Beverly Hills Rent Stabilization Director Departs [Updated]

The internal staff memorandum was brief and to-the-point: “Helen Morales is no longer with the City, effective immediately.” As the city’s first deputy director of rent stabilization Morales had a hand in standing-up the new program and getting the city’s Rent Stabilization Commission up-and-running. With those administrative tasks unfinished and households about to be displaced for redevelopment, is this the time right for a management change-up? Or was it overdue?

Update City council on Tuesday, March 7th agreed to hire Raymond B. Taylor as an interim Deputy Director for Rent Stabilization until a permanent replacement for Morales is hired. Taylor is a technocrat who has pinch-hit for city hall in the past, most recently in the city clerk’s office while recruitment for the position was underway. In 2019 he served as interim director of the Community Services Department. Taylor retired as city manager for Westlake Village in Ventura County. The locality includes virtually no rental units and rent stabilization there is effectively limited to mobile homes. He will have a steep learning curve and is likely to be dependent on community development staff to get up to speed. We wish him the best!

The Hire

Helen Morales hiring announcementDr. Helen Morales was hired as the first deputy director of rent stabilization in 2018. She brought a Cal State Masters degree in Public Administration to the job and, later, while working for the city, earned a doctoral degree in public administration from University of La Verne, and penned a dissertation that focused on the Los Angeles affordable housing program.

The appointment press release praised Morales’s tenure with the Los Angeles housing and community investment department (a city agency that oversees the rent stabilization program) and noted her experience as an administrative hearing officer there. “Helen’s extensive experience and knowledge of regional housing issues will be invaluable in working with our community to establish this very important rent stabilization program,” said then department director Susan Healy Keene (who herself separated from city employment years ago).

The deputy director oversaw the staffing of the city’s new rent stabilization division within the community develop department and the recruitment of tenant and landlord commissioners for the city’s new rent stabilization commission. Key responsibilities included administering the city’s new rental unit registry, providing staff support to the commission, and making occasional presentations to city council and various commissions. There were also many tenant and landlord complaints to field (if not always resolve).

Five-Year Tenure Comes to an End

Helen Morales was in her position for just under five years. That should have been sufficient time to shore-up political support for her tenure as deputy director for rent stabilization. Yet the tone of the staffing memo suggests an unexpected and involuntary separation from city employment: “Helen Morales is no longer with the City, effective immediately.”

In hindsight, Morales seemed to take a backseat role to Community Development Department director Timothea Tway to whom Morales reports. The director seemed to be assuming some of the deputy director’s responsibilities. Did executive management lose confidence — or did something particular precipitate the separation from city employment?

The public is not likely to know why Morales left because city hall is always circumspect about staffing issues and it positively clams-up when a top manager is dispatched. But that won’t stop us from speculating.

Least Likely Reason: Voluntary Separation

Were this a voluntary separation we might expect to hear some advance word or see a plan to transition job responsibilities to an interim appointee. But that didn’t happen and no interim appointee has been announced. Moreover the tone of the staffing memo suggests it was a surprise to the staff.

However the most likely reason why this was not a voluntary separation is the pay: it is too good to pass up. The rent stabilization deputy director can earn an annual base salary that ranges from $136k to $207k — about fifteen grand per month for fielding landlord and tenant complaints. That’s nice work if you can get it. (Renters Alliance provides the service for free.)

A deputy director can take home an additional 10% in salary bonus for “exceeding expectations” and on top of that earn $300 more monthly in incentive pay. That’s plenty of incentive to stick around.

Were that not enough there are the benefits: twenty paid city holidays, two additional personal paid holidays, three weeks paid vacation and 120 additional hours in paid administrative leave each year. There is even paid bereavement leave. Sick days accumulate at two per month and both the administrative leave and sick days can be partially cashed-out if unused. The city also pays for “platinum level” medical care. Pets can be insured at a discount through the city’s insurance policy. The executive employee compensation plan provides the details.

Would Morales have walked away from a craps table when she was on a roll? It seems the least-likely option.

More Likely the Reason: City Council Lost Confidence

Deputy directors supervise management analysts, write staff reports and are called upon to present findings and reports to city council that are factual and knowledgeable. Senior management must provide informed responses to councilmember questions. And the stakes are high: senior managers can be dismissed by city council with a simple vote. That doesn’t happen often. More likely a councilmember would exert influence behind the scenes in order to dismiss a manager.

At the February 7th council meeting deputy director Morales seemed to walk on thin ice. On the council agenda was a proposal to eliminate from the rent stabilization ordinance a provision that allows a multifamily property owner to evict tenants for demolition, or for common-interest conversion, with only 90 days notice once the relevant permit is obtained. (See B.H.M.C. 4-6-6 subsection J.)

For that item we sent a comment to council that recommended a number of additional tenant protections and the discussion did touch on a range of redevelopment-related concerns. But the question of whether or not to eliminate the demo-conversion provision became snared in uncertainty. The problem was the rent stabilization staff report which misinformed city council about the impact of eliminating that provision. In brief, the staff reported misinterpreted a provision of the state’s Ellis Act that allows for termination of rent-controlled tenancies. It was incorrectly represented to council that a developer is exposed to significant penalties if they evict households in order to redevelop the property as rental apartments.

That misinterpretation suggested that developers would be instead encouraged to develop condominiums — which would run counter to the city’s interest to build rental apartments in response to state pressure to do so. You see, city council wants to step on the redevelopment accelerator and is loathe to tap the brakes. Would taking the demo-conversion provision off the books discourage developers from building rental apartments?

When a local developer stepped up to clarify that the Ellis Act was misinterpreted, it caused councilmembers to express confusion about what step to next take. In the end city council retained the 90-day demolition-conversion provision but not after the discussion seemed to chase its own tail.

There was more. In discussing whether or not to ease barriers to redevelopment, Councilmember Julian Gold misunderstood a point of information provided by Morales. He then doubled-down on his misunderstanding and, as he continued to press his point, there resulted an uncomfortable back-and-forth with Morales. Gold finally dropped the matter without conceding his misunderstanding but no doubt that left a bad aftertaste with the councilmember. Did it contribute to her exit? We can only speculate.

Finally, in the redevelopment discussion Morales misinformed city council about the age of the rental housing stock. “Do we know the average age of those units?” asked Councilmember Gold. “The majority of the buildings are built around 1923,” said Morales. Gold replied, “A hundred years old is kind of pushing it and they can be charming but at some point, they have to be upgraded. Perhaps they have to be torn down, depending on what they need.” Most multifamily properties were originally developed in the 1930s and in recent decades some were redeveloped. They certainly don’t need to be razed.

Two days later the staffing memo went out. “Helen Morales is no longer with the City, effective immediately.”

Our Most Likely Reason: Morales Lost the Confidence of the Director

There is a bit of backstory to this theory. The city manager appointed top planner Timothea Tway as the new director of the Community Development Department effective January 1st. As the rent stabilization division is within Community Development, Morales now reported to Tway. Senior management (like any deputy department director) serves at the pleasure of the department head and the city’s executive leadership.

Did department director Tway lose confidence after the February 7th city council meeting or perhaps some time before? In recent months Morales’s supervisor took a more active role in steering rent stabilization commission meetings. At council meetings in December and February Tway was the primary presenter of rent stabilization division staff reports.

In February Tway co-authored the problematic staff report based on Morales’s guidance (she was listed as a secondary author). When the meeting went sideways (see the prior section) it was Tway out front with a problematic misinterpretation of state law. The department director has too much on her plate now to assume the duties of her deputy director. Maybe Tway simply lost confidence.

More substantively, the staffing change-up could suggest a new policy direction. When the rent stabilization program was created in 2018 it was effectively siloed as a division within the Community Development Department. The division functioned more like customer service for landlords and tenants and less like an integral element in the city’s housing program.

Tway has indicated an interest to consider rent stabilization as more of an integral element in the city’s housing policy and planning effort. For example she informed city council and the planning commission recently that the city was targeting new multifamily housing production for new mixed-use areas along major corridors; and that new housing need not come at the expense of losing naturally-occurring affordable multifamily housing that is characteristic of our multifamily areas.

If that is a change in perspective then it could be that current rent stabilization division senior management didn’t fit with the new direction. Again it’s all speculation!

Now Hiring: Deputy Director for Rent Stabilization

Did Morales separate from city employment voluntarily, or for cause, or because council or executive leadership lost confidence? We simply won’t know. What we do know is that the job announcement is already posted.

“We are looking for a forward thinking, hands-on individual, with superior communication and customer services skills, and a desire to build positive relationships with the community and city staff,” says the posting. “The individual must be able to independently make decisions and recommendations for action to upper management, City Council, or boards.”

The rent stabilization division is tasked with carrying out the rental unit registration process and maintaining all records and information related to the city’s rental unit data base. The division also conducts enforcement of complaints and allegations of violations of the Rent Stabilization Ordinance including illegal rent increases, habitability violations, no- cause evictions, relocation fees, registration, just cause evictions, lease violations, reduction in services, means and method plan, and mediation services. Applications are accepted through March 31st.