1 STAFF REPORT
DATE: January 31, 2023
TO: Justin Hess, City Manager
FROM: Patrick Prescott, Community Development Director VIA: Simone McFarland, Assistant Community Development Director for Economic Development and Housing
BY: Maribel Leyland, Housing Authority Manager
SUBJECT: Discussion on a Rent Control Ordinance in the City of Burbank and Current Tenant Protections
RECOMMENDATION
Note and file, or direct staff as appropriate.
BACKG ROUND
At the City Council meeting on July 12, 2022, then Vice Mayor Anthony requested a first step staff report on a local rent control ordinance in the City of Burbank. This report provides: 1) a summary of information previously submitted to the Council related to rent control and tenant protections ; and 2) an outline of the current state law related to rent increases and tenant protections.
DISCUSSION
There are two ways to implement rent control at the local level. The first way is for the City Council to enact it, as the City of Los Angeles Council did . On October 1, 1978 the City of Los Angeles froze rents for the first time as they worked through the details of the current ordinance approved March 31, 1979 .
1 If the Burbank City Council enacts rent
control, it would need to be an ordinance that is adopted by a majority of the Council following a first and second reading (as with all ordinances).
The second way to institute rent control is through a petition to put rent control on the ballot, and then the voters would need to approve it. In November 2020 , the Burbank Just Cause Eviction and Regulation Measure (Measure RC) was rejected by voters as summarized in the next section.
1 Rent Stabilization Ordinance of the City of Los Angeles - https://codelibrary.amlegal.com/codes/los_angeles/latest/lamc/0 - 0-0-195151 .
COMMUNITY
DEVELOPMENT
2 PRIOR REPORTS TO CITY COUNCIL ON RENT CONTROL
On August 7, 2020, staff presented an Elections Code 9212 Preliminary Report on the Impacts of the 2020 Burbank Just Cause Eviction and Rent Regulation Measure (Measure RC) that was on the November 2020 ballot. The report provided information on the potential effects and concerns of Measure RC. Council was asked to consider options under Elections Code Section 9215 (Attachment 1). An additional report was presented on October 6, 2020, with subsequent information related to the potential impacts of Measure RC (Attachment 2). The report s outlined the Measure’s proposed changes to the Burbank Municipal Code adding just cause eviction provisions, rent regulations and an updated Landlord Tenant Commission with expansive authority. Council voted to note and file the report. The rent control measure (the Burbank Rent Stabilization and Tenant Protection Act) on the November 2022 ballot was rejected by voters with 63.79% voting “No”.
In a subsequent report dated May 14, 2021, information on a residential rent freeze was presented to Council (Attachment 3). In summary, the Burbank City Council is unable to legally implement a rent freeze as described in the memo without a local rent control ordinance. The potential financial impact of implementing a rent freeze is also described, citing the cost estimate for the failed rent stabilization ordinance on the November 2020 ballot. The report also includes information on current tenant protections through Assembly Bill (AB) 1482,the California Tenant Protection Act , that went into effect on January 1, 2020.
CURRENT TENANT PROTECTIONS – AB 1482
Burbank renters have current protections in place. In 2019, Governor Newsom signed into law AB 1482 amending the Civil Code effective January 1, 2020. AB 1482 sets limits on rental increases through January 1, 2030. Furthermore, d uring the height of the COVID-19 Pandemic (Pandemic),there were further protections on rents and ev ictions via the State’s COVID-19 Tenant Relief Act (AB 3088 and S enate Bill (SB) 91), and protections through anti-gouging laws and orders. Both AB 3088 and SB 91 have ended, and the governor-declared emergency order(s) affecting rents (that triggered the state’s anti-price-gouging law) have also expired.2
AB 1482 established statewide rent caps along with just cause eviction standards for specific multifamily and rental properties. Subject to certain exceptions t his state law applies to all multi-family housing, as well as single homes or condos that are owned by a Real Estate Investment Trust (REIT) Corporation, and Limited Liability Company where one member is a corporation. The just cause and rent cap provisions of the law do not apply to units with an affordability covenant. Landlords need just cause for evicting a tenant with continuous or lawful tenancy of at least 12 months or 24 months in certain instances. Detailed at-fault or no-fault reasons for eviction are included in the Act. Under the no- fault provisions , a tenant being evicted may be entitled to a relocation f ee equivalent to one month’s rent. Additionally, AB 1482 states that in any 12-month period, a property owner can only increase rent by 5% plus the cost -of-living increase, which in
2 California Penal Code Section 396 prohibits price gouging during a declared state of emergency. Specifically, Section 396 states that “it is unlawful for a person, contractor, business, or other entity to sell or offer to sell . . . [a covered good] for a price of more than 10 percent greater than the price charged by that person for those goods or services immediately prior to the proclamation or declaration of emergency.” This applies to rental housing. 3 Los Angeles and most metro areas has historically been 2- 3% a year. 3 However, rents cannot be raised more than 10%. Units built within a rolling period of the last 15 years are exempt.
RENT CONTROL ORDINANCE – PROS AND CONS
As previously noted, there is a financial impact to a city to develop, implement and monitor a rent control ordinance; and additional staff is required as outlined in prior reports. In addition to those critical areas, there are several pros and cons previously discussed with prior Councils. In December 2017, staff presented an in -depth report with the pros and cons of rent control (Attachment 4). Council voted to note and file the report.
ENVIRONMENTAL REVIEW
Direction on this first step report on a rent control and tenant projection ordinance has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and as such, is not a “project” subject to the requirements of the California Environmental Quality Act (CEQA) 14 Cal . Cod e Regs section 15378. Additionally, a “project” does not include organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
FISCAL IMPACT
There is no fiscal impact to this first step report on a rent control ordinance in the City of Burbank. However, there is a fiscal impact to a rent control ordinance and that fiscal impact would need to be analyzed if Council directs staff to present a second step report.
CONCLUSION
The topic of rent control and tenant projections has been discussed by different Councils in the last several years, and most recently put to a vote by Measure RC on the November 2020 ballot. It was rejected by 64% of Burbank voters
As outlined in this and attached report s, there are current state rent caps and tenant protections through AB 1482 for Burbank residents . As addressed in previous reports, rent control can be very costly to enforce and would require a new city division/department to be established to oversee and implement.
Should Council direct staff to return with additional information on a local rent control and tenant projection ordinance, staff will return with u pdated and more specific information on the financial impact to the City along with any additional information Council requests.
ATTACHMENTS
Attachment 1 – Staff Report dated August 7, 2020 – 9212 Preliminary Report on Measure RC
Attachment 2 – Staff Report dated October 6, 2020 –
9212 Report on Impacts of an Initiative Ordinance on Rent Stabilization and Tenant Protections
Attachment 3 – City Manager Tracking List Memo dated May 14, 2021 – Rent Freeze Information
3 The current CPI is 7.9%.
4 Attachment 4 – Staff Report dated December 19, 2017 – Rent Control Discussion