Agenda packet — Berkeley City Council, August 3, 2022 (part 2 of 3)

Page 119 ends

Placing an Empty Homes Tax Ordinance on the November 8, 2022 Ballot ACTION CALENDAR July 26, 2022

Page 2 ends

new units is a longer-term process, and it is incumbent on the City to maximize the availability of existing units that are already built and could be available for rent or sale.

Unfortunately, Alameda County’s housing remains unaffordable for many of its residents, and this burden does not fall evenly across income and racial groups. While 47% of renters in Alameda County are rent burdened, the rate is 58% for Black renters and 87% for extremely low-income renters.4 Meanwhile, as this crisis continues to unfold, Berkeley Rent Stabilization Board data indicates that 1,128 fully or partially regulated5 units have been classified by their owners as not available to rent (NAR).6 Around 40% of the 1,128 NAR units are in properties that are completely vacant, and almost 80% of NAR units are in properties that are half or more empty. A few of these are actively being renovated but the majority are not. Many have not been occupied for some time or actually are rented but not reported as being so to the Rent Board. Based on a review of Rent Board data and Google Street View, approximately 100 of these units are in buildings that are entirely vacant and dilapidated. This contributes to neighborhood blight and requires costly vector control and fire inspections. Thus, much of the vacancies in the city are not due to natural turnover.

A recent report examining vacancies in San Francisco found that there is no single force driving the vacancies7. It also found that vacancies were disproportionately in multi- family apartment complexes and tended to be in areas with older housing stock and higher rates of new construction— suggesting that property owners are holding older units vacant to capitalize on new construction. Notably, in interviews with numerous landlords, the report found that landlords contradictorily listed rent control as a reason for both low and high vacancy rates8. In other words, landlords themselves did not agree there is a clear connection between rent control and vacancy rates.

Oakland and Vancouver, both experiencing their own challenges with housing unaffordability, use a vacant housing tax to encourage owners of vacant units to find tenants or sell to those who will. In 2016, Vancouver passed a measure that placed a surcharge on the assessed value of vacant units. Within two years of its implementation, 21.2% of vacant units returned to occupancy and the city generated 4 California Housing Partnership Housing Needs Dashboard, 2019, https://chpc.net/housingneeds/?view=37.405074,-
119.26758,5&county=California,Alameda&group=housingneed&chart=shortfall|current,cost- burden|current,cost-burden-re|current,homelessness,historical-rents,vacancy,asking- rents|2022,budgets|2021,funding|current,state-funding,lihtc|2010:2021:historical,rhna- progress,multifamily-production
5 Partially regulated units are only partially covered by the rent ordinance, while fully regulated are completely covered by the ordinance
6 Berkeley Rent Stabilization Board. There are also units classified as “vacant”, for which property owners are actively seeking tenants.
7 Paige Dow, Unpacking the Growth in San Francisco’s Vacant Housing Stock, 2018, https://ternercenter.berkeley.edu/wp-content/uploads/2020/08/CR_Final_2.3.19-

1.pdf?fbclid=IwAR1a_6T8DJR-p6qZ05u-oeIplpBzfeTabdxNeG_-I39vQ-vNlBwe6FT7D8A&fs=e&s=cl 8 Ibid.

Page 44 of 81 ends

Page 120 ends

Placing an Empty Homes Tax Ordinance on the November 8, 2022 Ballot ACTION CALENDAR July 26, 2022

Page 3 ends

$46 million Canadian dollars. Oakland enacted a vacant property tax of $3,000 to $6,000, varying based on property type. In its first year of implementation, the city collected over $7 million in revenue.9 San Francisco voters will consider a vacant housing tax measure on the November ballot.

Addressing vacant units is a critical part of addressing Berkeley’s housing crisis. Every year that a significant percentage of Berkeley’s housing stock remains vacant exacerbates the housing affordability and displacement crises. This item includes a modified version of San Francisco’s proposed tax adapted to Berkeley. It is in the public interest to refer to the City Attorney and City Manager to prepare and submit a resolution taxing empty homes that would be submitted to a vote of the electors at the November 8, 2022 General Municipal Election.

BACKGROUND
Berkeley’s housing challenges are significant, requiring numerous policy interventions across many years to remediate. However, of the units that were built as part of the 2023 RHNA goals, the majority have been unaffordable to most residents.10 In 2019 the City’s median rent was $3,165, making it affordable to only households earning over $130k annually. Median rents have also increased by greater than 50% between 2005 and 2019. Rising rents in the city are of particular concern given that the City has a high renter population, and the impact of high rents falls disproportionately on BIPOC residents11.
9 San Francisco Budget and Legislative Analyst’s Office: Residential Vacancies in San Francisco, 2022, https://56a418ca-94d2-476c-9a45-
f491ca4a0387.usrfiles.com/ugd/56a418_74b82803e4fb434bb1b13010828a4c01.pdf 10 2020 General Plan APR: City of Berkeley, Table 2
11 Anti-Eviction Mapping Project: Densifying Berkeley: Potential Impacts on Displacement and Equity, 2022, https://www.berkeleyside.org/wp-content/uploads/2022/04/AEMP-UpzoningReport-Draft4-3.pdf

Page 45 of 81 ends

Page 121 ends

Placing an Empty Homes Tax Ordinance on the November 8, 2022 Ballot ACTION CALENDAR July 26, 2022

Page 4 ends

Percent Renter Occupancy vs. Percent Berkeley Population, 201912 Fortunately, the City of Berkeley has taken numerous steps in recent years to tackle its affordable housing crisis, including issuing a $100 million affordable housing bond, permitting Berkeley residents (outside of the fire zones) to receive near-automatic approval to build certain types of ADUs, and rezoning BART stations to allow significant affordable housing. A potential 2022 affordable housing bond is under consideration.

While these efforts will increase the supply of housing in Berkeley, it will take years for the City to reap the benefits. Developments still need to be proposed, approved, and then constructed. Berkeley’s large supply of vacant homes presents a unique opportunity for the City to immediately provide new units to renters, as there are no approval processes or lengthy construction timelines.

Additionally, hot housing markets often attract real estate speculation. Redfin data shows that 13% of homes in Oakland were purchased by an institutional investor or business in the fourth quarter of 2021, a 16.9% increase over the year before. In San Francisco, 18% were acquired by institutional investors. This follows a concerning nation-wide trend where large institutional investors have since the beginning of the pandemic purchased an enormous number of homes; over 75% of these offers are in all cash,13 and many without any inspections, pricing prospective homeowners out of the real estate market. Large financial institutions, like Blackrock, are now some of the largest owners of real estate in the country. However, unlike traditional homeowners, they treat homes as a commodity to build wealth. This is made clear by private equity- backed landlords being 18% more likely than non-equity backed corporate landlords to evict tenants, who are themselves more likely to do so than small landlords. In a 12 Ibid.
13 Route Fifty: Governments Begin Pushing Back on Investors Snatching Up Homes, 2022, https://www.route-fifty.com/infrastructure/2022/07/while-investors-are-snatching-homes-governments- fight-save-properties-residents/368927/

Page 46 of 81 ends

Page 122 ends

Placing an Empty Homes Tax Ordinance on the November 8, 2022 Ballot ACTION CALENDAR July 26, 2022

Page 5 ends

particularly acute instance of the commoditization of housing, one company packaged rental debt from 3,000 homes and sold it to investors for $500 million,14 similar to what happens with mortgage debt.

In Berkeley, it is likely that some vacant units are in buildings purchased for the sole purpose of accruing more wealth, with no intention of housing tenants. For instance, there is one property owner who owns 9 units, across 4 properties of two or fewer units in the city—of these, 8 are listed as not available to rent. While the extent of this is unknown, applying a tax on vacant homes will discourage this practice that, in aggregate, raises rents and home prices for everyone else. The proposed Measure fulfills one of the key anti-speculation recommendations of the 2022 report by the Anti- Eviction Mapping Project (Densifying Berkeley: Potential Impacts on Displacement and Equity).

Using the assumptions made in the San Francisco Budget Analyst report on a prospective vacancy tax, and Berkeley Rent Board data on length of vacancies, it is estimated that Berkeley will generate between $5.8 million and $8.7 million in revenue annually and that several hundred vacant units could become occupied within two 14 Tech Equity Collaborative: Sold to the Highest Bidder: How Tech is Cashing in on the American Dream, 2022, https://techequitycollaborative.org/2022/06/29/sold-to-the-highest-bidder-how-tech-is-cashing- in-on-the-american-dream/

Page 47 of 81 ends

Page 123 ends

Placing an Empty Homes Tax Ordinance on the November 8, 2022 Ballot ACTION CALENDAR July 26, 2022

Page 6 ends

years.15 This is likely a conservative estimate as it only includes units that have been registered as NAR with the Berkeley Rent Board—other vacant units are not included.

The Finance Department has confirmed that the methodology behind these numbers is valid and logical and will affirm them for the ballot statement.

Applicable Units
Years since implementation Year 1 Two + Years** Year 1 Two + Years ** Year 1 Two + Years** Units Subject to Tax 249 187 841 631 1090 818
Revenue $747,000 $1,120,500 $5,046,000 $7,569,000 $5,793,000 $8,689,500 *Excuding 38 single family homes owned by non-corporate owners of less than 3 single-family homes **Assumes 75% of buildings remain vacant after one year Small properties have 1 - 2 units
Large properties have more than 2 units
Small Properties* Large Properties TOTAL

POTENTIAL REVENUES FROM BERKELEY VACANCY TAX
Berkeley’s proposed vacancy tax is built off San Francisco’s 2022 proposed Empty Home Tax proposal. The San Francisco vacancy tax applies only to owners of properties with three or more units when at least one has been unoccupied for more than 182 days in a year. Single family homes and two-unit properties are exempt, and the vacancy tax increases for larger properties and units that have been empty for longer. The proposed vacancy tax for Berkeley would likewise be imposed when a unit is left vacant for more than 182 days in a calendar year, providing time extensions for units under active reconstruction or in probate. It will also contain the following exemptions:
 Owners of up to two single family homes and/or condominiums so long as they are owned by natural persons or family trusts. Single family homes and/or condominiums owned by corporations, real estate trusts, and LLCs would not be exempt. Additionally, single family homes with an ADU or JADU will be classified as “one unit”;
 Duplexes, triplexes, and quadplexes where one unit is owner occupied and the owner indicates that another unit is not available to rent due to owner or family use for no compensation;
 A property of four or fewer units whose owner is over 65, makes under 80% of the Area Median Income, and resides in the property;
 Organizations that are exempt from paying property taxes in California, such as non-profit organizations and religious institutions;
 The Empty Homes Tax will be suspended if an eviction moratorium is in place in Berkeley.
15 These estimates are calculated using Berkeley Rent Board data

Page 48 of 81 ends

Page 124 ends

Placing an Empty Homes Tax Ordinance on the November 8, 2022 Ballot ACTION CALENDAR July 26, 2022

Page 7 ends

The exemption for very low-income owners over the age of 65 has not been included in these estimates as only around 100 of all 30,000 Berkeley residences use this exemption for City parcel taxes. The Berkeley Department of Finance found that, given the low number of property owners who would qualify for and use this exemption, revenues will not be materially impacted.

The tax rate would vary between $3,000 and $6,000 depending on the type of unit. Non- exempt condos, duplexes, townhomes and single family homes would pay $3,000 per year. Remaining units would pay $6,000 annually. Both tiers of fees double, to $6,000 and $12,000 annually, respectively, for units vacant for more than two years.

The tax would go into effect on January 1, 2024, and a home will only be considered vacant if it remains vacant for at least 182 days of the year. As such, the vacancy tax provides time for property owners to return units to occupancy or inform the city that a property is exempt before any tax comes into effect.

The vacancy tax in Berkeley would have numerous benefits. It will almost immediately increase the City’s housing stock while complimenting more time-consuming approval and construction processes. Further, the tax has the potential to bring hundreds of units online within a year and generate millions in affordable housing revenue as a byproduct.

A vacancy tax will also disincentivize property owners from engaging in real estate speculation, which will help limit rent and housing price increases across the City.

Finally, units that are occupied will be brought in line with the city’s housing regulations.

The City has much data related to properties that assist in applying the vacancy tax.

Measure MM requires owners to register partially covered units and Measure U1 taxes owners of more than four units. In addition, Berkeley’s long-standing rent registration for fully covered units has provided the city with extensive data on the housing stock in the City.

The draft Measure is currently drafted as a general tax. If passed, funds would be placed into the general fund with the non-binding intention of putting all revenue into the Housing Trust Fund. The Housing Trust Fund supports the following activities:
● Construction of new affordable housing, including by providing pre-development to non-profit affordable housing developers, for households with an income of 80% or less of Area Median Income;
● The acquisition and rehabilitation of multi-unit buildings for affordable housing, and the operation of such buildings acquired and/or rehabilitated for households with an income of 80% or less of Area Median Income;
● The administration of the Empty Homes Tax and administration of the Housing Trust Fund.

Page 49 of 81 ends

Page 125 ends

Placing an Empty Homes Tax Ordinance on the November 8, 2022 Ballot ACTION CALENDAR July 26, 2022

Page 8 ends

ALTERNATIVES CONSIDERED
The authors considered expanding the existing owner-occupied low-income senior exemption for properties of four or fewer units to all seniors regardless of income. This alternative would respond to the fact that certain seniors may have purchased property decades ago and may no longer be able rent units in the property. The City does not have specific data for properties of owner-occupied four or fewer units that are owned by seniors. However, according to census data, there are around 19,000 seniors in the city. Using the Rent Board’s NAR data, it is reasonable to expect such an exemption would impact far fewer than 74 NAR units in buildings of four or fewer units estimated to be owned and occupied by seniors.

The authors did not include this alternative because there is already a similar exemption in Section 7.54.030 M. providing owners exemption for a unit that is kept vacant for use by owner or a family member for no compensation.

ENVIRONMENTAL SUSTAINABILITY
Existing buildings embody carbon. Maximizing utilization of existing units is a prudent use of embodied carbon.

FISCAL IMPACTS OF RECOMMENDATION
Staff time will be necessary for a legal review and to prepare a Council item placing the ordinance on the ballot. However, significant savings are anticipated as the ordinance and resolution are already drafted and included as part of this referral.

CONTACT PERSON
Councilmember Kate Harrison, Council District 4, 510-981-7140

Page 50 of 81 ends

Page 126 ends

RESOLUTION NO. -N.S.

SUBMITTING TO THE BERKELEY ELECTORATE AN ORDINANCE ADDING CHAPTER 7.54 TO THE BERKELEY MUNICIPAL CODE TO IMPOSE AN EXCISE TAX

ON KEEPING RESIDENTIAL PROPERTY VACANT TO FUND GENERAL MUNICIPAL

SERVICES
WHEREAS, the Berkeley City Council has elected to submit to the voters at the November 8, 2022 General Municipal Election, a measure adding Chapter 7.54 to the Berkeley Municipal Code imposing an “Empty Homes Tax” on property owners who keep residential properties vacant, to fund general municipal services; and WHEREAS, residential vacancies are an ongoing concern in Berkeley. According to the 2020 Decennial Census, 9% of Berkeley’s housing units, or a total of 4,725 units, sat vacant at the time of the Census; and
WHEREAS, of total vacancies, the Berkeley Rent Stabilization Board data from 2022 indicates that 1,128 fully or partially regulated units in buildings with more than two units have been classified by their owners as not available to rent. Returning these units to the housing market is a key strategy for ensuring long-term affordability; and WHEREAS, prolonged vacancy restricts the supply of available housing units and runs counter to the City’s housing objectives. Prolonged vacancies can also decrease economic activity in neighborhoods and lead to blight; and WHEREAS, the housing affordability crisis has created an urgent need to pay for additional services and programs including, but not limited to, construction of new affordable housing for households with a household income of 80% or less of Area Median Income, including by providing pre-development funding to non-profit affordable housing developers, and the acquisition and rehabilitation of multi-unit buildings for affordable housing, and the operation of such buildings acquired and/or rehabilitated; and WHEREAS, Berkeley is also working to ensure all public funds available to build affordable housing are being maximized, from the City, Alameda County, State and Federal governments; and
WHEREAS, even with the addition of City, County, State, and Federal resources, Berkeley is unable to house all of its residents; and
WHEREAS, the increased costs of meeting the challenges of the housing crisis have impacted Berkeley’s General Fund; and
WHEREAS, the City needs new funds to pay for municipal services. The Empty Homes Tax is intended to disincentivize prolonged vacancies, thereby increasing the number of housing units available for occupancy, while also raising funds for municipal services, Attachment 2

Page 51 of 81 ends

Page 127 ends

including but not limited to constructing, acquiring, and rehabilitating affordable housing; and
WHEREAS, the Council desires to submit this measure to be placed upon the ballot at the November 8, 2022 Statewide General Election, consistent with the Council’s Resolution No. 70,336-N.S., adopted on May 10, 2022, calling for a General Municipal Election to be consolidated with said statewide election; and NOW THEREFORE, BE IT RESOLVED by the Council of the City of Berkeley that this resolution is hereby adopted and a ballot measure adding Chapter 7.54 to the Berkeley Municipal Code imposing an “Empty Homes Tax” on property owners who keep residential properties vacant, to fund general municipal services, shall be placed before the voters at the election on November 8, 2022.

BE IT FURTHER RESOLVED that the Board of Supervisors of Alameda County is hereby requested to include on the ballots and sample ballots the measure enumerated above to be voted on by the voters of the qualified electors of the City of Berkeley.

BE IT FURTHER RESOLVED that, pursuant to California Elections Code sections 10002 and 10403, this City Council does hereby call an election on Tuesday, November 8, 2022, and requests that the Alameda County Board of Supervisors consolidate said election with the Statewide General Election on that same date in the manner and schedule established by Resolution No. 70,336-N.S., adopted on May 10, 2022, and submit the Measure to the qualified voters of the City at said consolidated election.

BE IT FURTHER RESOLVED that the City Council acknowledges that the consolidated election will be held and conducted in the manner prescribed in Elections Code Section 10418.

BE IT FURTHER RESOLVED that the City of Berkeley hereby requests that the Alameda County Board of Supervisors permit the Registrar of Voters of Alameda County to perform services in connection with said election at the request of the City Clerk. These services to include all necessary services related to official ballot creation, sample ballot and voter information pamphlet preparation, vote-by-mail, polling places, poll workers, voter registration, voting machines, canvass operations, and any and all other services necessary for the conduct of the consolidated election; and BE IT FURTHER RESOLVED that the full text of the measure shall be printed in the Voter Information Pamphlet mailed to all voters in the City of Berkeley.

BE IT FURTHER RESOLVED that the above enumerated measure requires a majority vote threshold for passage.

BE IT FURTHER RESOLVED that the City Clerk is hereby directed to cause the posting, publication and printing of notices, pursuant to the requirements of the Charter of the City of Berkeley, the Government Code and the Elections Code of the State of California.

Page 52 of 81 ends

Page 128 ends

BE IT FURTHER RESOLVED that the City Clerk is hereby directed to obtain printing, supplies and services as required.

BE IT FURTHER RESOLVED that the City Clerk is hereby authorized to enter into any contracts necessary for election consulting services, temporary employment services, printing services, and any such other supplies and services as may be required by the statutes of the State of California and the Charter of the City of Berkeley for the conduct of the November General Municipal Election.

BE IT FURTHER RESOLVED that Pursuant to Elections Code Section 9285 (b), the City Council hereby adopts the provisions of Elections Code Section 9285 (a) providing for the filing of rebuttal arguments for city ballot measures.

BE IT FURTHER RESOLVED that the City will reimburse the Registrar of Voters for the costs associated with placing the measure on the ballot.

BE IT FURTHER RESOLVED that said proposed Ordinance measure shall appear and be printed upon the ballots to be used at said election as follows:

CITY OF BERKELEY ORDINANCE
YESShall the measure to tax property owners who keep residential units vacant more than 182 days per year, $3,000 for each condominium, duplex, single family dwelling, or townhouse vacant in the first year, increasing to $6,000 for each subsequent year, and $6,000 for all other residential units vacant in the first year, increasing to $12,000 for each subsequent year, with exceptions, from January 1, 2024 to December 31, 2034, estimated to generate between $5,800,000 and $8,700,000 annually, be adopted?
NO
BE IT FURTHER RESOLVED that the text of the Ordinance be shown as Exhibit A, attached hereto and made a part hereof.

Exhibits
A: Text of Ordinance

Page 53 of 81 ends

Page 129 ends

Exhibit A
ORDINANCE NO. #,###-N.S.

ADDING CHAPTER 7.54 TO THE BERKELEY MUNICIPAL CODE TO IMPOSE AN

EXCISE TAX ON KEEPING RESIDENTIAL PROPERTY VACANT TO FUND GENERAL

MUNICIPAL SERVICES
BE IT ORDAINED by the people of the City of Berkeley as follows:

Section 1. That Chapter 7.54 of the Berkeley Municipal Code is added to read as follows:

Chapter 7.54
Empty Homes Tax
Sections:

7.54.010 Short Title.

7.54.020 Findings and Purpose.

7.54.030 Definitions.

7.54.040 Imposition of Tax.

7.54.050 Returns; Presumption of Vacancy.

7.54.060 Exemptions and Exclusions.

7.54.070 Administration; Penalties.

7.54.080 Housing Trust Fund; Deposit of Proceeds.

7.54.090 Technical Assistance to the City Manager; Annual Reports.

7.54.100 Authorization and Limitation on Issuance of Bonds.

7.54.110 Severability.

7.54.120 Savings Clause.

7.54.010 Short Title.

This Chapter shall be known as the “Empty Homes Tax Ordinance,” and the tax it imposes shall be known as the “Empty Homes Tax.”

7.54.020 Findings and purpose.

The People of the City of Berkeley find and declare as follows:

A. Residential vacancies are an ongoing concern in Berkeley. According to the 2020 Decennial Census, 9% of Berkeley’s housing units, or a total of 4,725 units, sat vacant at the time of the Census.

B. Of total vacancies, the Berkeley Rent Stabilization Board data from 2022 indicates that 1,128 fully or partially regulated units in buildings with more than two units have been classified by their owners as not available to rent. Returning these units to the housing market is a key strategy for ensuring long-term affordability.

C. Prolonged vacancy restricts the supply of available housing units and runs counter to the City’s housing objectives. Prolonged vacancies can also decrease economic activity in neighborhoods and lead to blight.

Page 54 of 81 ends

Page 130 ends

2 D. The housing affordability crisis has created an urgent need to pay for additional services and programs including, but not limited to, construction of new affordable housing for households with a household income of 80% or less of Area Median Income, including by providing pre-development funding to non-profit affordable housing developers, and the acquisition and rehabilitation of multi-unit buildings for affordable housing, and the operation of such buildings acquired and/or rehabilitated.

E. Berkeley is also working to ensure all public funds available to build affordable housing are being maximized, from the City, Alameda County, State and Federal governments.

F. Even with the addition of City, County, State, and Federal resources, Berkeley is unable to house all of its residents.

G. The increased costs of meeting the challenges of the housing crisis have impacted Berkeley’s General Fund.

H. The City needs new funds to pay for municipal services. The Empty Homes Tax is intended to disincentivize prolonged vacancies, thereby increasing the number of housing units available for occupancy, while also raising funds for municipal services, including but not limited to constructing, acquiring, and rehabilitating affordable housing.

7.54.030 Definitions.

Unless otherwise defined in this Chapter, the terms used in this Chapter shall have the meanings given to them in Chapters 2.44 and 9.04, of the Municipal Code, as amended from time to time. For purposes of this Chapter, the following definitions shall apply:

A. “Affiliate” means an entity under common majority ownership or common control, whether that ownership or control is direct or indirect, with any other person or entity, including but not limited to a person or entity that majority owns or controls, or is majority owned or controlled by, any other person or entity.

B. “Building Permit Application Period” means the period following the date that an application for a building permit for repair, rehabilitation, or construction with respect to a Residential Unit is filed with the City through the date the Planning Department or its successor agency grants or denies that application, not to exceed one year.

Notwithstanding the preceding sentence, if more than one building permit application is filed by or on behalf of one or more persons in the Owner’s Group for the same Residential Unit, the Building Permit Application Period shall mean only the applicable period following the date the first application is filed with the City by or on behalf of anyone in the Owner’s Group. In the case of an owner qualifying for the Disaster Period in subsection D, the Building Permit Application Period may be extended beyond one year if the owner makes a good faith effort, as determined by the building official, to obtain a building permit.

C. “Rehabilitation Period” means the two-year period following the date that the City issues a building permit for repair, or rehabilitation, with respect to a Residential Unit, provided that if the City issues multiple building permits to or for the benefit of one or more persons in the Owner’s Group for the same Residential Unit, the Rehabilitation

Page 55 of 81 ends

Page 131 ends

3 Period shall mean only the two-year period following the issuance of the first building permit to or for the benefit of anyone in the Owner’s Group.

D. “Disaster Period” means the two-year period following the date that a Residential Unit was severely damaged and made uninhabitable or unusable due to fire, natural disaster, or other catastrophic event.

E. “Homeowners’ Exemption Period” means the period during which a Residential Unit is the principal place of residence of any owner of that Residential Unit and for which such owner validly has claimed either the homeowners’ property tax exemption under Section 218 of the California Revenue and Taxation Code or the disabled veterans’ exemption under Section 205.5 of that Code, as those sections may be amended from time to time.

F. “Lease Period” means the period during which any owner of a Residential Unit or any person in the Owner’s Group of that owner leases that Residential Unit to one or more tenants under a bona fide lease intended for occupancy, but not including any lease or rental of that Residential Unit to anyone in the Owner’s Group or to travelers, vacationers, or other transient occupants.

G. “New Construction Period” means the one-year period following the date that the City issues a certificate of final completion and occupancy with respect to a Residential Unit in a newly erected building or a newly added Residential Unit in an existing building.

H. “Owner Death Period” means, with respect to a co-owner or decedent’s estate, heirs, or beneficiaries, the period during which a Residential Unit is unoccupied, uninhabited, or unused because of the death of any owner of a Residential Unit who was the sole occupant of that Residential Unit immediately prior to such owner’s death, provided that such period shall not exceed the longer of two years or the period during which the Residential Unit is subject to the authority of a probate court.

I. “Owner In Care Period” means the period during which a Residential Unit is unoccupied, uninhabited, or unused because all occupants of the Residential Unit who used that Residential Unit as their principal residence are residing in a hospital, long term or supportive care facility, medical care or treatment facility, or other similar facility.

J. “Owner’s Group” means for each owner of a Residential Unit, with respect to each Residential Unit, the owner, any current or former co-owner, and any Related Person or Affiliate of the owner or any current or former co-owner.

K. “Related Person” means a spouse, domestic partner, child, parent, or sibling.

L. “Residential Unit” means a house, an apartment, a mobile home, a group of rooms, or a single room that is designed as separate living quarters, other than units occupied or intended for occupancy primarily by travelers, vacationers, or other transient occupants. Separate living quarters are those in which the occupants live and eat separately from any other persons in the building and which have a kitchen and direct access from the outside of the building or through a common hall. For purposes of this Chapter, a Residential Unit shall not include a unit in a currently operational nursing home, residential care facility, or other similar facility, or any unit that is fully exempt from property tax under the welfare exemption under Section 214(g) of the California Revenue and Taxation Code, as may be amended from time to time.

Page 56 of 81 ends

Page 132 ends

4 M. “Vacancy Exclusion Period” means the Building Permit Application Period, Rehabilitation Period, Disaster Period, Homeowners’ Exemption Period, Lease Period, New Construction Period, Owner Death Period, or Owner In Care Period, or where the owner has affirmatively indicated through filings with the Rent Board that a single unit in an owner-occupied duplex, triplex, or quadplex is being used by the owner or a family member for no consideration.

N. “Vacant” means unoccupied, uninhabited, or unused, for more than 182 days, whether consecutive or nonconsecutive, in a calendar year.

7.54.040 Imposition of Tax.

A. Except as otherwise provided in this Chapter, the City imposes an annual Empty Homes Tax on each person that owns a Residential Unit for keeping that Residential Unit Vacant.

B. The tax on an owner keeping a Residential Unit Vacant shall be as follows:

1. For the first calendar year that the Residential Unit is Vacant, the tax shall be $3,000 per vacant condominium, duplex, single family dwelling, or townhouse unit under separate residential unit ownership and $6,000 per any other vacant Residential Unit.

2. For the second consecutive calendar year and each subsequent calendar year thereafter that the Residential Unit is Vacant, the tax shall be $6,000 per vacant condominium, duplex, single family dwelling, or townhouse unit under separate residential unit ownership and $12,000 per any other vacant Residential Unit.

C. The rates set forth in subsection B. of this Section shall be adjusted annually in accordance with the increase in the Consumer Price Index: All Urban Consumers for the San Francisco/Oakland/San Jose Area for All Items as reported by the United States Bureau of Labor Statistics, or any successor to that index, as of December 31st of the preceding year, beginning with the 2025 calendar year.

D. The Empty Homes Tax shall be payable by the owner or owners of the Residential Unit kept Vacant. Not more than one tax per Residential Unit shall be imposed under this Section for a calendar year by reason of multiple liable owners. If there are multiple liable owners, each owner shall be jointly and severally liable for the tax, which shall be the highest amount of tax payable by any owner for that Residential Unit for that calendar year.

E. A person shall be liable for the Empty Homes Tax only if that person, while owning a Residential Unit, has kept or is deemed to have kept that Residential Unit unoccupied, uninhabited, or unused, for more than 182 days, whether consecutive or nonconsecutive, in a calendar year. In determining whether an owner has kept a Residential Unit Vacant during a calendar year, days within any Vacancy Exclusion Period shall be disregarded if that Vacancy Exclusion Period applies to that owner for that Residential Unit, as shall days in which the Residential Unit was not owned by the owner, but the owner shall be deemed to have kept the Residential Unit unoccupied, uninhabited, or unused on all other days that such Residential Unit is unoccupied, uninhabited, or unused during the calendar year.

Page 57 of 81 ends

Page 133 ends

5 F. The Empty Homes Tax shall take effect on January 1, 2024. The Empty Homes Tax shall expire on December 31, 2034, unless reauthorized by the voters prior to such date.

G. The Empty Homes Tax shall be suspended for as long as the Berkeley COVID-19 Residential Eviction Moratorium is in effect pursuant to BMC 13.110 and shall resume upon expiration.

7.54.050 Returns; Presumption of Vacancy.

A. Each person that is required to pay the Empty Homes Tax shall file a return in the form and manner prescribed by the City Manager.

B. Each person that owns a Residential Unit at any time during a calendar year and that is not exempt from the Empty Homes Tax with respect to that Residential Unit under any one of subsections A. through E. of Section 7.54.060 shall file a return for that calendar year in the form and manner prescribed by the City Manager. A person that fails to file the return required by this subsection B. for a Residential Unit shall be presumed to have kept that Residential Unit Vacant for the calendar year for which such return is required. The person who fails to file the required return may rebut the presumption by producing satisfactory evidence that such person did not keep the Residential Unit Vacant during the calendar year for which the return is required.

7.54.060 Exemptions and Exclusions.

A. For only so long as and to the extent that the City is prohibited by the Constitution or laws of the State of California or the Constitution or laws of the United States from imposing the Empty Homes Tax on any person that person shall be exempt from the Empty Homes Tax.

B. Any organization that is exempt from income taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, shall be exempt from the Empty Homes Tax.

C. The City, the State of California, and any county, municipal corporation, district, or other political subdivision of the State shall be exempt from the Empty Homes Tax, except where any constitutional or statutory immunity from taxation is waived or is not applicable.

D. A natural person or family trust that is the owner of no more than two Single Family Dwellings or condominiums shall be exempt from the Empty Homes Tax for Single Family Dwelling Residential Units or condominiums. For purposes of this subsection D. only, “Single Family Dwelling” is inclusive of a single accessory dwelling unit and a junior accessory dwelling unit. Additionally, for the purposes of this subsection D. only, the “owner” of such Rental Property shall not be any of the following set forth under California Civil Code Section 1947.12(d)(5)(A)(i)-(iii) (“AB 1482”): a real estate investment trust, as defined in Section 856 of the Internal Revenue Code; a corporation; or a limited liability company.

E. The tax imposed by this Chapter shall not apply to a property of four or fewer units which is owner-occupied and whose owner (1) is sixty-five (65) years of age or older and

Page 58 of 81 ends

Page 134 ends

6 (2) whose combined family income, from all sources for the previous year, is at or below the income level qualifying as eighty percent (80%) of area median income for a Family of such size under Section 8 of the United States Housing Act of 1937 (42 U.S.C.A.

Sections 1437 et. seq.), or successor legislation, for such year. Any taxpayer claiming the exemption under this section shall be required to demonstrate their entitlement thereto annually by submitting an application and supporting documentation to the City Manager or their designee in the manner and at the time established in regulations and/or guidelines hereafter promulgated by the City Manager subject to review by the City Council in its discretion. Such applications shall be on forms provided by the City Manager, or their designee, and shall provide and/or be accompanied by such information as the City Manager shall require, including but not limited to, federal income tax returns and W-2 forms.

7.54.070 Administration; Penalties
A. The City Manager shall enforce the provisions of this Chapter and may prescribe, adopt, and enforce rules and regulations relating to the administration and enforcement of this chapter. The City Manager shall cause all moneys collected pursuant to this chapter to be deposited to the credit of the general fund.

B. The tax required by this Chapter is delinquent if not received by the tax administrator on or before February 28 of each year.

C. Any person who fails to pay the tax required by this Chapter to the City or any amount of tax required to be collected and paid to the City within the time required shall pay a penalty of ten percent of the tax or amount of the tax, in addition to the tax or amount of tax, plus interest at the rate of one percent per month from the date on which the tax or the amount of tax required to be collected became due and payable to the City until the date of payment.

D. Transactions with the principal purpose of avoiding or evading all or a portion of the Empty Homes Tax shall be disregarded for purposes of determining the amount of the Empty Homes Tax and whether the Empty Homes Tax is due. Any owner determined to have engaged in one or more transactions with the principal purpose of avoiding or evading all or a portion of the Empty Homes Tax shall be liable for the Empty Homes Tax and also liable for a penalty in an amount equal to the Empty Homes Tax.

E. Any tax required to be paid by an owner under the provisions of this chapter shall be deemed a debt owed by the owner to the City. Any person owing money to the City under the provisions of this chapter shall be liable to an action brought in the name of the City for the recovery of such amount, along with any collection costs incurred by the City as a result of the person’s noncompliance with this chapter, including, but not limited to, reasonable attorneys’ fees, plus interest and penalties as herein provided.

7.54.080 Housing Trust Fund; Deposit of Proceeds.

A. The Council may deposit any portion of the general revenue purposes proceeds generated by the Empty Homes Tax into the Housing Trust Fund, subject to its operating rules.

Page 59 of 81 ends

Page 135 ends

7 7.54.090 Technical Assistance to the City Manager; Annual Reports.

A. The Department of Public Works, the Planning Department, and the Rent Board, shall provide technical assistance to the City Manager, upon the City Manager’s request, to administer the Empty Homes Tax.

B. Commencing with a report filed no later than February 15, 2026, covering the fiscal year ending June 30, 2025, the City Manager shall file annually with the Council, by February 15 of each year, a report containing the amount of monies collected from the tax during the prior fiscal year.

7.54.100 Authorization and Limitation on Issuance of Bonds.

The City shall be authorized to pledge revenues generated by the Empty Homes Tax to the repayment of limited tax bonds or other forms of indebtedness authorized under this Section. The Council shall by ordinance or resolution, as applicable, establish the terms of any limited tax bonds or other forms of indebtedness authorized hereby, including but not limited to, the amount of the issue, date, covenants, denominations, interest rate or rates, maturity or maturities, redemption rights, tax status, manner of sale, and such other particulars as are necessary or desirable.

7.54.110 Severability.

If any word, phrase, sentence, part, section, subsection, or other portion of this ordinance, or any application thereof to any person or circumstance is declared void, unconstitutional, or invalid for any reason, then such word, phrase, sentence, part, section, subsection, or other portion, or the prescribed application thereof, shall be severable, and the remaining provisions of this chapter, and all applications thereof, not having been declared void, unconstitutional or invalid, shall remain in full force and effect. The People of the City of Berkeley hereby declare that they would have passed this ordinance, and each section, subsection, sentence, clause and phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases had been declared invalid or unconstitutional.

7.54.120 Savings Clause.

No section, clause, part, or provision of this Chapter shall be construed as requiring the payment of any tax that would be in violation of the Constitution or laws of the United States or of the Constitution or laws of the State of California.

Section 2. Increase Appropriations Limit. Pursuant to California Constitution Article XIII B and applicable laws, for four years from November 8, 2022, the appropriations limit for the City shall be increased by the aggregate sum collected by the levy of the general tax imposed under this ordinance.

Section 3. California Environmental Quality Act Requirements. This Ordinance is

Page 60 of 81 ends

Page 136 ends

8 exempt from the California Environmental Quality Act, Public Resources Code section 21000 et seq., under, including without limitation, Public Resources Code section 21065 and CEQA Guidelines sections 15378(b)(4) and 15061(b)(3), as it can be seen with certainty that there is no possibility that the activity authorized herein may have a significant effect on the environment and pursuant to Public Resources Code section 21080, subdivision (b)(8), and CEQA Guidelines section 15273 as the approval of government revenues to fund existing services.

Section 4. General Tax; Majority Vote Requirement. This Ordinance imposes a general tax for general revenue purposes and shall be effective only if approved by a majority of the voters voting thereon.

Page 61 of 81 ends

Page 137 ends

Kate Harri
son
Vice Mayor, District 4
2180 Milvia Street, Berkeley, CA 94704 Tel: 510.981.7140 TDD: 510.981.6903 E-Mail: [email protected]

REVISED AGENDA MATERIAL
Meeting
Date: July 12, 2022
Item #: 16
Item Description: Placing a Special Tax Measure on the November 8, 2022 Ballot to Tax Vacant Residential Units to Fund Construction, Acquisition and Rehabilitation of Affordable Housing
Submitt
ed by: Vice Mayor Harrison
This revised agenda material regarding the Empty Homes Tax includes an updated background document and ordinance for informational purposes, reflecting Council comments and feedback at the May 31 Council meeting.

Pursuant
to the May 31 referral to the City Attorney and City Manager, Vice Mayor Harrison continues to work with the departments to prepare a finalized and legally sound draft for Council consideration before the Council recess.

Summary
of substantial changes in the updated measure:
• Expand Vacancy Exclusion Period to include instances where the owner has affirmatively indicated through filings with the Rent Board that a single unit in an owner-occupied duplex is being used by owner or family members for no consideration;
• Clarify that the tax shall expire on January 1, 2034, unless reauthorized by voters prior to such date.
• Add condominiums to the natural person/family trust exemption; • Add exemption for own-occupied properties of three or fewer units where the owner (1) is sixty-five (65) years of age or older and (2) whose combined family income, from all sources for the previous year, is at or below the income level qualifying as eighty percent (80%) of area median income. • Added clarification that the tax would not apply during periods of emergency.

Summary
of changes in the background document:

Attachment 3Page 62 of 81

Page 138 ends

• Information showing that a significant number of vacant properties in Berkeley are entirely or mostly vacant. This provides further evidence that much of the vacancies in the city are not due to natural turnover;
• Data showing that institutional investor purchases of homes are at an all-time high nationally. In Oakland and SF 13% and 18% were acquired by institutional investors respectively and an example from Berkeley added; • Updated revenue projections to a range of $4.8 million and $7.2 million, excluding units that indicated to be for use by owner. Clarify that this is likely a conservative estimate given only units that have registered as not available to rent (NAR) with the rent board are used;
• Exemptions detailed in the above section;
• Information clarifying the long period to prepare for the vacancy tax, as it will not take effect until 2024 and will only be applied at the end of that calendar year if units remain vacant.

Page 63 of 81 ends

Page 139 ends

Kate Harrison
Vice Mayor, District 4
2180 Milvia Street, Berkeley, CA 94704 ● Tel: (510) 981-7000 ● TDD: (510) 981-6903 ● Fax: (510) 981-7099 E-Mail: [email protected] Website: http://www.CityofBerkeley.info/Manager

ACTION CALENDAR
Julyne 1214, 2022

To: Honorable Mayor and Members of the City Council
From: Vice Mayor Kate Harrison
Subject: Placi ng a Special Tax Measure on the November 8, 2022 Ballot to Tax Vacant Residential Units to Fund Construction, Acquisition and Rehabilitation of Affordable Housing Refer to the City Attorney and City Manager an Empty Homes Tax Ordinance for the November 8, 2022 Ballot

RECOMMENDATION
Refer to the City Attorney and City Manager to prepare and submit a resolution Ssubmitting an Ordinance adding Chapter 7.54 to the Berkeley Municipal Code taxing housing units that 1) have remained vacant for more than one year, 2) are not under permitted renovation or in probate and 3) are in multi-unit buildings or are single family homes or condominiums whose owners are not natural persons or family trusts to a vote of the electors at the November 8, 2022 General Municipal Election.

CURRENT SITUATION AND RATIONALE FOR RECOMMENDATION
The City of Berkeley is experiencing a historic housing crisis. Between 2005 and 2019 gross median rent increased by over 50%. This has been particularly burdensome in a city where 58% of residents are renters.1 While in recent years Berkeley has met its RHNA goals for those earning above 120% Area Median Income (AMI), it has failed to build sufficient housing for everyone else. Further, housing at the >120% AMI category has not significantly improved affordability for lower income residents and has increased displacement in low-income neighborhoods.
2 The extraordinary gap between the
housing needs of residents and the availability of housing can only be bridged through the use of numerous policy interventions, including a vacancy tax intended to incentivize owners of housing property to bring units back on the market and discourage speculation.

In a recent poll of top policy priorities among Berkeley voters, increasing affordable housing for low-income and homeless residents received by far the most support, at

1 Anti-Eviction Mapping Project: Densifying Berkeley: Potential Impacts on Displacement and Equity, 2022, https://www.berkeleyside.org/wp-content/uploads/2022/04/AEMP-UpzoningReport-Draft4-3.pdf 2 Ibid.

Formatted: Font: Not Bold

Page 64 of 81 ends

Page 140 ends

Refer to the City Attorney and City Manager an Empty Homes Tax Ordinance for the November 8, 2022 Ballot

ACTION CALENDAR
July ne 124, 2022

Page 2 ends

58%.3 While Berkeley is actively building new affordable units, siting and constructing new units is a longer-term process, and it is incumbent on the City to maximize the availability of existing units that are already built and could be available for rent or sale.

Unfortunately, Alameda County’s housing remains unaffordable for many of its residents, and this burden does not fall evenly across income and racial groups. While 47% of renters in Alameda County are rent burdened, the rate is 58% for Black renters and 87% for extremely low-income renters.
4 Meanwhile, as this crisis continues to
unfold, Berkeley Rent Stabilization Board data indicates that 1,128 fully or partially regulated
5 units have been classified by their owners as not available to rent (NAR).6 Around 40% of the 1,128 NAR units are in properties that are completely vacant, and almost 80% of NAR units are in properties that are half or more empty. A few of these are actively being renovated but the majority are not. Many have not been occupied for some time or actually are rented but not reported as being so to the Rent Board. Based on a review of Rent Board data and Google Street View, approximately 100 of these units are in buildings that are entirely vacant and dilapidated. This contributes to neighborhood blight and requires costly vector control and fire inspections. Thus, much of the vacancies in the city are not due to natural turnover.

3 City of Berkeley Community Survey, Live Phone and Text to Online, April 28-May 3, 2022, https://berkeleyca.gov/sites/default/files/documents/2022-05- 31%20Item%2037%20Discussion%20and%20Direction%20Regarding.pdf. 4 California Housing Partnership Housing Needs Dashboard, 2019, https://chpc.net/housingneeds/?view=37.405074,-
119.26758,5&county=California,Alameda&group=housingneed&chart=shortfall|current,cost - burden|current,cost-burden-re|current,homelessness,historical-rents,vacancy,asking- rents|2022,budgets|2021,funding|current,state-funding,lihtc|2010:2021:historical,rhna- progress,multifamily-production
5 Partially regulated units are only partially covered by the rent ordinance, while fully regulated are completely covered by the ordinance
6 Berkeley Rent Stabilization Board. There are also units classified as “vacant”, for which property owners are actively seeking tenants.

Page 65 of 81 ends

Page 141 ends

Refer to the City Attorney and City Manager an Empty Homes Tax Ordinance for the November 8, 2022 Ballot

ACTION CALENDAR
July ne 124, 2022

Page 3 ends

collected over $7 million in revenue.7 San Francisco is actively considering placing a vacant housing tax measure on the November ballot.

Percent Renter Occupancy vs. Percent Berkeley Population, 201910

7 San Francisco Budget and Legislative Analyst’s Office: Residential Vacancies in San Francisco, 2022, https://56a418ca-94d2-476c-9a45-
f491ca4a0387.usrfiles.com/ugd/56a418_74b82803e4fb434bb1b13010828a4c01.pdf 8 2020 General Plan APR: City of Berkeley, Table 2
9 Anti-Eviction Mapping Project: Densifying Berkeley: Potential Impacts on Displacement and Equity, 2022, https://www.berkeleyside.org/wp-content/uploads/2022/04/AEMP-UpzoningReport-Draft4-3.pdf 10 Ibid.

Page 66 of 81 ends

Page 142 ends

Refer to the City Attorney and City Manager an Empty Homes Tax Ordinance for the November 8, 2022 Ballot

ACTION CALENDAR
July ne 124, 2022

Page 4 ends

Fortunately, the City of Berkeley has taken numerous steps in recent years to tackle its affordable housing crisis, including issuing a $100 million affordable housing bond, permitting Berkeley residents (outside of the fire zones) to receive near-automatic approval to build certain types of ADUs, and rezoning BART stations to allow significant affordable housing. A potential 2022 affordable housing bond is under consideration.

While these efforts will likely dramatically increase the supply of housing in Berkeley, it will take years for the City to reap the benefits. Developments still need to be proposed, approved, and then constructed. Berkeley’s large supply of vacant homes presents a unique opportunity for the City to immediately provide new units to renters, as there are no approval processes or lengthy construction timelines.

Page 67 of 81 ends

Page 143 ends

Refer to the City Attorney and City Manager an Empty Homes Tax Ordinance for the November 8, 2022 Ballot

ACTION CALENDAR
July ne 124, 2022

Page 5 ends

In Berkeley, it is likely that some vacant units are in buildings purchased for the sole purpose of accruing more wealth, with no intention of housing tenants. An example is one property owner who owns 9 units, across 4 properties of two or fewer units in the city—of these, 8 are listed as not available to rent. While the extent of this is unknown, applying a tax on vacant homes will discourage this practice that, in aggregate, raises rents and home prices for everyone else. The proposed Measure fulfills one of the key anti-speculation recommendations of the 2022 report by the Anti-Eviction Mapping Project (Densifying Berkeley: Potential Impacts on Displacement and Equity).

Using the assumptions made in the San Francisco Budget Analyst report on a prospect
ive vacancy tax, and Berkeley Rent Board data on length of vacancies, it is estimated that Berkeley will generate between $4.8 million and $7.2 million in revenue annually and that several hundred vacant units could become occupied within two years.11 This is likely a conservative estimate as it only includes units that have been registered as NAR with the Berkeley Rent Board—other vacant units are not included..

Revenues projected here assume that units for owner use are predominately in one and two unit buildings, therefore, we are only calculating likely revenues from properties with three or more units.

11 These low-end estimates areis calculated by using Berkeley Rent Board data

Page 68 of 81 ends

Page 144 ends

Refer to the City Attorney and City Manager an Empty Homes Tax Ordinance for the November 8, 2022 Ballot

ACTION CALENDAR
July ne 124, 2022

Page 6 ends

Berkeley’s proposed vacancy tax is built off San Francisco’s 2022 proposed Empty Home Tax proposal. The San Francisco vacancy tax applies only to owners of buildings with three or more units when at least one has been unoccupied for more than 182 days in a year. Single family homes and two-unit properties are exempt, and the vacancy tax increases for larger properties and units that have been empty for longer. The proposed vacancy tax for Berkeley would instead be imposed after a year of vacancy, providing time extensions for units under active reconstruction or in probate. It will also contain the following exemptions:
• Oo wners of up to two single family homes and/or condominiums so long as they are owned by natural persons or family trusts. Single family homes and/or condominiums owned by corporations, real estate trusts, and LLCs would not be exempt. Additionally, single family homes with an ADU or JADU will be classified as “one unit” for the purposes of determining how many units are owned. • Duplexes where one unit is owner occupied if the owner indicates that the other unit is not available to rent
• A property of three or fewer units whose owner is over 65, makes under 80% of the Area Median Income, and resides in the property
• Organizations that are exempt from paying property taxes in California, such as non-profit organizations and religious institutions
• The Empty Homes Tax will be suspended if an eviction moratorium is in place in Berkeley
The tax rate would vary between $3,000 and $6,000 depending on the type of unit.

Condos, duplexes, townhomes and Single Family Homes not exempt as described above would pay $3,000 per year. Remaining units would pay $6,000 annually. Both tiers of fees double, to $6,000 and $12,000 annually, respectively, for units vacant for more than two years.

The tax would go into effect on January 1, 2024, and a home w ill only be considered
vacant if it remains vacant for the entire year. As such, the vacancy tax provides a long Formatted: Font: (Default) Arial, 12 pt
Formatted: Font: (Default) Arial, 12 pt
Formatted: Font: (Default) Arial, 12 pt
Formatted: Font: (Default) Arial, 12 pt
Formatted: Font: (Default) Arial, 12 pt
Formatted: Font: (Default) Arial, 12 pt

Page 69 of 81 ends

Page 145 ends

Refer to the City Attorney and City Manager an Empty Homes Tax Ordinance for the November 8, 2022 Ballot

ACTION CALENDAR
July ne 124, 2022

Page 7 ends

runway for property owners to return units to occupancy or inform the city that a property is exempt before any tax comes into effect.

A vacancy tax will also disincentivize property owners from engaging in real estate speculation, which will help limit rent and housing price increases across the City.

Finally, units that are actually occupied will be brought in line with the city’s housing regulations.

The draft Measure is currently drafted as a special tax. If passed, Council and City would be required to spend proceeds as specified. While the primary purpose of the proposed tax is to bring vacant units back into the housing market, the proposed Measure includes a Housing Trust Fund supporting the following activities:
● Construction of new affordable housing, including by providing pre-development to non-profit affordable housing developers, for households with an income of 80% or less of Area Median Income;
● The acquisition and rehabilitation of multi-unit buildings for affordable housing, and the operation of such buildings acquired and/or rehabilitated for households with an income of 80% or less of Area Median Income;
● The administration of the Empty Homes Tax and administration of the Housing Trust Fund.

The referral calls on the Author to submit the measure to the City Attorney for legal review.

ENVIRONMENTAL SUSTAINABILITY
Existing buildings embody carbon. Maximizing utilization of existing units is a prudent use of embodied carbon.

CONTACT PERSON
Councilmember Kate Harrison, Council District 4, 510-981-7140

Attachments:
1: Draft Resolution

Page 70 of 81 ends

Page 146 ends

Placing an Empty Homes Tax Ordinance on the November 8, 2022 Ballot ACTION CALENDAR May 31, 2022

Page 8 ends

Exhibit A: Draft Text of Measure

Page 71 of 81 ends

Page 147 ends

RESOLUTION NO. -N.S.

SUBMITTING TO THE BERKELEY ELECTORATE AN ORDINANCE ADDING CHAPTER 7.54 TO THE BERKELEY MUNICIPAL CODE TAXING EMPTY HOMES ON THE NOVEMBER 8, 2022 BALLOT

WHEREAS, the Berkeley City Council has elected to submit to the voters at the November 8, 2022 General Municipal Election, a measure adding Chapter 7.54 to the Berkeley Municipal Code taxing empty homes; and

WHEREAS, in accordance with the provisions of Section 10002 and 10403 of the Elections Code of the State of California, the Alameda County Board of Supervisors is requested to consolidate the City of Berkeley General Municipal Election with the Statewide General Election to be held November 8, 2022; and

WHEREAS, the City of Berkeley hereby requests that the Alameda County Board of Supervisors permit the Registrar of Voters of Alameda County to perform services in connection with said election at the request of the City Clerk. These services to include all necessary services related to official ballot creation, sample ballot and voter information pamphlet preparation, vote- by-mail, polling places, poll workers, voter registration, voting machines, canvass operations, and any and all other services necessary for the conduct of the consolidated election; and

WHEREAS, the Regional Housing Needs Assessment requires the City of Berkeley to permit the construction of 3,854 affordable housing units in the next eight years.

WHEREAS, the Council desires to submit this measure to be placed upon the ballot at said consolidated election.

NOW THEREFORE, BE IT RESOLVED by the Council of the City of Berkeley that the Board of Supervisors of Alameda County is hereby requested to include on the ballots and sample ballots the measure enumerated above to be voted on by the voters of the qualified electors of the City of Berkeley.

BE IT FURTHER RESOLVED that the full text of the measure shall be printed in the Voter Information Pamphlet mailed to all voters in the City of Berkeley.

BE IT FURTHER RESOLVED that the above enumerated measure requires a two-thirds vote threshold for passage.

BE IT FURTHER RESOLVED that the City Clerk is hereby directed to obtain printing, supplies and services as required.

Page 72 of 81 ends

Page 148 ends

BE IT FURTHER RESOLVED that the City will reimburse the Registrar of Voters for the costs associated with placing the measure on the ballot.

BE IT FURTHER RESOLVED that said proposed Ordinance measure shall appear and be printed upon the ballots to be used at said election as follows:

CITY OF BERKELEY ORDINANCE

Shall the measure [ ] YES
NO

BE IT FURTHER RESOLVED that the text of the Ordinance be shown as Exhibit A, attached hereto and made a part hereof.

Exhibits

A: Text of Ordinance

Page 73 of 81 ends

Page 149 ends

Exhibit A
ORDINANCE NO. #,###-N.S.

ADDING CHAPTER 7.54 TO THE BERKELEY MUNICIPAL CODE TO TAX EMPTY HOMES

BE IT ORDAINED by the people of the City of Berkeley as follows:

Section 1. That Chapter 7.54 of the Berkeley Municipal Code is added to read as follows:

Chapter 7.54

Empty Homes Tax

Sections:

7.54.010 Short Title.

7.54.020 Findings and Purpose.

7.54.030 Definitions.

7.54.040 Imposition of Tax.

7.54.050 Returns; Presumption of Vacancy.

7.54.060 Exemptions and Exclusions.

7.54.070 Administration; Penalties.

7.54.080 Housing Trust Fund; Deposit of Proceeds.

7.54.090 Expenditure of Proceeds.

7.54.100 Technical Assistance to the Finance Department.

7.54.110 Authorization and Limitation on Issuance of Bonds

7.54.120 Amendment of Ordinance.

7.54.130 Severability.

7.54.140 Savings Clause.

7.54.010 Short Title.

This Chapter shall be known as the “Empty Homes Tax Ordinance,” and the tax it imposes shall be known as the “Empty Homes Tax.”

7.54.020 Findings and purpose.

The Council of the City of Berkeley finds and declares as follows:

A. Residential vacancies are an ongoing concern in Berkeley. According to the 2020 Decennial Census, 9% of Berkeley’s housing units, or a total of 4,725 units, sit vacant.

Page 74 of 81 ends

Page 150 ends

2 D. The Empty Homes Tax is intended to disincentivize prolonged vacancies, thereby increasing the number of housing units available for occupancy, while also raising funds for rent subsidies and affordable housing.

7.54.030 Definitions.

Unless otherwise defined in this Chapter, the terms used in this Chapter shall have the meanings given to them in Chapter 2.44 and 9.04, of the Municipal Code, as amended from time to time. For purposes of this Chapter, the following definitions shall apply:

A. “Affiliate” means a person under common majority ownership or common control, whether that ownership or control is direct or indirect, with any other person, including but not limited to a person that majority owns or controls, or is majority owned or controlled by, any other person.

Notwithstanding the preceding sentence, if more than one building permit application is filed by or on behalf of one or more persons in the Owner’s Group for the same Residential Unit, the Building Permit Application Period shall mean only the applicable period following the date the first application is filed with the City by or on behalf of anyone in the Owner’s Group. In the case of an owner qualifying for the Disaster Period in subsection D., the Building Permit Application Period may be extended beyond one year if the owner makes a good faith effort, as determined by the building official, to obtain a building permit.

E. “Accessory Dwelling Unit,” and “Single Family Dwelling,” shall have the same meanings as defined in Section 23F.04.010.

F.E. “Homeowners’ Exemption Period” means the period during which a Residential Unit is the principal place of residence of any owner of that Residential Unit and for which such owner validly has claimed either the homeowners’ property tax exemption under Section 218 of the California Revenue and Taxation Code or the disabled veterans’ exemption under Section 205.5 of that Code, as those sections may be amended from time to time.

G.F. “Lease Period” means the period during which any owne r of a Residential Unit or
any person in the Owner’s Group of that owner leases that Residential Unit to one or more tenants under a bona fide lease intended for occupancy, but not including any lease or rental of that Residential Unit to anyone in the Owner’s Group or to travelers, vacationers, or other transient occupants.

Page 75 of 81 ends

Page 151 ends

3 H.G. “New Construction Period” means the one-year period following the date that the City issues a certificate of final completion and occupancy with respect to a Residential Unit in a newly erected building or a newly added Residential Unit in an existing building.

I.H. “Owner Death Period” means, with respect to a co-owne r or decedent’s estate, heirs, or beneficiaries, the period during which a Residential Unit is unoccupied, uninhabited, or unused because of the death of any owner of a Residential Unit who was the sole occupant of that Residential Unit immediately prior to such owner’s death, provided that such period shall not exceed the longer of two years or the period during which the Residential Unit is subject to the authority of a probate court.

J.I. “Owner In Care Period” means the period during which a Residential Unit is unoccupied, uninhabited, or unused because all occupants of the Residential Unit who used that Residential Unit as their principal residence are residing in a hospital, long term or supportive care facility, medical care or treatment facility, or other similar facility.

K.J. “Owner’s Group” means for each owner of a Residential Unit, with respect to each Residential Unit, the owner, any current or former co-owner, and any Related Person or Affiliate of the owner or any current or former co-owner.

L.K. “Related Person” means a spouse, domestic partner, child, parent, or sibling.

M.L. “Residential Unit” means a house, an apartment, a mobile home, a group of rooms, or a single room that is designed as separate living quarters, other than units occupied or intended for occupancy primarily by travelers, vacationers, or other transient occupants. Separate living quarters are those in which the occupants live and eat separately from any other persons in the building and which have a kitchen and direct access from the outside of the building or through a common hall. For purposes of this Chapter, a Residential Unit shall not include a unit in a currently operational nursing home, residential care facility, or other similar facility, or any unit that is fully exempt from property tax under the welfare exemption under Section 214(g) of the California Revenue and Taxation Code, as may be amended from time to time.

N.M. “Vacancy Exclusion Period” means the Building Permit Application Period, Rehabilitation Period, Disaster Period, Homeowners’ Exemption Period, Lease Period, New Construction Period, Owner Death Period, or Owner In Care Period, or where the owner has affirmatively indicated through filings with the Rent Board that a single unit in an owner-occupied duplex is being used by owner or family members for no consideration.

O.N. “Vacant” means an unoccupied, uninhabited, or unused rental unit as defined in Chapter __ 4(g) for at least more than one tax year.

7.54.040 Imposi
tion of Tax.

A. Except as otherwise provided in this Chapter for the purposes described in Section 7.54.090, the City imposes an annual Empty Homes Tax on each person that owns a Residential Unit for keeping that Residential Unit Vacant.

B. The tax on an owner keeping a Residential Unit Vacant for a single tax year in 2024 and subsequent single tax years shall be shall as follows:

1. $3,000 per vacant condominium, duplex, single family dwelling, or townhouse unit under separate residential unit ownership;

2. $6,000 per other vacant Residential Unit.

Formatted: Font: Not Bold, Font color: Auto

Page 76 of 81 ends

Page 152 ends

4 C. The tax on an owner keeping a Residential Unit Vacant for the 2025 tax year or subsequent tax years, if that owner has kept that Residential Unit Vacant in the immediately preceding tax year, shall be as follows:

1. $6,000 per vacant condominium, duplex, single family dwelling, or townhouse unit under separate residential unit ownership;

2. $12,000 per other vacant Residential Unit.

D. The rates set forth in subsections B. of this Section shall be adjusted annually in accordance with the increase in the Consumer Price Index: All Urban Consumers for the San Francisco/Oakland/San Jose Area for All Items as reported by the United States Bureau of Labor Statistics, or any successor to that index, as of December 31st of the preceding year, beginning with the 2025 tax year.

E. The Empty Homes Tax shall be payable by the owner or owners of the Residential Unit kept Vacant. Not more than one tax per Residential Unit shall be imposed under this Section for a tax year by reason of multiple liable owners. If there are multiple liable owners, each owner shall be jointly and severally liable for the tax, which shall be the highest amount of tax payable by any owner for that Residential Unit for that tax year.

F. A person shall be liable for the Empty Homes Tax only if that person, while owning a Resi
dential Unit, has kept or is deemed to have kept that Residential Unit unoccupied, uninhabited, or unused, for more than at least one tax year.

G. The Empty Homes Tax shall take effect on January 1, 2024. The Empty Homes Tax shall expire on January 1, 2034, unless reauthorized by voters prior to such date.expire on December 31, 2053.

G.H. The Empty Homes Tax shall be suspended for as long as the Berkeley COVID-19 Residential Eviction Moratorium is in effect pursuant to BMC 13.110 and shall resume on upon expiration.

7.54.050 Returns; Presumption of Vacancy.

A. Each person that is required to pay the Empty Homes Tax shall file a return in the form and manner prescribed by the Finance Department.

B. Each person that owns a Residential Unit at any time during a tax year and that is not exempt from the Empty Homes Tax with respect to that Residential Unit under any one of subsections A. through E. of Section 7.54.060 shall file a return for that tax year in the form and manner prescribed by the Finance Department. A person that fails to file the return required by this subsection B. for a Residential Unit shall be presumed to have kept that Residential Unit Vacant for the tax year for which such return is required.

The person who fails to file the required return may rebut the presumption by producing satisfactory evidence that such person did not keep the Residential Unit Vacant during the tax year for which the return is required.

7.54.060 Exemptions and Exclusions.

A. For only so long as and to the extent that the City is prohibited from imposing the Empty Homes Tax, any person upon whom the City is prohibited under the Constitution or laws of the State of California or the Constitution or laws of the United States from imposing the Empty Homes Tax shall be exempt from the Empty Homes Tax.

B. Any organization that is exempt from income taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, shall be exempt from the Empty Homes Tax.

Page 77 of 81 ends

Page 153 ends

5 C. The City, the State of California, and any county, municipal corporation, district, or other political subdivision of the State shall be exempt from the Empty Homes Tax, except where any constitutional or statutory immunity from taxation is waived or is not applicable.

D. A natural person or family trust that owns no more than two sSingle fFamily dDwellings or condominiums shall be exempt from the Empty Homes Tax for sSingle fFamily dDwelling Residential Units or condominiums. For purposes of subparagraph D only, “Single Family Dwellings” is inclusive of a single aAccessory dDwelling uUnit or and a junior aAccessory dDwelling uUnit. Additionally, for the purposes of subparagraph D only, the “Owner” of such Rental Property shall not be any of the following set forth under California Civil Code Section 1947.12(d)(5)(A)(i)-(iii) (“AB 1482”): a real estate investment trust, as defined in Section 856 of the Internal Revenue Code; a corporation; or a limited liability company.

E. For each Residential Unit qualifying for any Vacancy Exclusion Period in a tax year, an owner shall be exempt from the Empty Homes Tax for that Residential Unit.

F. The tax imposed by this Chapter shall not apply to a pr operty of three or fewer units which is owner-occupied and whose owner (1) is sixty-five (65) years of age or older and (2) whose combined family income, from all sources for the previous year, is at or below the income level qualifying as eighty percent (80%) of area median income for a Family of such size under Section 8 of the United States Housing Act of 1937 (42 U.S.C.A.

7.54.070 Administration; Penalties
A. Except as otherwise provided under this Chapter, the Empty Homes Tax shall be administered pursuant to Chapter 2.44 and 9.04.

B. Transactions with the principal purpose of avoiding or evading all or a portion of the Empt
y Homes Tax shall be disregarded for purposes of determining the amount of the Empty Homes Tax and whether the Empty Homes Tax is due. In addition to the Empty Homes Tax due as a result of this subsection B., any owner liable for any Empty Homes Tax as a result of this subsection B. shall be liable for a penalty in an amount equal to the Empty Homes Tax due as a result of this subsection B.

7.54.080 Housing Trust Fund; Deposit of Proceeds.

A. Establishment of Fund. The Empty Homes Fund (“Fund”) is hereby established as a special purpose fund, and shall receive all taxes, penalties, interest, and fees collected from the Empty Homes Tax imposed under this Chapter.

B. The Fund will operate as a subsidiary fund within the Housing Trust Fund and be subject to its operating rules.

Page 78 of 81 ends

Page 154 ends

6 C. Use of Fund. Subject to the budgetary and fiscal provisions of the Charter, monies in the Fund shall be used exclusively for the purposes described in Section 7.54.090.

D. Administration of Fund. Commencing with a report filed no later than February 15, 2026, covering the fiscal year ending June 30, 2025, the Finance Director shall file annually with the Council, by February 15 of each year, a report containing the amount of monies collected in and expended from the Fund during the prior fiscal year, the status of any project required or authorized to be funded by Section 7.54.090, and such other information as the Finance Director, in the Finance Director’s sole discretion, deems relevant to the operation of Chapter.

E. All monies collected under the Empty Homes Tax Ordinance shall be deposited to the credit of the Fund, established in subsection A. of this Section. The Fund shall be maintained separate and apart from all other City funds and shall be subject to appropriation. Any balance remaining in the Fund at the close of any fiscal year shall be deemed to have been provided for a special purpose and shall be carried forward and accumulated in the Fund for the purposes described in Section 7.54.090.

7.54.090 Expenditure of Proceeds.

Subject to the budgetary and fiscal provisions of the Charter, monies in the Housing Trust Fund shall be appropriated on an annual or supplemental basis and used exclusively for the following purposes:

A. To the Finance Department and other City Departments, for administration of the Empty Homes Tax and administration of the Housing Trust Fund, limited, each year, to 10% of annual proceeds.

B. Refunds of any overpayments of the Empty Homes Tax, including any related penalties, interest, and fees.

C. All remaining amounts to provide funding, including administrative costs, for Eligible Programs, [ ]% of which shall be used for the programs described in subsection

7.54.090 C.(1)(a) and [ ]% of which shall be used for the programs described in subsection 7.54.090 C.(1)(b). The voters intend that these remaining amounts be spent on Eligible Programs at levels in addition to amounts currently spent on such Eligible Programs and that such remaining amounts not be used to supplant existing expenditures.

1. For purposes of this Section 7.54.090, “Eligible Programs” means:
a. Const
ruction of new affordable housing, including by providing pre- development funding to non-profit affordable housing developers. Buildings subject to expenditures under this subsection 7.54.090 C.(1)(B) shall be restricted through a recorded deed restriction or restrictions mandated for the useful life of the building to households with an household income of 80% or less of Area Median Income.
b. The acquisition and rehabilitation of multi-unit buildings for affordable housing, and the operation of such buildings acquired and/or rehabilitated.

Buildings subject to expenditures under this subsection 7.54.090 C.(1)(B) shall be restricted through a recorded deed restriction or restrictions mandated for the useful life of the building to households with an household income of 80% or less of Area Median Income.

2. For purposes of this Section 7.54.090, “Area Median Income” means the median income as published annually by the City Manager pursuant to Chapter 23.328.080

Page 79 of 81 ends

Page 155 ends

7 (Administrative Regulations), derived in part from the income limits and area median income determined by the United States Department of Housing and Urban Development, or its successor agency, for the Alameda County metro fair market rent area, adjusted solely for household size, but not for high housing cost area. The Council may modify this definition of Area Median Income solely for purposes of subsection 7.54.090 C.(1)(b) to determine area median income by zip code area.

7.54.100 Technical Assistance to the Finance Department.

The Department of Public Works, the Planning Depart
ment of Building Inspection, the
Rent Board, and the Assessor-Recorder’s Office shall provide technical assistance to the Finance Department, upon the Finance Department’s request, to administer the Empty Homes Tax.

7.54.1 10 Authorization and Limitation on Issuance of Bonds.

The City is hereby authorized to issue from time to time limited tax bonds or other forms of indebtedness to finance the costs of the projects described in Section 7.54.090. The City shall be authorized to pledge revenues generated by the Empty Homes Tax to the repayment of limited tax bonds or other forms of indebtedness authorized under this Section. The Council shall by ordinance or resolution, as applicable, establish the terms of any limited tax bonds or other forms of indebtedness authorized hereby, including but not limited to, the amount of the issue, date, covenants, denominations, interest rate or rates, maturity or maturities, redemption rights, tax status, manner of sale, and such other particulars as are necessary or desirable.

7.54.120 Amendment of Ordinance.

The Council may amend this ordinance in any manner by two-thirds vote, including reducing any applicable tax rates or adding or modifying exemptions that does not result in an increase in the tax imposed herein without further voter approval except as limited by Articles XIII A and XIII C of the California Constitution. If the City Council repeals this ordinance, it may subsequently reenact it without voter approval, as long as the reenacted ordinance does not result in an increase in the tax imposed herein.

7.54.130 Severability.

Severability. If any word, phrase, sentence, part, section, subsection, or other portion of this ordinance, or any application thereof to any person or circumstance is declared void, unconstitutional, or invalid for any reason, then such word, phrase, sentence, part, section, subsection, or other portion, or the prescribed application thereof, shall be severable, and the remaining provisions of this chapter, and all applications thereof, not having been declared void, unconstitutional or invalid, shall remain in full force and effect. The People of the City of Berkeley hereby declare that they would have passed this ordinance, and each section, subsection, sentence, clause and phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases had been declared invalid or unconstitutional.

7.54.140 Savings Clause.

Page 80 of 81 ends

Page 156 ends

8 No section, clause, part, or provision of this Chapter shall be construed as requiring the payment of any tax that would be in violation of the Constitution or laws of the United States or of the Constitution or laws of the State of California.

Section 2. Increase Appropriations Limit. Purs
uant to California Constitution Article XIII B
and applicable laws, for four years from November 8, 2022, the appropriations limit for the City shall be increased by the aggregate sum collected by the levy of the tax imposed under this ordinance.

Section 3. Calif
ornia Environmental Quality Act Requirements. This Ordinance is exempt from the California Environmental Quality Act, Public Resources Code section 21000 et seq., under, including without limitation, Public Resources Code section 21065 and CEQA Guidelines sections 15378(b)(4) and 15061(b)(3), as it can be seen with certainty that there is no possibility that the activity authorized herein may have a significant effect on the environment and pursuant to Public Resources Code section 21080, subdivision (b)(8), and CEQA Guidelines section 15273 as the approval of government revenues to fund existing services.

Section 4. Speci
al Tax; Two Thirds Vote Requirement. This Ordinance imposes a Special tax for special revenue purposes and shall be effective only if approved by two thirds of the voters voting thereon.

Page 81 of 81 ends

Page 157 ends

Page 158 ends

Office of the City Manager
2180 Milvia Street, Berkeley, CA 94704 ● Tel: (510) 981-7000 ● TDD: (510) 981-6903 ● Fax: (510) 981-7099 E-Mail: [email protected] Website: http://www.CityofBerkeley.info/Manager

REVISED

AGENDA MATERIAL
for Supplemental Packet 1

Meeting Date: July 26, 2022

Item Number: 31

Item Description: Placing a Measure on the November 8, 2022 Ballot Amending the Rent Stabilization and Eviction for Good Cause Ordinance (B.M.C. 13.76)

Submitted by: Office of the City Attorney and Matt Brown, General Counsel Rent Board

Amendments to staff report summarizing the ballot measure and the direction given by Council at the July 12, 2022 Council meeting.

The ballot measure language has been amended to: (1) delete the proposed removal of the just cause for eviction based on exceeding lease occupancy limits; (2) remove the proposed eviction protections for tenants of accessory dwelling units; and (3) clarify the function and intent of the exemption for “newly constructed units” that replace demolished protected units. The ballot measure retains the originally proposed amendments related to the Golden Duplex eviction protections and the section on Decontrol.

Amendments to resolution placing measure on the November 8, 2022 ballot: changes to title, ballot question language, Whereas statements, and other sections of resolution, reflecting Council’s direction on July 12, 2022. Non-substantive changes for clarity.

Page 1 of 201 ends

Page 159 ends

1 Rent Stabilization Board
Office of the Executive Director

ACTION CALENDAR
July 26, 2022

TO: Honorable Mayor and Members of the City Council

FROM: 4 x 4 Joint Committee on Housing City Council/Rent Board

SUBMITTED BY: Matt Brown, General Counsel, Rent Stabilization Board Farimah Brown, City Attorney

SUBJECT: Placing a Measure on the November 8, 2022 Ballot Amending the Rent Stabilization and Eviction for Good Cause Ordinance (B.M.C. 13.76)

RECOMMENDATION

1. Adopt a Resolution placing the proposed amendments to the Rent Stabilization and Eviction for Good Cause Ordinance on the ballot of the November 8, 2022 General Municipal Election.

2. Designate, by motion, specific members of the Council to file ballot measure arguments on this measure as provided for in Elections Code Section 9282.

SUMMARY
The Rent Stabilization Board and 4 x 4 Committee on Housing City Council/Rent Board recommended a set of amendments to the Rent Stabilization and Eviction for Good Cause Ordinance (B.M.C. Chapter 13.76). This was brought to Council as Item #20 in the Action Calendar of the July 12, 2022 meeting. These amendments proposed the following changes:

1. Amend the Rent Stabilization and Eviction for Good Cause Ordinance to allow for rent control to attach to all residential rental units where state law does not prohibit it, and specifically allow the City to designate new units as rent-controlled when they are created pursuant to demolition projects as allowed by Senate Bill 330;

Page 2 of 201 ends

Page 160 ends

2 2. Eliminate the good cause for Eviction that allows landlords to evict tenants who have exceeded previously established occupancy limits unless the number of occupants currently in the rental unit exceeds the maximum number of occupants legally allowed under Section 503(b)(2) of the Uniform Housing Code as incorporated by California Health & Safety Code Section 17922;

3. Eliminate B.M.C. Section 13.76.060Q. which allows Council, upon request by the Board, to decontrol rental units in the event the annual average vacancy rate for all rental units in the City of Berkeley exceeds five percent over a six-month period;

4. Add eviction protections for certain units that do not currently have them.

Council reviewed the proposed changes at its July 12, 2022 meeting. Council ultimately adopted a motion to delay final action on Item #20 of the agenda until its July 26, 2022 meeting and directed the City Attorney to bring back revised language reflecting the following changes:

1. Add eviction protections for tenant households who live in Golden Duplexes as proposed in the July 12, 2022 agenda packet;

2. Remove the language proposing to add eviction protections for tenant households who live in properties with qualifying Accessory Dwelling Units as proposed in the July 12, 2022 agenda packet;1

3. Amend the Rent Stabilization and Eviction for Good Cause Ordinance to allow for rent control to attach to all residential rental units where state law does not prohibit it, and specifically allow the City to designate new units as rent-controlled when they are created pursuant to demolition projects as allowed by Senate Bill 330 as proposed in the July 12, 2022 agenda packet;

1 Council also requested that the City explore noticing requirements to tenants living in properties with ADUs when they sign lease agreements, so those tenants are aware that they will be living in rental units that may be completely exempt from both rent control and eviction protections. The Rent Ordinance (BMC Chapter 13.76) is a voter- adopted initiative that can only be amended by the voters during a general election. Council, however, has adopted several chapters of the municipal code that the Rent Board specifically administers, including BMC Chapter 13.79 (Tenant Protections). This chapter already contains language regarding mandatory disclosure to tenants when there is specific language in the lease.

We believe Chapter 13.79 should be amended if Council wishes to require that landlords who qualify for a full exemption from rent control and eviction protections as articulated in BMC 13.76.050N. (ADU exemption) must have language in their written rental agreements identifying such exemption. This is consistent with the previously- adopted sections of that chapter. Moreover, Council has adopted other BMC chapters requiring specific language in all leases (See BMC Chapter 12.70.037 requiring that all written leases prohibit indoor smoking). As such, this item is not currently being moved forward for consideration as part of the ballot initiative amending the Rent Ordinance.

We have consulted with the Rent Board’s legal unit, and they concur that the language would be best placed in BMC

13.79 should Council wish to adopt this requirement.

Page 3 of 201 ends

Page 161 ends

3 4. Eliminate B.M.C. Section 13.76.060Q. which allows Council, upon request by the Board, to decontrol rental units in the event the annual average vacancy rate for all rental units in the City of Berkeley exceeds five percent over a six-month period as proposed in the July 12, 2022 agenda packet; and

5. Remove the language to eliminate the good cause for Eviction that allows landlords to evict tenants who have exceeded previously established occupancy limits unless the number of occupants currently in the rental unit exceeds the maximum number of occupants legally allowed under Section 503(b)(2) of the Uniform Housing Code as incorporated by California Health & Safety Code Section 17922 as proposed in the July 12, 2022 agenda packet.

FISCAL IMPACTS OF RECOMMENDATION
There will be a financial cost to the City limited to the costs associated with placing the measure on the ballot. Each additional measure added to the ballot increases the costs to the city.

If more rental units are fully covered by the Ordinance, Registration fees currently mandated by B.M.C. 13.76.080 for fully covered rental units may decrease as a result of economies of scale to provide services to all fully-covered units.

CURRENT SITUATION AND ITS EFFECTS
Berkeley voters passed Measure D in June 1980, establishing the current Berkeley Rent Stabilization and Eviction for Good Cause Ordinance as codified in Berkeley Municipal Code Chapter 13.76. Berkeley City Council has, periodically, placed measures on the general ballot for the voters to decide when the Board recommends amendments.

1. Add Eviction Protections to Rental Units that do not Currently Receive Them The Rent Ordinance fully exempts a subset of owner-occupied duplexes from the Rent Ordinance. These “golden duplexes” are ones that are currently owner-occupied as a principal residence and were owner-occupied (not necessarily by the same owner) on December 31, 1979.

Tenant occupied units on these properties do not have eviction protections articulated in the Rent Ordinance when the property owner occupies a unit on the property as their principal residence.

2. Expansion of Rent Control to Cover Units Created as the Result of Demolition Pursuant to SB 330 and make clear that Rent Control Applies to all Units unless Specifically Prohibited by State Law
The Rent Ordinance currently defines “new construction” as a rental unit that was created after

Page 4 of 201 ends

Page 162 ends

4 June 30, 1980. The date a unit was created is based upon the date of issuance of the first certificate of occupancy. While newly constructed units are partial ly covered by the Rent Ordinance (Registration, Security Deposit Interest, and Good Cause Eviction Protections), they are not covered by rent control.

3. Eliminate “Decontrol” Clause from the Ordinance
The elected Board may request that Council decontrol rental units if the annual average vacancy rate for all rental units in the city of Berkeley exceeds five percent over a six-month period.

BACKGROUND

1. Add Eviction Protections to Rental Units that do not Currently Receive Them The 4 x 4 Committee voted on a proposal that would protect more tenants from eviction. The Committee particularly expressed concern regarding vulnerable tenants who may lose their homes following the expiration of the eviction moratorium associated with the COVID-19 Pandemic (B.M.C. Section 13.110).

The Committee requested that good cause for eviction protections articulated in B.M.C. Section

13.76.130 be extended to tenants in properties that are currently fully exempt from the Ordinance; namely the Accessory Dwelling Unit exemption as defined in B.M.C. Section

13.76.050N. and the “golden duplex” exemption as defined in B.M.C. Sections 13.76.050F. and

13.76.050H. Both of these properties are fully exempt when the property owner principally resides in a unit on the property. The proposal would only add good cause eviction protections pursuant to B.M.C. Section 13.76.130; it would not remove any other exemptions from the Ordinance for these properties.

After reviewing the proposed language submitted by the 4 x 4 Committee, Council voted to continue to consider adding eviction protections for tenants occupying units in Golden Duplexes as defined in B.M.C. Sections 13.76.050F. and 13.76.050H. However, Council voted not to consider adding eviction protections for tenants occupying units in properties with ADUs as defined in B.M.C. Section 13.76.050N. As such, this proposal moves forward with only a proposed Rent Ordinance amendment that adds eviction protections for tenants in Golden Duplexes.

Council voted on July 12, 2022, to support this proposal. The language approved for further consideration is set forth in Attachment A, in subsection 13.76.050.

2. Expansion of Rent Control to Cover Units Created as the Result of Demolition Pursuant to SB 330 and make clear that Rent Control May Apply to all Newly Constructed Units unless Specifically Prohibited by State Law

Page 5 of 201 ends

Page 163 ends

5 The Housing Crisis Act of 2019 (SB 330 and SB 8, “HCA”) allows cities to impose rent control protections on units that are built as the result of demolition of previously-controlled units. The HCA requires all housing projects that demolish existing residential units to create as least as many residential units as are being demolished. Projects that contain "protected units," which include residential units that have been subject to a local rent control program within the previous five years, are required to provide replacement units at an affordable rent (or sales price) with the same number of bedrooms as the demolished unit. The affordability level of a replacement unit is based on the income level of the last household occupying the demolished unit and must be rented (or sold) at a rate that is affordable to occupants of the same income category or lower. If a "protected unit" was last occupied by persons or families above the low- income category, the affected city has the option to require that the housing project provide: 1) a replacement unit affordable to low-income households for a period of at least 55 years, or 2) a replacement unit that complies with the jurisdiction's rent or price control ordinance.

Currently, the Rent Control Ordinance expressly exempts newly constructed units from Chapters 10 (Establishment of Base Rent Ceiling and Posting), 11 (Annual General Adjustment of Rent Ceilings) and 12 (Individual Adjustments of Rent Ceilings) of Ordinance. These residential units are subject to the registration requirements of Measure MM, are covered by good cause for eviction, and are entitled to annual security deposit interest, but they are not subject to local rent controls. The HCA would allow for these new units created as the result of demolition to be fully covered by the rent control provisions of the ordinance should the City choose that option when approving new construction that was the result of demolition of existing qualifying units.

The 4 x 4 Committee also directed staff to draft language that would amend the Rent Ordinance to make clear that all newly constructed units are fully rent-controlled unless otherwise prohibited by state law.

The Board voted unanimously to support this proposal on March 17, 2022, the 4 x 4 Committee voted on May 3, 2022, to support this proposal, and Council voted on July 12, 2022 to support this proposal. The approved language is set forth in Attachment A, in subsections 13.76.040 and

13.76.050.

3. Eliminate “Decontrol” Clause from the Ordinance
The Rent Ordinance has a section that allows the Berkeley City Council (upon request by the Board) to exempt units from rent control should vacancy rates reach 5% over a six-month period.2 While Council has the discretion to eliminate rent controls for units (it is not mandatory), this clause is inconsistent with the Charter and most all of the Rent Ordinance which

2 BMC Section 13.76.060Q.

Page 6 of 201 ends

Page 164 ends

6 establishes the Board’s separate authority to regulate rents and administer the law independent of any other elected or appointed body.

Moreover, given that both the Charter and Rent Ordinance are voter-adopted initiatives, it follows that the issue of decontrol would be put before the voters in the event that the community decides to eliminate local rent control. Council has no other authority to interfere either substantively or procedurally in the Board’s administration, so removing this clause will be consistent with the overall operation of the rent program and the law the Board and staff administer.

The proposal would be to simply eliminate this paragraph from the Rent Ordinance.

The Board voted unanimously to support this proposal on March 17, 2022, and the 4 x 4 Committee voted on May 3, 2022, to support this proposal, and Council voted on July 12, 2022 to support this proposal. The approved language is set forth in Attachment A, in subsection

13.76.060.

ENVIRONMENTAL SUSTAINABILITY AND CLIMATE IMPACTS
There are no identifiable environmental effects, climate impacts, or sustainability opportunities associated with the subject of this report.

RATIONALE FOR RECOMMENDATION
This report and its recommendations are the result of direction from the 4 x 4 Committee, which voted on May 3, 2022 to recommend to the City Council to place the proposed amendments on the ballot for November 8, 2022. The Rent Stabilization Board also voted on March 17, 2020, to support the first three proposals.

ALTERNATIVE ACTIONS CONSIDERED
There was some discussion at both the Board and the 4 x 4 Committee of including a clause that makes explicit that California Civil Code Section 1954.52(b) allows Council to attach rent control to units that would otherwise qualify as new construction in the event that projects allowed for certain density bonuses, but this ultimately did not gain sufficient traction and is not a part of the proposed amendments. The Committee discussed at some length that they thought this was already allowed by the current amendments included in B.M.C. 13.76.040R. which make explicit that all new construction is fully covered by the Ordinance in the event that state law does not specifically prohibit it. In any event, the City will need to make more sweeping changes to the Planning/Zoning Ordinances in order to implement these changes should Council wish to do so in the future.

Page 7 of 201 ends

Page 165 ends

7 CONTACT PERSON
Matt Brown, General Counsel, Rent Stabilization Board, (510) 981-4905

Attachments:

1. Resolution
Exhibit A: Ordinance as Amended

2. May 3, 2022 Staff Report to 4 x 4 Committee

Page 8 of 201 ends

Page 166 ends

8 Attachment 1

RESOLUTION NO. ##,###-N.S.

SUBMITTING TO THE BERKELEY ELECTORATE A MEASURE AMENDING CHAPTER 13.76 OF THE BERKELEY MUNICIPAL CODE TO ALLOW RENT

CONTROL TO APPLY TO NEWLY CONSTRUCTED UNITS WHERE STATE AND

LOCAL LAW DO NOT PROHIBIT RENT CONTROL, AND SPECIFICALLY TO UNITS

BUILT AS THE RESULT OF DEMOLITION OF PREVIOUSLY RENT-CONTROLLED UNITS; ELIMINATE PROVISION ALLOWING CITY COUNCIL TO EXEMPT UNITS FROM RENT CONTROL IF CITY’S VACANCY RATE EXCEEDS 5% OVER A SIX- MONTH PERIOD; AND INCREASE EVICTION PROTECTIONS FOR CERTAIN LANDLORD-OCCUPIED PROPERTIES.

WHEREAS, the purposes of the Berkeley Rent Stabilization and Eviction for Good Cause Ordinance are to regulate residential rent increases in the City of Berkeley and to protect tenants from unwarranted rent increases and arbitrary, discrimin atory, or retaliatory evictions, in order to help maintain the diversity of the Berkeley community and to ensure compliance with legal obligations relating to the rental of housing. This legislation is designed to address the City of Berkeley's housing cri sis, preserve the public peace, health and safety, and advance the housing policies of the city with regard to low and fixed income persons, minorities, students, handicapped, and the aged; and

WHEREAS, the Berkeley Rent Stabilization Board will be able to provide greater protections to tenants in newly constructed units; and

WHEREAS, the Berkeley Rent Stabilization Board will be able to provide greater eviction protections for tenants in units that previously did not have such protections; and

WHEREAS, Section 13.76.060 (Decontrol) is to be eliminated; and

WHEREAS, these enumerated amendments to the Rent Stabilization and Eviction for Good Cause Ordinance will prevent displacement of tenants by extending additional protections and services to tenants who do not enjoy such protections under existing law; and

Page 9 of 201 ends

Page 167 ends

9 NOW THEREFORE, BE IT RESOLVED by the Council of the City of Berkeley that this resolution is hereby adopted and a measure amending Chapter 13.76 of the Berkeley Municipal Code to allow rent control to apply to newly constructed units where state and local law do not prohibit it and specifically to new construction built as the result of demolition of previously rent -controlled units ; eliminate a provision allowing the City Council to exempt units from rent control if the citywide vacancy rate exceeds 5% ; and increase eviction protections for certain landlord -occupied properties shall be placed before the voters at the election on November 8, 2022.

BE IT FURTHER RESOLVED that, pursuant to California Elections Code sections 10002 and 10403, this City Council does hereby call an election on Tuesday, November 8, 2022, and requests that the Alameda County Board of Supervisors consolidate said election with the Statewide General Election on that same date in the manner and schedule established by Resolution No. 70,336 -N.S., adopted on May 10, 2022, and submit the Measure to the qualified voters of the City at said consolidated election.

BE IT FURTHER RESOLVED that the City Council acknowledges that the consolidated election will be held and conducted in the manner prescribed in Elections Code Section 10418.

BE IT FURTHER RESOLVED that the full text of the measure shall be printed in the Voter Information Pamphlet mailed to all voters in the City of Berkeley.

BE IT FURTHER RESOLVED that the above enumerated measure requires a majority vote threshold for passage.

Page 10 of 201 ends

Page 168 ends

10 BE IT FURTHER RESOLVED that the City Clerk is hereby directed to obtain print ing, supplies and services as required.

BE IT FURTHER RESOLVED that the City Clerk is hereby authorized to enter into any contracts necessary for election consulting services, temporary employment services, printing services, and any such other supplies a nd services as may be required by the statutes of the State of California and the Charter of the City of Berkeley for the conduct of the November General Municipal Election.

BE IT FURTHER RESOLVED that the City will reimburse the Registrar of Voters for the costs associated with placing the measure on the ballot.

BE IT FURTHER RESOLVED that said proposed Ordinance measure shall appear and be printed upon the ballots to be used at said election as follows:

YES

BE IT FURTHER RESOLVED that the text of the measure be shown as Exhibit A, attached hereto and made a part hereof.

Exhibits

A: Text of Measure

Page 11 of 201 ends

Page 169 ends

11 Exhibit A
ORDINANCE NO. ##,###–N.S.

AN ORDINANCE OF THE CITY OF BERKELEY AMENDING CHAPTER 13.76 OF THE

BERKELEY MUNICIPAL CODE TO ALLOW RENT CONTROL TO APPLY TO NEWLY

CONSTRUCTED UNITS WHERE STATE AND LOCAL LAW DO NOT PROHIBIT

RENT CONTROL AND SPECIFICALLY TO UNITS BUILT AS THE RESULT OF DEMOLITION OF PREVIOUSLY RENT-CONTROLLED UNITS; ELIMINATE

PROVISION ALLOWING CITY COUNCIL TO EXEMPT UNITS FROM RENT CONTROL IF CITY’S VACANCY RATE EXCEEDS 5% OVER A SIX-MONTH PERIOD;

AND INCREASE EVICTION PROTECTIONS FOR CERTAIN LANDLORD-OCCUPIED PROPERTIES.

BE IT ORDAINED by the People of the City of Berkeley as follows:

Section 1. Section 13.76.040 of the Berkeley Municipal Code is amended to read as follows:

13.76.040 Definitions.

A. "Board" refers to the elected Rent Stabilization Board established by this chapter and Article XVII of the Charter of the City of Berkeley.

B. "Commissioners" means the members of the board who are denominated commissioners.

C. "Housing services" include but are not limited to repairs, maintenance, painting, providing light, hot and cold water, elevator service, window shades and screens, storage, kitchen, bath and laundry facilities and privileges, janitor services, refuse removal, furnishing, telephone, parking and any other benefit, privilege or facility connected with the use or occupancy of any rental unit. Services to a rental unit shall include a proportionate part of services provided to common facilities of the building in which the rental unit is contained.

Page 12 of 201 ends

Page 170 ends

12 D. "Landlord" means an owner of record, lessor, sublessor or any other person or entity entitled to receive rent for the use or occupancy of any rental unit, or an agent, representative or successor of any of the foregoing.

E. "Rent" means the consideration, including any deposit, bonus, benefit or gratuity demanded or received for or in connection with the use or occupancy of rental units and housing services. Such consideration shall include, but not be limited to, monies and fair market value of goods or services rendered to or for the benefit of the landlord under the rental agreement.

F. "Rental agreement" means an agreement, oral, written or implied, between a landlord and a tenant for use or occupancy of a rental unit and for housing services.

G. "Rental unit" means any unit in any real property, including the land appurtenant thereto, rented or available for rent for residential use or occupancy (including units covered by the Berkeley Live/Work Ordinance No. 5217-NS), located in the City of Berkeley, together with all housing services connected with use or occupancy of such property such as common areas and recreational facilities held out for use by the tenant.

H. "Property" means a parcel of real property which is assessed and taxed as an undivided whole.

I. "Tenant" means any renter, tenant, subtenant, lessee, or sublessee of a rental unit, or successor to a renter’s interest, or any group of tenants, subtenants, lessees, or sublessees of any rental unit, or any other person entitled to the use or occupancy of such rental unit.

J. "Skilled nursing facility" means a health facility or a distinct part of a hospital which provides the following basic services: skilled nursing care and supportive care to patients whose primary need is for availability of skilled nursing care on an extended basis. It provides 24-hour inpatient care and, as a minimum, includes medical, nursing, dietary, pharmaceutical services and an activity program. The facility shall have effective arrangements, confirmed in writing, through which services required by the patients, but not regularly provided within the facility, can be obtained promptly when needed.

Page 13 of 201 ends

Page 171 ends

13 K. "Health facility" means any facility, place or building which is organized, maintained and operated for the diagnosis, care and treatment of human illness, physical or mental, including convalescence and rehabilitation and including care during and after pregnancy, or for any one or more of these purposes, for one or more persons, to which such persons are admitted for a 24-hour stay or longer.

L. "Recognized tenant organization" means any group of tenants, residing in rental units in the same building or in different buildings operated by the same management company, agent or landlord, which requests to be so designated.

M. "Rent ceiling" means the maximum allowable rent which a landlord may charge on any rental unit covered by this chapter.

N. "Base rent ceiling" means the maximum allowable rent established under Section 13.76.100 of this chapter.

O. "Fees" means for the purpose of this chapter, a charge fixed by law for services of public officers or for use of a privilege under control of government.

P. "Nonprofit, accredited institution of higher education" means a post secondary educational institution whose legal status under the California Education Code is verified by an annual validation receipt from the California State Department of Education, and which is accredited by the Western Association of Schools and Colleges or the Association of Theological Schools and which is exempt from taxation under Section 501 (c)(3) of the United States Internal Revenue Code and under Section 23701(d) of the Revenue and Taxation Code, and which, if otherwise required by law to do so, has obtained a valid unrevoked letter or ruling from the United States Internal Revenue Service or from the Franchise Tax Board which states that the organization so qualifies for exemption from taxation.

Q. "Newly Constructed" means a rental unit created after June 30, 1980. For purposes of this definition, the date a unit was created is based upon the date of the first certificate of occupancy issued for the subject unit. However, in the event of the repeal or amendment of Civil Code Section 1954.52, such that "certificate of occupancy" is no longer the operative standard set forth under state law, the date a unit was created shall be determined by the final inspection approval by the City.

Page 14 of 201 ends

Page 172 ends

14 1. Notwithstanding any other provision in this ordinance, and to the extent that state or local law does not prohibit a local jurisdiction from regulating the rent on a residential rental unit, such units shall not be exempt as “newly constructed units” and, unless otherwise exempt, shall be covered by all provisions of this chapter. This includes, but is not limited to, any residential rental units created as a result of demolition and replacement of “protected units” where replacement of such units is required by the Housing Crisis Act of 2019, Government Code Sections 66300-66301, and to the extent that the City requires such units to be subject to this ordinance.

Section 2: Section 13.76.050 of the Berkeley Municipal Code is amended to read as follows:

13.76.050 Applicability
This chapter shall apply to all real property that is being rented or is available for rent for residential use in whole or in part, except for the following:

A. Rental units which are owned by any government agency. However, the exemption of units owned by the Berkeley Housing Authority from the terms of this chapter shall be limited to their exemption from the terms of Section 13.76.080, Rent Registration; Section 13.76.100, Establishment of Base Rent Ceiling and Posting; Section 13.76.110, Annual General Adjustment of Rent Ceilings; and Section 13.76.120, Individual Adjustments of Rent Ceilings, of this chapter.

B. Rental units which are rented primarily to transient guests for use or occupancy less than fourteen consecutive days in establishments such as hotels, motels, inns, tourist homes, and rooming and boarding houses. However, the payment of rent every fourteen days or less shall not by itself exempt any unit from coverage by this chapter.

C. Rental units in nonprofit cooperatives owned and controlled by a majority of the residents.

D. Rental units leased to tenants assisted under the Section 8 program (42 U.S.C.

Section 1437f) or the Shelter Plus Care Program (42 U.S.C. 11403 et. seq.) or similar

Page 15 of 201 ends

Page 173 ends

15 federally funded rent subsidy program. Except as may be preempted by state or federal law, the exemption of such rental units from the terms of this chapter shall be limited to Section 13.76.080, Rent Registration; Section 13.76.100, Establishment of Base Rent Ceiling and Posting; Section 13.76.110, Annual General Adjustment of Rent Ceilings and Section 13.76.120, Individual Adjustments of Rent Ceilings, of this chapter.

However, the exemption from Sections 13.76.080, 13.76.110 and 13.76.120 shall apply only for so long as the rent demanded does not exceed the authorized Payment Standard, which, for purposes of this subsection, is the maximum monthly rental assistance potentially available to an assisted household before deducting the household share of income paid for rent and utilities as established by the Berkeley Housing Authority or successor agency. For units where the rent demanded exceeds the Payment Standard, the Payment Standard or an initial rent above the Payment Standard if approved by the Berkeley Housing Authority, as reported to the board by the Berkeley Housing Authority or successor agency, shall become the unit’s base rent ceiling and the reference point from which the rent ceiling shall be adjusted in accordance with Sections 13.76.110 and 13.76.120.

E. Rental units in any hospital, skilled nursing facility, health facility, asylum, or non- profit home for the aged.

F. Rental units in a residential property which is divided into a maximum of four units where one of such units is occupied by the landlord as his/her principal residence. Any exemption of rental units established under this subsection (13.76.050 F.) shall be limited to rental units that would have been exempt under the provisions of this chapter had this chapter been in effect on December 31, 1979. After July 1, 1982, this exemption shall no longer apply to rental units in a residential property which is divided into three or four units. It shall continue to apply to rental units in a residential property which is divided into two units, and which meet all the other requirements of this subsection (13.76.050F). However, the exemption of such rental units shall be limited to their exemption from the terms of Section 13.76.070, Security Deposits; Section

13.76.080, Rent Registration; Section 13.76.100, Establishment of Base Rent Ceiling and Posting; Section 13.76.110, Annual General Adjustment of Rent Ceilings; and Section 13.76.120, Individual Adjustments of Rent Ceilings, of this chapter. Rental units

Page 16 of 201 ends

Page 174 ends

16 which become non-exempt under this provision shall have the provisions of Subsections

13.76.080I and 13.76.100C. applied to them.

G. A rental unit in a residential property where the landlord shares kitchen or bath facilities with the tenant(s) of such rental unit and where the landlord also occupies a unit in the same property as his/her principal residence.

H. For the purposes of Subsections 13.76.050 F. and G., the term landlord shall be defined only as the owner of record holding at least 50% interest in the property.

I. Newly constructed rental units, as defined in Section 13.76.040Q. However, the exemption of such newly constructed units shall be limited to their exemption from the terms of Section 13.76.100, Establishment of Base Rent Ceiling and Posting:

Section 13.76.110, Annual General Adjustment of Rent Ceilings; and Section 13.76.120, Individual Adjustments of Rent Ceilings, of this chapter. To the extent that state law permits, the exemption of such newly constructed units shall be limited to the first 20 years after completion of construction.

J. A rental unit which is rented by a nonprofit, accredited institution of higher education to a tenant or tenants who are student(s), faculty, or staff of the institution or of a member school of the Graduate Theological Union, provided, however, that the institution owned the unit as of January 1, 1988.

K. A rental unit in a residential property owned by an organization exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code that is rented to a low income tenant and subject to a regulatory agreement with a governmental agency that controls the unit’s rent levels. However, the exemption for such rental units from the terms of this chapter shall be limited to Section 13.76.080, Rent Registration; Section 13.76.100, Establishment of Base Rent Ceiling and Posting; Section 13.76.110, Annual General Adjustment of Rent Ceilings; and Section 13.76.120, Individual Adjustments of Rent Ceilings of this chapter and shall apply only for so long as the regulatory agreement is in effect. This exemption shall not apply to rental units at the property that are not subject to a regulatory agreement with a governmental agency or that are rented by a tenant who occupied the unit prior to the property’s acquisition by the tax-exempt organization.

Page 17 of 201 ends

Page 175 ends

17 L. Rental units in a facility owned or leased by an organization exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code that has the primary purpose of operating a treatment, recovery, therapy, sanctuary or shelter program for qualified clients, where such rental units are provided incident to the client’s participation in the primary program and where the client has been informed in writing of the temporary or transitional nature of the housing at the inception of his or her participation in the program. However, except as may be preempted by the Transitional Housing Participant Misconduct Act (California Health and Safety Code Sections 50580 et. seq.) or other state or federal law, such rental units shall not be exempted from the terms of Section 13.76.130, Good Cause Required for Eviction. For purposes of Section 13.76.130.A.2, the client’s continued eligibility for participation in the treatment, recovery, therapy, sanctuary or shelter program shall be deemed a material term of the client’s rental agreement with the program’s operator.

M. A rental unit or room which is rented by an active member of a fraternity or sorority recognized by the University of California Berkeley, or a rental unit or room which is rented by an active member of a fraternity or sorority identified by Rent Board Resolution. To qualify for the exemption, the rental unit must be owned by the fraternity or sorority or by an entity whose sole purpose is the maintenance and operation of the fraternity or sorority’s rental units for the benefit of the members in order to provide housing to said members at cost.

N. A rental unit in a residential property containing only a Single Family Dwelling (as defined in Subtitle 23F.04 of the Zoning Ordinance) and one lawfully established and fully permitted Accessory Dwelling Unit where the landlord also occupies a unit in the same property as his/her principal residence. This subsection (13.76.050N) shall only apply to properties containing a single Accessory Dwelling Unit, shall only apply to units compliant with all applicable requirements of Chapter 23C.24 ("Accessory Dwelling Units"), and shall only apply to tenancies created after November 7, 2018.

Page 18 of 201 ends

Page 176 ends

18 Adjustment of Rent Ceilings; and Section 13.76.120, Individual Adjustments of Rent Ceilings, of this chapter. A property owner who owns only one residential unit in the City of Berkeley, and occupied that residential unit for 365 consecutive days as their principal residence immediately prior to renting the unit, and is absent from the unit for a period not to exceed 24 months, and such period is specified in the lease, shall also be exempt from the terms of Section 13.76.080, Rent Registration, of this Chapter. The exemptions provided in this Section shall apply only as long as the pertinent provisions of California Civil Code Section 1954.50 et. seq. ("Costa-Hawkins") remain in effect and require such an exemption.

Section 3: Section 13.76.060 of the Berkeley Municipal Code is amended to read as follows:

13.76.060 Rent Stabilization Board
A. Composition. There shall be in the city of Berkeley an elected rent stabilization board; the board shall consist of nine commissioners. The board shall elect annually as chairperson one of its members to serve in that capacity.

B. Eligibility. Residents who are duly qualified electors of the city of Berkeley are eligible to serve as commissioners on the board.

C. Full disclosure of holdings. Candidates for the position of commissioner shall fulfill the requirements as set forth in the City Charter in Article III, Section 6 1/2.

In addition, when filing nomination papers, candidates shall submit a verified statement of their interests and dealings in real property, including but not limited to its ownership, sale or management and investment in and association with partnerships, corporations, joint ventures and syndicates engaged in its ownership, sale or management during the previous three years.

D. Election of commissioners. Commissioners shall be elected at the statewide general election held in November of even numbered years.

Page 19 of 201 ends

Page 177 ends

19 E. Terms of office. Commissioners’ terms of office shall be as set forth in Article XVII of the Berkeley City Charter.

F. Powers and duties. The elected rent stabilization board shall have the power to determine, to arbitrate and to set rent levels, whether through general or individual adjustments, of any unit which has controlled rents under any Berkeley Ordinance, and to administer any Berkeley program which regulates rents and evictions. The board shall have the following powers and duties:

1. Set the rent ceilings for all rental units.

2. Require registration of all rental units under Section 13.76.080.

3. Publicize the manner in which the base rent ceiling is established under Section 13.76.100.

4. To make adjustments in the rent ceiling in accordance with Sections 13.76.110 and 13.76.120.

5. Set rents at fair and equitable levels in view of and in order to achieve the purposes of this chapter.

6. To issue orders, rules and regulations, conduct hearings and charge fees as set below.

7. Make such studies, surveys and investigations, conduct such hearings, and obtain such information as is necessary to carry out its powers and duties.

8. Report annually to the city council of the city of Berkeley on the status of rental housing units covered by this chapter.

9. Request the City Council to remove rent controls under Section

13.76.060Q.

10. Administer oaths and affirmations and subpoena witnesses and relevant documents.

Page 20 of 201 ends

Page 178 ends

20 11. Establish rules and regulations for settling civil claims under Section 13.76.150.

12. Seek injunctive relief under Section 13.76.150.

13. Pursue civil remedies in courts of appropriate jurisdiction.

14. Intervene as an interested party in any litigation brought before a court of appropriate jurisdiction by a landlord or tenant with respect to rental units covered by this chapter.

15. Hold public hearings.

16. Charge and collect registration fees, including penalties for late payments.

17. Other powers necessary to carry out the purposes of this chapter which are not inconsistent with the terms of this chapter.

18. Except as provided in Section 13.76.060N of this chapter, the board shall finance its reasonable and necessary expenses for its operation without the use of general fund monies of the city of Berkeley.

G. Rules and Regulations: The board shall issue and follow such rules and regulations, including those which are contained in this Chapter, as will further the purposes of this Chapter. The board shall publicize its rules and regulations prior to promulgation in at least one newspaper of general circulation in the city of Berkeley.

All rules and regulations and relevant documents explaining the decisions, orders, and policies of the board shall be kept in the board’s office and shall be available to the public for inspection and copying.

The board shall publicize this Chapter so that all residents of Berkeley will have the opportunity to become informed about their legal rights and duties under this Chapter.

The board shall prepare a brochure which fully describes the legal rights and duties of landlords and tenants under this Chapter. The brochure shall be made available to the public.

Page 21 of 201 ends

Page 179 ends

21 H. Meetings: The board shall hold regularly scheduled meetings. Special meetings shall be called at the request of at least a majority of the commissioners of the board.

The board shall hold its initial meeting no later than July 15, 1980.

I. Quorum: Five commissioners shall constitute a quorum for the board.

J. Voting: The affirmative vote of five commissioners of the board is required for a decision, including all motions, rules, regulations, and orders of the board.

K. Compensation: The rent stabilization board shall be a working board.

Commissioners shall be paid compensation and benefits in an amount set by the board in order to compensate commissioners for their time and work performed as required by this chapter and the city charter.

L. Dockets: The board shall maintain and keep in its office all hearing dockets, which shall be available for public inspection.

M. Vacancies: If a vacancy shall occur on the board, a qualified person to fill such vacancy shall be selected in accordance with the procedures set forth in Article V of the City Charter.

N. Financing: The board shall finance its reasonable and necessary expenses by charging landlords annual registration fees in amounts deemed reasonable by the board. The registration fee for partially-exempt units shall reasonably approximate the cost of registration and counseling services for such units, and shall not include the cost of services from which such units are exempt. Such registration fees shall not be passed on to tenants in the form of rent increases except with the express prior approval of the board. The board is also empowered to request and receive funding, when and if necessary, from the city of Berkeley and/or any other available source for its reasonable and necessary expenses, including expenses incurred at the request of the City.

O. Staff: The board shall be a working board and shall employ such staff as may be necessary to perform its functions efficiently and as provided by Berkeley Ordinance.

Page 22 of 201 ends

Page 180 ends

22 P. Registration: The board shall require the registration of all rental units covered by this chapter as provided for in Section 13.76.080. The board may also require landlords to provide current information supplementing their registration statements.

Q. Decontrol: If the annual average vacancy rate for all rental units in the city of Berkeley exceeds five percent over a six month period, the city council is empowered, upon request by the board, at its discretion and in order to achieve the purposes of this chapter, to exempt rental units covered by this chapter from Sections 13.76.080, 13.76.100, 13.76.110 and 13.76.120 of this chapter. In determining the vacancy rate for the city of Berkeley the board and the city council shall consider all available data and may conduct their own survey. If units are exempted pursuant to this Subsection Q coverage shall be reimposed if the city council finds that the average annual vacancy rate has thereafter fallen below five percent. Prior to any decision to exempt or renew coverage for rental units under this Subsection Q the board shall hold at least two public hearings.

R. Q. Conflict of Interest: Commissioners shall be subject to the requirements of the California Political Reform Act and other applicable state and local conflict of interest codes. Commissioners shall not necessarily be disqualified from exercising any of their powers and duties on the grounds of a conflict of interest solely on the basis of their status as a landlord or tenant. However, a commissioner shall be disqualified from ruling on a petition for an individual adjustment of a rent ceiling under Section 13.76.120, where the commissioner is either the landlord of the property or a tenant residing in the property that is involved in the petition.

Section 4: Section 13.76.130 of the Berkeley Municipal Code is amended to read as follows

13.76.130 Good cause required for eviction
A. No landlord shall be entitled to recover possession of a rental unit covered by the terms of this chapter unless said landlord shows the existence of one of the following grounds:

Page 23 of 201 ends

Page 181 ends

23 1. The tenant has failed to pay rent to which the landlord is legally entitled pursuant to the lease or rental agreement and under the provisions of state or local law, unless the tenant has withheld rent pursuant to applicable law; and said failure has continued after service on the tenant of a written notice setting forth the amount of rent then due and requiring it to be paid, within a period, specified in the notice, of not less than three days. Rent that is lawfully withheld pursuant to emergency legislation that authorizes rent withholding during the effective period of a state of emergency applicable in Berkeley shall not constitute grounds for recovery of possession except as expressly provided in the applicable emergency legislation. Emergency legislation adopted during the emergency may prohibit recovery of possession for lawfully withheld rent even after the expiration of a state or local emergency.

2. The tenant has continued, after written notice to cease, to substantially violate any of the material terms of the rental agreement, except the obligation to surrender possession on proper notice as required by law, and provided that such terms are reasonable and legal and have been accepted in writing by the tenant or made part of the rental agreement; and provided further that, where such terms have been accepted by the tenant or made part of the rental agreement subsequent to the initial creation of the tenancy, the landlord shall have first notified the tenant in writing that he or she need not accept such terms or agree to their being made part of the rental agreement. Notwithstanding any contrary provision in this chapter or in the rental agreement, a landlord is not entitled to recover possession of a rental unit under this subsection where a tenant permits his or her rental unit to be occupied by a subtenant, provided:
a. The landlord has unreasonably withheld consent to the subtenancy; and
b. The tenant remains an actual occupant of the rental unit; and c. The number of tenants and subtenants actually occupying the rental unit does not exceed the number of occupants originally allowed

Page 24 of 201 ends

Page 182 ends

24 by the rental agreement or the board's regulations, whichever is greater.
d. Withholding of consent by the landlord shall be deemed to be unreasonable where:
(i) The tenant’s written request for consent was given at least two weeks prior to commencement of the subtenancy;
(ii) The proposed new subtenant has, upon the landlord’s written request, completed the landlord’s standard form application or provided sufficient information to allow the landlord to conduct a standard background check, including references and credit, income and other reasonable background information;
(iii) The proposed new subtenant meets the landlord’s customary occupancy qualifications and has not refused the landlord’s request to be bound by the terms of the current rental agreement between the landlord and the tenant; and
(iv) The landlord has not articulated in writing a well-founded reason for refusing consent.

3. The tenant has willfully caused or allowed substantial damage to the premises beyond normal wear and tear and has refused, after written notice, to pay the reasonable costs of repairing such damage and cease damaging said premises.

4. The tenant has refused to agree to a new rental agreement upon expiration of a prior rental agreement, but only where the new rental agreement contains provisions that are substantially identical to the prior rental agreement, and is not inconsistent with local, state and federal laws.

5. The tenant has continued, following written notice to cease, to be so disorderly as to destroy the peace and quiet of other tenants or occupants of the premises or the tenant is otherwise subject to eviction pursuant to subdivision 4 of Code of Civil Procedure Section 1161.

Page 25 of 201 ends

Page 183 ends

25 6. The tenant has, after written notice to cease, refused the landlord access to the unit as required by state or local law.

7. a. The landlord, after having obtained all necessary permits from the City of Berkeley, seeks in good faith to undertake substantial repairs which are necessary to bring the property into compliance with applicable codes and laws affecting the health and safety of tenants of the building or where necessary under an outstanding notice of code violations affecting the health and safety of tenants of the building, and where such repairs cannot be completed while the tenant resides on the premises.
b. Where such repairs can be completed in a period of 60 or fewer days, and the tenant, within 30 days after the service of a notice of termination of his or her tenancy, agrees in writing to vacate the premises during the period required to complete the repairs at no charge to the landlord, other than abatement of the obligation to pay rent for the premises during the period required to complete the repairs, the landlord may not recover possession pursuant to this subsection (13.76.130A.7.) unless the tenant shall fail or refuse to vacate the premises in accordance with such agreement.
c. Where the landlord owns any other residential rental units in the City of Berkeley, and any such unit is vacant and available at the time of premises or the entry of a judgment by a court of competent jurisdiction awarding possession of the premises to the landlord, the landlord shall, as a condition of obtaining possession pursuant to this subsection (13.76.130A.7.), notify tenant in writing of the existence and address of each such vacant rental unit and offer tenant the right, at the tenant’s option:
(i) To enter into a rental agreement (to be designated as a "temporary rental agreement") on any available rental unit which the tenant may choose, at a rent not to exceed the lesser of the lawful rent which may be charged for such available rental unit or

Page 26 of 201 ends

Page 184 ends

26 the lawful rent in effect, at the time of the notice of termination of tenancy, on the unit being vacated, said rental agreement to be for a term of the lesser of ninety days or until completion of repairs on the rental unit being vacated by tenant; or
(ii) To enter into a new rental agreement or lease for such available rental unit at a rent not to exceed the lawful rent which may be charged for such available rental unit.
d. Where the landlord recovers possession under this subsection (13.76.130A.7.), the tenant must be given the right of first refusal to re- occupy the unit upon completion of the required work. In the event the landlord files an application for an individual rent adjustment within six months following the completion of the work, the tenant shall be a party to such proceeding the same as if he or she were still in possession, unless the landlord shall submit, with such application, a written waiver by the tenant of his or her right to re-occupy the premises pursuant to this subsection.

8. The landlord, after having obtained all necessary permits from the City of Berkeley, seeks in good faith to recover possession of the rental unit, in order to remove the rental unit from the market by demolition.

Page 27 of 201 ends

Page 185 ends

27 of a notice terminating tenancy, and at all times thereafter to and including the earlier of the tenant’s surrender of possession of the premises or the entry of a judgment of a court of competent jurisdiction awarding possession of the premises to the landlord, holding at least a 50% interest in the property and shall not include a lessor, sublessor, or agent of the owner of record.
d. All notices terminating tenancy pursuant to
subsection 13.76.130.A.9 shall include the following: the existence and potential availability of relocation assistance under subsection

13.76.130A.9.g; the existence of tenant protections for families with minor children as defined in subsection 13.76.130A.9.k; the name and relationship of any qualified relative for purposes of subsection

13.76.130A.9b; and the landlord’s ownership interest in any residential properties in the City of Berkeley where such interest, in any form whatsoever, is ten percent (10%) or greater. The landlord shall, within ten days of giving notice, file a copy of the notice terminating tenancy with the Rent Board.
e. The landlord may not recover possession under this subsection (13.76.130A.9.) if a comparable unit, owned by the landlord in the City of Berkeley, was, at the time of the landlord’s decision to seek to recover possession of the rental unit, already vacant and available, or if a comparable unit, owned by the landlord in the City of Berkeley, thereafter becomes vacant at any time until the earlier of the tenant’s surrender of possession of the premises or the entry of a judgment of a court of competent jurisdiction awarding possession of the premises to the landlord. In an action by or against the tenant, evidence that a comparable unit was vacant and available within ninety days prior to the date of a notice terminating the tenant’s tenancy shall create a presumption that such unit was vacant and available at the time of the landlord’s decision to seek to recover possession of the premises. "Presumption" means that the court must find the existence of the

Page 28 of 201 ends

Page 186 ends

28 presumed fact unless and until the contrary is proven by a preponderance of the evidence.
f. The landlord shall offer any non-comparable unit owned by the landlord to the tenant if a non-comparable unit becomes available before the recovery of possession of the tenant’s unit at a rate based on the rent the tenant is paying with an upward or downward adjustment based on the condition, size, and other amenities of the replacement unit. Disputes concerning the initial rent for the replacement unit shall be determined by the Rent Board. g. Where a landlord recovers possession of a unit under subsection

13.76.130A.9, the landlord is required to provide standard relocation assistance to tenant households where at least one occupant has resided in the unit for one year or more in the amount of $15,000. The landlord is required to provide an additional $5,000 relocation assistance to tenant households that qualify as low-income; or include disabled or elderly tenants; minor children; or tenancies which began prior to January 1, 1999. The relocation fees set forth above shall be increased in accordance with the rules set forth in subsection

Page 29 of 201 ends

Page 187 ends

29 (iii) "Elderly" is defined as sixty (60) years of age or older. (iv) "Minor child" means a person who is under 18 years of age. (v) "Tenancy began prior to January 1, 1999" is a tenancy where an "original occupant" (as defined by Berkeley Rent Board Regulation) still permanently resides in the rental unit. h. Effective January 1 of each year beginning in 2018, the fees set forth above in subsection 13.76.130A.9.g., may be increased in an amount based on the Consumer Price Index - All Urban Consumers in the San Francisco-Oakland-San Jose Region averaged for the 12- month period ending June 30, of each year, as determined and published by United States Department of Labor. Any increase shall be published by the Board on or before October 31st of each year. i. It shall be evidence that the landlord has acted in bad faith if the landlord or the landlord’s qualified relative for whom the tenant was evicted does not move into the rental unit within three months from the date of the tenant’s surrender of possession of the premises or occupy said unit as his/her principal residence for a period of at least 36 consecutive months.
j. Once a landlord has successfully recovered possession of a rental unit pursuant to subsection 13.76.130A.9.a., then no other current or future landlords may recover possession of any other rental unit on the property pursuant to subsection 13.76.130A.9.a. It is the intention of this subsection that only one specific unit per property may be used for such occupancy under subsection 13.76.130A.9.a and that once a unit is used for such occupancy, all future occupancies under subsection

Page 30 of 201 ends

Page 188 ends

30 the unit for 12 months or more, and the effective date of the notice of termination of tenancy falls during the school year. The term "school year" as used in this subsection means the first day of instruction for the Fall Semester through the first day of the month following the last day of instruction for the Spring Semester, as posted on the Berkeley Unified School District website for each year.
(i) For purposes of subsection 13.76.130A.9.k, the term "custodial relationship" means that the person is a legal guardian of the child, or has a caregiver’s authorization affidavit for the child as defined by Section 6550 of the California Family Code, or that the person has provided full-time custodial care of the child pursuant to an agreement with the child’s legal guardian or court-recognized caregiver and has been providing that care for at least one year or half of the child’s lifetime, whichever is less. The term "family relationship" means that the person is the biological or adoptive parent, grandparent, brother, sister, aunt or uncle of the child, or the spouse or domestic partner of such relations.
l. A landlord may not recover possession of a unit from a tenant under subsection 13.76.130A.9 if any tenant in the rental unit:
(i) Is 60 years of age or older and has been residing on the property for five years or more; or
(ii) Is disabled and has been residing on the property for five years or more; or
(iii) Has resided on the property for five years or more and the landlord has a ten percent (10%) or greater ownership interest, in any form whatsoever, in five or more residential rental units in the City of Berkeley.
m. A tenant who claims to be a member of one of the classes protected by subsection 13.76.130A.9.l must submit a statement, with supporting evidence, to the landlord. A tenant’s failure to submit a

Page 31 of 201 ends

Page 189 ends

31 statement at any point prior to the trial date of an unlawful detainer action for possession of the tenant’s unit shall be deemed an admission that the tenant is not protected by subsection 13.76.130A.9.l. A landlord may challenge a tenant’s claim of protected status by raising it as an issue at trial in an unlawful detainer action for possession of the tenant’s unit.
n. The provisions of subsection 13.76.130A.9.l shall not apply to the following situations:
(i) Where a person is the owner of three or fewer residential units in the City of Berkeley and has no greater than a nine percent (9%) ownership interest in any other residential unit in the City of Berkeley; or
(ii) Where each residential rental unit in Berkeley in which the landlord holds an ownership interest of ten percent (10%) or greater is occupied by a tenant otherwise protected from eviction by subsection 13.76.130A.9.I and the landlord’s qualified relative who is seeking possession of a unit subject to subsection

13.76.130A.9.b is 60 years of age or older or is disabled as defined in subsection 13.76.130A.9.l.(ii) above; or
(iii) Where each residential rental unit in Berkeley in which the landlord holds an ownership interest of ten percent (10%) or greater is occupied by a tenant otherwise protected from eviction by subsection 13.76.130A.9.I, the landlord has owned the unit for which possession is being sought subject to subsection

13.76.130A.9.a for five years or more and is 60 years of age or older or is disabled as defined in subsection 13.76.130A.9.l.(ii). o. Where a landlord recovers possession under Subsection

13.76.130A.9, the tenant must be given the right of first refusal to re- occupy the unit upon its next vacancy.

Page 32 of 201 ends

Page 190 ends

32 p. When a landlord is required to provide a relocation assistance payment subject to subsection 13.76.130A.9.g, the payment shall be divided among the tenants occupying the rental unit at the time of service of the notice to terminate tenancy.
(i) Within ten days of service of a notice terminating tenancy under subsection 13.76.130A.9, the landlord shall deposit the standard relocation assistance (for households where an occupant has resided one year or more) with the City or its designated agent to be held in escrow. Within ten days after the funds are deposited into escrow, the City shall release the standard relocation assistance to the tenant household, unless the landlord notifies the Rent Stabilization Program in writing that he/she disputes the tenant’s eligibility to receive such assistance.
(ii) In order to claim entitlement to additional relocation assistance under subsection 13.76.130A.9.g, a tenant must notify the landlord and the Rent Stabilization Program in writing that he/she is claiming low-income, disabled, elderly, tenant with minor child status, or a claim that the tenancy began prior to January 1, 1999 (hereinafter "entitlement to additional relocation assistance") per subsection

13.76.130A.9.g within 30 days of filing of notice of termination of tenancy with the Rent Stabilization Program. The landlord shall deposit the additional relocation payment with the Rent Stabilization Program or its designated agent to be held in escrow for any tenant household who claims entitlement to additional relocation assistance within ten days after such notice claiming entitlement to additional relocation assistance is mailed. Within ten days after the funds are deposited into escrow, the Rent Stabilization Program shall authorize release of the relocation assistance to the tenant household that claims entitlement to additional relocation assistance, unless the landlord notifies the Rent Stabilization Program in writing that he/she disputes the tenant’s eligibility to receive such assistance.

Page 33 of 201 ends

Page 191 ends

33 (iii) When a tenant household’s eligibility to receive standard or additional relocation assistance as described in subsection

13.76.130A.9.g is disputed, either party may file a Rent Board petition requesting a determination of eligibility or file a claim in a court of competent jurisdiction. The Rent Stabilization Program shall release disputed relocation assistance funds to either the tenant or the landlord upon receipt of either a written agreement by both the landlord and the affected tenant, an order of a court of competent jurisdiction, or an order of a City or Rent Board hearing examiner issued pursuant to a petition process conducted in accordance with applicable Rent Board Regulations.
(iv) The landlord may rescind the notice of termination of tenancy prior to any release of relocation payment to the tenants by serving written notice stating such rescission on the tenants. In such instance, the relocation payment shall be released to the landlord.

Subsequent to the release of any relocation payment to the tenants, the landlord may rescind the notice of termination of tenancy only upon the written agreement of the tenants to remain in possession of the rental unit. If the tenants remain in possession of the rental units after service of a landlord’s written notice of rescission of the eviction, the tenants shall provide an accounting to the landlord of the amount of the relocation payment expended for moving costs, return to the landlord that portion of the relocation payment not expended for moving costs, and assign to the landlord all rights to recover the amount of relocation payment paid to third parties. If a rescission occurs under this subsection, the tenant(s) shall continue the tenancy on the same terms as before the notice was served.
(v) Where a landlord has served a notice of termination of tenancy on a tenant prior to the date that this amendment takes effect and the notice of termination of tenancy has not expired, the landlord shall deposit the full relocation payment with the City or its

Page 34 of 201 ends

Page 192 ends

34 designated agent to be held in escrow for the tenants if the tenants have not vacated the rental unit as of the effective date of this amendment, and the landlord shall pay the full relocation payment to the tenants if the tenants have vacated the rental unit as of the effective date of this amendment. Said deposit in escrow or payment to the tenants shall be made within ten days of the effective date of this amendment.
(vi) Failure of the landlord to make any payment specified herein shall be a defense to any action to recover possession of a rental unit based upon the landlord’s termination of tenancy notice pursuant to this subsection (13.76.130A.9). In addition, if the tenants of a rental unit have vacated the unit as a result of a notice of termination of tenancy pursuant to this subsection
(13.76.130.A.9), and the landlord fails to make any payment specified herein, the landlord shall be liable to the tenants for three times the amount of the payment as well as reasonable attorney fees.
q. A tenant who prevails in an action brought under this subsection (13.76.130A.9), in addition to any damages and/or costs awarded by the court, shall be entitled to recover all reasonable attorney’s fees incurred in bringing or defending the action.
r. At least twice annually, Rent Board staff shall report to the Rent Board regarding the occupancy status of units possession of which has been recovered pursuant to this subsection (13.76.130A.9) within the prior 36 months.
s. If any provision or clause of this subsection (13.76.130A.9) or the application thereof to any person or circumstance is held to be unconstitutional or to be otherwise invalid by any court of competent jurisdiction, such invalidity shall not affect other provisions or clauses, and to this end the provisions and applications of this subsection are severable.

Page 35 of 201 ends

Page 193 ends

35 10. A landlord or lessor seeks in good faith to recover possession of the rental unit for his/her occupancy as a principal residence, where the landlord or lessor has previously occupied the rental unit as his/her principal residence and has the right to recover possession of the unit for his/her occupancy as a principal residence under an existing rental agreement with the current tenants.

11. The tenant fails to vacate a rental unit occupied under the terms of a temporary rental agreement entered into pursuant to the provisions of subsection 13.76.130A.7.c., following expiration of the term of said temporary rental agreement, and following written notice of the availability of tenant’s previous rental unit for re-occupancy by tenant (if the term of the rental agreement has expired by reason of the completion of repairs on the old rental unit), or of written notice to quit (if the term of the rental agreement has expired by reason of the expiration of a period of 90 days).

B. A landlord’s failure to specify good cause as listed above in subsections 1. through

11. of Section 13.76.130A. in the notice of termination or the notice to quit and in the complaint for possession shall be a defense to any action for possession of a rental unit covered by the terms of this chapter.

C. In any action to recover possession of a rental unit covered by the terms of this chapter, except an action to recover possession under subsection

13.76.130A.7., 13.76.130.A.8, or 13.76.130.A.11., a landlord shall allege, as to each rental unit on the property, substantial compliance as of the date of the notice of termination or notice to quit and as of the date of the commencement of the action for possession with the implied warranty of habitability and compliance as of the date of the notice of termination or notice to quit and as of the date of the commencement of the action for possession with Sections 13.76.100 (Rent Ceiling) and 13.76.080 (Rent Registration) of this chapter.

D. The landlord shall file with the board a copy of any notice of termination, notice to quit, and summons and complaint, within ten days after the tenant has been served with such notice or summons and complaint.

Page 36 of 201 ends

Page 194 ends

36 Section 5. Severability. If any word, phrase, sentence, part, section, subsection, or other portion of this ordinance, or any application thereof to any person or circumstance is declared void, unconstitutional, or invalid for any reason, then such word, phrase, sentence, part, section, subsection, or other portion, or the prescribed application thereof, shall be severable, and the remaining provisions of this chapter, and all applications thereof, not having been declared void, unconstitutional or invalid, shall remain in full force and effect. The People of the City of Berkeley hereby declare that they would have passed this ordinance, and each section, subsection, sentence, clause and phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases had been declared invalid or unconstitutional.

Page 37 of 201 ends

Page 195 ends

REVISED

AGENDA MATERIAL
for Supplemental Packet 2

Meeting Date: July 12, 2022

Item Number: 20

Item Description: Placing a Measure on the November 8, 2022 Ballot Amending the Rent Stabilization and Eviction for Good Cause Ordinance (B.M.C. 13.76)

Submitted by: Office of the City Attorney and Matt Brown, General Counsel Rent Board

Amendments to resolution placing measure on the November 8, 2022 ballot: changes to ballot question language and non-substantive changes to title and other sections of resolution.

Amendments to ballot measure language: adding two additional exemptions to Section 13.76.050, subsections F and N for accessory dwelling units and certain owner-occupied properties; non-substantive changes to title and other sections.

Page 38 of 201 ends

Page 196 ends

1 Attachment 1

RESOLUTION NO. ##,###-N.S.

SUBMITTING TO THE BERKELEY ELECTORATE A MEASURE TO AMENDING BERKELEY MUNICIPAL CODE CHAPTER 13.76 OF THE BERKELEY MUNICIPAL

CODE TO ALLOW RENT CONTROL TO APPLY, TO THE EXTENT THAT STATE OR

LOCAL LAW PERMITS, FOR THE REGULATION OF NEWLY CONSTRUCTED UNITS

WHERE STATE AND LOCAL LAW DO NOT PROHIBIT RENT CONTROL, AND

SPECIFICALLYINCLUDING BUT NOT LIMITED TO UNITS ,BUILT AS THE RESULT

OF DEMOLITION OF PREVIOUSLY RENT-CONTROLLED UNITS CREATED PURSUANT TO SENATE BILL 330 (HOUSING CRISIS ACT OF 2019); ALLOW INCREASED OCCUPANCY OF RENTAL UNITS WITHOUT THREAT OF EVICTION;

ELIMINATE PROVISION ALLOWING CITY COUNCIL TO EXEMPT UNITS FROM RENT CONTROL IF CITY’S VACANCY RATE EXCEEDS 5% OVER A SIX-MONTH PERIOD; AND INCREASE EVICTION PROTECTIONS FOR CERTAIN LANDLORD- OCCUPIED PROPERTIES.TO ADD EVICTION PROTECTIONS FOR RENTAL UNITS

IN A RESIDENTIAL PROPERTY CONSISTING OF TWO UNITS WHERE ONE OF

THE UNITS IS OCCUPIED BY A LANDLORD AS THEIR PRINCIPAL PLACE OF

RESIDENCE AND WHERE ONE OF THE TWO UNITS WAS OWNER-OCCUPIED AS OF DECEMBER 31, 1979 AND EVICTION PROTECTIONS TO TENANTS IN RENTAL

UNITS CONTAINING A SINGLE FAMILY DWELLING AND ONE LAWFULLY

ESTABLISHED ACESSORY DWELLING UNIT WHERE THE LANDLORD OCCUPIES A UNIT IN THE SAME PROPERTY; TO PROHIBIT EVICTIONS BASED ON THE

ADDITION OF OCCUPANTS IF THE LANLDORD HAS UNREASONABLY REFUSED THE TENANT’S REQUEST; AND TO ELIMINATE SECTION 13.76.060 (DECONTROL).

WHEREAS, the purposes of the Berkeley Rent Stabilization and Eviction for Good Cause Ordinance are to regulate residential rent increases in the City of Berkeley and to protect tenants from unwarranted rent increases and arbitrary, discriminatory, or retaliatory evictions, in order to help maintain the diversity of the Berkeley community and to ensure compliance with legal obligations relating to the rental of housing. This legislation is designed to address the City of Berkeley's housing crisis, preserve the public peace, health and safety, and advance the hou sing policies of the city with regard to low and fixed income persons, minorities, students, handicapped, and the aged; and

WHEREAS, the Berkeley Rent Stabilization Board will be able to provide greater protections to tenants in newly constructed units; and

WHEREAS, the Berkeley Rent Stabilization Board will be able to provide greater eviction protections for tenants in units that previously did not have such protections; and

Page 39 of 201 ends

Page 197 ends

2 WHEREAS, eviction protections will be increased for tenant households that add additional occupants if a landlord has unreasonably refused a tenant’s written request; and

WHEREAS, Section 13.76.060 (Decontrol) is to be eliminated; and

WHEREAS, these enumerated amendments to the Rent Stabilization and Eviction for Good Cause Ordina nce will prevent displacement of tenants by extending additional protections and services to tenants who do not enjoy such protections under existing law; and

WHEREAS, the Berkeley City Council has elected to submit to the voters at the November 8, 2022 General Municipal Election, a measure amending Chapter 13.76 of the Berkeley Municipal Code to allow rent control to apply to new construction built as the result of demolition of previously rent-controlled units, allow increased occupancy of rental units, eliminate a provision allowing the City Council to exempt units from rent control if the citywide vacancy rate exceeds 5%, and increase eviction protections for certain landlord-occupied properties; to amend Berkeley Municipal Code Chapter 13.76 to allow for the regulation of newly constructed units if permissible under state or local law; to provide eviction protections under the Ordinance for tenants in properties consisting of two units where one unit is a landlord’s principal place of residence and one unit was a landlord’s principal place of residence as of December 31, 1979 and eviction protections to tenants residing on a property containing a single family dwelling and a lawfully established Accessory Dwelling Unit where the landlord occupies a unit at the property; to provide eviction protections for tenants that add additional occupants to their household after the landlord has unreasonably refused a written request to do so; and to eliminate Section 13.76.060 (Decontrol) from the Ordinance; and

WHEREAS, the City of Berkeley hereby requests that the Alameda County Board of Supervisors permit the Registrar of Voters of Alameda County to perform services in connection with said election at the request of the City Clerk. These services to include all necessary services related to official ballot creation, sample ballot and voter information pamphlet preparation, vote-by-mail, polling places, poll workers, voter registration, voting machines, canvass operations, and any and all other services necessary for the conduct of the consolidated election; and

WHEREAS, the Council desires to submit this measure to be placed upon the ballot at said consolidated election.

Page 40 of 201 ends

Page 198 ends

3 NOW THEREFORE, BE IT RESOLVED by the Counci l of the City of Berkeley that the Board of Supervisors of Alameda County is hereby requested to include on the ballots and sample ballots the measure enumerated above to be voted on by the voters of the qualified electors of the City of Berkeley.

BE IT FURTHER RESOLVED that the full text of the measure shall be printed in the Voter Information Pamphlet mailed to all voters in the City of Berkeley.

BE IT FURTHER RESOLVED that the above enumerated measure requires a majority vote threshold for passage.

BE IT FURTHER RESOLVED that the City Clerk is hereby directed to obtain printing, supplies and services as required.

BE IT FURTHER RESOLVED that the City Clerk is hereby authorized to enter into any contracts necessary for election consulting service s, temporary employment services, printing services, and any such other supplies and services as may be required by the statutes of the State of California and the Charter of the City of Berkeley for the conduct of the November General Municipal Election.

BE IT FURTHER RESOLVED that the City will reimburse the Registrar of Voters for the costs associated with placing the measure on the ballot.

BE IT FURTHER RESOLVED that said proposed Ordinance measure shall appear and be printed upon the ballots to be used at said election as follows:

CITY OF BERKELEY ORDINANCE
Shall the measure amending the Rent Stabilization and Eviction for Good Cause Ordinance to allow rent control to apply to new construction built as a result of demolition of rent-controlled units, where not prohibited by state law; allow a greater number of occupants per rental unit; eliminate a provision allowing the City Council t o exempt units from rent control if the citywide vacancy rate exceeds 5% over six months; and limit evictions for certain landlord-occupied properties be adopted? Shall the measure amending the Rent Stabilization and Eviction for Good Cause Ordinance to: allow, to the extent that state or local permits, for the regulation of newly-constructed units;

YES

Page 41 of 201 ends

Page 199 ends

4 to provide eviction protections to tenants in certain two -unit properties where such eviction protections previously did not apply; to provide eviction protections to tenants who add additional occupants after the landlord has unreasonably denied such a request; and to eliminate Section 13.76.060 be adopted?

BE IT FURTHER RESOLVED that the text of the measure be shown as Exhibit A, attached hereto and made a part hereof.

Exhibits

A: Text of Measure

Page 42 of 201 ends

Page 200 ends

5 Exhibit A
ORDINANCE NO. ##,###–N.S.

AN ORDINANCE OF THE CITY OF BERKELEY AMENDING CHAPTER 13.76 OF THE

BERKELEY MUNICIPAL CODE TO ALLOW RENT CONTROL TO APPLY TO NEWLY

CONSTRUCTED UNITS WHERE STATE AND LOCAL LAW DO NOT PROHIBIT

RENT CONTROL AND SPECIFICALLY TO UNITS BUILT AS THE RESULT OF DEMOLITION OF PREVIOUSLY RENT-CONTROLLED UNITS; ALLOW INCREASED OCCUPANCY OF RENTAL UNITS; ELIMINATE PROVISION ALLOWING CITY COUNCIL TO EXEMPT UNITS FROM RENT CONTROL IF CITY’S VACANCY RATE EXCEEDS 5% OVER A SIX-MONTH PERIOD; AND INCREASE EVICTION PROTECTIONS FOR CERTAIN LANDLORD-OCCUPIED PROPERTIES.

AN ORDINANCE OF THE CITY OF BERKELEY AMENDING BERKELEY MUNICIPAL CODE CHAPTER 13.76 TO ALLOW, TO THE EXTENT THAT STATE OR LOCAL LAW

PERMITS, FOR THE REGULATION OF NEWLY CONSTRUCTED UNITS, INCLUDING BUT NOT LIMITED TO, UNITS CREATED PURSUANT TO SENATE BILL 330 (HOUSING CRISIS ACT OF 2019); TO ADD EVICTION PROTECTIONS FOR RENTAL

UNITS IN A RESIDENTIAL PROPERTY CONSISTING OF TWO UNITS WHERE ONE

OF THE UNITS IS OCCUPIED BY A LANDLORD AS THEIR PRINCIPAL PLACE OF

RESIDENCE AND WHERE ONE OF THE TWO UNITS WAS OWNER-OCCUPIED AS OF DECEMBER 31, 1979 AND EVICTION PROTECTIONS TO TENANTS IN RENTAL

UNITS CONTAINING A SINGLE FAMILY DWELLING AND ONE LAWFULLY

ESTABLISHED ACESSORY DWELLING UNIT WHERE THE LANDLORD OCCUPIES A UNIT IN THE SAME PROPERTY; TO PROHIBIT EVICTIONS BASED ON THE

ADDITION OF OCCUPANTS IF THE LANLDORD HAS UNREASONABLY REFUSED THE TENANT’S REQUEST; AND TO ELIMINATE SECTION 13.76.060 (DECONTROL) BE IT ORDAINED by tThe People of the City of Berkeley do ordain as follows:

Section 1. Section 13.76.040 of the Berkeley Municipal Code is amended to read as follows:

13.76.040 Definitions.

Page 43 of 201 ends

Page 201 ends

6 A. "Board" refers to the elected Rent Stabilization Board established by this chapter and Article XVII of the Charter of the City of Berkeley.

B. "Commissioners" means the members of the board who are denominated commissioners.

D. "Landlord" means an owner of record, lessor, sublessor or any other person or entity entitled to receive rent for the use or occupancy of any rental unit, or an agent, representative or successor of any of the foregoing.

F. "Rental agreement" means an agreement, oral, written or implied, between a landlord and a tenant for use or occupancy of a rental unit and for housing services.

H. "Property" means a parcel of real property which is assessed and taxed as an undivided whole.

Page 44 of 201 ends

Page 202 ends

7 I. "Tenant" means any renter, tenant, subtenant, lessee, or sublessee of a rental unit, or successor to a renter’s interest, or any group of tenants, subtenants, lessees, or sublessees of any rental unit, or any other person entitled to the use or occupancy of such rental unit.

K. "Health facility" means any facility, place or building which is organized, maintained and operated for the diagnosis, care and treatment of human illness, physical or mental, including convalescence and rehabilitation and including care during and after pregnancy, or for any one or more of these purposes, for one or more persons, to which such persons are admitted for a 24-hour stay or longer.

M. "Rent ceiling" means the maximum allowable rent which a landlord may charge on any rental unit covered by this chapter.

N. "Base rent ceiling" means the maximum allowable rent established under Section 13.76.100 of this chapter.

O. "Fees" means for the purpose of this chapter, a charge fixed by law for services of public officers or for use of a privilege under control of government.

Page 45 of 201 ends

Page 203 ends

8 Education, and which is accredited by the Western Association of Schools and Colleges or the Association of Theological Schools and which is exempt from taxation under Section 501 (c)(3) of the United States Internal Revenue Code and under Section 23701(d) of the Revenue and Taxation Code, and which, if otherwise required by law to do so, has obtained a valid unrevoked letter or ruling from the United States Internal Revenue Service or from the Franchise Tax Board which states that the organization so qualifies for exemption from taxation.

R. Notwithstanding any other provision in this ordinance, and to the extent that state or local law does not prohibit a local jurisdiction from regulating the rent on a residential rental unit, such units shall not be exempt as “newly constructed units” and, unless otherwise exempt, shall be covered by all provisions of this chapter. This includes, but is not limited to, any residential rental units created as a result of demolition or replacement where such demolition or replacement is affected via the creation of a “housing development project” as defined in the Housing Crisis Act of 2019 (Senate Bill 330).

Section 2: Section 13.76.050 of the Berkeley Municipal Code is amended to read as follows:

13.76.050 Applicability
This chapter shall apply to all real property that is being rented or is available for rent for residential use in whole or in part, except for the following:

Page 46 of 201 ends

Page 204 ends

9 Section 13.76.100, Establishment of Base Rent Ceiling and Posting; Section 13.76.110, Annual General Adjustment of Rent Ceilings; and Section 13.76.120, Individual Adjustments of Rent Ceilings, of this chapter.

C. Rental units in nonprofit cooperatives owned and controlled by a majority of the residents.

D. Rental units leased to tenants assisted under the Section 8 program (42 U.S.C.

Section 1437f) or the Shelter Plus Care Program (42 U.S.C. 11403 et. seq.) or similar federally funded rent subsidy program. Except as may be preempted by state or federal law, the exemption of such rental units from the terms of this chapter shall be limited to Section 13.76.080, Rent Registration; Section 13.76.100, Establishment of Base Rent Ceiling and Posting; Section 13.76.110, Annual General Adjustment of Rent Ceilings and Section 13.76.120, Individual Adjustments of Rent Ceilings, of this chapter.

E. Rental units in any hospital, skilled nursing facility, health facility, asylum, or non- profit home for the aged.

Page 47 of 201 ends

Page 205 ends

10 F. Rental units in a residential property which is divided into a maximum of four units where one of such units is occupied by the landlord as his/her principal residence. Any exemption of rental units established under this subsection (13.76.050 F.) shall be limited to rental units that would have been exempt under the provisions of this chapter had this chapter been in effect on December 31, 1979. After July 1, 1982, this exemption shall no longer apply to rental units in a residential property which is divided into three or four units. It shall continue to apply to rental units in a residential property which is divided into two units, and which meet all the other requirements of this subsection (13.76.050F). However, the exemption of such rental units shall be limited to their exemption from the terms of Section 13.76.070, Security Deposits; Section

13.76.080I and 13.76.100C. applied to them.

H. For the purposes of Subsections 13.76.050 F. and G., the term landlord shall be defined only as the owner of record holding at least 50% interest in the property.

Page 48 of 201 ends

Page 206 ends

11 K. A rental unit in a residential property owned by an organization exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code that is rented to a low income tenant and subject to a regulatory agreement with a governmental agency that controls the unit’s rent levels. However, the exemption for such rental units from the terms of this chapter shall be limited to Section 13.76.080, Rent Registration; Section 13.76.100, Establishment of Base Rent Ceiling and Posting; Section 13.76.110, Annual General Adjustment of Rent Ceilings; and Section 13.76.120, Individual Adjustments of Rent Ceilings of this chapter and shall apply only for so long as the regulatory agreement is in effect. This exemption shall not apply to rental units at the property that are not subject to a regulatory agreement with a governmental agency or that are rented by a tenant who occupied the unit prior to the property’s acquisition by the tax-exempt organization.

L. Rental units in a facility owned or leased by an organization exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code that has the primary purpose of operating a treatment, recovery, therapy, sanctuary or shelter program for qualified clients, where such rental units are provided incident to the client’s participation in the primary program and where the client has been informed in writing of the temporary or transitional nature of the housing at the inception of his or her participation in the program. However, except as may be preempted by the Transitional Housing Participant Misconduct Act (California Health and Safety Code Sections 50580 et. seq.) or other state or federal law, such rental units shall not be exempted from the terms of Section 13.76.130, Good Cause Required for Eviction. For purposes of Section 13.76.130.A.2, the client’s continued eligibility for participation in the treatment, recovery, therapy, sanctuary or shelter program shall be deemed a material term of the client’s rental agreement with the program’s operator.

Page 49 of 201 ends

Page 207 ends

12 N. A rental unit in a residential property containing only a Single Family Dwelling (as defined in Subtitle 23F.04 of the Zoning Ordinance) and one lawfully established and fully permitted Accessory Dwelling Unit where the landlord also occupies a unit in the same property as his/her principal residence. This subsection (13.76.050N) shall only apply to properties containing a single Accessory Dwelling Unit, shall only apply to units compliant with all applicable requirements of Chapter 23C.24 ("Accessory Dwelling Units"), and shall only apply to tenancies created after November 7, 2018. However, the exemption of such rental units shall be limited to their exemption from the terms of Section 13.76.070, Security Deposits; Section 13.76.080, Rent Registration; Section

13.76.100, Establishment of Base Rent Ceiling and Posting; Section 13.76.110, Annual General Adjustment of Rent Ceilings; and Section 13.76.120, Individual Adjustments of Rent Ceilings, of this chapter.

O. A dwelling or a unit alienable separate from the title to any other dwelling unit unless the tenancy commenced before January 1, 1996. However, the exemption of such units shall be limited to their exemption from the terms of Section 13.76.100, Establishment of Base Rent Ceiling and Posting: Section 13.76.110, Annual General Adjustment of Rent Ceilings; and Section 13.76.120, Individual Adjustments of Rent Ceilings, of this chapter. A property owner who owns only one residential unit in the City of Berkeley, and occupied that residential unit for 365 consecutive days as their principal residence immediately prior to renting the unit, and is absent from the unit for a period not to exceed 24 months, and such period is specified in the lease, shall also be exempt from the terms of Section 13.76.080, Rent Registration, of this Chapter. The exemptions provided in this Section shall apply only as long as the pertinent provisions of California Civil Code Section 1954.50 et. seq. ("Costa-Hawkins") remain in effect and require such an exemption.

Section 3: Section 13.76.060 of the Berkeley Municipal Code is amended to read as follows:

13.76.060 Rent Stabilization Board

Page 50 of 201 ends

Page 208 ends

13 A. Composition. There shall be in the city of Berkeley an elected rent stabilization board; the board shall consist of nine commissioners. The board shall elect annually as chairperson one of its members to serve in that capacity.

B. Eligibility. Residents who are duly qualified electors of the city of Berkeley are eligible to serve as commissioners on the board.

C. Full disclosure of holdings. Candidates for the position of commissioner shall fulfill the requirements as set forth in the City Charter in Article III, Section 6 1/2.

D. Election of commissioners. Commissioners shall be elected at the statewide general election held in November of even numbered years.

E. Terms of office. Commissioners’ terms of office shall be as set forth in Article XVII of the Berkeley City Charter.

1. Set the rent ceilings for all rental units.

2. Require registration of all rental units under Section 13.76.080.

3. Publicize the manner in which the base rent ceiling is established under Section 13.76.100.

4. To make adjustments in the rent ceiling in accordance with Sections 13.76.110 and 13.76.120.

Page 51 of 201 ends

Page 209 ends

14 5. Set rents at fair and equitable levels in view of and in order to achieve the purposes of this chapter.

6. To issue orders, rules and regulations, conduct hearings and charge fees as set below.

7. Make such studies, surveys and investigations, conduct such hearings, and obtain such information as is necessary to carry out its powers and duties.

8. Report annually to the city council of the city of Berkeley on the status of rental housing units covered by this chapter.

9. Request the City Council to remove rent controls under Section

13.76.060Q.

10. Administer oaths and affirmations and subpoena witnesses and relevant documents.

11. Establish rules and regulations for settling civil claims under Section 13.76.150.

12. Seek injunctive relief under Section 13.76.150.

13. Pursue civil remedies in courts of appropriate jurisdiction.

14. Intervene as an interested party in any litigation brought before a court of appropriate jurisdiction by a landlord or tenant with respect to rental units covered by this chapter.

15. Hold public hearings.

16. Charge and collect registration fees, including penalties for late payments.

17. Other powers necessary to carry out the purposes of this chapter which are not inconsistent with the terms of this chapter.

Page 52 of 201 ends

Page 210 ends

15 18. Except as provided in Section 13.76.060N of this chapter, the board shall finance its reasonable and necessary expenses for its operation without the use of general fund monies of the city of Berkeley.

The board shall publicize this Chapter so that all residents of Berkeley will have the opportunity to become informed about their legal rights and duties under this Chapter.

The board shall prepare a brochure which fully describes the legal rights and duties of landlords and tenants under this Chapter. The brochure shall be made available to the public.

H. Meetings: The board shall hold regularly scheduled meetings. Special meetings shall be called at the request of at least a majority of the commissioners of the board.

The board shall hold its initial meeting no later than July 15, 1980.

I. Quorum: Five commissioners shall constitute a quorum for the board.

J. Voting: The affirmative vote of five commissioners of the board is required for a decision, including all motions, rules, regulations, and orders of the board.

K. Compensation: The rent stabilization board shall be a working board.

L. Dockets: The board shall maintain and keep in its office all hearing dockets, which shall be available for public inspection.

Page 53 of 201 ends

Page 211 ends

16 M. Vacancies: If a vacancy shall occur on the board, a qualified person to fill such vacancy shall be selected in accordance with the procedures set forth in Article V of the City Charter.

O. Staff: The board shall be a working board and shall employ such staff as may be necessary to perform its functions efficiently and as provided by Berkeley Ordinance.

P. Registration: The board shall require the registration of all rental units covered by this chapter as provided for in Section 13.76.080. The board may also require landlords to provide current information supplementing their registration statements.

Page 54 of 201 ends

Page 212 ends

17 R. Q. Conflict of Interest: Commissioners shall be subject to the requirements of the California Political Reform Act and other applicable state and local conflict of interest codes. Commissioners shall not necessarily be disqualified from exercising any of their powers and duties on the grounds of a conflict of interest solely on the basis of their status as a landlord or tenant. However, a commissioner shall be disqualified from ruling on a petition for an individual adjustment of a rent ceiling under Section 13.76.120, where the commissioner is either the landlord of the property or a tenant residing in the property that is involved in the petition.

Section 4: Section 13.76.130 of the Berkeley Municipal Code is amended to read as follows

1. The tenant has failed to pay rent to which the landlord is legally entitled pursuant to the lease or rental agreement and under the provisions of state or local law, unless the tenant has withheld rent pursuant to applicable law; and said failure has continued after service on the tenant of a written notice setting forth the amount of rent then due and requiring it to be paid, within a period, specified in the notice, of not less than three days. Rent that is lawfully withheld pursuant to emergency legislation that authorizes rent withholding during the effective period of a state of emergency applicable in Berkeley shall not constitute grounds for recovery of possession except as expressly provided in the applicable emergency legislation. Emergency legislation adopted during the emergency may prohibit recovery of possession for lawfully withheld rent even after the expiration of a state or local emergency.

Page 55 of 201 ends

Page 213 ends

18 2. The tenant has continued, after written notice to cease, to substantially violate any of the material terms of the rental agreement, except the obligation to surrender possession on proper notice as required by law, and provided that such terms are reasonable and legal and have been accepted in writing by the tenant or made part of the rental agreement; and provided further that, where such terms have been accepted by the tenant or made part of the rental agreement subsequent to the initial creation of the tenancy, the landlord shall have first notified the tenant in writing that he or she need not accept such terms or agree to their being made part of the rental agreement. Notwithstanding any contrary provision in this chapter or in the rental agreement, a landlord is not entitled to recover possession of a rental unit under this subsection where a tenant permits his or her rental unit to be occupied by a subtenant, provided:
a. The landlord has unreasonably withheld consent to the subtenancy; and
b. The tenant remains an actual occupant of the rental unit; and c. The number of tenants and subtenants actually occupying the rental unit does not exceed the number of occupants originally allowed by the rental agreement or the board's regulations, whichever is greater the maximum number of occupants legally allowed under Section 503.2 503(b)(2) of the Uniform Housing Code as incorporated by California Health & Safety Code Section 17922, except where prohibited by law. d. Withholding of consent by the landlord shall be deemed to be unreasonable where:
(i) The tenant’s written request for consent was given at least two weeks prior to commencement of the subtenancy; tenant has made a written request to the landlord to either sublet the unit and/or add additional occupants, and the landlord has failed to respond in writing within fourteen (14) days of the tenant’s request; or (ii) The proposed new subtenant has, upon the landlord’s written request, completed the landlord’s standard form application or

Page 56 of 201 ends

Page 214 ends

19 provided sufficient information to allow the landlord to conduct a standard background check, including references and credit, income and other reasonable background information, and the proposed new subtenant or additional occupant meets the landlord’s customary occupancy qualifications and has not refused the landlord’s request to be bound by the terms of the current rental agreement between the landlord and the tenant; and or
(iii) The proposed new subtenant meets the landlord’s customary occupancy qualifications and has not refused the landlord’s request to be bound by the terms of the current rental agreement between the landlord and the tenant; and
(iii iv) The landlord has not articulated in writing a well-founded reason for refusing consent. A landlord’s reasonable denial may not be based on the proposed occupant’s lack of credit worthiness or income if that occupant will not be legally obligated to pay some or all of the rent to the landlord.
e. Where a landlord can establish that the proposed additional occupant presents a direct threat to the health, safety, or security of other residents of the property, the landlord shall have the right to deny the proposed tenant’s occupancy.
f. Before initiating an action to recover possession based on the violation of a lawful obligation or covenant of tenancy regarding subletting or limits on the number of occupants in the rental unit, the landlord shall serve the tenant a written notice of the violation that provides the tenant with a minimum of fourteen (14) days to cure the violation. The notice must also inform the tenant(s) of their right to add subtenants and/or add additional occupants pursuant to this section.

Page 57 of 201 ends

Page 215 ends

20 4. The tenant has refused to agree to a new rental agreement upon expiration of a prior rental agreement, but only where the new rental agreement contains provisions that are substantially identical to the prior rental agreement, and is not inconsistent with local, state and federal laws.

6. The tenant has, after written notice to cease, refused the landlord access to the unit as required by state or local law.

Page 58 of 201 ends

Page 216 ends

21 jurisdiction awarding possession of the premises to the landlord, the landlord shall, as a condition of obtaining possession pursuant to this subsection (13.76.130A.7.), notify tenant in writing of the existence and address of each such vacant rental unit and offer tenant the right, at the tenant’s option:
(i) To enter into a rental agreement (to be designated as a "temporary rental agreement") on any available rental unit which the tenant may choose, at a rent not to exceed the lesser of the lawful rent which may be charged for such available rental unit or the lawful rent in effect, at the time of the notice of termination of tenancy, on the unit being vacated, said rental agreement to be for a term of the lesser of ninety days or until completion of repairs on the rental unit being vacated by tenant; or
(ii) To enter into a new rental agreement or lease for such available rental unit at a rent not to exceed the lawful rent which may be charged for such available rental unit.
d. Where the landlord recovers possession under this subsection (13.76.130A.7.), the tenant must be given the right of first refusal to re- occupy the unit upon completion of the required work. In the event the landlord files an application for an individual rent adjustment within six months following the completion of the work, the tenant shall be a party to such proceeding the same as if he or she were still in possession, unless the landlord shall submit, with such application, a written waiver by the tenant of his or her right to re-occupy the premises pursuant to this subsection.

9. Owner Move-in Evictions.

Page 59 of 201 ends

Page 217 ends

22 a. The landlord seeks in good faith with honest intent and without ulterior motive to recover possession for his/her own use and occupancy as his/her principal residence for a period of at least 36 consecutive months; or
b. For the use and occupancy as the principal residence by the landlord’s spouse or by the landlord’s child, or parent for a period of at least 36 consecutive months.
c. For the purposes of this subsection (13.76.130A.9.), the term landlord shall be defined as the owner of record, as of the time of giving of a notice terminating tenancy, and at all times thereafter to and including the earlier of the tenant’s surrender of possession of the premises or the entry of a judgment of a court of competent jurisdiction awarding possession of the premises to the landlord, holding at least a 50% interest in the property and shall not include a lessor, sublessor, or agent of the owner of record.
d. All notices terminating tenancy pursuant to
subsection 13.76.130.A.9 shall include the following: the existence and potential availability of relocation assistance under subsection

Page 60 of 201 ends

Page 218 ends

23 thereafter becomes vacant at any time until the earlier of the tenant’s surrender of possession of the premises or the entry of a judgment of a court of competent jurisdiction awarding possession of the premises to the landlord. In an action by or against the tenant, evidence that a comparable unit was vacant and available within ninety days prior to the date of a notice terminating the tenant’s tenancy shall create a presumption that such unit was vacant and available at the time of the landlord’s decision to seek to recover possession of the premises. "Presumption" means that the court must find the existence of the presumed fact unless and until the contrary is proven by a preponderance of the evidence.
f. The landlord shall offer any non-comparable unit owned by the landlord to the tenant if a non-comparable unit becomes available before the recovery of possession of the tenant’s unit at a rate based on the rent the tenant is paying with an upward or downward adjustment based on the condition, size, and other amenities of the replacement unit. Disputes concerning the initial rent for the replacement unit shall be determined by the Rent Board. g. Where a landlord recovers possession of a unit under subsection

Page 61 of 201 ends

Page 219 ends

24 (i) "Low-income tenants" means persons and families whose income does not exceed the qualifying limits for lower income families as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937, or as otherwise defined in Health and Safety Code Section 50079.5.
(ii) A person is "disabled" if he/she has a physical or mental impairment that limits one or more of a person’s major life activities within the meaning of the California Fair Housing and Employment Act (Government Code § 12926).
(iii) "Elderly" is defined as sixty (60) years of age or older. (iv) "Minor child" means a person who is under 18 years of age. (v) "Tenancy began prior to January 1, 1999" is a tenancy where an "original occupant" (as defined by Berkeley Rent Board Regulation) still permanently resides in the rental unit. h. Effective January 1 of each year beginning in 2018, the fees set forth above in subsection 13.76.130A.9.g., may be increased in an amount based on the Consumer Price Index - All Urban Consumers in the San Francisco-Oakland-San Jose Region averaged for the 12- month period ending June 30, of each year, as determined and published by United States Department of Labor. Any increase shall be published by the Board on or before October 31st of each year. i. It shall be evidence that the landlord has acted in bad faith if the landlord or the landlord’s qualified relative for whom the tenant was evicted does not move into the rental unit within three months from the date of the tenant’s surrender of possession of the premises or occupy said unit as his/her principal residence for a period of at least 36 consecutive months.
j. Once a landlord has successfully recovered possession of a rental unit pursuant to subsection 13.76.130A.9.a., then no other current or

Page 62 of 201 ends

Page 220 ends

25 future landlords may recover possession of any other rental unit on the property pursuant to subsection 13.76.130A.9.a. It is the intention of this subsection that only one specific unit per property may be used for such occupancy under subsection 13.76.130A.9.a and that once a unit is used for such occupancy, all future occupancies under subsection

13.76.130A.9.a must be of that same unit.
k. A landlord may not recover possession of a unit from a tenant under subsection 13.76.130A.9 if any tenant in the rental unit has a custodial or family relationship with a minor child who is residing in the unit, the tenant with the custodial or family relationship has resided in the unit for 12 months or more, and the effective date of the notice of termination of tenancy falls during the school year. The term "school year" as used in this subsection means the first day of instruction for the Fall Semester through the first day of the month following the last day of instruction for the Spring Semester, as posted on the Berkeley Unified School District website for each year.
(i) For purposes of subsection 13.76.130A.9.k, the term "custodial relationship" means that the person is a legal guardian of the child, or has a caregiver’s authorization affidavit for the child as defined by Section 6550 of the California Family Code, or that the person has provided full-time custodial care of the child pursuant to an agreement with the child’s legal guardian or court-recognized caregiver and has been providing that care for at least one year or half of the child’s lifetime, whichever is less. The term "family relationship" means that the person is the biological or adoptive parent, grandparent, brother, sister, aunt or uncle of the child, or the spouse or domestic partner of such relations.
l. A landlord may not recover possession of a unit from a tenant under subsection 13.76.130A.9 if any tenant in the rental unit:
(i) Is 60 years of age or older and has been residing on the property for five years or more; or

Page 63 of 201 ends

Page 221 ends

26 (ii) Is disabled and has been residing on the property for five years or more; or
(iii) Has resided on the property for five years or more and the landlord has a ten percent (10%) or greater ownership interest, in any form whatsoever, in five or more residential rental units in the City of Berkeley.
m. A tenant who claims to be a member of one of the classes protected by subsection 13.76.130A.9.l must submit a statement, with supporting evidence, to the landlord. A tenant’s failure to submit a statement at any point prior to the trial date of an unlawful detainer action for possession of the tenant’s unit shall be deemed an admission that the tenant is not protected by subsection 13.76.130A.9.l. A landlord may challenge a tenant’s claim of protected status by raising it as an issue at trial in an unlawful detainer action for possession of the tenant’s unit.
n. The provisions of subsection 13.76.130A.9.l shall not apply to the following situations:
(i) Where a person is the owner of three or fewer residential units in the City of Berkeley and has no greater than a nine percent (9%) ownership interest in any other residential unit in the City of Berkeley; or
(ii) Where each residential rental unit in Berkeley in which the landlord holds an ownership interest of ten percent (10%) or greater is occupied by a tenant otherwise protected from eviction by subsection 13.76.130A.9.I and the landlord’s qualified relative who is seeking possession of a unit subject to subsection

Page 64 of 201 ends

Page 222 ends

27 is occupied by a tenant otherwise protected from eviction by subsection 13.76.130A.9.I, the landlord has owned the unit for which possession is being sought subject to subsection

13.76.130A.9.a for five years or more and is 60 years of age or older or is disabled as defined in subsection 13.76.130A.9.l.(ii). o. Where a landlord recovers possession under Subsection

13.76.130A.9, the tenant must be given the right of first refusal to re- occupy the unit upon its next vacancy.
p. When a landlord is required to provide a relocation assistance payment subject to subsection 13.76.130A.9.g, the payment shall be divided among the tenants occupying the rental unit at the time of service of the notice to terminate tenancy.
(i) Within ten days of service of a notice terminating tenancy under subsection 13.76.130A.9, the landlord shall deposit the standard relocation assistance (for households where an occupant has resided one year or more) with the City or its designated agent to be held in escrow. Within ten days after the funds are deposited into escrow, the City shall release the standard relocation assistance to the tenant household, unless the landlord notifies the Rent Stabilization Program in writing that he/she disputes the tenant’s eligibility to receive such assistance.
(ii) In order to claim entitlement to additional relocation assistance under subsection 13.76.130A.9.g, a tenant must notify the landlord and the Rent Stabilization Program in writing that he/she is claiming low-income, disabled, elderly, tenant with minor child status, or a claim that the tenancy began prior to January 1, 1999 (hereinafter "entitlement to additional relocation assistance") per subsection

Page 65 of 201 ends

Page 223 ends

28 household who claims entitlement to additional relocation assistance within ten days after such notice claiming entitlement to additional relocation assistance is mailed. Within ten days after the funds are deposited into escrow, the Rent Stabilization Program shall authorize release of the relocation assistance to the tenant household that claims entitlement to additional relocation assistance, unless the landlord notifies the Rent Stabilization Program in writing that he/she disputes the tenant’s eligibility to receive such assistance.
(iii) When a tenant household’s eligibility to receive standard or additional relocation assistance as described in subsection

Page 66 of 201 ends

Page 224 ends

29 payment not expended for moving costs, and assign to the landlord all rights to recover the amount of relocation payment paid to third parties. If a rescission occurs under this subsection, the tenant(s) shall continue the tenancy on the same terms as before the notice was served.
(v) Where a landlord has served a notice of termination of tenancy on a tenant prior to the date that this amendment takes effect and the notice of termination of tenancy has not expired, the landlord shall deposit the full relocation payment with the City or its designated agent to be held in escrow for the tenants if the tenants have not vacated the rental unit as of the effective date of this amendment, and the landlord shall pay the full relocation payment to the tenants if the tenants have vacated the rental unit as of the effective date of this amendment. Said deposit in escrow or payment to the tenants shall be made within ten days of the effective date of this amendment.
(vi) Failure of the landlord to make any payment specified herein shall be a defense to any action to recover possession of a rental unit based upon the landlord’s termination of tenancy notice pursuant to this subsection (13.76.130A.9). In addition, if the tenants of a rental unit have vacated the unit as a result of a notice of termination of tenancy pursuant to this subsection
(13.76.130.A.9), and the landlord fails to make any payment specified herein, the landlord shall be liable to the tenants for three times the amount of the payment as well as reasonable attorney fees.
q. A tenant who prevails in an action brought under this subsection (13.76.130A.9), in addition to any damages and/or costs awarded by the court, shall be entitled to recover all reasonable attorney’s fees incurred in bringing or defending the action.

Page 67 of 201 ends

Page 225 ends

30 r. At least twice annually, Rent Board staff shall report to the Rent Board regarding the occupancy status of units possession of which has been recovered pursuant to this subsection (13.76.130A.9) within the prior 36 months.
s. If any provision or clause of this subsection (13.76.130A.9) or the application thereof to any person or circumstance is held to be unconstitutional or to be otherwise invalid by any court of competent jurisdiction, such invalidity shall not affect other provisions or clauses, and to this end the provisions and applications of this subsection are severable.

10. A landlord or lessor seeks in good faith to recover possession of the rental unit for his/her occupancy as a principal residence, where the landlord or lessor has previously occupied the rental unit as his/her principal residence and has the right to recover possession of the unit for his/her occupancy as a principal residence under an existing rental agreement with the current tenants.

B. A landlord’s failure to specify good cause as listed above in subsections 1. through

C. In any action to recover possession of a rental unit covered by the terms of this chapter, except an action to recover possession under subsection

Page 68 of 201 ends

Page 226 ends

31 13.76.130A.7., 13.76.130.A.8, or 13.76.130.A.11., a landlord shall allege, as to each rental unit on the property, substantial compliance as of the date of the notice of termination or notice to quit and as of the date of the commencement of the action for possession with the implied warranty of habitability and compliance as of the date of the notice of termination or notice to quit and as of the date of the commencement of the action for possession with Sections 13.76.100 (Rent Ceiling) and 13.76.080 (Rent Registration) of this chapter.

Section 5. Severability. If any word, phrase, sentence, part, section, subsection, or other portion of this ordinance, or any application thereof to any person or circumstance is declared void, unconstitutional, or invalid for any reason, then such word, phrase, sentence, part, section, subsection, or other portion, or the prescribed application thereof, shall be severable, and the remaining provisions of this chapter, and all applications thereof, not having been declared void, unconstitutional or invalid, shall remain in full force and effect. The People of the City of Berkeley hereby declare that they would have passed this ordinance, and each section, subsection, sentence, clause and phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases had been declared invalid or unconstitutional.Should any provision of this Ordinance, or its application to any person or circumstance, be determined by a court of competent jurisdiction to be unlawful, unenforceable, or otherwise void, that determination shall have no effect on any other provision of this Ordinance or the application of this Ordinance to any other person or circumstance and, to that end, the provisions hereof are severable.

Page 69 of 201 ends

Page 227 ends

1 Attachment 1

RESOLUTION NO. ##,###-N.S.

SUBMITTING TO THE BERKELEY ELECTORATE A MEASURE AMENDING CHAPTER 13.76 OF THE BERKELEY MUNICIPAL CODE TO ALLOW RENT

CONTROL TO APPLY TO NEWLY CONSTRUCTED UNITS WHERE STATE AND

LOCAL LAW DO NOT PROHIBIT RENT CONTROL, AND SPECIFICALLY TO UNITS

BUILT AS THE RESULT OF DEMOLITION OF PREVIOUSLY RENT-CONTROLLED UNITS; ALLOW INCREASED OCCUPANCY OF RENTAL UNITS WITHOUT THREAT OF EVICTION; ELIMINATE PROVISION ALLOWING CITY COUNCIL TO EXEMPT UNITS FROM RENT CONTROL IF CITY’S VACANCY RATE EXCEEDS 5% OVER A SIX-MONTH PERIOD; AND INCREASE EVICTION PROTECTIONS FOR CERTAIN LANDLORD-OCCUPIED PROPERTIES.

WHEREAS, the purposes of the Berkeley Rent Stabilization and Eviction for Good Cause Ordinance are to regulate residential rent increases in the City of Berkeley and to protect tenants from unwarranted rent increases and arbitrary, discriminatory, or retaliatory evictions, in order to help maintain the diversity of the Berkeley community and to ensure compliance with legal obligations relating to the rental of housing. This legislation is designed to address the City of Berkeley's housing crisis, preserve the public peace, health and safety, and advance the housing policies of the city with regard to low and fixed income persons, minorities, students, handicapped, and the aged; and

WHEREAS, the Berkeley Rent Stabilization Board will be able to provide greater protections to tenants in newly constructed units; and

WHEREAS, the Berkeley Rent Stabilization Board will be able to provide greater eviction protections for tenants in units that previously did not have such protections; and

WHEREAS, eviction protections will be increased for tenant households that add additional occupants if a landlord has unreasonably refused a tenant’s written request; and

WHEREAS, Section 13.76.060 (Decontrol) is to be eliminated; and

WHEREAS, these enumerated amendments to the Rent Stabilization and Eviction for Good Cause Ordinance will prevent displ acement of tenants by extending additional protections and services to tenants who do not enjoy such protections under existing law; and

WHEREAS, the Berkeley City Council has elected to submit to the voters at the November 8, 2022 General Municipal Election, a measure amending Chapter 13.76 of

Page 70 of 201 ends

Page 228 ends

2 the Berkeley Municipal Code to allow rent control to apply to new construction built as the result of demolition of previously rent-controlled units, allow increased occupancy of rental units, eliminate a provision allowing the City Council to exempt units from rent control if the citywide vacancy rate exceeds 5%, and increase eviction protections for certain landlord-occupied properties; and

WHEREAS, in accordance with the provisions of Section 10002 and 10403 of t he Elections Code of the State of California, the Alameda County Board of Supervisors is requested to consolidate the City of Berkeley General Municipal Election with the Statewide General Election to be held November 8, 2022; and

WHEREAS, the City of Berkeley hereby requests that the Alameda County Board of Supervisors permit the Registrar of Voters of Alameda County to perform services in connection with said election at the request of the City Clerk. These services to include all necessary services related to official ballot creation, sample ballot and voter information pamphlet preparation, vote-by-mail, polling places, poll workers, voter registration, voting machines, canvass operations, and any and all other services necessary for the conduct of the consolidated election; and

WHEREAS, the Council desires to submit this measure to be placed upon the ballot at said consolidated election.

NOW THEREFORE, BE IT RESOLVED by the Council of the City of Berkeley that the Board of Supervisors of Alameda Co unty is hereby requested to include on the ballots and sample ballots the measure enumerated above to be voted on by the voters of the qualified electors of the City of Berkeley.

BE IT FURTHER RESOLVED that the full text of the measure shall be printed in the Voter Information Pamphlet mailed to all voters in the City of Berkeley.

BE IT FURTHER RESOLVED that the above enumerated measure requires a majority vote threshold for passage.

BE IT FURTHER RESOLVED that the City Clerk is hereby directed to obtain printing, supplies and services as required.

Page 71 of 201 ends

Page 229 ends

3 statutes of the State of California and the Charter of the City of Berkeley for the conduct of the November General Municipal Election.

BE IT FURTHER RESOLVED that the City will reimburse the Registrar of Voters for the costs associated with placing the measure on the ballot.

BE IT FURTHER RESOLVED that said proposed Ordinance measure shall appear and be printed upon the ballots to be used at said election as follows:

CITY OF BERKELEY ORDINANCE
Shall the measure amending the Rent Stabilization and Eviction for Good Cause Ordinance to allow rent control to apply to new construction built as a result of demolition of rent-controlled units, where not prohibited by state law; allow a greater number of occupants per rental unit ; eliminate a provision allowing the City Council to exempt units from rent control if the citywide vacancy rate exceeds 5% over six months; and limit evictions for certain landlord-occupied properties be adopted?

YES

BE IT FURTHER RESOLVED that the text of the measure be shown as Exhibit A, attached hereto and made a part hereof.

Exhibits

A: Text of Measure

Page 72 of 201 ends

Page 230 ends

4 Exhibit A
ORDINANCE NO. ##,###–N.S.

AN ORDINANCE OF THE CITY OF BERKELEY AMENDING CHAPTER 13.76 OF THE

BERKELEY MUNICIPAL CODE TO ALLOW RENT CONTROL TO APPLY TO NEWLY

CONSTRUCTED UNITS WHERE STATE AND LOCAL LAW DO NOT PROHIBIT

BE IT ORDAINED by the People of the City of Berkeley as follows:

Section 1. Section 13.76.040 of the Berkeley Municipal Code is amended to read as follows:

13.76.040 Definitions.

A. "Board" refers to the elected Rent Stabilization Board established by this chapter and Article XVII of the Charter of the City of Berkeley.

B. "Commissioners" means the members of the board who are denominated commissioners.

Page 73 of 201 ends

Page 231 ends

5 D. "Landlord" means an owner of record, lessor, sublessor or any other person or entity entitled to receive rent for the use or occupancy of any rental unit, or an agent, representative or successor of any of the foregoing.

F. "Rental agreement" means an agreement, oral, written or implied, between a landlord and a tenant for use or occupancy of a rental unit and for housing services.

H. "Property" means a parcel of real property which is assessed and taxed as an undivided whole.

Page 74 of 201 ends

Page 232 ends

6 K. "Health facility" means any facility, place or building which is organized, maintained and operated for the diagnosis, care and treatment of human illness, physical or mental, including convalescence and rehabilitation and including care during and after pregnancy, or for any one or more of these purposes, for one or more persons, to which such persons are admitted for a 24-hour stay or longer.

M. "Rent ceiling" means the maximum allowable rent which a landlord may charge on any rental unit covered by this chapter.

N. "Base rent ceiling" means the maximum allowable rent established under Section 13.76.100 of this chapter.

O. "Fees" means for the purpose of this chapter, a charge fixed by law for services of public officers or for use of a privilege under control of government.

Page 75 of 201 ends

Page 233 ends

7 R. Notwithstanding any other provision in this ordinance, and to the extent that state or local law does not prohibit a local jurisdiction from regulating the rent on a residential rental unit, such units shall not be exempt as “newly constructed units” and, unless otherwise exempt, shall be covered by all provisions of this chapter. This includes, but is not limited to, any residential rental units created as a result of demolition or replacement where such demolition or replacement is affected via the creation of a “housing development project” as defined in the Housing Crisis Act of 2019 (Senate Bill 330).

Section 2: Section 13.76.050 of the Berkeley Municipal Code is amended to read as follows:

13.76.050 Applicability
This chapter shall apply to all real property that is being rented or is available for rent for residential use in whole or in part, except for the following:

C. Rental units in nonprofit cooperatives owned and controlled by a majority of the residents.

D. Rental units leased to tenants assisted under the Section 8 program (42 U.S.C.

Section 1437f) or the Shelter Plus Care Program (42 U.S.C. 11403 et. seq.) or similar federally funded rent subsidy program. Except as may be preempted by state or federal

Page 76 of 201 ends

Page 234 ends

8 law, the exemption of such rental units from the terms of this chapter shall be limited to Section 13.76.080, Rent Registration; Section 13.76.100, Establishment of Base Rent Ceiling and Posting; Section 13.76.110, Annual General Adjustment of Rent Ceilings and Section 13.76.120, Individual Adjustments of Rent Ceilings, of this chapter.

E. Rental units in any hospital, skilled nursing facility, health facility, asylum, or non- profit home for the aged.

13.76.080I and 13.76.100C. applied to them.

Page 77 of 201 ends

Page 235 ends

9 G. A rental unit in a residential property where the landlord shares kitchen or bath facilities with the tenant(s) of such rental unit and where the landlord also occupies a unit in the same property as his/her principal residence.

H. For the purposes of Subsections 13.76.050 F. and G., the term landlord shall be defined only as the owner of record holding at least 50% interest in the property.

L. Rental units in a facility owned or leased by an organization exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code that has the

Page 78 of 201 ends

Page 236 ends

10 primary purpose of operating a treatment, recovery, therapy, sanctuary or shelter program for qualified clients, where such rental units are provided incident to the client’s participation in the primary program and where the client has been informed in writing of the temporary or transitional nature of the housing at the inception of his or her participation in the program. However, except as may be preempted by the Transitional Housing Participant Misconduct Act (California Health and Safety Code Sections 50580 et. seq.) or other state or federal law, such rental units shall not be exempted from the terms of Section 13.76.130, Good Cause Required for Eviction. For purposes of Section 13.76.130.A.2, the client’s continued eligibility for participation in the treatment, recovery, therapy, sanctuary or shelter program shall be deemed a material term of the client’s rental agreement with the program’s operator.

Page 79 of 201 ends

Page 237 ends

11 O. A dwelling or a unit alienable separate from the title to any other dwelling unit unless the tenancy commenced before January 1, 1996. However, the exemption of such units shall be limited to their exemption from the terms of Section 13.76.100, Establishment of Base Rent Ceiling and Posting: Section 13.76.110, Annual General Adjustment of Rent Ceilings; and Section 13.76.120, Individual Adjustments of Rent Ceilings, of this chapter. A property owner who owns only one residential unit in the City of Berkeley, and occupied that residential unit for 365 consecutive days as their principal residence immediately prior to renting the unit, and is absent from the unit for a period not to exceed 24 months, and such period is specified in the lease, shall also be exempt from the terms of Section 13.76.080, Rent Registration, of this Chapter. The exemptions provided in this Section shall apply only as long as the pertinent provisions of California Civil Code Section 1954.50 et. seq. ("Costa-Hawkins") remain in effect and require such an exemption.

Section 3: Section 13.76.060 of the Berkeley Municipal Code is amended to read as follows:

B. Eligibility. Residents who are duly qualified electors of the city of Berkeley are eligible to serve as commissioners on the board.

C. Full disclosure of holdings. Candidates for the position of commissioner shall fulfill the requirements as set forth in the City Charter in Article III, Section 6 1/2.

Page 80 of 201 ends

Page 238 ends

12 D. Election of commissioners. Commissioners shall be elected at the statewide general election held in November of even numbered years.