Review Program Evaluation for July 2014 - June 2015
PREPARED BY: Steve Hernandez, Housing Specialist II, Community Development Department