City Appoints Nestor Otazu New Deputy Director for Rent Stabilization
City of Beverly Hills has appointed Nestor Otazu, longtime manager of the Community Preservation division, as the new deputy director of the rent stabilization division. Otazu fills the vacancy that opened after the city dispatched the former deputy director in February. For Otazu this represents a step up in the city’s organization chart as he moves from management to senior management. What does this appointment mean for rent stabilization and the tenants who rely on it?
A new appointment in charge of rent stabilization should raise questions about the future of the program. Instead our local papers only reprinted the city’s press release:
Otazu joined the City in 1998 as a Building Systems Technician before shifting to Code Enforcement Officer in 2000. He was later named manager of the division in 2008. During his tenure, he has worked to expand the depth of service and program operations to seven days a week. Otazu has also managed and administered rent stabilization codes and tenant and landlord processes. In 2017, he took an active role working with City leaders in the implementation, rollout and development of the new Rent Stabilization Program and rent registry.
Rent-stabilized households deserve to know whether this appointment is business-as-usual for city hall — a promotion that fills a vacancy while allowing a longtime manager to soon retire with a top-dollar pension; or whether the appointment is intended to move the Rent Stabilization division forward after five years of stagnation. Is Mr. Otazu the shot-in-the-arm that we need to put our city on par with other rent control cities?
The Good: A Longtime Code Enforcement Manager Who Knows Rent Stabilization
Community Preservation
Nestor Otazu is well-acquainted with the city’s rent stabilization ordinance because he was responsible for enforcing it long before the Rent Stabilization division was established in 2017. For decades the task of responding to tenant and landlord calls and complaints fell on the Community Preservation division (aka code enforcement) until the rent stabilization office took over that responsibility in 2018.
Responding to tenant complaints was only a small part of the Community Preservation division’s workload. The division is responsible for enforcing the entirety of the municipal code. According to the division’s mission statement,
Community Preservation Division maintains the quality of life in neighborhoods through constituent outreach, education, responsiveness to community concerns, and the fair enforcement of municipal codes. Officers respond days, nights, and weekends to compliance issues related to property maintenance, nuisances, building and zoning violations, business tax registration, and animal services. — Operations Budget FY2022–23 division workplan p. 283
The municipal code regulates nearly every aspect of city business from animal control to zoning. To enforce the regulations the division employs a manager (formerly Otazu) plus one senior code enforcement officer and six code enforcement officers. Six officers were under Otazu’s immediate supervision. (The other officer is tasked to the rent stabilization office for rental housing complaints, however that position has been vacant since Michal Masini parted with city employment last month.)
Rent Stabilization Prior to Ordinance Amendments
Longer-term tenants will remember Otazu as their point-of-contact on tenant issues. His division investigated unlawful rent increases, threat of eviction (when reported), and a wide variety of tenant concerns about the habitability of rental housing…but only if it was regulated by the rent stabilization ordinance.
The problem is that before amendments in 2017 and 2018 the rent stabilization ordinance provided relatively limited protections for tenants compared to other rent control cities. Most rent-stabilized households could be evicted for no cause or find the rent raised by 10% each and every year. Likewise most habitability complaints found no fix because the ordinance asked no more of landlords than the state’s bare habitability requirements: heat, hot water, working toilets, etc.
Longer-term Chapter 5 tenants had significantly better protections until ordinance amendments broadened protections to both Chapter 5 and Chapter 6 households. However all tenants continued to chafe at old paint and worn carpet — neither of which constituted an enforceable violation of state code or local ordinance. A code enforcement officer, if not Mr. Otazu himself, would typically break the bad news to tenants.
Despite the relatively limited role for Community Preservation, in our experience Mr. Otazu’s comportment reflected a degree of managerial confidence that will serve him in good stead as deputy director. His attention to detail — specifically the ins and outs of the municipal code — likewise is an asset in a policy-centric division. We found those qualities lacking in the former deputy director.
Potentially a Step Forward for Rent Stabilization
Mr. Otazu in his new position can stretch his legs a bit more than he could under the pre-amendment rent stabilization ordinance. Today there are additional protections for tenants and new tools like the rental unit registry that can help to hold a landlord accountable.
Mr. Otazu’s experience and long service in city hall are also valuable assets where it comes to bringing policy concerns to the attention of senior management — capabilities that were unavailable to the former deputy director who was new to city hall. Also, Community Preservation and Rent Stabilization are both divisions within the same department so Mr. Otazu will report-up through a largely unchanged management structure.
And of course there is the management experience. Six code enforcement officers report to the manager of Community Preservation and Mr. Otazu will manage a comparable staff in the Rent Stabilization division. If Mr. Otazu can hit the ground running there are opportunities for improvement within the division.
Potential Opportunities
Three opportunities for Rent Stabilization Division improvement come to mind immediately: housing inspections, better construction-related tenant protections and a bigger budget for his division.
Inspections. In our walks around the city we often see signs of physical dilapidation and we frequently make such reports to code enforcement. If we are diligent about follow-up then the division may order a correction. However the most effective way to remediate blight and dilapidation is to proactively identify problems in our rental housing and order those corrections internally.
At Rent Stabilization Mr. Otazu can revive a long-dormant proposal to implement a systematic rental housing inspection program like City of Los Angeles. The Building & Safety division proposed that program in 2005 but city council spurned it. But the volume of persistent tenant complaints about habitability has again focused attention on the need for inspections and indeed our rent stabilization commission recently recommended it.
Can Mr. Otazu dust-off that proposal and get it to city council for consideration?
Means and methods. Tenants are often affected by construction in an adjacent unit. However nearly all of us are unaware that the city already has on the books a requirement that the landlord must notify tenants of construction before it happens; and to disclose anticipated construction impacts and identify possible mitigations. Read more in our explainer: XXX
For some reason city hall will not inform tenants about this tenant protection. As a result, unwitting tenants often get steamrolled by the landlord simply because we don’t know enough to question the landlord’s actions. At Rent Stabilization Mr. Otazu could immediately furnish every tenant with the information that we need to hold the landlord to account for securing a building permit, if required; and to inform us ahead of time when the work will begin.
Budget. The Rent Stabilization division is tasked with regulating housing across more than one thousand properties and nearly 8,000 renting households. The division budget is only $1.8 million — half as much as the city spends on holiday decorations each year. The division employs the deputy director plus five full-time equivalent staffers plus one code enforcement officer assigned to rental housing complaints.
The division needs a bigger budget because the coming years will see real demands on the very limited resources available. We will see an increasing number of redevelopment applications and that means many more tenants will be displaced. We will see the increasing prevalence of new accessory dwelling units (ADUs) and they will cause tenants to lose their off-street parking. Somebody has to answer those calls!
The Bad: Code Enforcement Was Asleep at the Switch
We would be remiss if we did not call-out Mr. Otazu for allowing the Community Preservation division to look the other way while the quality of our rental housing stock declined. Too many properties fell into dilapidation and that condition was plain for everyone to see. Why didn’t the division see it? The division has a responsibility to proactively investigate code violations but it wasn’t doing that. Don’t take our word for it; an audit of the division several years ago documented it.
Moreover Community Preservation evidently has no process in place to deal with complaints about mold. Sometimes it’s visible but much more often it lurks behind the landlords’ preferred fix — a fresh coat of paint. And on occasions where we worked with tenants on such complaints, clearly the city had no interest to deal with the problem. It was easier to refer a tenant to the county’s Department of Health. Case closed!
The Stakes Are High
Mr. Otazu may be the shot-in-the-arm that the rent stabilization division needs after five years of inertia. If he brings his experience and ideas to the job we could see an inspection program, improved means and methods process and information to tenants about our rights. Under the previous deputy director the Rent Stabilization division did none of that. We hope that Mr. Otazu’s 25-year tenure at city hall grants him the running room to make those changes. Is Mr. Otazu up to the task?