City Council: Let’s Get on With the Program

Mayor Bosse tonight focused councilmembers on several key issues that are necessary to move the rent stabilization program forward: proceeding with a rental registry, funding the program, and hiring a deputy director. Other areas of council agreement included forming a tenant-landlord board and a new habitability standard. While the RSO program moves forward the next steps are yet unclear.

Susan Healey Keene
Susan Healey Keene delvers the staff report.

Tonight’s meeting presented Council with an important fork in the road. Last month City Council balked at fully funding the program. With the clock ticking down to a January 22nd deadline for completing registry data collection, Council needed to decide whether to move forward with a registry and to what extent it will fund the rent stabilization program. (Read the staff report for more information.)

Sukhsimranjit Singh
Sukhsimranjit Singh delivers his report to City Council.

Council was informed by the report on the facilitated dialogues from facilitator Sukhsimranjit Singh, who reviewed the process as pulled from position papers from tenants and landlords. (Watch to Singh deliver his oral report at minute 53:00 on the video).

After yet another meeting that extended into the wee hours, City Council was able to keep the program on track. Council agreed to:

  • Continue with the implementation of the registry of rental units;
  • Hire a deputy director for the rent stabilization program;
  • Appropriate $766,395 for a preliminary department budget (including the hire of temporary employees);
  • Hire an expert (or experts) to consult on technical aspects such as allowable rent increase and other policy particulars;
  • Create a tenant-landlord committee or board or some other representative body; and,
  • Endorse new habitability standards beyond the bare health and safety concerns that inform state law requirements.

Mayor Bosse was able to focus councilmembers on those questions relatively quickly. That was the easy part! Then came three hours of public comment (which you can view on the video).

City Council Discussion

But the consensus seems unstable: discomfort with the process — and perhaps the program generally — was articulated by both Councilmember Les Friedman and Vice-Mayor Julian Gold.

Councilmember Friedman ran for election this past spring and showed no favor for rent stabilization. He didn’t like the urgency ordinance that capped annual rent hikes. And at this meeting he again questioned the process.

Moreover Friedman pointedly questioned whether rent stabilization should extend to all households that rent housing. “We should protect tenants,” he said “but I’m not sure that every tenant needs that protection.”

Friedman echoed another talking point from the landlords: rent stabilization does not produce any housing and won’t address our housing affordability crisis. “One of the realities in our community is that we have a housing shortage. We need to build more, but our General Plan restrains density.”

(He is correct. Rent stabilization is not intended to create housing; it protects tenants now and in the future from predatory housing practices.*)

But Friedman disappointed landlords:

I am in favor of going forward with the registry. We have what I believe is a one-year deadline, and I don’t think it will be wise to take a chance that if we don’t enact a registry, and certify it within one year, that we won’t be able to do so.

Julian Gold. On the budget, “I guess so. In for a dime, in for a dollar.”

Vice-Mayor Gold was more emphatic about his reservations about rent stabilization. “I feel some angst that makes me uncomfortable,” he said. “I’m concerned…” he said at other points. He questioned both the policy process as well as (like Friedman) the city’s obligation to extend rent stabilization protection to all households that rent.

We started from the sense that some element of the tenant community needed help – and that’s well-intentioned, but it’s gotten much bigger, and I dunno, maybe everyone needs some help. I’m not convinced.

Then Gold suggested some kind of “tiered” application of rent stabilization with, presumably, differing levels of protection. (He was no more specific about his thinking.)

As to the program budget, Gold suggested that the staff-proposed budget of $766,395 (through June) was too high for his taste. Yet he also acknowledged that it was probably insufficient to fund the program.

When last month staff brought forward a consultant’s report that called for $1.5 million to get the department up and running, City Council declined to move forward. And at this meeting Gold described an appropriation of $766K as a step “down the rabbit hole.” But he gave his nod tentatively: “I guess so. In for a dime, in for a dollar, is how it goes.” The Vice-Mayor was all smiles last month as he approved $1.5 million for a holiday lighting program.

Councilmembers Robert Wunderlich, John Mirisch, and Mayor Lili Bosse were more supportive of rent stabilization program objectives. All joined Friedman and Gold in affirmatively agreeing to move ahead on the six issues enumerated in the staff’s presentation (see above). Their support was filtered though different personal styles and governing philosophies.

Robert Wunderlich
Robert Wunderlich. Dialogues were “a model of how the community can discuss contentious issues.”

Councilmember Robert Wunderlich spoke first. “The tenant and landlord committees did a remarkable job – it was a model of a community discussion contentious issues,” he said. “But there is a lot yet to do. There are [policy] areas not discussed at all. The ordinance has to be specific but discussions have really been occurring at a higher level.”

Wunderlich then turned to his colleagues with a question: “Is this the opening to something ongoing? What is our process going forward?” He suggested the Council take a day and devote its full attention to the rent stabilization policy issues and raised as a model the City Council budget workshops. (In the budget workshops, the staff makes presentations, the Council asks questions for asks for more information, and ultimately decides on the level of appropriations line-item by line-item.) “We can go into each issue area in greater detail,” Wunderlich said, “and learn where we need expert advice.”

“There is also information that we can collect ourselves,” he continued. “We have business tax information – does it allow for further breakdowns by size of building, for example? I want to hear about ordinances adopted in other cities. We may not decide to do the same thing, but we should not be blind to them. Is there openness to something like a budget workshop for these issues?”

The gist of his query: Where are we going from here with the policy process? It was perhaps the most important question of the evening. We tenants wonder what’s next in the policy process that’s been underway for eight months but that has only definitely answered the six questions posed to Council tonight.

John Mirisch
John Mirisch: Toss it back to the tenants & landlords “rather than handing it back to us.”

Councilmember John Mirisch said of the dialogues, “Let it continue.” But he hasn’t attended a single of the seven facilitated dialogues (even though he recommended the process to begin with). “There are areas of agreement. Less facilitation and more mediation would be the best way forward, rather than handing it back to us.”

As for housing policy, Mirisch took issue with Friedman’s implied pro-growth prescription for the General Plan. “Low density makes our city unique,” he said. “We can’t build it’s way out of high demand for housing,” he added, but rent stabilization means “stability for those who are here.”

Then Mirisch pivoted to preservation. Mills Act [tax incentives] could preserve what makes Beverly Hills special,” he suggested, referring to the claims of owners who want to be exempted from rent control on the basis that their properties add “charm” to the fabric of the city. “Let’s allow owners to use significant tax breaks to re-invest in their properties.” He prescribed expand the qualifying criteria to include “character-contributing” properties.

(Mills Act tax incentives are intended to encourage owners to preserve their properties. It is a 10-year, enforceable contract that requires an owner to conform to guidelines when improving or renovating the property. It also must be listed on our city’s Local Register of Historic Properties. That’s a high hurdle at present: just two rental housing properties are listed among the 36 total that receive a tax benefit. Expanding the program in the way Mirisch described – a “Mills Act Marshall Plan” he said  – could hold significant promise for preserving the kind of older multifamily properties that remain relatively affordable for tenants. However, it may call the bluff of those owners who talk about ‘charm’ but are actually in the rental housing business to flip or redevelop the property and don’t want to be locked into a long-term contract.)

Lili Bosse
Lili Bosse: “Call me an optimist…”

Mayor Lili Bosse capped the discussion with clear support. For continuing with the registry, hiring a program director, funding the program, creating a tenant-landlord board, and enacting new habitability standards (the six questions from the staff presentation). The Council was unanimous on these points with Vice-Mayor Gold and Councilmember Les Friedman less enthusiastic about the registry and program.

Mayor Bosse was not equivocal:

Call me an optimist. I feel we’ve come a long way. We are not as far apart as we though. We’ve heard “data, data, data” from both tenants and landlords, and that makes the registry an imperative because it protects both tenants and landlords. It is a problem that we haven’t had one. And we’re far down that line already and it’s of tremendous benefit.

(Council first directed that a registry be created in January, then reaffirmed their decision – unanimously – in February, April, and June.)

Bosse supported the hiring of a director (“Absolutely!”) and the budget (“staff listened to all of our concerns”). She agreed with a consultant after earlier rebuffing the idea. “We’re not there yet [on the increase] and both sides say they want a fair number. More information will make for an informed decision, not a number picked out of a hat.” She also backed the tenant-landlord board (“absolutely!”) and new habitability standards. When tenants and landlords agree on something, she added, “We should support it.”

However the Council consensus on the six questions should not obscure real divisions among councilmembers about how the city should progress from soon-to-be-completed registry to policy decisions that affect tenants and landlords.

Wunderlich had proposed that workshops like used for the budget could move City Council in a focused manner through the necessary policy decisions. Mirisch instead preferred more facilitated dialogues (“Your work is not done!”). But other councilmembers didn’t really engage it. Indeed Wunderlich’s invitation to his colleagues for next-step suggestions went largely unaddressed and that should be concerning to tenants and landlords alike. (Follow the Council discussion at hour 4:02:30 on the video.)

When will this road come to an end and what harrowing hairpin turns await us on the journey? City Council’s decisions tonight are really the most significant apparent step forward since this policy process began in earnest in January. This past spring, oversight of rent stabilization was relocated from Community Services to the Community Development Department — a huge shift.

Now it appears that the commission’s landlord-tenant forum responsibilities may be handed over to a tenant-landlord board or committee. The policy changes that we tenants have seen are the top of the iceberg as the administration of the rent stabilization program undergoes even more significant changes within City Hall.