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Housing
COMMUNITY
DEVELOPMENT
City Council
January 31, 2023
Discussion on
Current Tenant Protections
and a Rent Control
Ordinance
1)Provide information
to the City Council to
facilitate a discussion
on Rent Control
2) Provide an
overview of current
tenant protections
Why Are We Here?
What is Rent Control?
• Regulatory Approach to Limits on Rent Increases
• Burbank does not have a local Rent Control
Ordinance
• The State of California does have rent control
through Assembly Bill 1482
• Since January 1, 2020 there are rent caps and just
cause provisions for certain properties in Burbank
and throughout the state; to be discussed later in
this report
Pros and Cons of Rent Control
Positive Aspects of Rent Control
• Caps rents
• Controls increases
• Reinforces financial remedies for
illegal evictions
• Can require relocation assistance
Concerns Regarding Rent Control
• Incentivizes people to say in apartments longer
• May increase overcrowding
• Encourages illegal subleasing
• Can cause deteriorating housing stock
• Limits availability of rent controlled housing for
new tenants
• Does not encourage structural improvements by
landlords
• Difficult and costly to enforce
• State relies on Municipal Regulation; the alternative is to rely on the state law – AB 1482
• Legislature Acts to Consider:
• Costa Hawkins Rental Housing Act (1995) Units
with certificate of occupancy after 2/1/95
Exemption
• Ellis Act 1986 (1986) Right to withdraw properties
from the market
Additional Considerations
Cost of Rent Control
1) Cost Comparison – From 2020 Elections Code 9212 Preliminary Report
*Measure H passed in Pasadena and took effect on December 22, 2022. The City of Pasadena has been served with a lawsuit challenging the validity of the measure. Pasadena is required to continue to implement Measure H until and unless a court directs the city to stop doing so. There is no timeline for when the lawsuit will conclude. 2) Additional $1,800,000 Required for Start-Up (2020 Est.) 3) Cost Offset by Fees Paid by Landlords
4) Extensive Administration and Enforcement through a new body – Rent Control Board
Number of
Units Number of Staff
Annual
Cost/Budget
City
Santa Monica 26,425 25 $ 5,525,245
Berkley 19,548 24.85 $5,960,000
Pasadena (NEW 2022)* 31,316 26 $5,800,000
Burbank – Failed Measure RC 22,292 19 Est. $4,500,000
Cost to Landlords
• Funded by fees paid by landlords for covered units:
Burbank 2020 est. fee: $200 per unit per year
Paid on approx. 22,292 units covered = $4.5M
Pasadena 2022 fee: $184 per unit per year
Paid on 31,316 units covered = $5.8M
• Revenue dependent on rental units covered/allowable
by law
• Exact program costs may be higher
Current Tenant Protections
State Rent Control through AB 1482 – California
Tenant Protection Act
Just Cause Eviction and Rent Caps for Specific
Rental Properties
Effective Date:
January 1, 2020
Sunset Date: January 1, 2030
• Rent Caps: 5% Plus Consumer Price Index
(CPI); no more than 10%
• Requires Just Cause for Evicting Tenants
Political Debate
• Much disagreement
• Seems to work in the short term
• Long term causes many unintended
challenges
Alternatives
Creating New Units with Affordability Covenants
• Deed restricted
• Limits rental prices
• Can contain income-level qualifications
• Sets beginning rental prices
• Allows controlled rental increases
• Sets time periods for enforcement
Things to Consider
In addition to Concerns and Cost Previously Noted:
• Effect on Housing Supply and Affordability
• Effect on Property Values
• Increase in Condominium Conversions
• Overall Housing Approach - Regulatory vs. Market
Demand
• Other Unintended Consequences
Questions?
Maribel Leyland, Housing Authority Manager
Community Development Department
(818)238-5180
[email protected]