___________________________________________________________________________________ “loophole” but a clearly designed and well thought out provision which when combined with the referenced notice provisions, is a clear and unambiguous addressing of the reality of the effect of expiring affordable housing agreements with which the developers have fully performed. It is not a “loophole” involving any ambiguity in appliable law. It clearly sets forth the presumed and understood right of owners to move to an initial market rate rent after full performic of their obligations at the expiration of such agreements (upon specified notice) and thereafter all such units would be governed by the rate increase provisions.
Local legislation in conflict with general law is void. Conflicts exist if the ordinance duplicates, contradicts, or enters an area fully occupied by general law, either expressly or by legislative implication. In determining whether the Legislature has preempted by implication to the exclusion of local regulation, courts look to the whole purpose and scope of the legislative scheme. Courts examine if the subject matter has been so fully and completely covered by general law as to clearly indicate that it has become exclusively a matter of state concern or whether the subject matter has been partially covered by general law couched in such terms as to indicate clearly that a paramount state concern will not tolerate further or additional local action.
In this case the State legislature has designed an entire set of related code sections addressing this issue and preempting local ordinance.
The comment that the applicable code sections “allow” local action is truly paring the applicable code sections to suit your argument. The code sections make clear that this language specifically does NOT allow a local government to establish limitations on any rental rate increases not otherwise permissible under Chapter 2.7 (commencing with Section 1954.50) or affects the existing authority of a local government to adopt or maintain rent controls or price controls consistent with that chapter.
Rent Control may not be a ‘fully occupied area’ of state law - localities have considerable control. But when the issue becomes narrower - how much rent a landlord can charge after a rental assistance contract is canceled or terminated, it does not seem that the Legislature has fully addressed this issue and it is clear that it did NOT intend that the specific time limitation and allowances it imposed to be directly contradicted by local law. For instance - if the Legislature did not intend for a time limit to be imposed, it would not have included one at all. It is well established that statutes must be construed so that none of the language is superfluous: to hold that the state law and the city ordinance do not conflict would be to render the provisions of State law on such subject (including for instance the 90-day limit in Civil Code section 1954.535) superfluous. Given this scope of State law it seems apparent the state and proposed local law conflict, and thus the proposed ordinance is preempted.
Arguably, the proposed ordinance is an unconstitutional regulatory taking without just compensation. The Ordinance fails to provide a mechanism for a landlord who or which has fulfilled their contractual obligations to restrict rents based upon income levels for a set period of time to achieve a fair rate of return on their property and thus is unconstitutional under Birkenfeld, in which the California Supreme Court held: “a regulation may be invalid on its face when its terms will not permit those who administer it to avoid confiscatory results in its application to the complaining parties.” Birkenfeld v. City of Berkeley, 17 Cal. 3d 129, 165
30.20 September 9, 2024
___________________________________________________________________________________ (1976). While it is true that a city’s police powers permit the implementation of price control measures, such as rent control, these price control measures must not be “‘arbitrary, discriminatory, or demonstrably irrelevant to the policy the legislature is free to adopt, and hence an unnecessary and unwarranted interference with individual liberty.’” Birkenfeld, 17 Cal. 3d at 165. The State of California recognized the strong possibility of a regulatory taking argument in its drafting of the price controls of Civil Code Section 1947.12. By enacting Civil Code Section 1947.13, which the City of Santa Cruz is seeking to vitiate by the proposed ordinance, it avoided a constitutional challenge on these grounds, but the City will not be able to survive such a challenge. While the City has deceptively included this ordinance within the Chapter of the Municipal Code entitled “Just Cause Eviction Above AB 1482” it is clearly a rent control ordinance which is only applicable to those owners who previously agreed to restrict rents based upon income levels of the residents, which is yet another ground on which the Ordinance may be challenged in addition to the pre-emption arguments addressed otherwise herein.
The proposed Ordinance violates due process and equal protection under state and federal law as it is marked by arbitrariness and selective and capricious decision-making. As the Court stated in Vill. of Euclid, Ohio v. Ambler Realty Co., 272 U.S. 365, 395 (1926):
“[W]hen […] the provisions set forth in the ordinance in tedious and minute detail, come to be concretely applied to particular premises, including those of the appellee, or to particular conditions, or to be considered in connection with specific complaints [they] may be found to be clearly arbitrary and unreasonable.”
It is well known that the impetus behind this Ordinance are complaints of residents of the St.
George, who have received notice of the expiring restrictions in accordance with state law after the current owner has fulfilled the contractual obligations under the applicable regulatory agreements. For the City to exercise its legislative powers for the benefit of these particular individuals, or even the narrow population of others, if any, that are similarly situated, is unconstitutional.
The proposed ordinance imposes a different definition for the annual “percentage change in the cost of living” than is applicable to all other properties subject to AB 1482 within the City.
Under Civil Code Section 1947.12(g)(1)(A)(iv) the CPI-U for the San Francisco-OaklandHayward metropolitan area only covers the counties of Alameda, Contra Costa, Marin, San Francisco and San Mateo. To apply this standard to only properties within the City of Santa Cruz which were previously subject to regulatory agreements limiting rents also is arbitrary.
If passed, not only will the ordinance be subject to legal challenge on constitutional grounds, the chilling effect the City’s actions will have on future affordable housing developments is incalculable. No longer can any affordable housing developer or investor reasonably rely on any agreement reached with the City of Santa Cruz if it demonstrates its willingness to use its legislative powers to vitiate the terms of contractual agreements.
30.21 September 9, 2024
___________________________________________________________________________________ It is our sincere hope that the City will decline to adopt the proposed ordinance which results in a regulatory taking, impermissibly targets the St. George Apartments, and allow the rents to adjust as expressly permitted by state law.
Yours truly,
Dictated but not read
WILLIAM A. VAN ROO
30.22 7
Lindsay Nelson
From: Rafa Sonnenfeld <[email protected]>
Sent: Monday, September 9, 2024 2:16 PM
To: City Council
Subject: Comment for City Council Agenda Item #30
Attachments: City of Santa Cruz - Agenda Item # 30 Comment Letter.pdf Please find Santa Cruz YIMBY's comment letter in support of the ordinance proposed under Agenda Item #30 attached.
Thanks,
Rafa
30.23 September 9, 2024
To: Santa Cruz City Council
809 Center Street
Santa Cruz, CA 95060
Via email to [email protected]
RE: City Council Agenda Item #30:
Ordinance Extending AB 1482 Rental Increase Protections Upon Expiration of Affordable Housing Rental Restrictions
Santa Cruz YIMBY advocates for abundant housing at all levels of affordability to meet the needs of a growing population in Santa Cruz County. Our pillars of policy advocacy include zoning reform, permitting reform, fixing bad incentives, funding affordable housing, and increasing housing stability.
Santa Cruz YIMBY supports the proposed ordinance that limits the amount of rent hikes for residents of affordable housing developments constructed prior to 1995 that have expiring affordability restrictions. Most renters of multifamily housing across the state are protected from extreme rent hikes under state law which limit rent increases to no more than 10% per year, however the state law does not extend those same protections to renters of buildings subject to expiring affordability restrictions.
This means that low income renters who were previously protected by an affordability restriction can see their rents be increased an unlimited amount when the affordability restriction expires, which can lead to displacement, and even homelessness.
According to the City’s Housing Element, there may be as many as 193 affordable apartments across the city which are at risk of losing their affordability restrictions and subjecting their low income tenants to significant rent increases. We applaud the authors of the proposed ordinance for drafting a narrowly tailored solution to protect the low income tenants of these apartments from large rent hikes by extending the protections of AB 1482 to these residents. It will not impact any new apartments built after 1995, and will have no negative impact on the ability to develop new housing in the city.
Santa Cruz YIMBY Comments for Agenda Item 30 Page 1 of 2
30.24 This proposal also still allows the owners of these apartments to earn a fair return on their investments, as they are free to set the rents of new tenancies at market rents, while rents for existing tenants can be raised as much as 5% over CPI or 10% a year, which is a fair and reasonable rental rate increase limit that already applies to most other tenants of multifamily housing across the state, while helping to prevent existing low income tenants from being displaced.
This is a common sense proposal that is good for tenants and good for the city.
Thank you,
Santa Cruz YIMBY
Ryan Meckel, Volunteer Lead
Rafa Sonnenfeld, Volunteer Lead
Santa Cruz YIMBY Comments for Agenda Item 30 Page 2 of 2
30.25 From: sage
To: City Council
Subject: The St George
Date: Monday, September 9, 2024 4:00:49 PM
Please absolutely pass this ordinance to protect folks living in places like the St. George and the Palomar, absolutely. Not doing this would be criminal. At a time when we're building so many new housing units, all these single units, studios and one bedroom places that will be expensive or a little less expensive. We have a terrible homeless problem, so let's not make it worse and be cruel by allowing the crazy increases that they're trying to impose. Thank you for doing the right thing..
Sage Smiley, LCSW
30.26 31.1
31.2 31.3
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