Landlords voiced concerns about long-term sustainability and the unintended consequences on the rental market.
10-day Notice to Cure: There is currently confusion regarding whether a notice to cure is necessary for nonpayment of rent. In its current form, the Just Cause Evictions and Tenant Protections Ordinance, requires that landlords present a tenant with a 10-day notice to cure for all curable lease breaches, including non-payment. Nonpayment of rent is inherently addressed by a specific procedure in state law: a 3 -Day Notice to Pay Rent or Quit, after which an eviction may proceed if rent isn’t paid.
Alternatives Available to the City Council
Staff is seeking direction from the City Council as to next steps , which may include one of the following alternatives:
1) Direct staff to continue to implement all four (4) Ordinances and return with a Program report in October 2025.
2) Direct staff to amend any or all four (4) of the Ordinances to address concerns raised or to clarify requirements and bring such amendments back to the City Council for consideration.
3) Direct staff to return to the City Council as soon as possible with ordinances to repeal any of or all four (4) of the Ordinances.
CEQA CONSIDERATION:
Not a Project. The City of Salinas has determined that this administrative report is not a project under the California Environmental Quality Act (CEQA Guidelines Section 15061(b)(3)) because it would not have a significant effect on the environment. Additionally, the City’s approval of this Resolution is exempt because it does not meet the definition of a “project” under CEQA, pursuant to CEQA Guidelines sections 15060(c)(1) and 15378(a), because it has no potent ial to result in a direct or reasonably foreseeable physical change in the environment.
CALIFORNIA GOVERNMENT CODE §84308 APPLIES:
No.
STRATEGIC PLAN INITIATIVE:
This administrative report provides an update on the implementation of four ordinances: Rental Registration, Rent Stabilization, Tenant Protection and Just Cause Eviction, and Tenant Anti - Harassment, which are consistent with and further the City Council’s goal of promoting and preserving Housing/Affordable Housing (City of Salinas Strategic Plan 2022 -2025) and are identified program activities in the City’s adopted 6th Cycle Housing Element (2023-2031).
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DEPARTMENTAL COORDINATION:
The City Attorney’s Office and Community Development, Finance and Human Resources Departments collaborated on and contributed to the preparation of this agenda item. The Housing and Community Development Division led Program implementation in consultation and coordination with the City Attorney and Administrative staff.
FISCAL AND SUSTAINABILITY IMPACT:
Rental Registration and Rent Stabilization Program implementation is intended to be cost-neutral and self-funded through the collection of annual fee revenues. Based on a conservative projection of a thirty percent (30%) fee collection rate, an estimated amount of $205,203 was appropriated from the General Fund in FY 24-25 in the form of a loan transfer to cover Program start -up costs including contracting for Program porta l and data base development, hiring administrative staff, developing education and marketing materials, and providing Program supportive services. Table 1 below details actual fee revenue collected as of April 14, 2025, and Table 2 below details actual expenditures as of April 14, 2025, compared to the FY 24-25 Program budget. The expense and revenues presented below continue to increase as rental units continue to be registered and staffing costs are incurred.
Table 1: Program Fees Collected | January 1, 2025 to April 14, 2025
Fee
Amount
Number of
Units
Registered*
Total Fees
Remitted*
Residential Rental
Registration
$45/unit 3,646 $164,070.00
Rent Stabilization $170/unit 7,317 $1,243,890.00
Total 10,963 **$1,421,233.00
* Data source: Tolemi Slate Platform
**Beginning April 2, 2025, late fees were assessed.
Table 2: Program Budget and Expenditures | January 1, 2025 to April 14, 2025
FY 24-25
Budget
Actual
Expenditures
Remaining
Balance
Salaries and Benefits $142,250 $76,928.64 $65,321.36
Software $200,000 $129,000.00 $49,300.00
Supportive Services
(Hearing Officer,
Education/Outreach)
$300,000 $26,550.55 $295,149.45
Indirect
Costs/Overhead
$ 13,000 $0.00 $13,000.00
Total $655,250.00 $232,479.19 $422,770.81
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As shown in the tables above, Program Fee revenue exceeded actual Program cost . As a ctual Program revenue collection rates exceed Program costs, the General Fund loan transfer of $205,203 will be repaid. Depending on Council direction to staff regarding the Program, Council may need into address the handling of any remaining balance after the General Fund has been repaid.
ATTACHMENTS:
1. Staff Analysis of Program Revenue, Cost and Cost Recovery for FY 24/25 Budget
2. Program Implementation Chronology
3. Program Implementation Data
Attachment 2: Staff Analysis of Program Revenue, Cost and Cost Recovery to Develop FY24-25 Budget Residential Rental Registration (RRR) 2530.30.3220-56.3530 14,464 Charges for Services Rental Registration Fees Rental Stabilization Ordinance (RSO) 2530.30.3220-56.3540 8,330 Charges for Services Rent Stabilization Fees Total Units 22,794
Max Revenue 6 months
Program Fee Per Unit FY 25-26 FY 24-25
RRR $45.00 650,880.00$ 325,440.00$
RSO $170.00 1,416,100.00$ 708,050.00$
2,066,980.00$ 1,033,490.00$
Position GL Annual FTE FY 25-26 FY 24-25
Planning Manager 2530.30.3220-61.xxxx 235,000.00$ 0.2 47,000.00$ 23,500.00$ Community Development Analyst 2530.30.3220-61.xxxx 154,200.00$ 1 154,200.00$ 77,100.00$ Admin Analyst 2530.30.3220-61.xxxx 128,800.00$ 1 128,800.00$ 64,400.00$ Admin Aide 2530.30.3220-61.xxxx 108,700.00$ 1 108,700.00$ 54,350.00$ Staffing 626,700.00$ 3.2 438,700.00$ 219,350.00$ Software 2530.30.3220-66.5800 200,000.00$ 200,000.00$ Hearing Officer, Education/Outreach 2530.30.3220-63.5900 300,000.00$ 300,000.00$ Operating Expenditures 500,000.00$ 500,000.00$
Overhead 2530.30.3220-64.1000 26,000.00$ 13,000.00$ Total Yearly Program Cost 964,700.00$ 732,350.00$
FY 24-25 Unobligated Cash Balance 2530-11.9999 141,287.00$ Compliance Rate Ordinance Fees 2530 Cash CDA LT - 3186 General Fund Total 30% 310,047.00$ 140,000.00$ 77,100.00$ 205,203.00$ 732,350.00$ 40% 413,396.00$ 140,000.00$ 77,100.00$ 101,854.00$ 732,350.00$ 50% 516,745.00$ 140,000.00$ 77,100.00$ (1,495.00)$ 732,350.00$ 60% 620,094.00$ 140,000.00$ 77,100.00$ (104,844.00)$ 732,350.00$ 70% 723,443.00$ 140,000.00$ 77,100.00$ (208,193.00)$ 732,350.00$ 80% 826,792.00$ 140,000.00$ 77,100.00$ (311,542.00)$ 732,350.00$ Compliance Rate
Ordinance Fees 2530 Cash CDA LT - 3186 General Fund Total Cost includes 10%*
50% 1,033,490.00$ - - 27,680.00$ 1,061,170.00$ 60% 1,240,188.00$ - - (179,018.00)$ 1,061,170.00$ 70% 1,446,886.00$ - - (385,716.00)$ 1,061,170.00$ 80% 1,653,584.00$ - - (592,414.00)$ 1,061,170.00$ * Increased expenses by 10% to include projected colas, step increase for employees. Check with Finance on what factor to use.
Transfer in from General Fund 2530.00.0000-90.1000 205,203.00$ Transfer out to Rent Stabilization/Reg 1000.00.0000-95.2530 205,203.00$ FY 24-25 Funding (Jan-June)
FY 25-26 Funding
Attachment 3: Rental Registration & Rent Stabilization Implementation Timeline
Program Implementation Chronological Timeline
- September 10, 2024
o Adoption of Rent Stabilization, Just Cause Eviction and Tenant Protection, and Tenant Anti- Harassment Protection ordinances
- November 19, 2024
o Approval of Resolution No. 23163 for professional services with Tolemi, to provide the implementation of the Rental Registration and Rent Stabilization Program. (Resolution No. 23163)
o Approval of the Rent Stabilization Fees of $170.00 per Rent Stabilized units. (Resolution No. 23169)
o Approval of Rental Registration Fees of $45.00 (Resolution No. 23170) o Approval of FY 24-25 Budget, fund transfer from General Fund of $205,203 and two limited term Administrative Positions (Resolution No. 23171) - December 9, 2024 – December 31, 2024
Updated the Rental Registration page to include new information and regulations
Edited the About section to include new rental related regulations Added Registration and Rent Stabilization fees to top of page Added definition of rent-stabilized unit
Added an accordion style directory to find all information about the program including:
The Rental Registration Ordinance and the Resolution
The Rent Stabilization Ordinance and the Resolution
The Just Cause Eviction and Tenant Protections Ordinance The Tenant Anti-Harassment Ordinance
Annual Allowable Rent Increase Tool
o Created an interactive html tool for the public to use o Created a step-by-step guide on how to use the excel
worksheet for allowable rent increases
Forms and Notices
Definitions & Frequently Asked Questions
Tenant Resources
Landlord Resources
Updated our office hours and contact information to reflect the divisions information
Added a link to registration platform, Tolemi
Added a link to schedule in-person appointments
Added text at the bottom of page on how to contact us or Tolemi Reorganized Housing & Community Development webpage
Created link to new Rental Registration & Rent Stabilization webpage
Mapped the webpage to ensure that it only takes 4 or less clicks to get to registration webpage
Edited Mobile Home – Max Rent Increase page to remove any Rental Registration and Rent Stabilization information and added newest Mobile Home Max Rent Increase PDF
- November 20, 2024 – January 1, 2025
o City Staff worked with Tolemi to test and create a platform ready for the launch date of January 1, 2025.
o Staff worked with the City Attorney to create required notices. o Sent emails on December 31, 2024, to all property owners and property managers that had registered in FY 23/24 under the Residential Rental Registration Program that the new software was live.
- January 2, 2025
o City staff posted Program launch on social media.
- February 3 – February 12, 2025
o City staff worked with Tolemi to create a list of suspected rental units. o Staff reviewed and edited the list of suspected rental properties/units provided by Tolemi of all suspected rentals that had not been registered by the January 31 deadline.
- February 14, 2025
o Staff prepared and mailed 5,374 Notices of Delinquency to suspected rental properties.
- February 20, 2025 & February 27, 2025
o Staff held open office hours from 4:30 PM – 7:00 PM to assist landlords with any questions and/or online registrations.
- March 21, 2025
o Staff posted a reminder about the deadline for registrations.
Attachment 4: Rental Registration & Rent Stabilization Program Data As of April 14, 2025 – 2:00 PM PDT
BuildingBlocks/Tolemi Suspected Rental Properties 8,202 BuildingBlocks/Tolemi Suspected Rental Units 21,779
Total Properties Registered (Submitted & Paid) 3,903
Total Units Registered 10,728
•Rent Stabilized 7,131
•Non - Rent Stabilized 3,597
Total Fees Collected $ 1,421,233.00
Registrations Pending Landlord Edits/Review 4
Registrations Pending Payment 471
Total Estimated Compliance
•Properties 47.58% (50.47%*)
•Units 49.25% (50.34%*)
*470 property owners have communicated that their property is not a rental Pending Landlord Petitions 5
Pending Tenant Petitions 1
REPORT ON
RESIDENTIAL RENTAL
REGISTRA TION AND
RENT ST ABILIZATION
PROGRAM
IMPLEMENTATION
April 22, 2025
City Council
Presented by: Lisa
Brinton, Director
Background
April 2023 - City Council adopted a Residential Rental Registration Program • Rental Registration Ordinance
September 2024 – City Council adopted a Rent Stabilization Program • Rent Stabilization Ordinance
• Just Cause Eviction and Tenant Protections Ordinance
• Tenant Anti-Harassment Ordinance
November 2024 - Council took further action to establish:
• Registration fees (Resolution No. 23169 & 23170)
• The FY 2024–25 budget
Planning Manager (FTE) 0.2
Community Development Analyst (FTE) 1.0
Admin Analyst (FTE) 1.0
Admin Aide (FTE) 1.0
3.2 Salaries and Benefits $ 142,250.00
Software $ 200,000.00
Supportive Services (Hearing Officer,
Education/Outreach) $ 300,000.00
Indirect Costs/ Overhead $ 13,000.00
$ 655,250.00
Program
Budget &
Staffing
Implementation Progress
Vendor Selection & Platform Development
• Tolemi selected in Nov 2024 (Resolution No. 23163)
• Platform launched by Program start date: Jan 1, 2025
• Software identifies potential rental properties via multiple criteria Website & Resources
• Program web page created with summaries of all 4 ordinances • Included FAQs, forms, definitions, and tenant/landlord resources • Notices and petition forms available in English and Spanish • Allowable Rent Increase Tool with user guide made available Implementation Progress
Procedures & Legal Coordination
• Forms and notices developed in consultation with City Attorney Outreach & Support
• Dedicated phone line, email, and office hours established • Evening office hours added: Feb 20 & 27 (4:30 PM–7:00 PM) • Notice of Delinquency sent Feb 12 to 5,374 unregistered properties Support Provided To Date:
• 7,086 phone calls answered
• 833 emails responded to
• 532 in-person appointments completed
Implementation Challenges
• Interpretation of Ordinance Requirements
• Registration Process and Platform
Implementation Feedback Received from Landlords
• Registration Fees
• Rent Increase Limits
• CPI Timing Issues
• Sub-Metering
• Right-To-Return Period
• Withdrawal of Rental Unit(s)
• Relocation Assistance
• 10-day notice to Cure
Challenges
& Landlord
Feedback
Program
Overview
BuildingBlocks/Tolemi Suspected Rental Properties 8,202 BuildingBlocks/Tolemi Suspected Rental Units 21,779
Total Properties Registered (Submitted & Paid) 3,903
Total Units Registered 10,728
•Rent Stabilized 7,131
•Non - Rent Stabilized 3,597
Total Fees Collected 1,421,233.00$
Registrations Pending Landlord Edits/Review 4
Registrations Pending Payment 471
Total Estimated Compliance
•Properties 47.58% (50.47%*)
•Units 49.25% (50.34%*)
Pending Landlord Petitions 5
Pending Tenant Petitions 1
*470 property owners have communicated that their property is not a rental Rental Registration & Rent Stabilization Program Data
Program Fees Collected
January 1, 2025 to April 14, 2025
Fee Amount Number of Units
Registered Total
Residential Rental Registration (Single Family and/or Newer Built) $45.00 3,646.00 $164,070.00
Ren
t Stabilization (Multi-Family "two or more units on one parcel built bef
ore February 1,1995") $170.00 7,317.00 $1,243,89 0.00
10,963.00 $1,421,23 3.00
Beginning April 2, 2025, late f
ees were assessed.*
Actual Program Expenditures
Budget Actuals Remaining
Salaries 142,250.00 76,928.64 65,321.36
Software 178,300.00 129,000.00 49,300.00
Supportive Services 321,700.00 26,550.55 295,149.45
Indirect Costs 13,000.00 - 13,000.00
Total 655,250.00 232,479.19 422,770.81
1. Direct staff to continue to implement all four (4)
ordinances and return with a Program report in October
2025.
2. Direct staff to amend and bring back to Council for
consideration any of or all four (4) ordinances to clarify requirements and/or address concerns.
3. Direct staff to return to Council as soon as possible with draft ordinances to repeal any of or all four (4) ordinances.
Next
Steps
Questions?
For more information, contact Housing Division
(831) 758-7901 or [email protected]
https://www.cityofsalinas.org/Your-Government/Departments/Community-Development