RSO Process is in the Hands of the Consultant

Tenants and landlords looking forward to a final rent stabilization policy for Beverly Hills will have to wait a while longer. On November 21st City Council handed over to a national consulting firm, HR&A Advisors, tasks including data collection, analysis, and possibly even additional facilitated dialogues. It is a necessary step that will extend the RSO timeline to nearly two years.

That is, two years from the time that Council issued an urgency ordinance last January to the input in spring of 2019. In the meantime, the current policy will remain in effect.

What does this latest development mean?

We are entering a new phase of the process

Behind us are the late-night Council meetings and inchoate public input, as well as the facilitated discussions that brought tenants and landlords to the roundtable. City Council’s decision to hand over some aspects of the process to a consultant suggests a more informed discussion.

Until now the dearth of hard data about the rent increases, evictions, and landlord operating income hobbled the discussion. The recommendation for a consultant came from Councilmember Wunderlich who wanted to bring expert knowledge to the process. (Read Renters Alliance comments on the scope of work.)

The consultant’s scope of work will define the discussion

The HR&A Advisors scope of work includes a number of issues including these key ones: the cap on allowable rent increases and the appropriate use of relocation fees.

First up is the consultant’s proposal to review the annual rent increase cap:

CONSULTANT proposes to frame the discussion about alternative annual rent increase values, benchmarks and/or formulas by first presenting the facts about recent trends in renter household characteristics and landlord operating expenditures... then summarize the methods for making annual rent adjustments in other California cities with comparable rent control laws.

Then the matter of relocation fees:

The analysis of this issue shall include an explanation of the purpose of relocations fees; related requirements in State and Federal law; and how the fees have been derived and applied in other cities with rent control laws... Analysis of this issue will also address prevailing practices... in other cities with rent control laws concerning special relocation fee differentials for households with a member who is a senior, disabled, or presence of minor children.

Also the Scope of Work includes an evaluation of a proposal from landlords to exempt all duplexes, and owner-occupied under-4 unit properties, from city RSO protections. The staff report tees up the exemption for consideration this way:

CONSULTANT proposes to frame the discussion about this issue by first presenting the facts about the number, age and other characteristics of smatter buildings, and any differences in tenant household characteristics and/or landlord operating expense characteristics that might justify exempting these buildings from the RSO.

There are many more issues up for analysis. City Council will likely get a full report by Spring.

There may be a new tenant-landlord committee

When the tenant committee proposed a tenant-landlord committee or rent board during Dialogue #6, we envisioned a body representative of both tenants and landlords that would both adjudicate disputes and make policy recommendations. Rent boards or commissions operate with varying degrees of power and control in rent-stabilized cities. We envisioned significant decision-making power.

But Tuesday’s City Council discussion is focused on ‘mediation boards’ – a different animal! But it reflects this bit from facilitator Singh’s report executive summary:

Both sides agree that City should constitute a “mediation board” where matters can be discussed to improve communication and hence relationship between landlords and tenants. They also think that this is a good place to further discuss and explore the issues of Habitability and Power Imbalance. — Singh, report to City Council

Framed this way, a ‘mediation board’ would provide a function akin to the Human Relations Commission’s Tenant Landlord Forum (a process that “has no teeth,” according to a commissioner). We’ll have to see how City Council defines it.

In sum, Tuesday’s City Council offered an important status update on the registry as well as provided a look ahead at the policy process. Whatever the next step may be, change to our rent stabilization law is long-coming and this meeting suggests we’re on our way.