Title
Recommendation to Authorize the Mayor to Send a Letter Encouraging the Owner to Comply with the Rent Review Advisory Committee (RRAC) Recommendations. (Housing 265)
Body
To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Authorize the Mayor to Send a Letter Encouraging the Owner to Comply with the Rent Review Advisory Committee (RRAC) Recommendations
BACKGROUND
The duties of the Rent Review Advisory Committee (RRAC) are to review tenant concerns related to residential rental increases. Since its inception in 1979, the RRAC has provided a neutral forum for renters and residential property owners to present their views concerning rent increases, evaluate increases, determine whether proposed increases are reasonable, and, if not, attempt to mediate a resolution acceptable to all parties.
On March 1, 2016, the City Council passed Ordinance 3148, effective March 31, 2016, that directs the RRAC to continue to hear tenant-initiated rent increase complaints for rent increases of less than 5% and hear landlord-initiated rent increases of more than 5%. For rent increases of less than 5% and rent increases above 5% for single-family homes (and other exempt units), the RRAC determination is not binding on the parties.
This appeal under consideration by the City Council pre-dates the effective date of the new ordinance. Therefore, it is being processed under the prior ordinance governing RRAC procedures. Under the previous ordinance all RRAC decisions were non-binding. Those non-binding decisions could be appealed to the City Council for a non-binding decision. As noted below, this particular case deals with a rent increase for a single-family home so the process is essentially the same under the old and new ordinance.
DISCUSSION
429 Grand Street is a single-family home owned by Chun Wu. Tenant Jill Clevenger filed a Rental Increase Complaint (RIC) with the RRAC in January 2016 (Exhibit 1). On February 16, 2016, the RRAC reviewed the rent increase of $550 per month, which increases the monthly rent from $2,750 to $3,300. The moratorium on certain rent increases does not apply to this case because the unit is a single-family home. At the RRAC meeting, the owner was represented by attorney, Mr. Fong. Their arguments are contained in the approved minutes of the February 16 RRAC meeting, which are provided as Exhibit 2. The RRAC unanimously determined that the rent increase was excessive under the circumstances and recommended a maximum $275 increase for a total of $3,025. The RRAC recommended that this rent increase be implemented in two phases so that a $137.50 increase becomes effective on March 1, 2016, and that another $137.50 increase becomes effective on September 1, 2016. On February 17 2016, the RRAC issued a letter to the owner stating the RRAC’s official recommendation and asking the owner to respond within ten days (Exhibit 3).
Staff did not receive a response from Mr. Wu within the requested time period. Staff contacted Mr. Wu and learned that he was concerned that the recommendation would not be valid once the Ordinance went into effect. Staff consulted with the City Attorney, who advised it would be. It was communicated to Mr. Wu and his attorney that the Ordinance would not invalidate the RRAC recommendation in that the recommendation is considered one annual rent increase with a portion deferred. Mr. Wu acknowledged in a phone conversation that he understood this clarification but wanted to let the appeal continue without a written statement from him. Ms. Clevenger asked for an appeal of this case on March 8, 2016 (Exhibit 4).
Given the RRAC’s determination that the rent increase is excessive, it is requested that the City Council authorize the Mayor to send a letter (Exhibit 5) to the owner encouraging compliance with the RRAC’s recommendation.
FINANCIAL IMPACT
There is no financial impact on the General Fund in encouraging the owner to comply with the RRAC’s recommendations.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The RRAC’s action, as well as the request that the RRAC’s recommendation be considered by the City Council, is consistent with the Rent Review Ordinance in effect when the RIC was filed.
ENVIRONMENTAL REVIEW
Encouraging a property owner to follow the recommendation of the RRAC is not a project subject to environmental review under the California Environmental Quality Act.
RECOMMENDATION
Authorize the Mayor to send a letter encouraging the owner to comply with the Rent Review Advisory Committee’s recommendation.
Respectfully submitted,
Brendan Sullivan-Sariñana, Vice Chair, Rent Review Advisory Committee
By,
Claudia Young, Community Development Program Manager
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. Rental Increase Complaint Form - 429 Grand Street
2. Approved Minutes of the February 16, 2016 Regular RRAC Meeting
3. RRAC recommendation letter to property owner dated February 17, 2016
4. Tenant appeal for review by the City Council dated March 8, 2016
5. Draft letter from Mayor to owner