AGENDA REPORT
Meeting Date: April 18, 2023
Item Number:
To: Honorable Mayor & City Council
From: Laurence S. Wiener, City Attorney
Subject: AN URGENCY ORDINANCE OF THE CITY OF BEVERLY HILLS
READOPTING RESIDENTIAL TENANT UNPAID REPAYMENT
PROTECTIONS AND THE CAP ON THE ANNUAL RENT
INCREASE ALLOWED PURSUANT TO BEVERLY HILLS
MUNICIPAL CODE SECTIONS 4-5-303(C) AND 4-6-3 FROM
JUNE 1, 2022 THROUGH JUNE 30, 2023, REPEALING
ORDINANCE NO. 23-O-2872, AND DECLARING THE URGENCY
THEREOF
Attachments: 1. Urgency Ordinance
RECOMMENDATION
Staff recommends that the City Council adopt the urgency ordinance.
INTRODUCTION
The Governor’s State of Emergency on the COVID-19 crisis ended on February 28, 2023, and the City’s state of emergency will end on April 19, 2023. In anticipation of the end of the City’s state of emergency, the Council adopted urgency Ordinance No. 23-O2872 on February 7, 2023, to preserve the emergency housing protections that the Council previously adopted in response to the COVID-19 crisis.
Staff has determined that certain provisions of Ordinance No. 23-O-2872 should be clarified. Therefore, staff recommends that the City Council adopt the attached urgency ordinance, which readopts the emergency housing protections the Council previously adopted and repeals Ordinance No. 23-O-2872. The attached urgency ordinance makes no changes to the emergency housing protections that the Council previously adopted.
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Meeting Date: April 18, 2023
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 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 Thereafter, the Council adopted Ordinance No. 20-O-2805, which was superseded from time to time.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 (the “Prior Ordinance”) implemented emergency housing protections. Once the City ends the local emergency, the emergency housing protections will cease to be effective unless readopted.
Accordingly, the City Council adopted Ordinance No. 23-O-2872 on February 7, 2023, to preserve the emergency housing protections the Council previously adopted pursuant to the Prior Ordinance so that their application does not lapse when the City ends it local emergency. The emergency housing protections are described below. 1) The deadline for repayment of unpaid rent.
The Prior Ordinance provides that tenants must pay any unpaid rent accrued from March 15, 2020 through May 31, 2022, due to the substantial financial impacts of COVID-19, 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 for the reasons stated in the Prior Ordinance, or a landlord may seek rent that is delayed for the reasons set forth in the Prior Ordinance 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.
2) The 3.10% maximum rent increase for the period June 1, 2022 through June 30, 2023.
The Prior Ordinance provides that notwithstanding the provisions of Sections 4-5-303 (C) and 4-6-3 of the Beverly Hills Municipal Code, for an allowable rent increase, that for any reason, was not imposed or was imposed at a rate of less than 3.10% for the period July 1, 2019 through June 30, 2020 the maximum allowable rent increase allowed pursuant to Section 4-5-303 (C) and 4-6-3 of the Beverly Hills Municipal Code from June 1, 2022 through June 30, 2023 is 3.10%. Provided, further, if the rent increase was imposed at a rate of less than 3.10%, then the maximum allowable rent increase from June 1, 2022 through June 30, 2023 shall be reduced by the percent increase that was imposed.
The Council adopted urgency Ordinance No. 20-O-2872 to ensure that once the Council ends its state of emergency, the emergency housing protections set forth in the Prior Ordinance will still be in place. Otherwise, the repayment of unpaid rent would be due immediately upon the end of the City’s state of emergency, and rents could be increased for the period June 1, 2022 through June 30, 2023 without regard to the 3.10% cap. This would significantly impact the City’s residential tenants who could face eviction and homelessness upon the sudden and unexpected acceleration of unpaid rent and the lack of a maximum cap on the allowable rent increase following the end of the moratorium on rent increases.
The attached urgency ordinance readopts the emergency housing protections set forth in the Prior Ordinance and will avoid the detrimental effects described in the preceding paragraph, and preserve the public peace, health and safety.
Meeting Date: April 18, 2023
As mentioned above, the purpose of the attached urgency ordinance is to clarify certain provisions of Ordinance No. 20-O-2872, and the attached urgency ordinance makes no changes to the Prior Ordinance. However, with respect to the maximum rent increase set forth in the Prior Ordinance, it has been argued during the annual rent registration process that the Prior Ordinance allows a rent increase for the period June 1, 2022 through June 30, 2023 for tenants who did not have an allowable rent increase during the period July 1, 2019 through June 30, 2020 (i.e., tenants who moved into a unit during or after that period). The attached urgency ordinance clarifies that the only tenants who may be subject to a rent increase pursuant to Sections 4-5-303(C) and 4-6-3 of the Beverly Hills Municipal Code during the period June 1, 2022 through June 30, 2023, shall be those tenants that were eligible for a rent increase pursuant to these sections during the period July 1, 2019 through June 30, 2020, and no other annual rent increases shall be allowed during the period June 1, 2022 through June 30, 2023. This clarification is declaratory of existing law.
Staff recommends the Council adopt the attached urgency ordinance. As an urgency ordinance predicated on the immediate preservation of the public peace, health and safety, this ordinance could be adopted by the Council this evening by a 4/5 vote of Council.
FISCAL IMPACT
There will be no material fiscal impacts from adopting the urgency ordinance.
Laurence S. Wiener,
City Attorney
Approved By
Attachment 1
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ORDINANCE NO. 23-OAN URGENCY ORDINANCE OF THE CITY OF BEVERLY HILLS
READOPTING RESIDENTIAL TENANT UNPAID RENT REPAYMENT
PROTECTIONS AND THE CAP ON THE ANNUAL RENT INCREASE
ALLOWED PURSUANT TO BEVERLY HILLS MUNICIPAL CODE SECTIONS 4-5-303(C) AND 4-6-3 FROM JUNE 1, 2022 THROUGH JUNE 30, 2023, REPEALING ORDINANCE NO. 23-O-2872, AND DECLARING THE URGENCY
THEREOF
THE CITY COUNCIL OF THE CITY OF BEVERLY HILLS HEREBY ORDAINS AS FOLLOWS:
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 of the Beverly Hills Municipal Code (“BHMC”) to ensure the availability of mutual 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, during the local emergency, and in the interest of public peace, health and safety, as affected by the emergency caused by the spread of COVID-19, it was necessary for the City Council to exercise its authority to issue regulations related to the protection of the public peace, health or safety, including avoiding unnecessary housing displacement, protect the City’s affordable housing stock, and tp prevent housed individuals from falling into homelessness; and WHEREAS, pursuant to Ordinance No. 20-O-2805, as superseded from time to time by subsequent ordinances, including the City’s current Ordinance No. 20-O-2818, the City Council imposed a temporary moratorium during the period of local emergency 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 BHMC Sections 4-5-303(C) and 4-6-3 with respect to any rent increase scheduled to take effect on or after March 15, 2020; provided that Ordinance No. 20-O-2818 did not alter the date of annual rent increases in future years or relieve a tenant of liability for the unpaid rent, which Ordinance No. 20-O2818 required to be paid in full within one year of the end of the local emergency; and WHEREAS, the City Council adopted Ordinance No. 22-O-2861, amending Ordinance No. 20-O-2818, to provide: 1) for the end of the temporary moratoriums on May 31, 2022; 2) that a tenant must pay the unpaid rent in full by May 31, 2023; and 3) that, notwithstanding the provisions of BHMC Sections 4-5-303(C) and 4-6-3, (i) for an allowable rent increase, that for any reason, was not imposed for the period July 1, 2019 through June 30, 2020, the maximum allowable rent increase allowed pursuant to BHMC Sections 4-5-303(C) and 4-6-3 from June 1, 2022 through June 30, 2023 is 3.10%; and (ii) for an allowable rent increase, that for any reason, was imposed at a rate of less than 3.10% for the period July 1, 2019 through June 30, 2020 the maximum allowable rent increase from June 1, 2022 through June 30, 2023 of 3.10% shall be reduced by the percent increase that was imposed; and WHEREAS, the local emergency will end on April 19, 2023, and Ordinance No. 20-O-2818, as amended by Ordinance No. 22-O-2861, shall cease to be in effect upon the end of the local emergency; and
WHEREAS, the sudden and unanticipated repeal upon the end of the local emergency of the -2-
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unpaid rent repayment protections for residential tenants and the cap on the maximum allowable annual rent increase allowed pursuant to BHMC Sections 4-5-303(C) and 4-6-3, from June 1, 2022 through June 30, 2023, could cause significant financial burdens on residential tenants in the City leading to evictions and the displacement of tenants from housing; and
WHEREAS, to avoid unnecessary housing displacement, protect the City’s affordable housing stock, and prevent housed individuals from falling into homelessness, and thereby protect the public health, safety and welfare, it is essential that the emergency protections regarding the repayment of rent and the amount of the allowable rent increase following the end of the local emergency be preserved following the end of the local emergency; and
WHEREAS, some confusion has occurred on the part of the public regarding Ordinance No. 2818, as amended by Ordinance No. 22-O-2861. This Ordinance clarifies certain provisions of Ordinance No. 20-O-2818, as amended by Ordinance No. 22-O-2861, and is declaratory of existing law.
Section 1. Recitals. The City Council hereby adopts the above recitals, which are incorporated herein by this reference.
Section 2. Urgency Declaration. Based upon the above recitals, the City Council finds and determines that this Ordinance must be adopted as an urgency ordinance and become effective immediately to preserve the public health, safety and welfare by protecting residential tenants with respect to the repayment period for unpaid back rent and the allowable rent increase following the end of the local emergency.
Section 3. Unpaid Rent. All unpaid rent accrued from March 15, 2020 through May 31, 2022, that a residential tenant demonstrated the tenant was unable to pay due to substantial financial impacts related to COVID-19 must be paid in full by May 31, 2023. For purposes of this Ordinance, “substantial financial impacts related to COVID-19” has the meaning set forth in subsection (c) of Section 1. A. of Ordinance No. 20-O-2818, as amended by Ordinance No. 22-O-2861 (the “Prior Ordinance”), and the tenant must have demonstrated the tenant’s inability to pay rent in accordance with subsection a. of Section 1. A. and subsection 2 of Section 1. A. of the Prior Ordinance. 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 for the reasons stated in the Prior Ordinance, or a landlord may seek rent that is delayed for the reasons set forth in the Prior Ordinance 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. For ease of reference, the sections of the Prior Ordinance cited above are attached as Exhibit “A” to this Ordinance.
Section 4. Maximum Allowable Rent Increase. Nothing in the Prior Ordinance or this Ordinance shall alter the date of annual rent increases in future years; provided, however, that notwithstanding the provisions of Sections 4-5-303 (C) and 4-6-3 of the Beverly Hills Municipal Code, for an allowable rent increase, that for any reason, was not imposed or was imposed at a rate of less than 3.10% for the period July 1, 2019 through June 30, 2020, the maximum allowable rent increase allowed pursuant to Section 4-5-303 (C) and 4-6-3 of the Beverly Hills Municipal Code from June 1, 2022 through June 30, 2023 is 3.10%. Provided, further, if the rent increase was imposed at a rate of less than 3.10%, then the maximum allowable rent increase from June 1, 2022 through June 30, 2023 shall be reduced by the percent increase that was imposed. The only tenants who may be subject to a rent increase pursuant to Sections 4- 5-303(C) and 4-6-3 of the Beverly Hills Municipal Code during the period June 1, 2022 through June 30, -3-
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2023, shall be those tenants that were eligible for a rent increase pursuant to these sections during the period July 1, 2019 through June 30, 2020, and no other annual rent increases shall be allowed during the period June 1, 2022 through June 30, 2023.
Section 5. Repeal of Ordinance No. 23-O-2872. Ordinance No. 23-O-2872 is hereby repealed.
Section 6 . Uncodified. This Ordinance shall not be codified.
Section 7. 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 of this Ordinance.
Section 8. 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 of the Government Code, shall certify to the adoption of this 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 of the Council of this City.
Section 9. 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 a.m., April 19, 2023, upon its adoption by a minimum 4/5 vote of the City Council.
Section 10. Duration. This Ordinance shall remain in effect until it is superseded by another Ordinance adopted by the City Council.
Section 11. Certification. The City Clerk shall certify to the adoption of this Ordinance.
Adopted:
Effective:
_____________________________________
JULIAN A. GOLD, M.D.
Mayor of the City of Beverly Hills, California
ATTEST:
_________________________________ (SEAL)
HUMA AHMED
City Clerk
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APPROVED AS TO FORM: APPROVED AS TO CONTENT:
____________________________ __________________________________ LAURENCE S. WIENER NANCY HUNT-COFFEY
City Attorney City Manager
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EXHIBIT “A”
SECTIONS OF THE PRIOR ORDINANCE
(Ordinance No. 20-O-2818, as amended by Ordinance No. 22-O-2861) “1. A temporary moratorium on eviction for non-payment of rent by residential tenants substantially impacted by the COVID-19 crisis is imposed as follows:
a. During the period March 15, 2020 through May 31, 2022, no landlord shall endeavor to evict a tenant in either of the following situations: (1) for nonpayment of rent if the 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 of tenants, neighbors, or the landlord, other than based on illness of the 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 of Civil 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 of this 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 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, 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 if that is the method of written communication that has been used previously, or correspondence by regular mail, if that is the method of written 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.”
“c. For purposes of this 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 of the 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 of COVID-19 including for tenants who are salaried employees or self-employed; (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.” “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 COVID19; or (3) the amount of rent that the tenant will pay, then the landlord shall notify the tenant of the disagreement in writing within ten (10) days of receipt of the written documentation 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 of receipt of the landlord's written determination and shall provide a copy of the appeal to the landlord. Appeals will be heard by the Standing Committee of the City Council appointed to hear disruptive tenant hearings or other Members of the City Council as designated by the Mayor, to make a final determination of the 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 of the dispute. If the Rent Stabilization Commission cannot render a decision by a majority vote, then the Standing Committee or other Members of the City Council, as -2-
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designated by the Mayor, will make a final determination of the dispute. Final Decisions of the 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.”