Rent Stabilization in Mountain View Community Stabilization and Fair - PowerPoint PPT Presentation

Rent Stabilization in Mountain View Community Stabilization and Fair Rent Act (CSFRA) “Measure V” mountainview.gov/rentstabilization

What is Rent Stabilization? A local program designed to limit the amount of rent increases a landlord may require above a base rent • Can limit – Which fees and charges are “rent” – Amount of increases – Frequency of increases • Cannot Limit – Base rent for new tenancies (vacancy decontrol) 2 mountainview.gov/rentstabilization

Legal Framework: Limitations on Rent Stabilization California State Law • Costa-Hawkins Act – Vacancy decontrol – Exempts single-family homes and condos – Exempts rental units built after 1995 (or earlier in some jurisdictions) • Ellis Act – Owners have power to withdraw from the rental market (but have to offer right of first return) 3 mountainview.gov/rentstabilization

California Experience: Rent Stabilization Policies High rents • Excessive rent increases • Symptoms Evictions • Lack of long-term • stability for renters Problems Unpredictable rental • market 4 mountainview.gov/rentstabilization

California Experience: Rent Stabilization Policies Regulate evictions • and rent increases Responses Create options for • enforcement Gather data • Provide stability • Increase rental • Outcomes market predictability 5 mountainview.gov/rentstabilization

California Experience: Rent Stabilization Policies 29 Different Cities… 29 Different Policies 6 mountainview.gov/rentstabilization

Rent Stabilization in Mountain View Community Stabilization and Fair Rent Act (CSFRA) • Enacted by City voters • Purpose – Stabilize rents – Provide just cause eviction protections – Provide fair return for Landlords 7 mountainview.gov/rentstabilization

Mountain View : Population 80,000 76,000 74,066 70,708 67,460 70,000 58,655 60,000 51,092 50,000 40,000 30,889 30,000 20,000 10,000 6,563 1,161 250 0 1880 1910 1950 1960 1970 1980 1990 2000 2010 2017 8 mountainview.gov/rentstabilization

Mountain View: Historic Rent Data Studio 1 BR 2 BR $3,188 $2,468 $2,128 $2,065 $1,761 $1,585 30% increase 40% increase 50% increase 9 mountainview.gov/rentstabilization

Background February, 2010 • Tenant Relocation Assistance Ordinance January 7, 2016 • Right to Lease Ordinance (RTL) May 26, 2016 • Rental Housing Dispute Resolution Program (RHDRP) June, 2016 • Signatures submitted to put Measure V on ballot November 8, 2016 • Election day: Measure V received majority votes November 15, 2016 • Just Cause Urgency Ordinance effective December 23, 2016 • CSFRA effective, but Temporary Restraining Order April 5, 2017 • Preliminary Injunction Denied: CSFRA Implemented April 18, 2017 • Rental Housing Committee appointed June 6, 2017 • RTL and RHDRP repealed 10 mountainview.gov/rentstabilization

CSFRA Overview 1 2 3 • Establishes a Rental • Sets Base Rent • Determines Allowable Housing Committee Rent Increases 4 5 6 • Creates a Petition • Provides Just Cause • Provides Relocation Process for individual tenant eviction Assistance for certain rent adjustments protections displaced Tenants 11 mountainview.gov/rentstabilization

CSFRA Covered Rental Units Multi-Family Units Fully Exempt Units Rent First Certificate of Rent Just x Single Family Homes Roll Occupancy Increases Cause x Back Condominiums x Companion Units P P P x Duplexes Before February 1, 1995 x Units in hotels, motels, etc. rented out for less than 30 days x Units in hospitals, medical care Between P X X facilities, dormitories, etc. February 1, 1995 and CSFRA effective date x Government or subsidized rental units After CSFRA effective X X X date 12 mountainview.gov/rentstabilization

CSFRA Covered Rental Units Total Covered: 15,088 Fully Covered: 13,254 Partially Covered: 1,834 Exempt: 1,555 13 mountainview.gov/rentstabilization

CSFRA Overview The Players Rental Stakeholders Housing Landlords Committee Tenants Legal City Council Counsel Mountain CSFRA View Rental City Staff Housing Helpline 14 mountainview.gov/rentstabilization

CSFRA Overview 1. Establishes a Rental Housing Committee Set rent at fair and equitable Establish levels Pursue Civil Rules and Remedies Regulations Determine Establish Annual schedule of Rental General penalties Housing Adjustment Committee Appoint Administer Hearing program Officers Hold Public Establish Hearings budget 15 mountainview.gov/rentstabilization

Rental Housing Committee Program Implementation Approach • Perform community outreach and education 1. • Establish Annual General Adjustment of Rent for 2017 2. • Adopt Rules and Regulations 3. • Develop an IT systems plan 4. • Determine a staffing plan 5. • Set budget and fees 6. • Implement process for annual fee billing 7. • Consider further Regulations 8. 16 mountainview.gov/rentstabilization

CSFRA Overview 2. Sets Base Rent Tenancy started on Tenancy started or before after Oct. 19, 2015 Oct. 19, 2015 -OR- Base Rent = Base Rent = Rent in effect on Initial Rent at start of Oct. 19, 2015 tenancy From the Effective Date onwards only Base Rent can be charged. 17 mountainview.gov/rentstabilization

CSFRA Overview 3. Determines Allowable Rent Increases Annual General Adjustment (AGA): Amount by which Rent for CSFRA Covered Rental Units may be increased each year Based on inflation → • Consumer Price Index Minimum 2% increase allowed − On May 22, per year Maximum 5% increase allowed − 2017 the RHC per year adopted an Effective from September 1 onwards • AGA of 3.4% each year for 2017 A Landlord can • Increase rent with AGA − Save up rent increases (banking) − 18 mountainview.gov/rentstabilization

CSFRA Overview 4. Purpose of Petition Process for Rent Adjustments 1 2 3 4 Notify all parties Initiate a request Explain and of a pending Establish fair and for an individual document the petition and transparent adjustment of bases for a rent allow all parties procedures rent adjustment to participate in the process 19

CSFRA Overview 4. Petition Process for Individual Rent Adjustments Tenant Petition for Landlord Petition Downward for Upward Adjustment of Rent Adjustment of Rent If unable to Rent in excess of receive fair return lawful rent on investment Failure to maintain MNOI habitable standard premises Decrease in Vega adjustment services or standard maintenance 20 mountainview.gov/rentstabilization

CSFRA Overview 4. Petition Process for Individual Rent Adjustments Regulations Chapter 4: Petition Process A. I. • Purpose Petition • Notice of Submission B. J. • Authority to File Petition • Consolidation of Petitions C. K. • Petition Forms • Petition Response D. L. • Requirements for All Petitions • Prerequisites to Accept Petition E. M. • Reductions (Habitability) • When Dismissals are Prohibited • Prehearing Settlement F. N. • Reductions (Reduced Services) Conference G. O. • Reductions (Unlawful Rent) • Summary of Petition Process H. • Increases 21 mountainview.gov/rentstabilization

CSFRA Overview 4. Petition Process for Individual Rent Adjustments Regulations Chapter 5: Hearing Process A. • Purpose of Hearing Process B. • Hearing Officers C. • Notice and Prehearing Procedures D. • Postponement Requests E. • Conduct of Hearing F. • Hearing Decision G. • Burden of Proof H. • Appeals to the RHC 22 mountainview.gov/rentstabilization

CSFRA Overview 4. Petition Process for Upward Rent Adjustments CSFRA provides 1 Basis for Landlord Petitions To ensure a fair and reasonable rate of return (§ 1710(a)) 23 mountainview.gov/rentstabilization

CSFRA Overview 4. Petition Process for Upward Rent Adjustments Regulations Chapter 6: MNOI standard Fair Return methodology • 1. based on maintenance of net operating income Calculate NOI for Property in Base Year (MNOI) Compares net operating • income for base year and petition year 2. If net income for the petition • Adjust Base Year NOI by Percent Change year is less than the net in CPI – Rent of Primary Residence income for the base year, adjusted by CPI, landlord may be entitled to an 3. individual upward adjustment of rent: Compare Adjusted NOI with Petition Year NOI 24 mountainview.gov/rentstabilization

CSFRA Overview 4. Petition Process for Upward Rent Adjustments Regulations Chapter 6: MNOI standard – Net Operating Income Operating NOI Gross Income Expenses Regulation 6.E Regulation 6.D Calculations – Fees & Costs – Rents – Annual – Property Taxes – Ancillary – Per Property – Repairs Services – Amortized (laundry, vending, etc.) Capital Improvements 25 mountainview.gov/rentstabilization

CSFRA Overview 4. Petition Process for Upward Rent Adjustments Regulations Chapter 6: MNOI Standard/CPI – Rent of Primary Residence Petition CPI – Rent of Primary Residence 430.929 Adjustment = = = 1.16 2015 Annual CPI – Rent of Primary Residence 371.075 26 mountainview.gov/rentstabilization