RSO in Review: A Look Back at 2019

Ringing in a new year is an opportunity to look back over the past year and we should recall that it started with a bang: four city council study sessions to finalize the rent stabilization ordinance. But then it ended with a whimper: the Rent Stabilization Commission that council created still exists only in an ordinance. Let’s take a look back at those developments and more in our 2019 recap.

Pace to a Final Ordinance Quickens, Then Slows

Thinking back a year, Beverly Hills was moving quickly on rent stabilization. Picking up the pace after the initial ordinance changes in 2017, city council took another bold step in the fall of 2018 to end no-just-cause evictions (arguably the most significant RSO reform in Beverly Hills in forty years). The rental unit registry was in place and the city’s new rent stabilization office was up-and-running.

Brief Recap of 2018

Now it was time to finalize the rent stabilization ordinance. City council held four rent stabilization ‘study sessions’ in late 2018 to nail down specifics. All of the major issues were in play: an exemption for owner-occupied duplexes, negotiations over the cap on annual rent increases, a new relocation fee schedule, and perhaps more landlord costs passed-through to tenants (including seismic retrofit).

Council even found tentative agreement in principle on a new local habitability standard!

The pace quickened when a draft revised rent stabilization ordinance was brought forth for stabilization study session #4 in December. Then-mayor Julian Gold wanted to step on the gas to wrap up the issue before his mayoral term ended (in March) and city council looked ready to act.

Alas, that wasn’t meant to be. As the study sessions progressed, tenants began to harbor concerns about the pace of the process. The discussion was moving quickly and, more worrisome, the council’s deliberations seemed ad-hoc. (We called it a lightning round of policy proposals and straw votes.) We felt that important policy considerations were brushed-over in haste.

We had to wonder if councilmembers had really contemplated what an exemption for 2-unit properties meant to hundreds of duplex households. Or, if council had carefully considered that allowing landlords an annual percentage rent increase one and a half times that provided to landlords in West Hollywood may be too much.

Hurry Up, Then Wait in 2019

By the time the issue came back to city council in February many of those policy particulars were codified in a second draft rent stabilization ordinance. There was the good: council agreed to greater protections for families with children in school (a protection unique to Beverly Hills). Council was also ready to tighten lax controls on tenant terminations for major remodeling.

But a few changes were problematic. Such as the proposed ‘probationary tenancy’ provision; it would allow landlords to terminate tenants for no-cause after just one year.  Council also gave the preliminary OK to allow more landlord costs passed-through to tenants.

Tenants called for a pause. The proposed revisions to the rent stabilization ordinance didn’t see carefully thought-through even though the process has been underway for well over two years.

With the support of Councilmember Lili Bosse, and assent from three other councilmembers, the second draft ordinance was taken off the table.

However one proposal would go forward though: the creation of a new Rent Stabilization Commission. The idea emerged out of roundtable discussions between tenants and landlords as a way to resolve disputes and even provide policy recommendations to city hall. It found traction with city council too. Indeed council support for a new commission represented an important endorsement of rent stabilization because the city is in no hurry to add commissions to the eleven we have.

With the rent stabilization ordinance draft no longer operational, and the timeline for standing-up the new commission uncertain, the path to a final rent stabilization ordinance is unclear.

Rent Stabilization Commission Take One

Language creating the commission was included in the first draft of the new rent stabilization ordinance in December (2018). It specified a 5-member body: one landlord, one tenant and three ‘at-large’ members.

But councilmembers at the February meeting surprised everyone: task the new commission with making recommendations for rent stabilization ordinance changes. Commissioners would hold hearings, take public comment and then advise city council.

Tenants however had two concerns. First, handing the task to an as-yet unformed commission meant a longer timeline for sure. At best we could expect the RSO discussion to extend to late in the year. At worst it could stretch over the holidays. Worse-case scenario: it could come back to a new city council after the March 2020 election.

And second, the commission’s composition was a problem for tenants. With five members but only two that were tenants and landlords we would be a minority on our own commission. Why should ‘at-large’ members (homeowners, in effect) outnumber representatives from the stakeholder groups most affected by ordinance changes? Can we really expect a homeowner to be “neutral” on an important policy issue?

Rent Stabilization Commission Take Two

In March of 2019 city staff came back with a draft ordinance to create the Rent Stabilization Commission and now the proposed membership would include two each of landlords and tenants plus one at-large member. The balance seemed better. But why six alternates for a 5-member commission? The staff report explained:

To achieve balanced representation of landlords and tenants at Commission meetings, the quorum provision of the proposed Ordinance requires that two landlord representatives and two tenant representatives be present at every Commission meeting along with the at large member. In addition, the proposed Ordinance requires six alternates be appointed by Council, two of whom shall be tenants; two of whom shall be landlords, and two of whom shall be at large members. The alternates shall serve only in the place of their concomitant commission member. — Staff report, March 3, 2019

That six alternates concept proved unworkable for city council. After more discussion in March an unorthodox six member commission was agreed upon.

Final commission ordinance
The final commission composition as seen here in the final Rent Stabilization Commission ordinance.

City council formally created the commission in April. Now the commission’s chief job — indeed its only responsibility — was to discuss changes to the rent stabilization ordinance! The city then began to accept applications process for two seats available in each the tenant, landlord and at-large categories (plus one alternate seat in each category). (At the time we noted our (concerns about the application.)

The application period closed in May with about 30 aspiring commissioners applying for nine available seats. After we reviewed those applications we were troubled that landlords seemed more motivated to serve than were tenants!

In mid-July commission interviews were conducted for the tenant and landlord category seats. However staff vetting of the at-large category applicants (resident homeowners without an interest in Beverly Hills rental property) showed that nearly all of those applicants had some financial interest in multifamily rental properties outside the city. City hall had to go back to the drawing board for at-large category recruitment.

A Commission in Ordinance Only…So Far

In August council needed to decide how the at-large candidates’ financial interests in rental real estate may or may not disqualify them from serving on the commission. The staff report explained the dilemma:

During the commission interviews it was found that all (with the exception of one) of the applicants for the At Large category had financial and/or personal interests in multi- residential buildings outside of Beverly Hills. There were seven (7) applicants for the At Large category. From the At Large applicants, six (6) had interests in multi-family residential properties outside of Beverly Hills. — Staff report, August 20, 2019

Two of the the six commission members are in the at-large category. The commission’s balance hung in the balance; city council had to get it right. so in October the existing requirements for the at-large commissioner category were tweaked:

….One shall not be considered and landlord and would qualify as an “at large member,” if one has a financial interest of five percent or less in a multi-family residential rental property located outside of the City and does not control the multi-family residential rental property. — Ordinance 19-O–2788

Subsequently a new commission announcement was posted and by early December the commissioner application period had closed.

Upon reviewing the applications staff had yet more questions about the candidates. As of the end of the year we were still waiting for the next step: would interviews commence or did the at-large category requirements need to be revisited again? Back to the drawing board again?

The delay in standing-up the commission has pushed back the timeline back even further. Where we had once expected a final ordinance by late 2019 now we are looking to sometime in mid- to late-year…after the next city council election!

Other Steps Forward in 2019

In July city council continued to fund our housing rights legal services program and got a big assist from Cedars Sinai with a one-time grant that allowed the city to double program funding (to $220,000) for the FY 2019-20 fiscal year.

In August the city also held its first tenant-only community education workshop. We pressed for it and in our recap we found it to be much better than the the combined tenant-landlord workshop.

In October the RSO office held a special landlord workshop on registration and historic preservation but unfortunately it was not well-attended. In December we were back to combined tenant-landlord seminars with a reprise of the RSO Basics workshop.

Looking to the Year Ahead…

The big event this year is the March 2020 election. Beverly Hills will go to the polls to choose among five declared city council candidates to fill two open council seats. In the consolidated primary election name recognition will be crucial so we will see the candidates jockeying for exposure. And the campaigns are already gearing up!

In early January the three leading candidates — Bosse, Gold and Gordon — will hold midday kick-off events. January will be a busy because important housing issues come back for council discussion, including a final inclusionary housing ordinance. That is out best hope for affordable housing over the long term. (More on that soon.)

In early February the vote-by-mail ballot becomes available and later in February we go to the polls on any day during the new 11-day voting window.

The city council election is the 3rd of March. Once the county tabulates the results will will know if the two incumbents (Gold and Bosse) are reelected or if one or two challengers will prevail. Regardless we already know who will be mayor given the ceremonial rotation of councilmembers into the office: Les Friedman.

On the 6th of April comes the new city council installation/reorganization. Thereafter council will conduct a priority setting exercise for the next fiscal year. And later that month we will get a sense of the incoming mayor’s committee and council assignments. (We will learn much more about the mayor’s priorities in his customary state-of-the-city address at Greystone in October.)

May opens city budget-setting season with a series of study sessions and then in June city council wraps it up with adopted operating & capital improvements budgets.

This year’s upcoming events is a reminder that it is not only big items like a new rent stabilization ordinance that will affect us as residents who rent. It is also the city priorities, budget allocations and administrative policies of the rent stabilization office that will determine how we fare as tenants. Stay tuned!