Title
Introduction of Ordinance Amending the Alameda Municipal Code by Eliminating the Sunset Clause (December 31, 2019) from Ordinance No. 3148 (City of Alameda Rent Review, Rent Stabilization, and Limitations on Evictions Ordinance). (Rent Stabilization 265)
Body
To: Honorable Mayor and Members of the City Council
From: Amy Wooldridge, Interim City Manager
EXECUTIVE SUMMARY
On March 1, 2016, the City Council adopted the Rent Review, Rent Stabilization, and Limitations on Evictions Ordinance (Ordinance 3148), which was effective on March 31, 2016. Section 6-58.200 (Repeal of the Article) provides that the ordinance would be automatically repealed, unless by December 31, 2019, the Council took affirmative action to extend it. This ordinance would delete Section 6-58.200 and, thereby, eliminate the “sunset clause.” As a result, Ordinance 3148 and the Rent Stabilization Program, which implements the ordinance, would continue without an expiration date.
BACKGROUND
When the City Council adopted Ordinance 3148 in March 2016, the City of Alameda (City) and the larger Bay Area were in the midst of a rental housing crisis resulting in rapidly increasing rents, displacement of long-term tenants, and unregulated evictions. Ordinance 3148 limits rent increases to one during a 12-month period, provides a binding hearing process for many rent increases over 5%, limits certain types of tenancy terminations, and requires payment of relocation benefits for terminations due to no cause or no fault of the tenant.
In addition, Section 6-58.200 provides that the ordinance would be automatically repealed, unless by December 31, 2019, the Council took affirmative action to extend it. This section is sometimes referred to as the “sunset clause.” While the City Council always has the authority to amend, suspend, or repeal an ordinance, the explicit inclusion of the sunset clause was an acknowledgement that the ordinance established a new regulatory framework for the rental housing market in Alameda and that it would be important to monitor its implementation during the initial years.
Since the ordinance’s adoption, the City has contracted with the Housing Authority of the City of Alameda, via a staffing services agreement, to administer the Rent Stabilization Program (RSP) which implements the ordinance’s requirements regulating rent increases, terminations, and payment of relocation benefits. The RSP is staffed and has an office, a website, and forms and guidelines for all aspects of the Program. As a result of this work, staff is able to effectively carry out the mandates of the ordinance. In addition, the RSP is funded through an annual fee charged to landlords.
In 2018, a measure was placed on the ballot that would have made the ordinance part of the City Charter. As drafted, the measure eliminated the sunset clause, which meant the ordinance would have been in effect until the people voted to repeal it. The measure failed. Therefore, the ordinance is still in effect, including the sunset clause, and the Council has the ability to amend, suspend or repeal the ordinance.
Given the continuing rental housing crisis that is defined in part by vacancy rates well below 5%, which is considered an indicator of a healthy rental market, and market rents that continue to increase at a rapid pace, staff is recommending that the City Council introduce an ordinance eliminating the sunset clause. In addition to acknowledging that there is still a need to stabilize the rental market in Alameda, eliminating the sunset clause will also minimize disruptions to the RSP.
DISCUSSION
Staff is recommending that the City Council eliminate the sunset clause from the ordinance at this time for several reasons. As noted above, the RSP is funded by an annual fee paid for by landlords with properties covered by the ordinance. In order to collect the fee for the 2019-20 Fiscal Year, which begins on July 1, 2019, the Finance Department would like to begin invoicing landlords in May 2019. Without action to continue the RSP beyond December 2019, it would be difficult to undertake the required billing and fee collection in a timely and efficient manner for the upcoming fiscal year.
A second reason for eliminating the sunset clause is that it is a barrier to recruiting and retaining qualified staff to run the RSP. When jobs are advertised, it is with the caveat that the program could end by December 31, 2019. As it gets closer to that deadline with no affirmative action by the Council to extend or eliminate the sunset provision, it becomes more difficult to retain and recruit permanent staff. In the initial start-up years, the Housing Authority has relied on temporary staff to fill some of its key program positions. Eliminating the sunset clause now will provide certainty to existing staff and allow recruitment in the competitive Bay Area job market. This is essential to running an effective program with a focus on excellent customer service.
Lastly, given the continuing challenges in the Bay Area rental market of low vacancy rates and high rents, it is clear that the need to provide a local regulatory framework for controlling rent increases, limiting terminations, and requiring relocation payments for no fault/no cause terminations still exists and will exist in the foreseeable future. The City Council always has the authority to amend, suspend or repeal the ordinance if such protections are no longer deemed necessary.
Therefore, staff recommends that the City Council introduce an ordinance amending the Alameda Municipal Code (AMC) to eliminate the sunset clause from Ordinance 3148.
FINANCIAL IMPACT
There is no impact to the General Fund from eliminating the sunset clause from Ordinance 3148. The RSP is a full cost-recovery program as landlords are charged an annual fee to cover the cost of administering all aspects of the Program.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The proposed amendment to Ordinance 3148 to eliminate the sunset clause is consistent with the requirements of the AMC.
ENVIRONMENTAL REVIEW
Adoption of an ordinance amending Ordinance 3148 to eliminate the sunset clause is exempt from review under the California Environmental Quality Act (CEQA) pursuant to the following, each a separate and independent basis: CEQA Guidelines, section 15378 (not a project) and Section 15061 (b) (3) (no significant environmental impact).
RECOMMENDATION
Introduce an Ordinance amending the Alameda Municipal Code by eliminating the sunset clause (December 31, 2019) from Ordinance No. 3148 (City of Alameda Rent Review, Rent Stabilization, and Limitations on Evictions Ordinance).
Respectfully submitted,
Debbie Potter, Base Reuse and Community Development Director
Financial Impact section reviewed by,
Elena Adair, Finance Director