B0785-0023\2612101v3.doc
STAFF REPORT
Meeting Date: January 18, 2022
To: Honorable Mayor & City Council
From: Helen Morales, DPA, Deputy Director of Rent Stabilization Subject: Update and Options Regarding the City’s COVID-19 Related Rent Protections
Attachments: 1. October 26, 2021, Agenda Report
2. Rent Stabilization Commission Resolution
INTRODUCTION
On October 26, 2021, staff presented an Agenda Report regarding Resolution of the Rent Stabilization Commission Recommending to the City Council Amendments to the City Council Ordinance 20-O-2818 in Connection with the Temporary Moratoria on Evictions and Rent Increases During the Local Emergency (Attachment 1). Staff requested that the City Council consider the recommendations of the Rent Stabilization Commission (Commission) to modify the temporary eviction and rent increase moratoriums provided for in Urgency Ordinance No. 20-O-2818 (Ordinance) as stated in the Rent Stabilization Commission Resolution (Attachment 2).
The Ordinance imposes a moratorium during the period of local emergency on:
1) evictions for non-payment of rent by residential tenants who are substantially financially impacted by COVID-19 and who comply with the requirements of the Ordinance (Section 1);
2) no-fault evictions for residential tenants, unless necessary for the health and safety of tenants, neighbors, or the landlord, other than based on illness of the tenant or any other occupant of the residential unit (Section 1); and 3) annual rent increases authorized by Sections 4-5-303 (c) and 4-6-3 of the Beverly Hills Municipal Code and scheduled to take effect on or after March 15, 2020, provided, however, that the Ordinance does not alter the date of annual rent increases in future years (Section 4).
Nothing in the Ordinance relieves the tenant of liability for the unpaid back rent, which the landlord may seek after the expiration of the local emergency. The Ordinance provides that the tenant must pay in full all back rent within one year of the expiration of the local emergency (Section 1). However, Assembly Bill (AB) 832 has modified this Meeting Date: January 18, 2022
repayment period for back rent that came due during the period March 1, 2020 through September 30, 2021. All back rent for this period must be repaid by May 31, 2023, or one year after the end of the local emergency, whichever is earlier.
The Commission recommended the following amendments to the Ordinance:
1) to end the moratorium on eviction for non-payment of rent by residential tenants substantially impacted by COVID-19 at the same time as the Statewide eviction protections established by AB 3088 end, which, pursuant to AB 832, ended on September 30, 2021;
2) to end the moratorium on no-fault evictions for residential tenants at the same time as the Statewide eviction protections established by AB 3088 end, which, pursuant to AB 832, ended on September 30, 2021; 3) to end the moratorium on annual rent increases at the same time as the Statewide eviction protections established by AB 3088 end, which, pursuant to AB 832, ended on September 30, 2021; and
4) tenants be required to pay back rent in full within one year of the end of the eviction moratorium for non-payment of rent (instead of one year after the end of the local emergency).
At the October 26, 2021 City Council meeting, the City Council discussed ending the eviction moratoriums on March 31, 2022, which is when the State COVID-19 Rental Housing Recovery Act “COVID-19 recovery period rental debt” ends, pursuant to California Code of Civil Procedure Section 1179.09(b). The City Council also commenced discussion regarding ending the rent increase moratorium, as recommended by the Commission, and how to address rent increases that will commence after the end of the rent increase moratorium. At that time, the City Council requested that the City Attorney provide options for the City Council to consider regarding the amount of allowable rent increases following the end of the moratorium.
DISCUSSION
Background
Eviction and Rent Increase Moratoriums
The eviction and rent increase moratoriums set forth in the Ordinance remain in effect.
The Ordinance provides that the eviction and rent increase moratoriums shall remain in effect for the duration of the local emergency (Sections 1 and 4), and the City Council has not ended the local emergency. On October 26, 2021, the City Council discussed ending the eviction moratoriums as of the end of the day on March 31, 2022.
Staff requests direction on the following potential amendments to the Ordinance:
1) Whether to end the eviction moratoriums on March 31, 2022; Meeting Date: January 18, 2022
2) Whether to end the rent increase moratorium on March 31, 20221; 3) The maximum allowable rent increase that housing providers will have the ability to impose at the end of the rent increase moratorium; and 4) Whether to provide that the one-year period to pay back rent ends one year after the end of the City’s eviction moratorium for non-payment of rent.
Whether to End the Eviction Moratoriums on March 31, 2022 The Ordinance provides that the eviction moratoriums remain in effect for the duration of the local emergency. Staff requests direction on whether to amend the Ordinance to end the eviction moratoriums on March 31, 2022.
Whether to End the Rent Increase Moratorium on March 31, 2022 Similar to the eviction moratoriums, the Ordinance provides that the rent increase moratorium remains in effect for the duration of the local emergency. Staff requests direction on whether to amend the Ordinance to end the rent increase moratorium on March 31, 2022.
The Maximum Allowable Rent Increase at the End of the Rent Increase Moratorium The Ordinance provides for a moratorium on annual rent increases authorized by Sections 4-5-303 (c) and 4-6-3 of the Municipal Code and scheduled to take effect on or after March 15, 2020 (Section 4). The Ordinance further provides that nothing in the Ordinance shall alter the date of annual rent increases in future years.
Because the Ordinance took effect on March 15, 2020, and is still in effect, landlords may have missed as many as two annual rent increases as of today and may miss as many as three annual rent increases as of March 15, 2022. The number of missed annual rent increases depends on the date when a rent increase could have occurred in the absence of the moratorium on rent increases for both Chapter 5 and Chapter 6 units.
Chapter 6
The Municipal Code allows a landlord to increase the rent for a unit annually, and twelve months must have elapsed since the last rent increase (Section 4-6-3 A). The rent increase that may be imposed is the greater of: (a) 3% of the rental rate then in effect, or (b) the percentage equal to the percentage increase, if any, of the Consumer Price Index (CPI) published by the United States Department of Labor, Bureau of Labor Statistics for LA/Riverside/OC Area between May 1st of the then current year and May 1st of the immediately preceding year (Section 4-6-3 B).
At the end of the rent increase moratorium, a Chapter 6 tenant could receive a rent increase of as much as 6.9% (if two annual rent increases were missed) and as much as 1 The City Council could provide direction to end the eviction moratoriums and the moratorium on rent increases prior to the end of the local emergency on a date other than March 31, 2022.
Meeting Date: January 18, 2022
10% (if three annual rent increases were missed).
2 The below chart references the
Chapter 6 annual rent increase schedule:
MAXIMUM ALLOWABLE RENT INCREASE
CHAPTER 6 TENANTS
DATE PERCENTAGE ALLOWED
7/1/19 - 6/30/20 3.10%
7/1/20 - 6/30/21 3.0% (1.2% CPI)
7/1/21 - 6/30/22 3.90%
Chapter 5
There are 240 rental units in the City that are subject to Chapter 5 of the Ordinance. The Municipal Code allows a landlord to annually increase the rent for a unit that is subject to Chapter 5 as follows: the maximum allowable rent increase is 8% or the increase of the CPI as of the date of the notice of increase, whichever is lower, within any twelve (12) month period. The rent increases are adjusted on a monthly basis based on the change in the CPI for Los Angeles (or any successor equivalent) as published by the United States Department of Labor, Bureau of Labor Statistics and computed as follows: “The latest published CPI figure shall be added along with such figures for the preceding eleven (11) individual months, and, from the sum reached, there shall be deducted the sum of such figures for the twelve (12) months further preceding the last such twelve (12) months. That remainder shall then be divided by the lower of the two (2) sums heretofore mentioned, and the resulting figure shall indicate the permissible maximum percentage by which the base rent may be increased by virtue of the rise in the CPI.” (Section 4-5-303 A, B and C).
For a Chapter 5 tenant, rent increases vary as provided in the below schedule based upon the annual rent increase anniversary month/date.
2020 JAN FEB MARCH APRIL MAY JUNE JULY AUGUST SEPT OCT NOV DEC
PERCENT
ALLOWED 3.1% 3.1% 3.1% 2.8% 2.6% 2.5% 2.4% 2.3% 2.1% 1.9% 1.7% 1.6% 2021 JAN FEB MARCH APRIL MAY JUNE JULY AUGUST SEPT OCT NOV DEC
PERCENT
ALLOWED 1.4% 1.2% 1.3% 1.5% 1.8% 2.0% 2.2% 2.3% 2.6% 3.0% 3.4% At the end of the rent increase moratorium, a Chapter 5 tenant could receive a rent increase of as much as 5.1% (if two annual rent increases were missed) and as much as 2 The State Tenant Protection Act, Civil Code Section 1947.12 (TPA), limits annual rent increases for certain rental units to 5% plus the cost of living increase or 10%, whichever is less. However, the TPA does not prohibit local annual increase caps that are more restrictive and, therefore, does not override the annual caps on rent increases that are set forth in Chapters 5 and 6.
Meeting Date: January 18, 2022
8.5% (if three annual rent increases were missed) (estimating a future maximum increase of 3.4% for the third year).
Options
The City Council may consider the following options to determine the maximum allowable rent increase after the end of the rent increase moratorium:
1. One option, which was discussed on October 26th, is to allow the prior rent increases to be phased in over time. The following example is with respect to the first increase listed above of 3.1% for Chapter 6 units for the period of 7/1/19 - 6/30/20. This increase was not allowed to be imposed by landlords who had an annual rent increase anniversary date after March 15, 2020. One option for phasing in the 3.1% increase would be to allow an increase following the end of the moratorium of 4% (being 3.9% for the current rent increase and 0.1% for the missed increase for the 7/1/19 - 6/30/20 period). The remaining balance of the 3% for the missed rent increase could be divided evenly so that an increase of 1% would be allowed over the next three years in addition to the annual adjustment that would be allowed for each of those years.
2. Another option, which can be combined with the first option, would be for the Council to declare that because of the pandemic and the extraordinary economic conditions that occurred during the pandemic, that for the period from 7/1/20 - 6/30/21, when the CPI increase was only 1.2%, the provision of the Code that allows an increase which is the greater of 3% or the increase of the CPI will be suspended. In such case, the increase for that period would be limited to the CPI increase of 1.2%. As an example, the 1.2% could be added to the rent increase in 2023 (which would also include the 1.0% for the 7/1/19 - 6/30/21 period).
3. Another option, which also can be combined with the above options, would be to allow more than one increase to occur during the years following 2022, so that the phase in could occur more quickly.3
For example, in 2023, a portion of the deferred rent
increase, such as 1%, could be imposed six months after the last annual rent increase and six months prior to the next annual rent increase.
All of the above options can be adjusted or combined together by the Council.
4. Another option would be to only allow the 2021-2022 rent adjustment to be imposed and not to allow housing providers to impose any of the other rent increases that were not imposed due to the rent increase moratorium. 3 Under the TPA, the allowable rent increase can be divided into a maximum of two increments during a twelve-month period.
Meeting Date: January 18, 2022
In consideration of the foregoing options, it is important to note that Municipal Code Sections 4-5-401 and 4-6-11 provide a process for landlords to apply to a City hearing officer to consider special increases above those permitted by the Municipal Code.4 With respect to Chapter 5 units, a hearing officer, designated by the City Manager, may grant an application when the hearing officer determines that such relief is necessary in order to:
• Implement the purpose of the chapter to protect public health and welfare, with particular reference to protecting the occupants of apartment units from unreasonable rent increases, while at the same time recognizing the landlord’s need to have the rent be sufficient to cover maintenance and costs of operation of the building, and encouraging capital improvements; or • Prevent the strict application of the chapter from imposing an undue hardship upon a landlord in a particular case of specific circumstances; or • Prevent the provisions of the chapter from operating in an unreasonable or illegal manner in the particular circumstances of an applicant (Section 4-5-401).
With respect to Chapter 6 units, a landlord may file a rent adjustment application with the City for all rental units in the landlord’s rental complex to achieve a just and reasonable return based on net operating income principles (Section 4-6-11).
For both Chapter 5 and Chapter 6 units, a hearing officer will conduct a hearing and render a decision as to whether to allow an additional rent increase, and if so, determine the additional rent increase amount.
Require the Repayment of all Back Rent One Year After the End of the City’s Eviction for Non-payment of Rent
The Ordinance provides that nothing in the ordinance shall relieve the tenant of liability for the unpaid rent, which the landlord may seek after expiration of the local emergency, and which the tenant must pay in full within one year of the expiration of the local emergency (Section 1b). The City Council has discussed whether to amend the Ordinance to end the eviction moratoriums on March 31, 2022, rather than at the expiration of the local emergency.
Staff requests direction as to whether the Ordinance should be amended to end the eviction moratoriums prior to the end of the local emergency (e.g., on March 31, 2022) and, if so, whether to tie the repayment period for back rent to the end of the eviction moratorium instead of the end of the local emergency. This could mean that tenants would be required to pay all back rent in full within one year of the end of the eviction moratorium (e.g., by March 31, 2023).
4 If option no. 4 is selected, it is more likely that housing providers will begin filing rent increase applications with the City, which will increase the City’s annual cost to administer the Rent Stabilization Ordinance.
Meeting Date: January 18, 2022
State Law
On June 28, 2021, Governor Newsom signed Assembly Bill (AB) 832, which extended statewide eviction protections for residential tenants who have been negatively impacted by COVID-19. These protections were originally enacted by AB 3088, and as modified by Senate Bill 91 and AB 81, were set to expire on June 30, 2021. Under AB 832, these protections remained in place until September 30, 2021. Residential tenants cannot be evicted for nonpayment of rent coming due between March 1, 2020 and September 30, 2021, if they demonstrated COVID-19 related financial distress by complying with certain procedures. In addition, for rent coming due between September 1, 2020 and September 30, 2021, tenants must have paid at least 25 percent of the total rent (in installments or a lump sum) on or before September 30, 2021. If tenants complied with these requirements, their unpaid rental debt was converted into consumer debt, and landlords cannot evict tenants for nonpayment of rent that came due between March 1, 2020 and September 30, 2021.
These State law bills did not preempt local eviction bans that were adopted before August 19, 2020 and were designed to protect COVID-19 impacted residential tenants from eviction. These bills, however, do provide that any new local residential eviction ban, or extension, expansion, renewal, or reenactment of an existing ban, adopted after August 19, 2020, will have no effect until April 1, 2022.
In addition, these bills placed new limitations on existing local eviction bans that provide for a specific period of time by which tenants must repay COVID-19 rental debt, such as the City’s Ordinance. As discussed above, the Ordinance provides that back rent must be repaid within one year after the end of the local emergency. AB 832 modifies the repayment period set forth in the Ordinance for rent that comes due during the period March 1, 2020 through September 30, 2021 as follows: the back rent must be repaid by one year after the expiration of the local emergency or May 31, 2023, whichever is earlier.
County Resolution
The County Resolution adopted by the Los Angeles County Board of Supervisors on June 22, 2021, amended and restated the County’s eviction moratoriums during the local emergency proclaimed by the County. The County Resolution extended the moratorium period through September 30, 2021, for no fault evictions and evictions for non-payment of rent by residential tenants affected by COVID-19. The County adopted further regulations on September 28, 2021, which purportedly extended the moratorium on evictions. However, AB 832 provided that after August 19, 2021 no local ordinance to protect tenants from eviction for non-payment of rent could be further extended or, if it is extended, that ordinance could not take effect before April 1, 2022. The County appears to be taking the position that the County is preempted under state law through March 31, 2022, from extending eviction protections for residential tenants related to nonpayment of rent due to COVID-19 and the County is not currently enforcing that moratorium.
The County Resolution provides that the County’s moratoriums extend to incorporated cities, and the Resolution established the County's eviction protections as the baseline for all incorporated cities within the County, including cities that have their own local Meeting Date: January 18, 2022
eviction moratoriums, to the extent a city’s moratorium does not include the same or greater tenant protections as the County's moratorium. Nothing in the County Resolution shall be construed to preclude any incorporated city within the County from imposing, or continuing to impose, greater local protections than are imposed by the County moratoriums, if the protections are not inconsistent with the Resolution and are not preempted by State or federal regulations.
The County Resolution also includes a moratorium on rent increases for residential tenants, but the Resolution provides that nothing in the Resolution shall be construed to apply this limitation on rent increases in incorporated cities within the County.
The County Resolution and the State law bills have no effect on the City’s Ordinance except that AB 832 modifies the repayment period set forth in the Ordinance for rent that comes due during the period from March 1, 2020 through September 30, 2021. The back rent must be repaid by the earlier of one year after the expiration of the local emergency or May 31, 2023.
Surrounding Jurisdictions
Local Urgency Ordinance Provisions that Remain in Place The City of Los Angeles adopted an ordinance placing a moratorium on evictions for non-payment of rent for residential tenants who are unable to pay rent due to circumstances related to COVID-19. In addition, the ordinance provides, among other things, that all unpaid back rent is due to be paid by tenants one year after the end of the local emergency.
The City of Los Angles prohibited rent increases for rental units subject to the Rent Stabilization Ordinance until one year after the expiration of the local emergency.
Like Beverly Hills, the City of Los Angeles’ ordinance is tied to the end of the local emergency. At this time, the City of Los Angeles’ ordinance remains in effect as originally established and a tenant cannot be evicted for non-payment of rent due to COVID-19 through the end of the local emergency; all back rent must be paid within one year from the end of the local emergency; and rent increases will not be allowed until one year after the end of the local emergency (no consideration will be given for missed rent increases).
West Hollywood instituted a rent freeze. Rent increases for rent stabilized units cannot be applied until 60 days after the expiration of the local emergency period. A 30-day notice to increase rent will be available when the local emergency period ends. It is not clear r whether past rent increases would be allowed in the future, or if the freeze would be lifted at the end of the local emergency and only the current annual rent increase would be allowed.
Meeting Date: January 18, 2022
Other Jurisdictions that take the Position that they are Pre-empted by State Law Many of the other surrounding jurisdictions also adopted eviction moratoriums including West Hollywood, Culver City and Santa Monica. Like Beverly Hills and Los Angeles, these other jurisdictions placed eviction moratoriums on evictions for non-payment of rent by residential tenants impacted by COVID-19. Unlike Beverly Hills and Los Angeles, each of these other jurisdiction’s ordinances included an end date.
Each of the other jurisdictions have taken the position that their ordinances are preempted by State law and that their tenants continue to be protected under the State and County protections that remain in place as mentioned above.
FISCAL IMPACT
The fiscal impact to the City that is anticipated as a result of this item is whether housing providers may file rent increase applications with the City, which will increase the City’s administrative cost to administer the RSO.
RECOMMENDATION
Staff requests direction as to: 1) whether to end the eviction moratoriums on March 31, 2022; 2) whether to end the rent increase moratorium on March 31, 2022; 3) determine the maximum allowable rent increase that can be imposed by landlords at the end of the rent increase moratorium; and 4) whether to provide that the one-year period to pay back rent ends one year after the end of the eviction moratorium for non-payment of rent instead of at the end of the local emergency.
Ryan Gohlich, AICP,
Director of Community Development
Approved By
Attachment 1
AGENDA REPORT
Meeting Date: October 26, 2021
Item Number:
To: Honorable Mayor & City Council
From: Helen Morales, DPA, Deputy Director of Rent Stabilization Subject: RESOLUTION OF THE RENT STABILIZATION COMMISSION
RECOMMENDING TO THE CITY COUNCIL AMENDMENTS TO THE
CITY COUNCIL ORDINANCE NO. 20-O-2818 IN CONNECTION WITH
THE TEMPORARY MORATORIA ON EVICTIONS AND RENT
INCREASES DURING THE LOCAL EMERGENCY
Attachments: 1. Rent Stabilization Commission Resolution
2. Ordinance No. 20-O-2818
RECOMMENDATION
Staff recommends that the City Council consider the recommendations of the Rent Stabilization Commission (Commission) to modify the temporary eviction and rent increase moratoriums provided for in Urgency Ordinance No. 20-O-2818 as stated in the Rent Stabilization Commission Resolution (Resolution) (Attachment 1).
INTRODUCTION
On March 15, 2020, the City Manager, in his role as Director of Emergency Services, proclaimed the existence of a local emergency, which was ratified by the City Council on March 16, 2020. As authorized by Governor Newsom under Executive Order N-28-20, the City Council adopted its first Urgency Ordinance, Ordinance No. 20-O-2805, on March 16, 2020. This ordinance, among other things, provided eviction protections for Beverly Hills residential tenants. From time to time, the City Council has adopted superseding ordinances, and the current ordinance related to moratoriums on residential evictions and rent increase is Ordinance No. 20-O-2818, which the City Council adopted on September 1, 2020 (Ordinance) (Attachment 2).
F-1
Meeting Date: October 26, 2021
The Ordinance imposes a moratorium during the period of local emergency on:
1) evictions for non-payment of rent by residential tenants who are substantially financially impacted by COVID-19 and who comply with the requirements of the Ordinance (Section 1);
2) no-fault evictions, unless necessary for the health and safety of tenants, neighbors, or the landlord, other than based on illness of the tenant or any other occupant of the residential unit (Section 1); and
3) annual rent increases authorized by Sections 4-5-303 (c) and 4-6-3 of the Beverly Hills Municipal Code, provided, however, that the Ordinance does not alter the date of the annual rent increases in future years (Section 4).
Nothing in the Ordinance relieves the tenant of liability for the unpaid back rent, which the landlord may seek after the expiration of the local emergency. The Ordinance provides that the tenant must pay in full all back rent within one year of the expiration of the local emergency (please note in the following section that State law modifies this repayment period).
On July 15, 2021, the City Council requested that the Commission provide recommendations to the City Council regarding possible amendments to the provisions of the Ordinance related to the residential eviction moratoriums and RSO rent increase moratorium. The Commission discussed possible amendments to the Ordinance at its August 4, 2021 regular and September 13, 2021 special duly noticed Commission meetings. The Commission considered and adopted the Resolution at its October 6, 2021 regular meeting.
DISCUSSION
The Ordinance provides eviction and rent increase moratoriums during the period of the local emergency. The Ordinance further provides that the provisions shall remain in effect for the duration of the local emergency (Section 12). The local emergency proclaimed by the City Manager is still in effect, meaning that the moratoriums on evictions and rent increases described above are still in effect.
State Law
On June 28, 2021, Governor Newsom signed Assembly Bill (AB) 832, which extends statewide eviction protections for residential tenants who have been negatively impacted by COVID-19. These protections were originally enacted by AB 3088 and modified by Senate Bill 91 and AB 81, and were set to expire on June 30, 2021. Under AB 832, these protections remained in place until September 30, 2021. Residential tenants cannot be evicted for nonpayment of rent coming due between March 1, 2020 and September 30, 2021, if they demonstrate COVID-19 related financial distress by complying with certain procedures. In addition, for rent coming due between September 1, 2020 and September 30, 2021, tenants must pay at least 25 percent of the total rent (in installments or a lump sum) on or before September 30, 2021. If tenants comply with these requirements, their unpaid rental debt will be converted into consumer debt, and landlords cannot evict tenants for nonpayment of rent coming due between March 1, 2020 and September 30, 2021.
Meeting Date: October 26, 2021
These State law bills did not preempt local eviction bans that were adopted before August 19, 2020, and were designed to protect COVID-19 impacted residential tenants from eviction. These bills, however, do provide that any new local residential eviction ban, or extension, expansion, renewal, or reenactment of an existing ban, adopted after August 19, 2020, will have no effect until April 1, 2022.
In addition, these bills placed new limitations on existing local eviction bans that provide for a specific period of time by which tenants must repay COVID-19 rental debt, such as the City’s Ordinance. As discussed above, the Ordinance provides that back rent must be repaid within one year after the end of the local emergency. AB 832 modifies the repayment period set forth in the Ordinance for rent that comes due during the period March 1, 2020 through September 30, 2021 as follows: the back rent must be repaid by one year after the expiration of the local emergency or May 31, 2023, whichever is earlier.
County Resolution
The County Resolution adopted by the Los Angeles County Board of Supervisors on June 22, 2021, amended and restated the County’s eviction moratoriums during the local emergency proclaimed by the County. The Resolution extended the moratorium period through September 30, 2021, for no fault evictions and evictions for non-payment of rent by residential tenants affected by COVID-19. However, AB 832 provided that after August 19, 2021 no local ordinance to protect tenants from eviction could be further extended or, if it is extended, that ordinance could not take effect before April 1, 2022.
Therefore, the County is preempted under state law through March 31, 2022, from enacting new or amending existing protections for residential tenants related to nonpayment of rent due to COVID-19. Although the County adopted further regulations on September 28, 2021 which purportedly extended the moratorium on evictions, the County is not currently enforcing that moratorium. Of course, the City did not have an expiration date on its eviction protection ordinance, so AB 832 does not affect the City's ordinance.
The County moratoriums extended to incorporated cities, and the Resolution established the County's eviction protections as the baseline for all incorporated cities within the County, including cities that have their own local eviction moratoriums, to the extent a city’s moratorium does not include the same or greater tenant protections as the County's moratorium. Nothing in the County Resolution shall be construed to preclude any incorporated city within the County from imposing, or continuing to impose, greater local protections than are imposed by the County moratoriums, if the protections are not inconsistent with the Resolution and are not preempted by State or federal regulations.
The County Resolution also includes a moratorium on rent increases for residential tenants, but the Resolution provides that nothing in the Resolution shall be construed to apply this limitation on rent increases in incorporated cities within the County.
The County Resolution and the State Bills have no effect on the Ordinance except for the repayment period of back rent. AB 832 modifies the repayment period set forth in the Ordinance for rent that comes due during the period from March 1, 2020 through September 30, 2021. The back rent must be repaid by the earlier of one year after the expiration of the local emergency or May 31, 2023.
Meeting Date: October 26, 2021
Commission Recommendations
The Commission discussed amendments to the Ordinance and adopted a Resolution with recommendations to City Council on amendments to the City Council Ordinance No. 20-O-2818 in connection with the temporary moratoriums on evictions and the rent increase moratorium during the period of the local emergency.
The Commission recommends that the Ordinance related to the temporary moratoriums on evictions and the moratorium on rent increases be amended as follows:
1) to end the moratorium on eviction for non-payment of rent by residential tenants substantially impacted by COVID-19 at the same time as the Statewide eviction protections established by AB 3088 ends, which pursuant to AB 832 ended on September 30, 2021;
2) to end the moratorium on no-fault evictions for residential tenants at the same time as the Statewide eviction protections established by AB 3088 ends, which pursuant to AB 832 ended on September 30, 2021;
3) to end the moratorium on annual rent increases at the same time the Statewide eviction protections established by AB 3088 ends, which pursuant to AB 832 ended on September 30, 2021; and
4) Tenants be required to pay back rent in full within one year of the end of the eviction moratoriums.
FISCAL IMPACT
There is no direct fiscal impact with this item.
Ryan Gohlich, AICP,
Director of Community Development
Approved By
Attachment 1
B0785-0023\2574911v1.doc
RESOLUTION NO. RSC 9
A RESOLUTION OF THE BEVERLY HILLS RENT STABILIZATION
COMMISSION RECOMMENDING TO THE CITY COUNCIL
AMENDMENTS TO CITY COUNCIL ORDINANCE NO. 20-0-2818 IN
CONNECTION WITH THE TEMPORARY MORATORIA ON EVICTIONS
AND RENT INCREASES DURING THE PERIOD OF LOCAL EMERGENCY WHEREAS, the Beverly Hills City Council (“City Council”) established the Beverly Hills Rent Stabilization Commission (“Commission”) pursuant to Ordinance No. 19-O-2776, effective on May 3, 2019; and
WHEREAS, on March 15, 2020, the City Manager, in his role as the Director of Emergency Services, proclaimed the existence of a local emergency, which was ratified by the Council on March 16, 2020; and
WHEREAS, the City Council adopted Ordinance No. 20-0-218 (“Ordinance”) on September 1, 2020 (originally adopted on March 16, 2020 as Ordinance No. 20-0-2805 and subsequently superseded by the Ordinance); and
WHEREAS, in Section 1, the Ordinance provides for a temporary moratorium during the period of local emergency on eviction for non-payment of rent by residential tenants substantially impacted by COVID-19, with tenants required to pay back rent in full within one year of the expiration of the local emergency; and
WHEREAS, in Section 1, the Ordinance also provides for a temporary moratorium during the period of local emergency on no-fault evictions, unless necessary for the health and safety of tenants, neighbors, or the landlord, other than based on illness of the tenant or any other occupant of the residential unit; and
WHEREAS, in Section 4, the Ordinance also provides for a temporary moratorium during the period of local emergency on the annual rent increase authorized by Sections 4-5-303(c) and 4-6-3 of the Beverly Hills Municipal Code, provided that nothing in the Ordinance alters the date of the annual rent increases in future years; and
WHEREAS, on July 15, 2021, the City Council requested the Commission to provide recommendations to the City Council regarding possible amendments to the above-described provisions of the Ordinance related to the residential eviction moratoria and the moratorium on annual rent increases; and
WHEREAS, on August 4, 2021 and September 13, 2021, the Commission held duly noticed meetings to consider recommendations regarding possible amendments to the Ordinance related to the residential eviction moratoria and the moratorium on annual rent increases; and DocuSign Envelope ID: B4D32DA7-3B38-484E-98D5-DBF50E5B94F2 2 B0785-0023\2574911v1.doc
WHEREAS, the Commission desires to adopt this resolution to set forth the Commission’s recommendations;
NOW, THEREFORE, THE CITY OF BEVERLY HILLS RENT STABILIZATION COMMISSION DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:
Section 1. The Commission hereby finds that each of the recitals set forth above is true and correct and is incorporated herein by this reference as part of the Commission’s recommendation.
Section 2. On August 4, 2021, by a majority (4-2) vote, the Commission voted to recommend to the City Council that the Ordinance be amended to end the moratorium on eviction for non-payment of rent by residential tenants substantially impacted by COVID-19, as described above, at the same time as the Statewide eviction protections established by Assembly Bill 3088 end (which, pursuant to Assembly Bill 832 remain in effect until September 30, 2021, unless extended) with tenants required to pay back rent in full within one year of the end of the moratorium.
Section 3. On September 13, 2021, by a majority (4-2) vote, the Commission voted to recommend to the City Council that the Ordinance be amended to end the moratorium on no-fault evictions, as described above, and the moratorium on annual rent increases, as described above, at the same time as the Statewide eviction protections established by Assembly Bill 3088 end (which, pursuant to Assembly Bill 832 remain in effect until September 30, 2021, unless extended).
Adopted: October 6, 2021
Lou Milkowski
Chair of the Rent Stabilization Commission
Attest:
Helen Morales, DPA
Secretary of the Rent Stabilization Commission
Approved as to form: Approved as to content:
Laurence Wiener Helen Morales, DPA
City Attorney Secretary of the Rent Stabilization Commission DocuSign Envelope ID: B4D32DA7-3B38-484E-98D5-DBF50E5B94F2
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS.
CITY OF BEVERLY HILLS )
I, KAREN MYRON, Recording Secretary of the Rent Stabilization Commission of the City of Beverly Hills, California, do hereby certify that the foregoing is a true and correct copy of Resolution No. RSC 9, duly passed, approved and adopted by the Rent Stabilization Commission of said City at a meeting of said Commission on October 6, 2021, and thereafter duly signed by the Secretary of the Rent Stabilization Commission, as indicated; and that the Rent Stabilization Commission of the City consists of six (6) voting members and said Resolution was passed by the following vote of said Commission, to wit:
AYES: Commissioners Miller, Tryfman, Vice Chair Baseman, Chair Milkowski NOES: Commissioners Bronte, Sokoloff
ABSTAIN: None
ABSENT: None
________________________________
KAREN MYRON
Recording Secretary of the
Rent Stabilization Commission
City of Beverly Hills, California
DocuSign Envelope ID: B4D32DA7-3B38-484E-98D5-DBF50E5B94F2 Certificate Of Completion
Envelope Id: B4D32DA73B38484E98D5DBF50E5B94F2 Status: Completed Subject: Time Sensitive - Please DocuSign: Reso RSC 9 - Moratoria During Local Emergency.v2.pdf Source Envelope:
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COMM DEV COMMISSION SPECIALIST,
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City of Beverly Hills
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Attachment 2
ORDINANCE NO. 20-0- 2818
AN URGENCY ORDINANCE OF THE CITY OF BEVERLY HILLS
ADOPTING EMERGENCY REGULATIONS RELATED TO RESIDENTIAL
AND COMMERCIAL TENANT EVICTIONS, AND OTHER MEASURES,
REPEALING ORDINANCE NO. 20-0-2817, AND DECLARING THE
URGENCY THEREOF
THE CITY COUNCIL OF THE CITY OF BEVERLY HILLS HEREBY ORDAINS AS FOLLOWS:
WHEREAS, international, national, state, and local health and governmental authorities are responding to an outbreak ofrespiratory disease caused by a novel coronavirus named "SARSCoV-2," and the disease it causes has been named "coronavirus disease 2019," abbreviated COVID-19, ("COVID-19"); and
WHEREAS, on March 4, 2020, the Los Angeles County Board of Supervisors and Department ofPublic Health declared a local emergency and local public health emergency to aid the regional healthcare and governmental community in responding to COVID-19; and WHEREAS, on March 4, 2020, the Governor ofthe State ofCalifornia declared a state of emergency to make additional resources available, formalize emergency actions already underway across multiple state agencies and departments, and help the state prepare for the broader spread ofCOVID-19; and
WHEREAS, on March 13, 2020, the President ofthe United States of America declared a national emergency and announced that the federal government would make emergency funding available to assist state and local governments in preventing the spread and addressing the effects ofCOVID-19; and
WHEREAS, on March 15, 2020, the City Manager, in his role as the Director of Emergency Services, proclaimed the existence of a local emergency pursuant to Section 2-4-107 ofthe Beverly Hills Municipal Code to ensure the availability ofmutual aid and an effective City response to the novel coronavirus ("COVID-19") and that state of emergency was ratified by the City Council on March 16, 2020; and
WHEREAS, the Califomia Department of Public Health and the Los Angeles County Department ofPublic Health have all issued orders including, but not limited to, social distancing, staying home ifsick, canceling or postponing large group events, working from home, and other precautions to protect public health and prevent transmission ofthis communicable virus; and -1-
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WHEREAS, as a result ofthe public health emergency and the precautions recommended by health authorities, many tenants in Beverly Hills have experienced or expect soon to experience sudden and unexpected income loss; and
WHEREAS, the Governor ofthe State ofCalifornia has stated that individuals exposed to COVID-19 may be temporarily unable to report to work due to illness caused by COVID-19 or quarantines related to COVID-19, and individuals directly affected by COVID-19 may experience loss of income, health care and medical coverage, and ability to pay for housing and basic needs, thereby placing increased demands on already strained regional and local health and safety resources, including shelters and food banks; and
WHEREAS, further economic impacts are anticipated, leaving tenants vulnerable to eviction; and
WHEREAS, the City of Beverly Hills is redoubling its efforts to maintain hand hygiene, respiratory etiquette, and social distancing. It is absolutely critical that the City does everything possible to slow the pace of community spread and avoid unnecessary strain on our medical system. To aid in these efforts, the City Council is ordering a series oftemporary restrictions be placed on certain establishments throughout the City in which large numbers of people tend to gather and remain in close proximity and is requiring the wearing offace coverings; and WHEREAS, during this local emergency, and in the interest ofprotecting the public health and preventing transmission of COVID-19, it is essential to avoid unnecessary housing displacement, to protect the City's affordable housing stock, and to prevent housed individuals from falling into homelessness; and
WHEREAS, commercial tenants who operate businesses within the City may have to close their businesses in response to emergency orders, which will substantially decrease or eliminate their income, and businesses that are permitted to remain open also are likely to experience a significant loss ofincome while the emergency orders are in effect; and WHEREAS, restaurants were prohibited from offering dine-in service, limiting restaurants to delivery and takeout offerings only, which has placed a sudden and severe financial strain on many restaurants, particularly those that are small businesses that already operate on thin margins, adding to financial pressures in the industry that predate the COVID-19 crisis; and WHEREAS, it is in the public interest to take action to maximize restaurant revenue from the takeout and delivery orders that to assist restaurants in surviving this crisis and remain as sources of employment and neighborhood vitality in the City; and WHEREAS, many consumers use third-party applications and websites to place orders with restaurants for delivery and takeout, and such third-party platforms charge restaurants fees ranging from 30% to 40% ofthe purchase price per order; and WHEREAS, restaurants, and particularly restaurants that are small businesses with few locations, have limited bargaining power to negotiate lower fees with third-party platforms, given -2-
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the high market saturation of third-party platforms, and the dire financial straits small business restaurants are facing in this COVID-19 emergency; and
WHEREAS, temporarily capping the per-order fees will accomplish the legitimate public purpose of easing the financial burden on struggling restaurants during this emergency while not unduly burdening third-party platforms that have seen an increase in demand; and WHEREAS, in the interest ofpublic peace, health and safety, as affected by the emergency caused by the spread ofCOVID-19, it is necessary for the City Council to exercise its authority to issue these regulations related to the protection ofthe public peace, health or safety.
Section 1. The City Council ofthe City ofBeverly Hills does adopt the recitals and the following emergency regulations which shall take effect immediately:
1. A temporary moratorium on eviction for non-pa3anent of rent by residential tenants substantially impacted by the COVID-19 crisis is imposed as follows:
a. During the period of local emergency declared in response to COVID19, no landlord shall endeavor to evict a tenant in either of the following situations: (1) for nonpayment ofrent ifthe tenant demonstrates that the tenant is unable to pay rent due to substantial financial impacts related to COVID-19, or (2) for a no-fault eviction, unless necessary for the health and safety oftenants, neighbors, or the landlord, other than based on illness ofthe tenant or any other occupant of the residential rental unit. A landlord who receives notice that a tenant cannot pay some or all of the rent temporarily for the reasons set forth above shall not serve a notice pursuant to Code ofCivil Procedure section 1161(2), file or prosecute an unlawful detainer action based on a 3-day pay or quit notice, or otherwise seek to evict for nonpayment of rent. A landlord receives notice of a tenant's inability to pay rent within the meaning ofthis Ordinance if the tenant, within seven (7) days after the date that rent is due, notifies the landlord in writing, of lost income or extraordinary expenses related to COVID-19 and inability to pay fiill rent due to substantial financial impacts related to COVID-19, and within thirty (30) days after the date the rent is due, provides written documentation to the landlord to support the claim, using the form provided by the City. A copy of both the seven-day notice and the documentation to support the claim shall also be provided by email (or if email is not feasible by mail along with notification by telephone) to the City's Rent Stabilization office. For purposes of this Ordinance, "in writing" includes email or text communications to a landlord or the landlord's representative ifthat is the method of written communication that has been used previously, or correspondence by regular mail, ifthat is the method ofwritten communication that has been used previously and the parties have not agreed to use email or text messaging. Any medical or financial information provided to the landlord shall be held in confidence, and shall be used only for evaluating the tenant's claim. b. Nothing in this Ordinance shall relieve the tenant of liability for the unpaid rent, which the landlord may seek after expiration ofthe local emergency, and which the tenant must pay in ftill within one year of the expiration of the local emergency. One year after the end ofthe emergency, unless ifthe rent is paid in ftill, a landlord may charge or collect a late fee for rent that is delayed for the reasons stated in this Ordinance; or a landlord may seek rent that -3-
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is delayed for the reasons stated in this Ordinance through the eviction or other appropriate legal process. No fee for the late payment of rent shall be charged by a landlord during the period of the emergency or one year after the end ofthe emergency. If a landlord makes an accommodation with respect to rent forbearance from a tenant pursuant to subsection l.a, and the tenant is in conformance with the tenant's obligations under that subsection, then the landlord shall not make a negative report to a credit bureau so long as the tenant remains in compliance with those obligations.
c. For purposes ofthis Section 1, "financial impacts related to COVID-19" include, but are not limited to, lost household income or extraordinary expenses as a result of any ofthe following: (1) being sick with COVID-19, or caring for a household or family member who is sick with COVID-19; (2) lay-off, loss of hours, or other substantial income reduction resulting from business closure or other economic or employer impacts ofCOVID-19 including for tenants who are salaried employees or self-employed; (3) compliance with a recorrmiendation from a government health authority to stay home, self-quarantine, or avoid congregating with others during the state of emergency; (4) extraordinary out-of-pocket medical expenses related to COVID-19; or (5) child care needs arising from school closures related to COVID-19. d. For purposes ofthis Ordinance, "no-fault eviction" refers to any eviction for which the notice to terminate tenancy is not based on alleged fault by the tenant, including but not limited to, eviction notices served pursuant to Code of Civil Procedure sections 1161(1), 1161(5), or 1161b, use by landlord or relatives as specified in Beverly Hills Municipal Code Chapters 5 and 6, demolition or condominium conversion, major remodeling, and the Ellis Act, which is called withdrawal of residential rental structure from the rental market in the Beverly Hills Municipal Code.
e. During this emergency, any notice served by a landlord on a tenant under Section 4-5-513 or Section 4-6-6 L ofthe Beverly Hills Municipal Code is hereby tolled. f. This Ordinance applies to nonpayment eviction notices, no-fault eviction notices, and unlawful detainer actions based on such notices, served or filed on or after the date on which a local emergency was proclaimed on March 15, 2020. g. For purposes ofthis Section 1, "substantial" shall be defined as a material decrease ofmonthly income, the incurring ofextraordinary expenses related to COVID-19, or any other circumstance which causes an unusual and significant financial impact on the tenant. h. Because some tenants may not be aware ofthis Ordinance's provisions, the Deputy Director ofthe Rent Stabilization may extend the seven (7) day deadline for notifying the landlord for up to thirty (30) days.
2. If a landlord disagrees with the residential tenant's assertion regarding: (1) whether a substantial financial impact exists; (2) whether the substantial financial impact is related to COVID-19; or (3) the amount ofrent that the tenant will pay, then the landlord shall notify the tenant ofthe disagreement in writing within ten (10) days ofreceipt ofthe written documentation -4-
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from the tenant. The residential tenant may file a written appeal to the City, on a form provided by the City, within ten (10) days ofreceipt ofthe landlord's writtendeterminationand shall provide a copy of the appeal to the landlord. Appealswill be heard by the StandingCommittee ofthe City Council appointed to hear disruptive tenant hearings or other Members of the City Council as designated by the Mayor, to make a final determinationofthe dispute, until fifteen (15) days after the Rent Stabilization Commission is appointed and sworn into office, in which case the Rent Stabilization Commission shall make a final determination ofthe dispute. Ifthe Rent Stabilization Commission cannot render a decision by a majority vote, then the Standing Committee or other Members ofthe City Council, as designated by the Mayor, will make a final determination ofthe dispute. Final Decisions ofthe Subcommittee, Council Members designated by the Mayor, or the Rent Stabilization Commission are subject to judicial review filed pursuant to Section 1094.6 of the California Code of Civil Procedure. The hearing procedures shall be established by the City Attorney.
Section 2. The following regulations shall apply to commercial tenancies:
1. The following definitions shall apply to this Section 2:
"Affiliate" shall mean the commercial tenant and any other entity that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the commercial tenant.
"Amnesty Date" shall mean August 1,2020 for Large Commercial Tenants, and September 1, 2020 for all other commercial tenants. "Large Commercial Tenants" shall mean a business that, together with its Affiliates, (1) employs more than 100 employees, or (2) has average annual gross receipts ofmore than $15 million over the previous three years, or (3) has business operations, other than sales conducted solely through online channels, in three or more countries, including the United States; or (4) a business whose payment of rent is guaranteed by a business falling within the scope of subsections (1) or (2) or (3) ofthis subsection.
"Rent Recommencement Date" shall mean August 1, 2020 for Large Commercial Tenants and October 1, 2020 for all other commercial tenants. "Repayment Date" shall mean the date by which all forborne rent shall be due.
2. Landlords and their commercial tenants shall work together during this time of emergencycaused by the spreadofCOVID-19 to make a good faith attempt to developa payment strategy for rent that accounts for the substantial financial impacts relatedto COVID-19 that may be faced by some tenants. Any payment strategynegotiatedbetween a landlord and a commercial tenant shalltake precedenceover the provisionsofthis Ordinance. Absent such a payment strategy, commercial tenants shallbe requiredto paytheir rent underthe following provisionsofthis Section
2. -5-
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The following paragraphs (a) through (d) ofthis Section 2, subsection 2 shall not apply to Large Commercial Tenants.
a. In order to assure that the landlords and commercial tenants will meet to attempt to develop a payment strategy for rent that accounts for the substantial financial impacts related to COVID-19, the landlord shall send a notice to any commercial tenant who has not agreed to a payment strategy with the landlord or who is not otherwise paying full rent, substantiallyin the form provided by the City, and by certifiedmail with return receipt, overnightcourier service, or by any other delivery method that provides written evidence of receipt, which informs the commercial tenant of the requirement to meet and requesting that the tenant contact the landlord within ten (10) days to arrange a meeting and meet with the landlord within forty five (45) days to discuss a payment strategy that accounts for the substantial financial impacts related to COVID19. A copy of this notice shall be provided to the City. This notice must be mailed by July 10, 2020.
b. Ifthe landlord fails to send the notice or otherwise fails to meet with the commercial tenant, then the Repayment Date shall be September 1,2021. c. If the commercial tenant fails to contact the landlord in response to the notice or otherwise fails to meet with the landlord, then the Repayment Date shall be December 1, 2020.
d. If either party has attempted to schedule a meeting, but the other party appears to be unwilling to meet, eitherpartymay callthe RentStabilization Office of the Cityof Beverly Hills and a City staff member will schedule such meeting or will determine that one or both parties are unwilling to meet. If the Rent Stabilization Office determines that eitheror both parties are unwilling to meet than the parties shall follow the provisions set forth below in this Section 2. The Rent Stabilization Office's determination that either or both parties are unable to meetshall create a rebuttable presumption in any unlawful detainer action or other actionwhich seeks to recover rent.
3. A temporary moratorium on eviction for non-payment of rent by commercial tenants andLarge Commercial Tenants substantially impacted bytheCOVID-19 crisis isimposed as follows:
a. During the period of local emergency declared in response to COVID19, and up until the date described in subsection d below, no landlord shall endeavor to evict a commercial tenant or Large Commercial Tenant in either of the following situations: (1) for nonpayment ofsome or allof therentifsuch commercial tenant demonstrates thatthecommercial tenant is unable to pay rent due to substantial financial impacts related to COVID-19; or (2) for a no-fault eviction unless necessary for the health and safety of tenants, neighbors, or the landlord, other than based on illness of the tenant, the tenant's family or any of tenant's employees. A landlord who receives notice that a commercial tenant cannot pay some or all of the rent temporarily for the reasons setforth above shall not serve a notice or otherwise seek to evict a tenant for nonpayment ofrent.
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b. A landlord receives notice of a commercial tenant's inability to pay rent within the meaning of this Ordinance ifthe commercialtenant, within seven (7) days after the date that rent is due, notifies the landlord in writing oflost income or extraordinary expenses related to COVID-19 and inability to pay full rent due to substantial financial impacts related to COVID-19, and within thirty (30) days after the date the rent is due, provides written documentation to the landlord to support the claim. Any medical or financial information provided to the landlord shall be held in confidence, and only used for evaluating the commercial tenant's claim. For purposes of this Ordinance, "in writing" includes email or text communications to a landlord or the landlord's representative if that is the method of written communication that has been used previously, or correspondenceby regular mail, ifthat is the method ofwritten communicationthat has been used previously and the parties have not agreed to use email or text messaging. c. Nothing in this Ordinance shall relieve any commercial tenant or Large Commercial Tenant ofliability for the unpaid rent,
d. Forbearance ofrent shall end on the Rent Recommencement Date. e. A Large Commercial Tenant must pay forborne rent on September 1, 2020 and all other commercial tenants must pay forborne rent on March 1,2021 ifsuch commercial tenant and the landlord have met pursuant to this Section 2 but have not come to an agreement regarding a payment strategy.
f. For Large Commercial Tenants, with regard to forborne rent a landlord may charge eitherthe late fee or the interest that is provided in the leasebetween the landlord and the tenant from the time that the first rental payment was missed until the forborne rent is paid. No other late fee, interest or other penalty shall be charged by the landlord during the emergency or before the Repayment Date. After the Repayment Date, and if the forborne rent has not been repaid, a landlord may charge the full amount of the late fee, interest and other penalty that is provided inthe leasebeginning on theRepayment Date. However, the fullamount of the latefees, interest and other penalty shall only run from the Repayment Date.
For all other commercial tenants, with regard to the forborne rent, a landlord may charge one half the amount of eitherthe late fee or the interest that is provided in the lease between the landlord and the tenant capped at five percent (5%) from the time that the first rental payment was missed until the forborne rent is paid. No other late fee, interest or other penalty shall be charged by the landlord during the emergency or before the Repayment Date. After the Repayment Date, and if the forborne rent has not been repaid, a landlord may charge the full amount of the late fee, interest and other penalty that is provided in the lease beginning on the Repayment Date. However, the full amount of the late fees, interest and otherpenalty shall only run fi'om the Repayment Date.
g. Foranycommercial tenant who is covered bythisOrdinance andwishes to avoidthe payment of late fees or interest on the tenant's forborne rent,the tenantmaypay some or all oftheir forborne rent, with no late fees, interest or other penalties, no later than the Amnesty -7-
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Date. Ifthe tenant pays all forborne rent by that Amnesty Date, the landlord shall not charge any late fees, interest, or other penalty.
h. For purposes ofthis Section 2, "financial impacts related to COVID-19" include, but are not limited to, a tenant who lost substantial business income or has extraordinary expenses as a resuh of any of the following: (1) being sick with COVID-19, or caring for a household or family member who is sick with COVID-19; (2) income reduction resulting from business closure or other economic or employer impacts of COVID-19; (3) compliance with a recommendation from a government health authority to stay home, self-quarantine, or avoid congregating with others during the state of emergency; (4) extraordinary out-of-pocket medical expenses related to COVID-19; or (5) child care needs arising from school closures related to COVID-19.
i. For purposes ofthis Section 2, "substantial" shall be defined as a material decrease ofmonthly income, the incurring ofextraordinary expenses related to COVID-19, or any other circumstance which causes an unusual and significant financial impact on the tenant. j. This Ordinance shall not apply to any commercial tenant that is a publicly traded entity, an entity that is listed on the Fortune 1000, or any entity that employs more than 500 employees or any commercial tenant that owned by another entity that is publicly traded, listed on the Fortune 1000 or combined with the commercial tenant and other subsidiaries employs more than 500 employees. As used in the preceding sentence, the term "owned" shall mean ownership of a majority ofthe ownership interest ofthe commercial tenant. This exemption shall not apply to a franchisee or similar small business owner who is the responsible tenant on the lease unless such small business owner meets the criteria ofthis exemption. (1) Any commercial tenant covered by the exemption set forth in this subsectionj, and who otherwise complied with this Ordinance, shall have until 10 days, after the tenant has received notice as provided below, to pay all forborne rent that became due since March 16,2020. The landlord shall not charge a late fee or interest in connection with such unpaid rent. If a commercial tenant fails to pay all forborne rent within 10 days after the tenant has received written notice delivered by certified mail with return receipt, overnight courier service, or by any other delivery method and provides written evidence ofreceipt, the landlord may charge a late fee or interest from that date.
(2) A landlord may give notice to any commercial tenant covered by the exemption set forth in this subsection j at any time. k. A dispute as to whether the commercial tenant has demonstrated facts sufficient to result in a temporary payment reduction or other legal remedy shall be determined according to civil law.
Section 3. In addition to the requirements ofthe Governor's Executive Order and the requirements of the Los Angeles County Department of Health order, the following regulations -8-
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related to businesses, located in the City of Beverly Hills are adopted in order to implement recommended practices as a result ofthe COVID-19 pandemic:
a. Business located in the City with self-service unwrapped food items such as buffets are prohibited.
b. Enforcement ofCity codes and regulations may be relaxed as City staff deems appropriate in connection with commercial signs and banners displayed on or adjacent to restaurants, bars or other businesses that are permitted to remain open pursuant to this Ordinance. c. The City shall provide for additional loading zones near businesses that are authorized to be open in order to facilitate curbside pickup. d. The City shall waive fees associated with a Special Event Permit for temporary outdoor dining and shall waive the minimum ten (10) day period for filing an application for a Special Event Permit for temporary outdoor dining. e. The City Manager is authorized to issue street closure permits and any other permits necessary to allow for temporary outdoor dining. f. To the extent that Beverly Hills Municipal Code Sections 5-10-2 through 5-10-7 prohibit retail establishments from providing without charge reusable bags or recycled paperbagsto customers at the pointofsale, Beverly HillsMunicipal Code Sections 5-10-2 through 5-10-7 are hereby suspended.
Section4. During the period of local emergency declared by the Director of Emergency Services on March 15,2020 and affirmed by the CityCouncil on March 16,2020, in response to the COVID-19 pandemic, a temporary moratorium is hereby imposed on the annual rent increases authorized by Sections 4-5-303(c) and 4-6-3 of the BeverlyHills Municipal Code.
This moratoriumon rent increases shall be applied to any rent increase scheduled to take effect on or after March 15, 2020. Nothingin this Ordinance shallalter the date of annualrent increases in future years.
Section 5. During the period of local emergency declared by the City Council on March 16, 2020, in response to the COVID-19 pandemic, there shall be no increase in Internet access fees or reduction in service.
Section 6. For those establishments offering food pickup options, and other essential businesses, proprietors are directed to establish social distancing practices for thosepatrons in the queue for pickup and otherreasons, as well those allowed in the premises or otherwise working.
Such restaurants and essential businesses shall establish health and safety measures for their employees and customers, including but not limitedto appropriate glovesand masks.
Section 7. Face Coverings. All persons shall wear face coverings that cover their mouth and nose openings such asscarves (dense fabric, without holes), bandannas, neck gaiters, or other fabric face coverings, when they leave their homes or places of residence for essential activities, such astaking a walk through their neighborhood, if that person has potential to come -9-
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within six feet of another person not a member of their household. All persons, including nonmedical essential workers are discouraged from using Personal Protective Equipment (PPE), such as N95 masks, for non-medical reasons.
Exceptions: These following exceptions will apply to this Section 6:
(1) Children under the age of 2 are not required to wear face coverings. (2) Persons who must remove the face covering in order to receive medical services. (3) Persons who are directed to remove the face covering by a law enforcement officer.
For the purposes ofthis Ordinance, the terms "essential business," "essential workers," and "essential activity" shall have the same meanings as they do under State law.
Section 8. Business Tax. No penalties or interest shall accrue on outstanding business tax during the period that the City ofBeverly Hills has declared an emergency related to the COVID-19 pandemic. The Director of Finance is authorized in his sole discretion to waive any penalties and/or interest on business tax imposed prior to the March 15, 2020 declaration of emergency, upon a request by a business owner and a demonstration by the business ovmer of economic hardship due to COVID-19.
Section 9. Hoarding. The City Council urges residents not to hoard essential goods such as hand sanitizer, cleaning supplies, toilet paper, canned food, frozen food and other needed supplies. The CityCouncil strongly condemns hoarding. Retail establishments located in the City shall be responsible for limiting the sales of such items, as they see fit to provide greater accessibility to a larger group of customers.
Section 10. Third Partv Food Delivery Service Commission.
1. Definitions. For purposes ofthis Section, the following definitions apply:
"Delivery Fee" meansa fee chargedby a Third-partyFood DeliveryService for providing a Retail Food Establishment with a service that delivers food and beverages from such establishment to customers. The term does not include any other fee or cost that may be charged by a Third-Party Food Delivery Service to a Retail Food Establishment, such asfees for listing or advertising the Retail Food Establishment on the Third-party Food Delivery Service platform or fees related to processing the online order including, but not limited to service fees, fees for facilitating Online Orders for pick-up, and credit card processing fees. "Online Order" means an order placed by a customer, including a phone order, for delivery or pick-up from a restaurant located within the City. "Purchase Price" means the menu price ofthe items contained in an Online Order, minus any applicable coupon or promotional discount provided to the customer by the restaurant through the Third-Party Food Delivery Service. Such term therefore excludes taxes. -10-
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gratuities and any other fees or costs that may make up the total amount charged to the customer of an Online Order.
"Retail Food Establishment" means a restaurant, delicatessen bakery, coffee shop, or other eat-in or carry-out service of processed or prepared raw and ready-to-eat food or beverages.
"Third-Party Food Delivery Service" means any website, mobile application or other internet service that offers or arranges for the sale of food and beverages prepared by, and the delivery or pick-up offood and beverages from, no fewer than 20 separately owned and operated food service establishments.
2. Prohibitions. So long as the local emergency is in effect, it shall be unlawful for a Third-party Food Delivery Service to do the following:
a. charge a Retail Food Establishment a Delivery Fee that totals more than fifteen percent (15%) ofthe Purchase Price of each Online Order. b. charge a Retail Food Establishment any amount designated as a Delivery Fee for an Online Order that does not involve the delivery offood or beverages. c. charge a Retail Food Establishment any combination of fees, commissions, or costs for the Retail Food Establishment's use ofthe Third-party Food Delivery Service that is greater than five percent (5%) of the Purchase Price of each Online Order or to charge any amount of fees, commissions, or costs for the Retail Food Establishment's use ofthe Third-Party Food Delivery Service unless the contract between the Retail Food Establishment and the Third-Party Food Delivery Service allows for fees, commissions, and costs other than a Delivery Fee. For the purpose of this subsection c, fees, commissions, or costs do not include the Delivery Fee, which is capped at fifteen percent (15%). d. charge a Retail Food Establishment any fee, commission, or cost other than as permitted in subsections a through c, above.
e. charge a customer any Purchase Price for a food or beverage item that is higher than the price imposed by the Retail Food Establishmenton the Third-PartyFood Delivery Service or, if no price is imposed by the Retail Food Establishment on the Third-Party Food Delivery Service, the price listed on the Retail Food Establishment's own menu.
f retain any portion of amounts designated as a tip or gratuity. Any tip or gratuity shall be paid by the Third-party Food Delivery Service, in its entirety, to the person delivering the food or beverages.
3. Disclosures. The Third-party Food Delivery Service shall disclose to the customer an accurate, clearly identified, and itemized cost breakdown of each transaction, including, but not limited to the following:
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a. the Purchase Price ofthe food and beverages at the cost Ustedon the Retail Food Establishment's menu;
b. the Delivery Fee charged to the Retail Food Establishment; c. each fee, commission, or cost, other than a Delivery Fee, charged to the Retail Food Establishment;
d. each fee, commission, or cost, other than the Delivery Fee or the Purchase Price ofthe food, charged to the customer by the Third-party Food Delivery Service; e. any tip or gratuity that will be paid to the person delivering the food or beverages.
4. A Third-Party Food Delivery Service shall not be found in violation of this Section if between June 17, 2020 and June 24, 2020, it imposes a Delivery Fee per Online Order that totals more than fifteen percent (15%), and other fees, commissions, and costs that total more than five percent (5%), ofthe Purchase Price ofsuch Online Order, provided that the Third-Party Food DeliveryServicerefundsthe portionof the fee that exceedsthose amountsto the Retail Food Establishment prior to July 3, 2020.
5. If a Third-Party Food Delivery Servicecharges a Retail Food Establishmentfees that violate this Section, the Retail Food Establishment shall provide written notice to the ThirdParty Food Delivery Service requesting a refund within seven days. If the Third-Party Food Delivery Service does not provide the refund requested after seven days or the Third-PartyFood Delivery Service continues to charge fees in violation of this Section after the initial notice and seven-day cure period, a Retail FoodEstablishment may enforce this Section by means of a civil action seeking damages and injunctive relief. The prevailing party in any such action shall be entitled to an award ofreasonable attorney fees.
Section 11. Violations. Violations ofthis Ordinance shall be punishable as set forth in Section2-4-111 and Chapter3 of Title 1 of the Beverly HillsMunicipal Codeexceptviolations of Section 7, which shall be solely subject to the administrative citation process set forth in Chapter 3 of Title 1 of the Beverly HillsMunicipal Code. Violations of anypublichealthorderduly issued by the Los Angeles County Public Health Officer may be cited andprosecuted as an infraction or may besubject to theadministrative citation process setforth inChapter 3 ofTitle 1oftheBeverly Hills Municipal Code. In addition, this Ordinance provides a defense to a tenant, in the eventthat an unlawful detainer action is commenced in violation ofthis Ordinance.
Section 12. Remain in Effect. This Ordinance shall remain in effect for the duration of the local emergency.
Section 13. Ordinance No. 20-0-2817 is hereby repealed and replaced by this Ordinance.
Section 14. Uncodified. This Ordinance shall not be codified. -12-
B0785-1672\2451529v4.doc
Section 15, Severabilitv. If any provision ofthis Ordinance is held invalid by a court of competent jurisdiction, such provision shall be considered a separate, distinct and independent provision and such holding shall not affect the validity and enforceability ofthe other provisions ofthis Ordinance.
Section 16.. Publication. The City Clerk shall cause this Ordinance to be published at least once in a newspaper of general circulation published and circulated in the city within fifteen (15) days after its passage in accordance with Section 36933 ofthe Government Code, shall certify to the adoption ofthis Ordinance and shall cause this Ordinance and the City Clerk's certification, together with proof of publication, to be entered in the Book of Ordinances ofthe Council ofthis City.
Section 17. Effective Date. This Ordinance is adopted as an urgency ordinance for the immediate preservation ofthe public peace, health and safety within the meaning of Government Code Section 36937(b), and therefore shall be passed immediately upon its introduction and shall become effective at 12:01 a.m., September 2, 2020 upon its adoption by a minimum 4/5 vote of the City Council.
Section 18. Duration. This Ordinance shall remain in effect until it is superseded by another Ordinance adopted by the City Council.
Section 19. Certification. The City Clerk shall certify to the adoption ofthis Ordinance.
Adopted: September 1, 2020
Effective: September 2, 2020
ATTEST:
lUkXiA
HUMA AHMED
City Clerk
APPROVED AS TO FORM:
LAURENCE S. WIENER
City Attorney
B0785-1672\2451529v4.doc
(SEAL)
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LESTER J. FRIEDMAN
Mayor ofthe City ofBeverly Hills,
California
APPROVED AS TO CONTENT:
GEOROrcmVEZ
City Manager
Attachment 2
B0785-0023\2574911v1.doc
RESOLUTION NO. RSC 9
A RESOLUTION OF THE BEVERLY HILLS RENT STABILIZATION
COMMISSION RECOMMENDING TO THE CITY COUNCIL
AMENDMENTS TO CITY COUNCIL ORDINANCE NO. 20-0-2818 IN
CONNECTION WITH THE TEMPORARY MORATORIA ON EVICTIONS
AND RENT INCREASES DURING THE PERIOD OF LOCAL EMERGENCY WHEREAS, the Beverly Hills City Council (“City Council”) established the Beverly Hills Rent Stabilization Commission (“Commission”) pursuant to Ordinance No. 19-O-2776, effective on May 3, 2019; and
WHEREAS, on March 15, 2020, the City Manager, in his role as the Director of Emergency Services, proclaimed the existence of a local emergency, which was ratified by the Council on March 16, 2020; and
WHEREAS, the City Council adopted Ordinance No. 20-0-218 (“Ordinance”) on September 1, 2020 (originally adopted on March 16, 2020 as Ordinance No. 20-0-2805 and subsequently superseded by the Ordinance); and
WHEREAS, in Section 1, the Ordinance provides for a temporary moratorium during the period of local emergency on eviction for non-payment of rent by residential tenants substantially impacted by COVID-19, with tenants required to pay back rent in full within one year of the expiration of the local emergency; and
WHEREAS, in Section 1, the Ordinance also provides for a temporary moratorium during the period of local emergency on no-fault evictions, unless necessary for the health and safety of tenants, neighbors, or the landlord, other than based on illness of the tenant or any other occupant of the residential unit; and
WHEREAS, in Section 4, the Ordinance also provides for a temporary moratorium during the period of local emergency on the annual rent increase authorized by Sections 4-5-303(c) and 4-6-3 of the Beverly Hills Municipal Code, provided that nothing in the Ordinance alters the date of the annual rent increases in future years; and
WHEREAS, on July 15, 2021, the City Council requested the Commission to provide recommendations to the City Council regarding possible amendments to the above-described provisions of the Ordinance related to the residential eviction moratoria and the moratorium on annual rent increases; and
WHEREAS, on August 4, 2021 and September 13, 2021, the Commission held duly noticed meetings to consider recommendations regarding possible amendments to the Ordinance related to the residential eviction moratoria and the moratorium on annual rent increases; and DocuSign Envelope ID: B4D32DA7-3B38-484E-98D5-DBF50E5B94F2 2 B0785-0023\2574911v1.doc
WHEREAS, the Commission desires to adopt this resolution to set forth the Commission’s recommendations;
NOW, THEREFORE, THE CITY OF BEVERLY HILLS RENT STABILIZATION COMMISSION DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:
Section 1. The Commission hereby finds that each of the recitals set forth above is true and correct and is incorporated herein by this reference as part of the Commission’s recommendation.
Section 2. On August 4, 2021, by a majority (4-2) vote, the Commission voted to recommend to the City Council that the Ordinance be amended to end the moratorium on eviction for non-payment of rent by residential tenants substantially impacted by COVID-19, as described above, at the same time as the Statewide eviction protections established by Assembly Bill 3088 end (which, pursuant to Assembly Bill 832 remain in effect until September 30, 2021, unless extended) with tenants required to pay back rent in full within one year of the end of the moratorium.
Section 3. On September 13, 2021, by a majority (4-2) vote, the Commission voted to recommend to the City Council that the Ordinance be amended to end the moratorium on no-fault evictions, as described above, and the moratorium on annual rent increases, as described above, at the same time as the Statewide eviction protections established by Assembly Bill 3088 end (which, pursuant to Assembly Bill 832 remain in effect until September 30, 2021, unless extended).
Adopted: October 6, 2021
Lou Milkowski
Chair of the Rent Stabilization Commission
Attest:
Helen Morales, DPA
Secretary of the Rent Stabilization Commission
Approved as to form: Approved as to content:
Laurence Wiener Helen Morales, DPA
City Attorney Secretary of the Rent Stabilization Commission DocuSign Envelope ID: B4D32DA7-3B38-484E-98D5-DBF50E5B94F2
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS.
CITY OF BEVERLY HILLS )
I, KAREN MYRON, Recording Secretary of the Rent Stabilization Commission of the City of Beverly Hills, California, do hereby certify that the foregoing is a true and correct copy of Resolution No. RSC 9, duly passed, approved and adopted by the Rent Stabilization Commission of said City at a meeting of said Commission on October 6, 2021, and thereafter duly signed by the Secretary of the Rent Stabilization Commission, as indicated; and that the Rent Stabilization Commission of the City consists of six (6) voting members and said Resolution was passed by the following vote of said Commission, to wit:
AYES: Commissioners Miller, Tryfman, Vice Chair Baseman, Chair Milkowski NOES: Commissioners Bronte, Sokoloff
ABSTAIN: None
ABSENT: None
________________________________
KAREN MYRON
Recording Secretary of the
Rent Stabilization Commission
City of Beverly Hills, California
DocuSign Envelope ID: B4D32DA7-3B38-484E-98D5-DBF50E5B94F2 Certificate Of Completion
Envelope Id: B4D32DA73B38484E98D5DBF50E5B94F2 Status: Completed Subject: Time Sensitive - Please DocuSign: Reso RSC 9 - Moratoria During Local Emergency.v2.pdf Source Envelope:
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455 N. Rexford Drive
Beverly Hills, CA 90210
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Lou Milkowski
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Karen Myron
[email protected]
COMM DEV COMMISSION SPECIALIST,
CD-PLANNING
City of Beverly Hills
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