AGENDA REPORT
Meeting Date: February 7, 2023
Item No.:
To: Honorable Mayor & City Council
From: Cynthia Owens, Municipal Affairs Program Manager
Laurence Wiener, City Attorney
Subject: AN URGENCY ORDINANCE OF THE CITY OF BEVERLY HILLS
READOPTING RESIDENTIAL TENANT REPAYMENT
PROTECTIONS AND READOPTING THE CAP ON ANNUAL
RENT INCREASES FOR THE 2022-2023 FISCAL YEAR, AND
DECLARING THE URGENCY THEREOF; AND
REQUEST FOR CITY COUNCIL DIRECTION ON EMERGENCY
REGULATIONS CURRENTLY IN PLACE
Attachments: 1. Draft Urgency Ordinance
RECOMMENDATION
Staff recommends that the City Council adopt the urgency ordinance. It also requests the City Council’s direction regarding which, if any, of the remaining emergency regulations it wishes to preserve after the end of the local state of emergency.
INTRODUCTION
As the Governor’s State of Emergency on the COVID-19 crisis is expected to end on February 28, 2023, staff believes it is appropriate that the City Council adopt an urgency ordinance to preserve the emergency housing protections that the Council has already adopted and determine whether it would like to retain any of its other remaining emergency regulations prior to declaring an end to the City’s state of emergency.
This staff report will discuss the need to maintain:
1) The City’s emergency regulations pertaining to repayment of unpaid rent by residential tenants substantially impacted by the COVID-19 crisis, and 2) The 3.1% maximum increase for rental rates adopted for the 2022-2023 fiscal year.
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Meeting Date: February 7, 2023
This report will also review each of the emergency regulations currently in place and ask for the Council’s direction on which regulations, if any, it would like to preserve such that they remain effective after the local state of emergency ends.
The accompanying urgency ordinance readopts the residential tenant repayment provisions and the annual rent increase will remain in effect until rendered ineffective by its terms.
DISCUSSION
On March 15, 2020, the City Manager proclaimed the existence of a local state emergency to ensure the City could effectively respond to the COVID-19 pandemic. The City Council ratified the state of emergency on March 16, 2020. Thereafter, the Council adopted Ordinance No. 20-O-2805, which was superseded from time to time. That ordinance and its amendments implemented emergency regulations to ease financial burdens on businesses and residents and slow the spread of the virus. Once the City ends the local emergency, the regulations that were adopted will cease to be effective.
Accordingly, staff recommends the City Council review the regulations which still remain in place prior to ending the local emergency.
This staff report will be organized into two sections. The first section will discuss adoption of an urgency ordinance to preserve certain emergency housing regulations.
These regulations are included in the attached ordinance and could be adopted this evening. The second section of the report reviews the other emergency regulations currently in effect. These regulations will remain in effect for the duration of the local emergency. Staff would be seeking direction regarding whether the Council wants to preserve any of these regulations so that they remain effective after the local emergency ends.
A. Urgency of Adopting Housing Provisions
There are two emergency housing protection regulations that remain effective, which staff believes the City should adopt by urgency ordinance so that their application does not lapse when the City ends its local emergency. They are:
1) The deadline for repayment of unpaid rent, and
2) The 3.1% maximum rent increase for fiscal year 2022 – 2023.
The rent repayment provisions currently in effect provide that tenants must pay any unpaid rent accrued due to the eviction moratorium in full by May 31, 2023, after which landlords may charge or collect late fees for delayed rent, or seek eviction due to unpaid sums. Once the City ends its state of emergency, Ordinance No. 20-O-2818 will cease to be effective, meaning the repayment deadline and maximum rent increase percentage through June 30, 2023 will end as well. Thus, if the City ends the state of emergency prior to May 31st or June 30th of this year, which it is likely to do given the proliferation of vaccine availability, the decreasing rate of spread of the COVID-19 virus, and the pending end of the Governor’s state of emergency, payment of any unpaid rent would be due immediately, and rent increases could proceed according to Sections 4-5-303(C) and 4-6-3 of the City’s Municipal Code. This would significantly impact the City’s residential tenants who could face eviction and homelessness upon the sudden acceleration of unpaid rent and the lack of a maximum cap of rent increases.
To avoid these detrimental effects, and preserve the public peace, health and safety, staff recommends the City Council adopt the attached urgency ordinance, which would Meeting Date: February 7, 2023
preserve the rent repayment deadline of May 31, 2023 and the rent increase cap through June 30, 2023, regardless of when the City ends its local emergency. As an urgency ordinance predicated on immediate preservation of the public peace, health or safety, this ordinance could be adopted by the City Council this evening by a 4/5 vote.
B. Emergency Regulations Currently in Place
Aside from the housing protections, there are several other emergency regulations that remain in effect, and will cease to be effective when the local emergency ends. Staff requests that the Council determine which, if any, of these regulations it wishes to preserve past the end of the local emergency.
In the event the Council wishes to preserve one or more of these regulations, staff will draft an ordinance adopting the selected regulations. This ordinance would be approved pursuant to standard ordinance adoption procedures, which requires two readings, after which the Ordinance becomes effective 30 days after adoption. Accordingly, introduction and first reading of this ordinance would occur on February 21, 2023, with a second reading and adoption on March 7, 2023. This would make the ordinance effective on April 6, 2023. Staff then recommends the City end the local state of emergency on April 18, 2023 to ensure there is no lapse in the regulations that the City decides to carry forward.
Ending the state of emergency on April 18th would occur within 60 days of the end of the Governor’s state of emergency. This is important because upon termination of the Governor’s state of emergency, suspension of Government Code 8630 will end. Section 8630 requires the City to review the continuing need for a local emergency every 60 days. If the Governor’s state of emergency ends on February 28th, then the City must review the continued need for the local emergency by April 29, 2023. The aforementioned ordinance timeline allows the City to enact regulations and end the local emergency before this date.
If the Council does not wish to preserve any of the remaining regulations, then staff recommends it end the local emergency on February 21, 2023.
The remaining emergency regulations are:
(1) Relaxed enforcement of signs and banners adjacent to restaurants and bars Since restaurants and bars are now allowed to operate at full capacity, and some have additional outdoor seating, the City Council may decide it is time to resume enforcement of the City’s laws regarding signs and banners adjacent to restaurants and bars. If the Council does not extend this regulation, staff would recommend providing 30 days’ notice of the resumption of enforcement of these laws. This would include requiring businesses to remove all non-conforming signage such as hanging banners and sidewalk advertising placards, also known as sandwich board signs. Before resuming enforcement, staff will perform outreach and education to the businesses on what constitutes non-conforming signage. Staff will also advise the businesses of the date that they need to remove the non-conforming signage by in order to avoid any enforcement actions by the City.
(2) City to provide additional loading zones to facilitate curbside pickup Because restaurants are now allowed to operate at full capacity, and some have additional outdoor seating, the City Council may wish to consider whether or not it would Meeting Date: February 7, 2023
like to continue using metered parking spaces solely for curbside pickup. Restaurant owners and their customers have found the additional loading zones useful, however, it comes at the expense of parking spaces which could be used by retail shoppers. (3) Delegation of authority to City Manager to issue street closure permits and other permits necessary to allow outdoor dining
Outdoor dining has been very popular and successful during the pandemic due to the Open BH program. The Open BH program allows restaurants, salons, retail, faithbased organizations, and gyms to operate outside. Carrying forward this regulation would preserve the City Manager’s authority to allow outdoor dining pursuant to the current Open BH program. However, the City Council may wish to consider whether or not this program should continue to apply to other businesses such as retail, faith-based organizations, gyms and salons. At the time of this report, there are still many nonrestaurant businesses utilizing the Open BH program. The City Council could also consider repealing the City Manager’s authority to close streets, but retain her ability to issue other permits for outdoor dining. The City Council would retain the authority to close streets as needed.
(4) Waiver of fees and minimum period for filing an application for a Special Event Permit for temporary outdoor dining
To accommodate outdoor dining under the Open BH program, City Council enacted an emergency regulation which waived the fee for a Special Event Permit and eliminated the required minimum 10-day period before a Special Event Permit is issued.
The City Council may wish to preserve these regulations until the Council acts on a more permanent Open BH program. Alternatively, the City Council may reinstate the Special Event Permit fee and 10-day waiting period even if outdoor dining continues beyond the local emergency.
(5) Imposition of restrictions on third-party food delivery services The City has imposed several restrictions on third party food delivery services, such as Uber Eats and Doordash, which effect their contractual relationship with their restaurant clients and their delivery employees. Included in the restrictions are maximum fees the service may charge a restaurant. The maximum limit is set at 15% of the purchase price for delivery fees, and 5% of the purchase price for all other fees and costs. Additionally, food delivery services may not charge customers more than the restaurant’s listed prices, and must provide an itemized breakdown of the costs and fees associated with each order. Lastly, the regulations require all tips and gratuity to be given to the person delivering the food, not the food delivery service itself. The restaurants themselves enforce these restrictions through written notices followed by the opportunity to pursue a civil action for damages and injunctive relief.
These regulations were adopted when restaurants were reliant on these services and could only cater to restaurant customers through pickup and delivery. Now that restaurants can again seat at 100 percent capacity and some restaurants additionally have outdoor seating, the restriction may no longer be necessary.
Meeting Date: February 7, 2023
FISCAL IMPACT
There will be no material fiscal impacts from adopting the urgency ordinance.
Laurence S. Wiener,
City Attorney
Approved By
Attachment 1
ORDINANCE NO. 23-0-
AN URGENCY ORDINANCE OF THE CITY OF BEVERLY HILLS
READOPTING RESIDENTIAL TENANT REPAYMENT
PROTECTIONS AND READOPTING THE CAP ON ANNUAL RENT
INCREASES FOR THE 2022-2023 FISCAL YEAR, 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 have responded to an outbreak of respiratory 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 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-1 9”) and that state of emergency was ratified by the City Council on March 16, 2020 (“local state of emergency”); and WHEREAS, the City of Beverly Hills enacted emergency regulations to ease financial burdens and slow the spread ofthe virus;
WHEREAS, during the City’s local emergency, and in the interest of protecting the public health and preventing transmission of COVID- 19, it was 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, pursuant to Ordinance No. 20-0-2818 (“Ordinance”), as amended by Ordinance No. 22-0-286 1, the City Council imposed a temporary moratorium on (1) evictions for non-payment of rent by residential tenants substantially impacted by the COVID-19 crisis; (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 rental unit; and (3) the annual rent increases authorized by Sections 4-5-303(C) and 4-6-3 of the Beverly Hills Municipal Code with respect to any rent increase scheduled to take effect on or after March 15, 2020; provided that nothing in the Ordinance shall alter the date of annual rent increases in future years; and
WHEREAS, the Ordinance provides that nothing in the Ordinance relieves a tenant of liability for the unpaid rent, which the landlord may seek after May 31, 2023, and which the tenant must pay in full by May 31, 2023; and
WHEREAS, the Ordinance prescribes a maximum allowable rent increase from July 1, 2022 through June 30, 2023 of 3.10%; and
WHEREAS, upon the end of the local state of emergency, the Ordinance shall cease to be effective; and
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WHEREAS, the sudden and unanticipated repeal of the unpaid rent repayment provisions and cap on annual rent increases could cause significant financial burdens on residential tenants in the City leading to eviction and the displacement of housing; and, WHEREAS, to avoid unnecessary housing displacement, protect the City’s affordable housing stock, and prevent housed individuals from falling into homelessness, it is essential that the emergency unpaid rent repayment protections for residential tenants and cap on annual rent increases remain in effect until their prescribed conclusions; and WHEREAS, based on the foregoing, the City Council finds that in order to fully protect the public health, safety and welfare, the repayment deadline for unpaid rent for those residential tenants substantially impacted by the COVID-1 9 crisis and the cap on annual rent increases must be preserved.
Section 1. Urgency Declaration. Based upon the recitals above, the City Council finds that this Ordinance is necessary for the immediate preservation of the public health, safety and welfare. The City Council finds and determines that the immediate preservation of the public health, safety and welfare requires that this Ordinance be enacted as an urgency ordinance pursuant to Government Code Section 3693 7(b) and take effect immediately upon adoption. This Ordinance must be adopted and must become effective immediately in order to protect residential tenants within the City who could face eviction and homelessness upon the acceleration of unpaid rent and the immediate end ofthe emergency annual rent increase protections when the City proclaims the local state of emergency has ended.
Section 2. All unpaid rent accrued from March 15, 2020 to May 3 1, 2022 by residential tenants due to substantial financial impacts related to the COVID-19 emergency must be paid in full by May 31, 2023. After May 31, 2023, unless the rent is paid in full, a landlord may charge or collect a late fee for rent that is delayed ; or a landlord may seek rent that is delayed through the eviction or other appropriate legal process. No fee for the late payment of such unpaid rent shall be charged by a landlord during the period March 15, 2020 through May 31, 2023. If a landlord makes an accommodation with respect to rent forbearance and the tenant is in conformance with the tenant’s obligations under that accommodation, then the landlord shall not make a negative report to a credit bureau so long as the tenant remains in compliance with the accommodation.
Section 3. The maximum allowable rent increase allowed pursuant to Section 4-5- 303(C) and 4-6-3 from July 1, 2022 through June 30, 2023 is 3.10%. Provided, further, ifthe rent increase was imposed at a rate less than 3.10%, then the maximum allowable rent increase from July 1, 2022 through June 30, 2023 shall be reduced by the percent increase that was imposed.
Nothing in this Ordinance shall alter the date of annual rent increases in future years.
Section 3. Uncodified. This Ordinance shall not be codified.
Section 4. Severability. If any provision of this 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 of the other provisions ofthis Ordinance.
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Section 5. 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 6. Effective Date. This Ordinance is adopted as an urgency ordinance for the immediate preservation of the 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 AM on February 8, 2023, upon its adoption by a minimum 4/5 vote of the City Council.
Section 8. Certification. This City Clerk shall certify to the adoption ofthis Ordinance.
Adopted:
Effective: LILT BOSSE
Mayor ofthe City of Beverly Hills,
California
ATTEST:
HUMA AHMED
City Clerk
APPROVED AS TO FORM: APPROVED AS TO CONTENT:
LAURENCE S. WIENER NANCY HUNT-COFFEY
City Attorney City Manager
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