Title
Final Passage of an Uncodified Ordinance Amending Uncodified Ordinance No. 3275 to Extend the Time that Tenants Must Repay “Deferred Rent” from 210 Days to 395 Days Following the City Council’s Rescission of the Local Emergency; and
Recommendation to Receive an Update Regarding City Council’s Request for Information on Status of Tenant Payment of Rent and Rent Relief Program and Outreach to Tenants Regarding Eviction Protections. (Community Development)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
On July 21, 2020, City Council introduced an Uncodified Ordinance Amending Uncodified Ordinance No. 3275 to Extend the Time that Tenants Must Repay “Deferred Rent” from 210 Days to 395 Days Following the City Council’s Rescission of the Local Emergency. The Ordinance is set for final passage on September 1, 2020 and will be effective on October 1, 2020.
As part of its discussion of the Ordinance, which staff was recommending due to the on-going declared local emergency and the extended nature of the pandemic and local health orders that preclude the full re-opening of the economy and the resulting impact on the ability of some tenants to fully or partially pay rent, City Council requested several follow-up items from staff. Follow-up items included more outreach to tenants who do not have access to the internet and/or speak a language other than English and more data regarding the status of tenants’ ability to pay full or partial rent and possible impacts on landlords of the reduction in rental income. This report provides an update of these items, along with an update on the City of Alameda’s (City) emergency rent relief program that was approved in June 2020.
BACKGROUND
On July 21, 2020, City Council introduced an ordinance amending Ordinance No. 3275 to extend the amount of time tenants have to repay deferred rent from seven months to 13 months following the City’s rescission of the local emergency. The Ordinance is now set for final passage.
At the July 21, 2020 meeting, as part of the City Council’s consideration of the Ordinance, City Council also directed staff to gather data regarding the status of tenant payment of rent to determine the extent of the issue in the City and whether or not the City Council may need to consider additional assistance to both landlords and tenants. City Council also directed staff to expand its outreach efforts regarding the various ordinances that have been adopted providing renter protections, noting that if tenants do not know their rights, it is harder to ensure those rights are accessed. In June 2020, in two actions, the City Council approved $713,116 in Community Development Block Grant (CDBG)-funded emergency rental assistance (allocating CDBG CARES Act and annual CDBG funds). The discussion below provides an update on all of these activities.
DISCUSSION
Landlord Survey and Findings
Following City Council’s direction, staff designed a nine-question survey that it sent out to 2,393 landlords utilizing the newly developed Rent Registry to learn more about the rent payment status of Alameda tenants. The survey was designed to assess the impact of the health pandemic on landlords through early August.
Staff received 494 responses representing more than 2,245 units. Following are some highlights:
• The survey responses came from a broad range of owners and managers of one to 250 units. 81% of the respondents own or manage 1-4 units.
• 79% of the respondents’ tenants are paying close to full rent, but 5% are receiving no rent.
• The most common comment was that expenses continue to rise and/or remain due. In addition to mortgage payments, landlords are responsible for fees due to the City, taxes, insurance, and utilities, none of which are being waived. Owners and property managers asked that the City advocate for deferments or reductions of expenses.
• Some landlords are experiencing longer vacancy terms and lower rent rates, which is compounding the problem. Raised the question of whether tenants also want flexibility for shorter lease terms right now.
• Seniors and others who rely on rent payments as their primary source of income, including those who have experienced a job loss, are using savings to cover the gap and are concerned about their decreasing savings.
• While landlords who owned a single property and who had a tenant who was current more frequently expressed concern about what will happen if their tenant stops paying, the landlords who own 5-15 units tended to have highest percentage of tenants who were paying less than full rent.
The data is summarized in Exhibit 1. Gathering data to understand the magnitude of the immediate and long-term impacts of tenants’ inability to pay some, or all, of their rent is a first step in developing programs and policies to address this issue. This concern is one that impacts landlords, tenants and local jurisdictions across the State (and country). Staff has been working with Alameda County and other Alameda County cities to share information and best practices (including sharing the survey instrument and results). Alameda County staff has been researching the possibility of a County-funded loan program for landlords to assist them cover expenses if tenants are unable to pay rent. Components of the loan program might include low- to no-interest loans, loans secured by a promissory note and deed of trust, two- to three-year term, and future rent as a source of repayment. County staff anticipates bringing the proposed loan program to the County Board of Supervisors’ Health Committee in September 2020. If the County approves such a program, it is anticipated that it would be available to landlords throughout the County, not just those in the unincorporated areas. Staff will continue to monitor this program development.
Expanded Outreach to Tenants about Tenant Protection Measures
As part of considering the ordinance to provide more time for tenants to repay deferred rent, City Council members and several members of the public raised concerns about ensuring that information about tenant protections was provided more comprehensively especially to those tenants who do not have access to the internet and/or speak a language other than English. Working with the City’s Public Information Officer, staff has prepared a FAQ that will be mailed directly to over 10,000 tenants. Once again, staff is able to utilize the new Rent Registry to obtain address for these tenants. The FAQ will include both an email address and a phone number to call to receive assistance with additional questions. This will ensure that those tenants without internet access can still be informed about their rights. In addition, the FAQ as well as the envelop will provide notice of the important information being provided in various languages so that tenants who do not speak English will be alerted to the nature of the mailing. Tenants will then be able to follow up and speak with someone in their preferred language to receive assistance. The FAQ will be mailed out following final passage of the Ordinance and prior to the Ordinance’s October 1, 2020 effective date.
Emergency Rent Relief Program
Following City Council’s approval of an emergency rent relief program for low-income tenants, on July 28, 2020, the COVID-19 Emergency Rent Relief Program launched to provide assistance to low-income tenants who are suffering a temporary financial setback due to the COVID-19 public health emergency and need help with rent due. While tenants must apply to the Program and document need, the payments are made directly to the landlord. Both the tenant and landlord benefit from this Program.
The application process closed on August 10, 2020. Staff received 406 applications of which 287 were confirmed to be complete at the time of this staff report.
Data is presented for the complete applications:
Average household size: Three (3) with a maximum of seven (7) members
Average monthly rent: $2,050 with a ranges from $99.00 to $6,000
Average amount in arrears: $3,959
Exhibit 2 contains a summary of the data along with detailed information on the tenant demographics. Of note is that 7% of the applicants are persons with a disability and applicants speak eleven (11) languages other than English with Mongolian (6%) and Spanish (5%) the most common.
Overwhelmingly, the primary need for rent relief stems from a loss of a job or, in many cases, from the loss of multiple jobs.
Alameda County has also launched its Rent Relief Program and the application process for that program closed on August 11, 2020. An additional sixty-three (63) applications from Alameda residents were submitted to Alameda County.
The City has contracted with Building Futures with Women and Children (BFWC) to administer the Emergency Rent Relief program. BFWC has conducted the lottery to establish the rank order for the applications and is now reviewing the applications based on that ranking. It is anticipated that rental assistance grants will start to be provided by the end of September (five to ten grants will be funded at a time). Staff will continue to update the City Council on the program. It should be noted that the Alameda Strong community relief effort is also soliciting funds for rent relief grants and that program will provide a secondary source of assistance.
Exhibit 3 contains a resource guide for landlords and tenants to make them aware of other resources that may be available to them
ALTERNATIVES
• Approve final passage of the Uncodified Ordinance Amending Uncodified Ordinance No. 3275 to Extend the Time that Tenants Must Repay “Deferred Rent” from 210 Days to 395 Days Following the City Council’s Rescission of the Local Emergency.
• Modify the Ordinance described above.
• Decline to approve final passage of the ordinance described above.
• Receive the updates for various programs/initiatives described above.
FINANCIAL IMPACT
There is no impact to the General Fund to approving final passage of the Ordinance or to receiving the updates provided.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
Final passage of the Ordinance is consistent with the City of Alameda’s general police powers, Article XI of the California Constitution, and Government Code Section 36937.
ENVIRONMENTAL REVIEW
Final passage of the Ordinance and the updates provided are exempt from review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378 (b) (not a project); and Section 15061(b)(3) (no significant environmental impact).
CLIMATE IMPACTS
This action has no climate impacts.
RECOMMENDATION
It is recommended that the City Council:
1. Approve final passage of an Uncodified Ordinance Amending Uncodified Ordinance No. 3275 to Extend the Time that Tenants Must Repay “Deferred Rent” from 210 Days to 395 Days Following the City Council’s Rescission of the Local Emergency; and
2. Receive an Update Regarding City Council’s Request for Information on Status of Tenant Payment of Rent and Rent Relief Program and Outreach to Tenants Regarding Eviction Protections
CITY MANAGER RECOMMENDATION
The City Manager concurs with the staff recommendation.
Respectfully submitted,
Debbie Potter, Community Development Director
Lisa Fitts, Community Development Program Manager
Financial Impact section reviewed,
Nancy Bronstein, Human Resources Director and Interim Finance Director
Exhibits:
1. Data Highlights from the Landlord Survey
2. Overview of COVID-19 Emergency Rent Relief Applications
3A. Resource Guide for Property Owners
3B. Resource Guide for Renters
cc: Eric Levitt, City Manager