I know my neighbors are asking, What’s the next step in the rent stabilization policy process? Doesn’t everyone think this way? Well, this coming Thursday City Council will continue discussing the implementation of the new rent stabilization policy. Council will focus on two issues: the creation of a rental unit database & registry to track tenancies across rent-stabilized properties; and identifying a format for facilitated roundtable(s) that would bring residents and landlords together later this year around an equitable rent stabilization policy. Get ready for an important meeting!
The registry is an essential tool for any rent-stabilized city because it allows a city to monitor compliance with rent stabilization policies. Here in Beverly Hills we have 8,600 units to track. But until now, our city had no accounting of the actual number of units (much less the rents paid). The city simply followed up on any complaint as it came in from a tenant. Read the staff report for more about what’s on the Council agenda.
Consider these examples of how the lack of a registry worked against landlord accountability:
- Though rents were limited to a 10% annually under city policy, no program or staffer ever documented the rents being charged. The city had no means to know if the annual rent increase cap was being exceeded for any units.
- No program or staffer from City Hall would follow up after a ‘no just cause’ termination to ensure that the rent was not increased (as our city policy mandated) in order to eliminate the profit motive for such dislocations.
- Few (if any) landlords were sanctioned for violations of the city’s rent stabilization policies because they were, yes, on the honor system for thirty years. There was no accountability!
This Thursday’s meeting will show how proactive is City Council when it comes to tenant protections.
For those who rent it is clear that we want City Hall to be more proactive. Here the devil is in the details: unlike an annual rent cap and relocation fees, which are understandable numbers, here we are talking more about a policy framework than hard numbers. That means, which data will the city collect? To what extent will we make sure that our for rent stabilization program is functioning properly?
My recommendation is that our city collect the data that it needs to monitor rents, conditions of rental, and periods of tenancy for each rent stabilized unit. To the inventory used by Los Angeles I would ask which units are held back from the market and the cause of any tenancy termination:
- Address, unit number and unit size by category (e.g., 1-bedroom);
- Included utilities (electric, water) and amenities (parking);
- Move-in date, current rent and date of last increase;
- Units exempted from rent stabilization (e.g., owner-occupied, relative occupied, or manager-occupied); and,
- Any tenancy termination (whether for ‘no just cause’ or Ellis Act condo-conversion or demolition).
How City Council directs the Community Development Department to proceed will send a message to those who rent about how seriously the city takes housing protections.
However, landlords (and their lobbyist) are working to undermine the database & registry. Perhaps because it could be a tool for ‘proactive administration’ of rent stabilization, landlord representatives invoke privacy concerns to argue against tracking of rents. They also say the cost of the system and their costs of compliance are too high. And they claim that a rental registry would impact mom-and-pop landlords.
To the latter criticism I’d respond, How many landlords don’t undertake a complex accounting every year in order to reap generous tax deductions for owning and operating rental property? How burdensome could it be for a ‘mom-and-pop’ landlord, with maybe 4 units, to report rents and the start & end of every new tenancy? Their business entails tracking tenancies and every landlord keeps his own records.
Moreover, many of our landlords are not even ‘mom-and-pops.’ Thursday’s staff report notes that 6-in-10 rental properties in Beverly Hills fall outside of the mom-and-pop category (defined by City of Los Angeles as four or fewer units). The 6-in-10 buildings that are, by definition, our largest account for many more total units than do the mom-and-pop operators who are a minority. So whenever you hear ‘mom-and-pop,’ remember that larger property owners will disproportionately benefit from reducing city oversight.
We will hear councilmembers echo the landlords’ positions on Thursday. We’ve already heard one councilmember, Julian Gold, preemptively question the cost of the database & registry. Newly-elected councilmember Les Friedman will likely highlight the cost issue, too. They may talk about privacy or some other red herring. The bottom line is that the registry is essential and a database that fails to collect the necessary information is hardly worth implementing at all.
(Fun fact: Les Friedman was the only councilmember to propose adding a sunset clause to the current rent-stabilization policy. If Council took too long to make changes, in his view, the new policies should simply end and we presumably revert back to the scant protection that we had.)
You can contact City Council to let our representatives know that it is important that database & registry be done right. Please have a look at the staff report and contact me (firstname.lastname@example.org) with any questions you may have about how to make your case to City Council. I will be happy to help focus your input!
Next Steps in the Rent Stabilization Process
The other key decision item before City Council is the public facilitated roundtable(s) process. Some of you attended Council and Human Relations Commission meetings to voice your views. Well, get set to do it all over again when the city convenes facilitated discussion(s) this summer or fall. What will these roundtables look like? How many will there be? On Thursday, City Council may create an ad-hoc committee on rent stabilization to hammer out the particulars. Who would sit on that ad-hoc rent stabilization committee?
My recommendation is that councilmember John Mirisch is a logical pick because he floated the idea of facilitated discussions to begin with. He has expressed an interest to both protect residents and to create a sustainable housing policy. I would like to see Mayor Bosse join him as the second councilmember. Or perhaps Bob Wunderlich, who has recommended that the city include a real estate-market expert in the discussion. “Like a professor,” he suggested. (I don’t think he meant a realtor!)
Mayor Bosse has given tenants a leg up with two other sets of committee appointments. She has appointed herself and John Mirisch to the Planning Commission liaison committee. (That commission will have a say in our rent stabilization policy going forward, and may even take a policy-making role, but it is too early to tell.) Second, she appointed herself and John to the Council’s ad-hoc seismic retrofit committee too. (Remember, the current rent stabilization policy could put the entirety of seismic costs onto tenants. Maybe having pro-tenant representatives on that committee will blunt the impact.)
Those appointments are just a couple of the many reasons why the recent election was a net-positive for tenants. The thing to remember, though, is that important policies like rent stabilization are shaped outside of the glare of Council chamber lights. It happens in liaison committees (which give direction to our commissions) and City Council ad-hoc committees (such as may be created on Thursday to bring recommendations back to Council). Our Mayor’s committee appointments are the key.
Lastly, the broader context for rent stabilization has been reshaped when the city relocated the rent stabilization process from Community Services department to Community Development. The tasking of Community Development was necessary because rent stabilization is a pillar of housing policy and it would be better-administered by planning professionals. It is simply beyond the remit of Community Services.
How You Can Help
Looking ahead to the Thursday, April 20th City Council meeting, we want to be sure that City Council knows that we value a strong rent-stabilization policy and implementation program.
First up is the database & registry. We want it to be effective. That can begin with the city collecting all available rental unit information that the Community Development Department needs to ensure that our rental housing market serves residents who rent. This must include unit size, whether utilities are included, and, importantly, the current rent and begin/end date of every tenancy.
We need to know which units fall under rent stabilization but have been removed from the market because they are owner-occupied, relative occupied, or manager-occupied. (Fun fact: managers compensated by a discounted rent may have zero rent-stabilization protections to fall back on.)
We need to know which units are vacant at any given time. That data will not only help the city enforce our ban on short-term rentals (like Airbnb); it will show which property owners are ‘warehousing’ empty units for possible conversion into condominiums or otherwise helping to drive up asking rents on available units.
And last, we need to know when, and why, a tenancy is terminated for any reason. Today landlords can tell you to leave with 30- or 60-days notice. The city should closely track all such ‘no just cause’ terminations to monitor potential abuse of that policy. Indeed the city should document any tenant displacement, including Ellis Act evictions (the law allows property owners to empty buildings when they say they will exit the rental business).
Please let City Council know that you value a comprehensive database & registry to hold landlords accountable and to allow the city to monitor rental housing market conditions.
Next up is the public dialog to finalize rent-stabilization policies. City Council will likely create an ad-hoc committee to recommend a format for roundtable discussions this summer and fall. Let’s suggest to Council that it include councilmembers who are committed to renter protections and residential stability in the rental housing market. Please have a look at the staff report and contact me with any questions.
Let City Council know that you want a process that well-represents the 8,600 households who rent housing in Beverly Hills. Then be sure to join us in Chambers on Thursday at 7pm in City Hall. And don’t forget to share our sign-up form with your neighbors: http://eepurl.com/cIA2T9