Beverly Hills Moratorium Likely to Sunset on September 30th [updated]

County and state COVID–19 tenant protections are set to expire on September 30th and it looks like City of Beverly Hills will follow suit by agreeing to sunset our own local moratorium. That would open the door to eviction for nonpayment, for no-fault reasons, and post-pandemic rent increases. More surprising is that council appears ready to task the Rent Stabilization Commission with making the recommendation. We connect some dots to suggest tenants be ready to pay full rent and a rent increase in October.

Update At the July 15 meeting, city council referred the question of whether and when to sunset local moratorium tenant protections to the Rent Stabilization Commission, however it is not clear how the commission will address that question given new concerns about COVID-19 contagion. In our view there is simply too much uncertainty at present for the commission to make a recommendation to city council. In fact, as council was beginning to discuss the commercial aspect of the moratorium, the County Department of Health was reinstating certain indoor mask requirements among other things. Consequently city council chose to table the discussion about the commercial moratorium for now. Stay tuned for the Rent Stabilization Commission’s discussion in early August.

Background

Beverly Hills declared a local COVID–19 emergency in March of 2020 and thereafter adopted Urgency Ordinance No. 20-O–2805 to enact a moratorium on eviction for non-payment and to prohibit no-fault evictions for any other reason. Two weeks later on March 31 city council adopted Urgency Ordinance No. 20-O–2806 to additionally enact a moratorium on rent increases for rent-controlled tenants.

Urgency ordinances since then have imposed a raft of other health and economic measures. But now they have been largely repealed in parallel with relaxed county and state emergency measures. Indeed Beverly Hills has declared itself open for business!

County and state eviction protections were recently extended to September 30th but the Beverly Hills local moratorium will remain on the books until it is repealed. With county and state protections expiring soon it was just a matter of time; now Beverly Hills appears ready to repeal our COVID-19 tenant protections. But when?

The Rent Stabilization Commission Gets the First Word?

City council appears poised to refer the moratorium repeal to the Rent Stabilization Commission for discussion and recommendation.

We learned about it not from a blurb on the rent stabilization division website or an email from the city but from a brief paragraph at the bottom of the last page of the COVID–19 staff report. In a report that is otherwise focused on certain COVID–19 measures related to business taxes, food delivery charges and restaurant signage is this passage about tenant protections:

Staff anticipates the City’s Rent Stabilization Commission will have a quorum should the City Council approve the Commissioner appointments presented to them on July 15, 2021. As part of its purview, the City’s Rent Stabilization Commission (“Commission”) will be able to consider how the City should address residential evictions for the nonpayment of rent due to COVID–19. (p. 6)

That comes as some surprise given the commission’s difficulties over the past year. The commission has shown itself to be ill-suited to conducting detailed rent stabilization policy discussions.

It is all the more surprising because city council has remained firmly in the driver’s seat on all things COVID ever since the first urgency ordinance last March. Indeed council has not referred any other COVID-19 emergency measure to a city commission for a recommendation. Why is city council tasking this newly reconstituted commission with an important policy recommendation?

Perhaps it is about political cover. The July 15th city council staff report notes, “Any change to these [moratorium] regulations will raise numerous and substantial policy issues.” Indeed there will be renting households who feel that it is too soon to pay full rent (and a likely rent increase). If city council can show such a recommendation from the commission then it becomes an easier call politically (hence the need for cover).

Of course we can’t know how Rent Stabilization commissioners will vote and the outcome may pleasantly surprise us. But expecting the commission to oppose ending the moratorium is like betting against the house in Las Vegas and expecting to win. You may win because there is uncertainty in any roll of the dice but the odds are always stacked in the house’s favor.

Timing Suggests the Moratorium Will Sunset on September 30th

The moratorium will have to sunset one day, of course, but when? The timing of the process suggests that September 30th is that day.

The moratorium question will go to the Rent Stabilization Commission at its next regular meeting in August. (We know that because the July 15th repeal staff report to city council actually proposes it.) The commission today is short two tenant-representatives but city council will appoint two tenant-representatives to fill the vacant seats on the commission on July 15th agenda, according to the staff report. Filling the vacant seats would allow commission to get back into business.

The commission will have the necessary quorum to make a recommendation about ending the moratorium at its next regularly-scheduled meeting on August 4th. That’s just in time to get a recommendation to city council at council’s next regular meeting on August 17th.

The key thing to keep in mind about the timing is that it allows city council to sunset the moratorium on or before September 30th with political cover provided by the Rent Stabilization Commission. Specifically the timing would allow city council on August 17th to sunset the moratorium on rent increases in time for landlords to notify tenants of a rent increase payable on or after October 1st.

The timing works for an October rent increase (and maybe even a double increase!) because ending the rent increase moratorium on August 17th would allow the landlord the necessary 30 days notice to tenants to take the rent increase by October 1st.

All Deliberate Haste

The interest to loop-in the Rent Stabilization Commission means that the commission has to get up-and-running and that means the city needs to appoint two new tenant representatives quickly. And the city has worked to do that: the notice of commission vacancies was posted on April 20th; the application window closed on June 18th; staff reviewed the applications and councilmembers conducted interviews with applicants on June 29th; and finally a recommendation is forwarded to city council for appointments on July 15th.

That is a rocket docket compared to the first round of commission appointments! In April of 2019 city council formally created the Rent Stabilization Commission but city council didn’t make appointments until a year later in May of 2020.

The haste can only be explained by some need to include the Rent Stabilization Commission in the moratorium sunset discussion. And the only reason to do so is for political cover for city council.

In our view the haste is misplaced. City council has shown no urgency to amend the rent stabilization ordinance, so councilmembers were not tapping their feet awaiting for any recommendation from the commission on any topic.

Also there is no COVID-19 tenant appeal on the horizon. Hearing those appeals was a key function of the commission before the recent tenant-representative resignations. But those appeals are now few; we haven’t seen any appeal come forward for six months.

It is perfectly proper to loop the commission into the moratorium discussion. The municipal code charges the Rent Stabilization Commission with “any functions” assigned to it by city council (B.H.M.C. 2–2–501). But is it necessary? We have seen too many unproductive policy discussions in the commission to allow an answer to this important policy question to originate with the commission.