The Beverly Hills City Council on Feb. 22 unanimously updated and extended stricter rent controls, including required relocation fees for no-cause evictions of tenants.
Councilwoman Kathy Reims said the ordinances approved this week “answer the questions that we need right now, even on a temporary basis.”
The council extended the conditions of an urgency ordinance that was set to expire on Feb. 25 to reduce allowable rent increases from 10 percent to 3 percent. This week, they included a provision that stipulates if the consumer price index (CPI) exceeds 3 percent, then rent prices can be adjusted accordingly.
The council first established the 3-percent cap after midnight on Jan. 25, after a five-hour meeting that started on Jan. 24. That ordinance, the pace with which it was approved, and the length of city council meetings, have been scrutinized at city council candidate forums over the past month for the March 7 election. Likewise this week, the city council unanimously approved the updated ordinance after 12 a.m. Wednesday, after hours of consideration.
Earlier in the meeting, the council members acknowledged that a final ordinance – which they hope to finalize and approve this year to set more permanent reforms and more strictly regulate the industry – is not ready yet. They described the current ordinances as “place holders” to take care of the concerns over rising rents while city staff research and formulate a more permanent system that will work best for Beverly Hills.
“We don’t know what the permanent ordinance is going to be yet,” said Councilman Julian Gold. “What’s on the table today is likely not going to be on the table in a couple months.”
City Attorney Larry Wiener explained that the city is required to adopt an administrative process for a landlord to appeal if they desire more than a 3-percent increase. A hearing officer or officers will refer to income records for 2016 to determine if the landlord is receiving a reasonable rate of return. If the landlord has an increase in expenses for improvements or repairs to the building, they will be able to request a higher rent to maintain the same rate of return. A hearing officer will be named later for the interim ordinances. The city can decide to appoint a commission, rent control board or other form of independent review for the permanent ordinance.
On Tuesday, staff members and Human Relations Commission chair Jerald Friedman said the city needs more time to study how the permanent rent caps will affect Beverly Hills. He said more issues remain, such as how to calculate mandatory relocation fees, and whether certain tenants can benefit depending on time spent at the residence. They said they need to gather more information on the existing renters, landlords and the housing stock.
Friedman also said he is concerned about the divisiveness the ordinance caused in the community. Reims acknowledged that “just by the very nature of the roles” of owners and renters that the conversation would create “adversarial positions.”
“This is not like other business arrangements,” she said. “This is about making a home. […] and these living situations are as important and meaningful as anybody else’s.”
During public comment, renters and landlords shared personal stories and offered starkly different views on how the city should handle rent controls.
Many seniors and residents on fixed incomes discussed fear of being forced to move out due to high rent increases. Members of the council said throughout the process of reforming the city rent codes, they have heard from many tenants who have been afraid to make repair requests or to speak publicly about their concerns due to potential retaliation – through either rent increases or evictions.
Landlords and property owners raised similar concerns, in that they fear they might not be able to stay in business if the city restricts their abilities too much, and they expressed concerns with rising costs of utilities, taxes and minimum wage. Some said they wouldn’t be able to continue repairs or capital improvements without being able to pass fees to tenants.
“A separate problem, we have landlords who have a real need to pay the costs of maintaining the buildings,” Gold said, adding that their goal is to find a middle ground.
One major issue for the city is that they have not collected data regarding the number of properties where the rents have increased or where evictions are happening. Indeed, the for rates of rent in Beverly Hills that staff used as a reference was obtained from Westside Rentals – an online marketplace for apartments.
“We just don’t have the data,” said Susan Keene, director of the Community Development Department.
City staff is in the process of creating a database for the approximately 8,600 multi-family units. They anticipate it will be complete within a few weeks. The city will use the database to establish a rental registry program. According to the city staff report, in general, both tenants and landlords showed support for a database and a rental registry. However, both groups shared concerns about privacy issues. Gold and Vice Mayor Nancy Krasne said they want to make sure it will be worth the time and labor before city staff undertakes the entire project.
Staff also recommended that the city include a provision that would have allowed landlords to automatically pass through costs associated with any future government-mandated alterations, but Councilwoman Lili Bosse eliminated it.
She also addressed the notion that the city council shouldn’t have approved the urgency ordinance in January in the early morning hours, and the concerns raised by residents that the issues in general arose too suddenly and without proper warning. She countered and said rent control issues have been a concern for the six years she has been on the city council.
“It’s been an emergency,” she said.
Mayor John Mirisch pushed the council members and city attorney to continue to strengthen the ordinance and establish guidelines for rent adjustment appeals. But Wiener said he would need more than 15 minutes to craft the legislation, and the other council members were against it.
“No good decision comes after 12,” Krasne said.
“We can’t craft law after midnight,” Bosse added.
City hall is scheduling public forums to continue the dialogue between residents and landlords to help finalize the permanent ordinance, and will announce meeting dates soon. The council members, however, are certain at this point that the city will not return to the 10-percent cap.
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