TO: COMMUNITY AND ECONOMIC FROM: Rosalynn Hughey
DEVELOPMENT COMMITTEE
SUBJECT: SEE BELOW DATE: October 12, 2023
Approved Date
SUBJECT: RENT STABILIZATION PROGRAM DRAFT STRATEGIC PLAN
STATUS REPORT
RECOMMENDATION
(a) Accept the staff report on the draft three-year Strategic Plan (2023 – 2026) for the Rent Stabilization Program and the ordinances it administers, including the Apartment Rent Ordinance, Mobilehome Rent Ordinance, Tenant Protection Ordinance, and Ellis Act Ordinance.
(b) Cross-reference this item to the November 7, 2023, City Council meeting.
SUMMARY AND OUTCOME
The Community and Economic Development Committee will review the draft Three-Year Strategic Plan 2023-2026 (draft Strategic Plan) for Rent Stabilization Programs.
BACKGROUND
In 1979, the City Council appointed a task force to address issues in rental housing and adopted a rent stabilization ordinance for mobilehome parks and apartments, which thereafter established the Apartment Rent Ordinance and Rent Stabilization Program (Program). The Program’s mission is to enforce the City’s housing ordinances through education, engagement, and collaboration to build and maintain safe, healthy, and sustainable communities.
In 2016, the City Council began a series of actions to strengthen the City’s rent ordinance, address rising housing costs, and help avoid the displacement of vulnerable residents. In November 2016, the City Auditor issued an audit report entitled: “The Apartment Rent Ordinance: Additional Investment, Improved Processes, and Strategic Resource Deployment CED AGENDA: 10/23/23
ITEM: CC 23-238
FILE: (d)4
10/14/23
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
October 12, 2023
Subject: Rent Stabilization Program Draft Strategic Plan Status Report
Needed to Better Serve Tenants and Landlords” (City Auditor’s Report)1. The audit report included 19 recommendations regarding additional investment, improved processes, and strategic resource deployment needed to better serve residents and housing providers.
Recommendation #15 of the City Auditor’s Report directed the Housing Department to “develop a strategic plan for (the Program) that outlines desired goals and outcomes and establishes measures of program effectiveness.” The City Auditor’s Report reasoned that a strategic plan provides a foundation for the effective administration of the programs that define desired results and plans tasks to meet those results. The City Auditor’s Report recommended that the strategic plan include objectives, strategies, activities, outcome measures, and targets.
In April 2021, Program staff (staff) presented a draft of a three-year Strategic Plan to the Housing and Community Development Commission (HCD Commission). Commissioners provided significant feedback and recommendations on the draft Strategic Plan that was presented. Given this feedback and the staff’s need to focus on COVID-19-related responsibilities, the Housing Department decided to procure the services of a consultant to support the research and analysis needed to develop a strategic plan. The consultant would assist staff with information gathering, self-assessments, consensus building on objectives, and program and operational priorities.
In April 2022, the Housing Department posted a request for proposals for consulting assistance to create a three-year strategic plan. The City received two proposal submissions. A selection panel determined that RSG, Inc. (RSG), would be awarded the consultant contract. Staff executed a contract with RSG in July 2022 and began work shortly thereafter.
On April 24, 2023, staff provided a status report on the development of the Strategic Plan to the Community and Economic Development (CED) Committee. In the motion to approve the status report, the CED Committee requested that staff conduct additional outreach, present the community and housing provider's feedback to the HCD Commission, and return to the CED Committee with another status report before presenting the draft Strategic Plan to the full City Council.
In June 2023, RSG delivered the first draft of the Strategic Plan, and staff worked with RSG to make revisions and refinements. The draft of the Strategic Plan was posted on the Housing Department website in July 2023 and presented to the HCD Commission on August 10, 2023.
Staff made further revisions to the draft Strategic Plan based on feedback received from the public and HCD Commissioners. An updated draft of the Strategic Plan was posted on the Housing Department website in September 2023, and staff sought out feedback from stakeholders on the revisions that were made.
1 p. 55-58, https://www.sanjoseca.gov/home/showpublisheddocument?id=10563
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
October 12, 2023
Subject: Rent Stabilization Program Draft Strategic Plan Status Report
ANALYSIS
In developing the draft Strategic Plan, staff examined goals, outcomes, and measurements of program effectiveness to ensure the community is receiving necessary housing services. Staff and RSG worked together to consider the City Auditor's direction on the Strategic Plan's components. The City Auditor's Report2 stated:
“The Strategic Plan should prepare for contingencies, create a framework for progress, and allocate resources strategically to meet its goals. In our opinion, the Housing Department should develop a formal strategic plan with specific goals, that include:
• Objectives that are specific, measurable, attainable, relevant, time-framed, and state what is expected to change as part of the goal;
• Strategies that clearly articulate pathways to achieve an objective, give clear direction, and allocate resources and new opportunities, as they advance the goal; • Activities which are steps taken by an agency to implement a strategy; they should communicate the intended action and describe the results of that action; they should be measurable, as they advance the goal;
• Measures to track the performance of objectives, strategies, and activities; they should be relevant, measurable, unambiguous, reliable, and meaningful to users; • Targets are quantitative levels of a measure that the organization is striving to achieve through its activities, strategies, and objectives; they should be realistic, have clear ownership, and be clear about trade-offs between competing targets.” The Program’s current draft version of the Strategic Plan was prepared as a response to the City Auditor’s recommendation.
Overview of the Updated Draft Strategic Plan
Staff developed the draft Strategic Plan3 to guide Program implementation over the next three years by establishing a set of goals and tasks intended to evaluate and improve the effectiveness of the overall Program. The draft Strategic Plan also draws from some of the goals and strategies for housing stability and tenant protections that are included in the Housing Element4 . The draft
Strategic Plan outlines short-term and long-term tasks aimed at improving the Program in four general areas:
1. Data collection and metrics;
2. Process and operations;
2 Ibid.
3 An initial draft of the Strategic Plan was posted on the website in July 2023 and the public and HCD Commission were invited to give feedback. The initial draft is here:
https://www.sanjoseca.gov/home/showpublisheddocument/103977/638264100690600000 4 2023-2031 Housing Element adopted by City Council June 20, 2023: https://www.sanjoseca.gov/yourgovernment/departments-offices/planning-building-code-enforcement/planning-division/citywide-planning/housingelement/2023-2031-draft-housing-element
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
October 12, 2023
Subject: Rent Stabilization Program Draft Strategic Plan Status Report
3. Outreach and engagement; and
4. Program design.
After receiving public comment and feedback, staff revised the draft Strategic Plan. Attachment A is the Program’s updated draft Strategic Plan for 2023 – 20265. There are no proposed changes to the Apartment Rent Ordinance, Mobilehome Rent Ordinance, Tenant Protection Ordinance, or Ellis Act Ordinance (collectively referred to as ordinances) in the draft Strategic Plan.
Stakeholder Engagement and Feedback
In February and March 2023, RSG and staff engaged tenants, housing providers, property managers, mobilehome residents and park owners in a series of meetings to gather input on the Program. The purpose of this initial stakeholder engagement phase was to learn what is going well with the Program from the public’s perspective, what issues residents and housing providers are seeing with the implementation of the Program, and suggestions for improvements to Program operations and procedures. The purpose of the draft Strategic Plan is not to propose changes to any of the ordinances. The feedback from residents and housing providers served to inform staff and RSG about what tasks should be planned to make the Program more effective and what tasks will help measure the Program’s effectiveness, including identifying types of analysis to conduct to examine impacts to housing providers and residents.
On April 4, 2023, RSG presented in a virtual community meeting a summary of the stakeholder engagement meetings and community input6
. Attachment B provides summaries of the
feedback received at each of the stakeholder engagement meetings and feedback received by email. Attachment C is the PowerPoint presentation slides that RSG reported during the April 4, 2023 community meeting.
The top three messages expressed by participants at the initial stakeholder engagement sessions were related to transparency, cultural relevancy, and partnership. 1) Transparency
Stakeholders want to see transparency in the implementation of the ordinances, what the City is doing, and where the fees are going. They also expressed a desire for transparency on what course of action housing providers and residents have when there is a violation of the ordinance. They want new housing providers and residents to be educated and aware of what the ordinances are and how they impact both housing providers and residents.
2) Cultural Relevance
5 The updated draft of the Strategic Plan with significant revisions highlighted was posted September 25, 2023 here:
https://www.sanjoseca.gov/home/showpublisheddocument/105133/638312379864270000 6 April 4, 2023 RSP Report Out on Stakeholder Engagement https://youtu.be/pij-PuFqAdc
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
October 12, 2023
Subject: Rent Stabilization Program Draft Strategic Plan Status Report
Stakeholders also want the City to be culturally responsive to both residents and housing providers. Stakeholders would like information to be accessible to vulnerable populations and want to ensure that communities are protected and can afford to live in San José. 3) Partnership
Additionally, stakeholders expressed wanting a greater partnership between the City and advocacy groups representing both housing providers and residents. Residents and housing providers have firsthand experience with the impacts of the ordinances.
Stakeholders want to make sure the City is recognizing and using their firsthand knowledge and lived experiences of residents because their experiences offer valuable insight. Housing providers have direct experience with following and complying with the ordinances and program procedures. Both groups want to ensure that their voices are heard in the decision-making process.
This stakeholder input was incorporated into an initial draft Strategic Plan, which was posted in July 2023 on the Housing Department website. Electronic notices were emailed out inviting the public to provide feedback on the initial draft Strategic Plan through August 18, 2023.
On August 10, 2023, staff presented the initial draft Strategic Plan to the HCD Commission.
Several public comments were made during the August HCD Commission meeting about the initial draft Strategic Plan. The public comments were echoed by some HCD Commissioners expressing concern that the initial draft Strategic Plan did not adequately address the needs of and impacts to housing providers. Public comments and input from some HCD Commissioners also demonstrated that there was a perception and concern that the initial draft Strategic Plan would lead to significant policy changes that would further constrain housing providers. In the weeks after the HCD Commission meeting, staff met with housing providers to follow up regarding their concerns and review the initial draft Strategic Plan in further detail.
Revisions to the Draft Strategic Plan
Based on the feedback received by residents, housing providers, and HCD Commissioners, the initial draft Strategic Plan has been revised (updated draft Strategic Plan) and includes revised tasks to achieve the four goals of the three-year plan. The purpose of these changes is to support residents and housing providers in their efforts to create stable housing throughout San José.
Below is a summary of revisions to the short-term and long-term tasks set forth in the updated draft of the Strategic Plan:
Update to Goal 1 – Improve Data Collection and Metrics
The Program aims to take steps in identifying all housing providers covered by the ARO that are required to register with the rent registry. A revision to Task 1.1 in Table 1 below would allow the Program to maintain annual compliance through administrative measures.
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
October 12, 2023
Subject: Rent Stabilization Program Draft Strategic Plan Status Report
Table 1: Strategic Plan Revision Under Goal 1
GOAL 1 – IMPROVE DATA COLLECTION AND METRICS
Type of
Revision
Short- or
Long-Term Task
Revised Short-Term
1.1 Identify all housing providers of rent stabilized units that are not in the rent registry. Use notification, encouragement, and administrative citations to maintain at least 95%
compliance of units annually.
Updates to Goal 2 – Improve Implementation through Process and Operational Enhancements
To further enhance the services provided, the Program seeks to establish and implement processes that would assist residents and housing providers within the rent-stabilized community.
These enhancements highlighted in Table 2 will serve to address areas of concern and improvements that reflect the input that was expressed by stakeholders.
Table 2: Strategic Plan Updates Under Goal 2
GOAL 2 – IMPROVE IMPLEMENTATION THROUGH PROCESS AND
OPERATIONAL ENHANCEMENTS
Type of
Revision
Short- or
Long-Term Task
Added Short-Term
2.5 Establish a mediation program to support residents and housing providers in coming to voluntary mutual agreements for their disputes.
Moved
Short-Term
(Moved from
Long-Term)
2.6 Implement a pre-approval process for proposed capital improvements to allow housing providers to determine feasibility of cost recovery.
Revised Long-Term
2.9 Consider a “hardship petition” process for low-income residents in response to a proposed increase petition from a housing provider.
Updates to Goal 3 – Improve Community Outreach and Marketing The Program strives to further strengthen and expand educational opportunities within the mobilehome and rental communities to better educate the public regarding the City’s ordinances and available resources. Table 3 summarizes several updates intended to cultivate relationships and increase training within the community, which in turn will promote the Program’s education and outreach efforts.
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
October 12, 2023
Subject: Rent Stabilization Program Draft Strategic Plan Status Report
Table 3: Strategic Plan Revisions, Additions and Deletions Under Goal 3 GOAL 3 – IMPROVE COMMUNITY OUTREACH AND MARKETING
Type of
Revision
Short- or
Long-Term Task
Revised Short-term
3.2 Consider collaboration with community organizations that may have well-established relationships with vulnerable populations, including any grassroots efforts like “promotores” programs, in an effort to increase awareness of tenants' rights under the ARO and TPO.
Added Short-Term
3.3 Conduct Housing Provider “Landlord Learning Sessions” targeting smaller landlords, with multi-lingual
translation/interpretation, and that are held in collaboration with, third party service providers and other City Departments.
Deleted --
3.4 Increase education and resources provided to tenants and landlords on City programs and their rights at tenant / landlord education centers located throughout the City. Locations should include Diridon Station Area, the City's forthcoming transit center, to maximize transit access as well as neighborhoods with high displacement risk according to UC Berkeley Urban
Displacement Project analysis. Use digital tools, pop-ups, and/or mobile sites, and partner with community-based organizations to deliver services in ways that are convenient and accessible for all users, especially those with disabilities.
Added Short-Term 3.7 Establish standing regular meetings with housing providers.
Revised Long-Term
3.9 Identify ongoing funding to increase nonprofit organizations' support of San José tenants’ and housing providers’ rights and responsibilities, including fair housing laws. Increase funding of nonprofits to do broad tenant outreach, education, and in some cases legal representation on housing issues, to lower income tenants in the City. Support a nonprofit-run hotline for information and referrals on general tenant/housing provider issues (not legal advice) for all housing providers and tenants, regardless of income or type of home. [Significantly Revised]
Deleted ---
3.9 Explore a San José Right to Counsel program and/or
alternative housing collaborative court model for the City Council's consideration. Issue a Request for Proposals and work with selected consultant to study costs and benefits of a right to counsel program and other court intervention alternatives and identify necessary legal, financial and other resources. Evaluate program options and seek City Council approval of a feasible program. Additionally, explore potential regional partnerships for a regional Right to Counsel study and implementation as an alternative.
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
October 12, 2023
Subject: Rent Stabilization Program Draft Strategic Plan Status Report
Updates to Goal 4 – Evaluate Program Effectiveness of ARO, TPO, and Related Policies The Program seeks to assess the effectiveness of the oversight of the City’s ordinances to determine what improvements could be made in the way that the ordinances are implemented.
Table 4 outlines changes made in this section of the Strategic Plan in response to concerns regarding short and long-term goals.
Table 4: Revisions, Additions and Deletions Under Goal 4 GOAL 4 – EVALUATE PROGRAM EFFECTIVENESS OF ARO, TPO, AND
RELATED POLICIES
Type of
Revision
Short- or
Long-Term Task
Revised Short-Term
4.1 Consider establishing an administrative procedure to identify, notify, and investigate within 18 months all instances where an ARO housing provider has increased the rent by more than the allowed 5%.
Added Short-Term
4.3 Evaluate the frequency of use of joint petitions and consider enhancements to encourage their use by housing providers and tenants.
Revised Short-Term
4.4 Work with the State to establish that San José can educate the public about and enforce AB 1482. Assess whether desired enforcement authority can be granted administratively or if legislation is needed.
Added Long-Term 4.6 Evaluate the impact to housing providers and residents due to limits on utility charges.
Deleted --
4.6 Evaluate the current Apartment Rent Ordinance and its effectiveness to determine if possible amendments should be recommended to achieve the goals of (1) stabilizing rents, (2) promoting stability and long renter tenancy, and (3) ensuring a fair return on investment to property owners.
Deleted --
4.5 Request that the City Council expand the Tenant Protection Ordinance to not count immediate household members against occupancy limits, to the extent allowed by State Health and Safety Code.
Stakeholder Engagement on the Updated Draft of the Strategic Plan At the Committee’s meeting on April 24, 2023, Council Committee members requested staff to consider conducting additional outreach to a broader range of stakeholder groups as part of the development of the Strategic Plan. Staff publicly posted the initial draft of the Strategic Plan on the Housing Department’s website in July 2023 and sent out an email announcement to the Program’s mailing lists (e-blast) inviting public comment and feedback. This was done ahead of the HCD Commission meeting on August 10, 2023, when the initial draft of the Strategic Plan was presented. Staff received considerable feedback and suggestions at the HCD Commission
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
October 12, 2023
Subject: Rent Stabilization Program Draft Strategic Plan Status Report
meeting and through additional meetings and emails following the commission meeting, particularly from housing providers and housing provider groups. Staff considered all feedback that was received and updated the draft Strategic Plan. The updated draft was posted on the Housing Department’s website on September 25, 2023, and an e-blast was sent inviting the public to review and provide additional commentary and feedback.
Staff also held three stakeholder engagement sessions on October 3, October 4, and October 5, 2023, to provide tenants, housing providers, and mobilehome residents and park owners another opportunity to provide further input and feedback on the updated draft of the Strategic Plan. A summary of the feedback received during these stakeholder engagement sessions is included in Attachment B.
EVALUATION AND FOLLOW-UP
This item will be cross-referenced to the November 7, 2023 City Council meeting.
COORDINATION
This memorandum was coordinated with the City Attorney’s Office.
PUBLIC OUTREACH
The following outreach and engagement was conducted in the development of the Strategic Plan:
DATES ACTIVITY
February 9, 2023 Presentation of preliminary findings and analysis to HCD Commission
February 27, 2023 Tenant virtual stakeholder engagement meeting to gather input on the Program
March 2, 2023 Tenant in-person stakeholder engagement meeting to gather input on the Program
March 6, 2023 Housing provider virtual stakeholder engagement meeting to gather input on the Program
March 8, 2023 Housing provider in-person stakeholder engagement meeting to gather input on the Program
March 13, 2023 Mobilehome community stakeholder engagement to gather input on the Program
February – March 2023 Online survey to gather input on the Program
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
October 12, 2023
Subject: Rent Stabilization Program Draft Strategic Plan Status Report
DATES ACTIVITY
April 4, 2023 Virtual community meeting with a summary of stakeholder community input
July – August 2023 Invitation for public comment on the initial draft Strategic Plan posted on the Housing Department website
August 10, 2023 Draft Strategic Plan presented to HCD Commission September – October 2023 Invitation for public comment on the updated draft of the Strategic Plan posted on the Housing Department website October 3, 2023 Tenant virtual engagement meeting on draft Strategic Plan October 4, 2023 Mobilehome community virtual engagement meeting on draft Strategic Plan
October 5, 2023 Monthly Housing Provider Roundtable meeting (Upcoming) October 19, 2023 Housing provider virtual engagement meeting on draft Strategic Plan
COMMISSION RECOMMENDATION AND INPUT
In April 2021, staff presented a draft of a three-year Strategic Plan to the HCD Commission.
Commissioners provided significant feedback and recommendations on the draft Strategic Plan.
Given this feedback and the staff’s need to focus on COVID-19-related responsibilities, the Housing Department decided to procure the services of a consultant to support the research and analysis needed to develop a strategic plan.
The HCD Commission heard this item again, more recently, on August 10, 2023. The Commissioners heard comments from the public and discussed the report. After some debate, the Commission did not take any formal action on the Strategic Plan. Throughout the discussion, concern was raised to staff that the draft Strategic Plan did not adequately address the needs of housing providers. These concerns were heard, and changes were made to the updated draft Strategic Plan being considered by the CED Committee.
CEQA
Not a Project, PP17-009, staff reports, assessments, annual reports, and informational memorandums that involve no approvals of any City action.
PUBLIC SUBSIDY REPORTING
This item does not provide a public subsidy as defined in sections 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
October 12, 2023
Subject: Rent Stabilization Program Draft Strategic Plan Status Report
/s/
ROSALYNN HUGHEY
Deputy City Manager and
Acting Housing Director
The principal author of this memorandum is Emily Hislop, Division Manager. For questions, please contact Rachel VanderVeen, Assistant Director, at [email protected] or (408) 535-8231.
ATTACHMENTS
Attachment A: Rent Stabilization Program: Updated Draft Strategic Plan 2023-2026 Attachment B: Summary of Stakeholder Feedback
Attachment C: April 4, 2023 Stakeholder Report Out and Findings Presentation Slides by RSG, Inc.