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HomeMy WebLinkAbout2004-03-15 City Council (9)City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: COMMUNITY SERVICES DATE:MARCH 15, 2004 CMR: 177:04 SUBJECT:EVALUATION OF ORDINANCE ~QUIRING RESPONSE TO REQUEST FOR DISCUSSION BETWEEN LANDLORDS AND TENANTS MANDATORY OF DISPUTES This is an informational report and no Council action is requir.ed. BACKGROUND At its October 15, 2001 meeting, Council passed the Mandatory Response Ordinance which provides a neutral forum for discussing issues including but not limited to, rent increases. The Mandatory Response Ordinance amends the Renta! Stabilization Ordinance by requiring landlords to provide written notification to tenants about their rights and responsibilities and eliminates the exemption of condominiums. The ordinance also requires landlords having more than one single-family home rental to register with the City. DISCUSSION Project Sentinel has completed its second year Mandatory Response Program Evaluation (Attachment A). The evaluation contains the following statistics: ¯Number and types of contacts ¯Number of cases opened, types of cases and case outcomes ¯Evaluations from the parties involved ¯Responses from participating mediators Project Sentinel concludes that the program has produced a high rate of resolution, 64 percent as compared to the overall rate of resolution in the voluntary mediation program of 66.1 percent. In 2003, the resolution rate was equivalent to the resolution rate in the voluntary landlord tenant cases. Both program participants and mediators have responded positively and no retaliation claims have been brought to the attention of the program. CMR: 177:04 Page 1 of 2 Project Sentinel maintains program information on its website, as well as on the City’s website. Project Sentinel has also worked with City staff to provide an updated Tenant Guide, which will include information on the Mandatory Response Program. The City of Palo Alto, through the Community Services Department’s Human Services Division and Cubbertey Community Center, continues to provide outreach to the landlord/tenant community by distributing Tenant Guides in all the libraries and community centers and Mandatory Response Program information through utility bill inserts. RESOURCE IMPACT Project Sentinel administers the program for the City. It receives Human Services Resource Allocation Process (HSRAP) funding of $65,641 that will end on June 30, 2005. The second year of funding for the program is currently part of the City’s budget process. ATTACHMENTS Attachment A: Project Sentinel’s Mandatory Response P,rogram Evaluation Annual Report Attachment B:Mandatory Response to Request for Discussion of Disputes Between Landlords and Tenants Ordinance PREPARED BY: DEPARTMENT HEAD: CITY MANAGER APPROVAL: ~D~irector of Human Services RICHARD JAM~S Director of Co/-~mqunity Services EMI!EY HARRISON Assistant City Manager CMR: 177:04 Page 2 of 2 Tel: /408) 720-9888 Project Sentinel Housing Mediation Program- Mortgage Counseling 1055 Sunnyvale-Saratoga Road, Suite # 3 Sunnyvale, CA 94087 Fax: (408) 720-0810 E-Mail: Mediate4US@AOL.com MANDATORY RESPONSE PROGRAM ANNUAL REPORT January 2003 to February 2004 INTRODUCTION This report describes Project Sentinel’s experience in administering the second ),ear of Palo Atto’s Mandatory Response Program. The Mandatory Response Ordinance establishes a dispute’resolution process for certain specified landlord tenant disputes in the City of Palo Alto, including rental increases, repairs and maintenance, privacy concerns and security deposits. It applies to landlords who operate at least two rental-housing units in the city. The first stage of the process offers the parties the opportunity to resolve their dispute through telephone conciliation. If the conciliation is unsuccessful, both parties are required to attend a mediation session, and to listen to the explanatory "opening statement" from the mediator. Parties are not required to remain in the mediation after the opening statement, and they are not required to reach a~eement if they do chose to remain. The mediations are conducted by experienced volunteers from the Palo Alto Mediation Pro~am, under the same pri.’nciples that govern all community mediation pro~ams administered by Project Sentinel, including guarantees of neutrality and confidentiality. Other sections of the Ordinance require landlords to register their contact information, and to give tenants notice of the existence of the dispute resolution process in leases and other rental documents. The Ordinance prohibits retaliation for utilizing the pro~am. IMPLEMENTATION Project Sentinel has been the agency contracted to administer the pro~am since its inception in January 2002. The agency filed it first annual report in February 2003. Since then, the agency has continued to maintain the basic elements of the pro~am, including a complete set of forms, a database to track case results, and a panel of experienced volunteer mediators. The agency assig-ns a fulltime case manager to the Palo Alto pro~ams, located in the Palo Alto office. The number of volunteers who Mandatory Response Progarn _amnual Report March 8, 2004 Page 2 now meet the qualifications required to participate in the Mandatory Response Progam has increased. The agency has also continued to conduct special trainings for the volunteers on subjects such as conciliation techniques, and cultural diversity. The agency also provided a new training for the volunteers, to familiarize them with the basic principles of landlord tenant rights and responsibilities. The purpose of this training was not to enable them to counsel the parties, because that component is handled separately by the Project Sentinel staff. The purpose instead was to make sure the mediators understood the context of the disputes they were mediating, in order to ask useful questions and explore pertinent issues. Project Sentinel has also maintained updated web pages at its own site, www.housing.org, and on the city site. In the past several months, the agency has worked with city staff to provide an undated Tenant Guide, which wi!l include information on the Mandatory Response Program for the first time. Mandatory Response Pro~am Annual Report March 8, 2004 Page 3 SUMM.A~RY OF PROGRA_M RESULTS &A~NU~RY 2003 THROUGH DECEMBER 31,2003 Statistics for the pro~am performance are set forth in the following tables: Table I: Analysis of Initial Contacts TYPE Total Tenant-Landlord/Rental Housing initial catls Number of the total Tenant-Landlord calls which were potentially within the MRP Scope Percentage of the total Tenant- Landlord calls which were within the MRP Scope Number of initial MRP packets requested and mailed to interested parties NUMBER 597 152 25.4% 58 Mandatory Response Pro~am Annual Report March 8, 2004 Page 4 Table II: Case Outcomes TOTAL NUMBER OF MRP CASES OPENED 27 Number withdrawn by requesting party after 2 counseling and prior to conciliation Number withdrawn by requesting party after 1 conciliation efforts Number of MRP cases resolved in conciliation 12 Number of MRP cases mediated to a~eement 4 Number of MRP cases mediated to impasse 6 Number of MRP cases which were set for 0 mediation in which one or both parties left immediately after the opening statement Number dismissed by administrator as 0 inappropriate for this pro~am Number of cases still pending Number of retaliation claims raised 0 Mandatory Response Pro~am .Annual Report March 8, 2004 Page 5 Table III: Types of Cases Opened Rental Increase 0 Deposit 17 Repairs/maintenance 6 Utilities 0 Occupants 0 Parking/storage 2 Privacy 0 Quiet enjoyment 2 Use of common areas 0 Conclusions and Recommendations The overall experience of the pro~am continues to be that is that it is quietly and successfully working. The pro~am has produced a high rate of resolution in mandatory cases, 64% of the cases closed were resolved in conciliation or mediation, [16 out of 25]. In this year, the resolution rate has been equivalent to the resolution rate in the voluntary landlord tenant cases, which was 66.1%, [39 out 59 cases volunteer cases closed]. The pro~am has received a high level of favorable survey responses from those parties who have participated. Mandatory Response Pro~am Annual Report March 8, 2004 Page 6 As was true in the first annual report, in this second year there have been no parties who walked out of the mediation immediately after the opening statement and there have been no retaliation claims. There have also been no instances of landlords refusing to participate in the mandatory process. Although the overall number of contacts is lower for this second year, the numbers for cases opened and outcomes remain consistent with the first year. The type of cases being opened under the MRP continues to reflect the nature of the rental housing market during this last year. As noted above in Table III, the two largest categories are deposits and maintenance/repairs. In a market where rental rates having been falling overall, it is not surprising that none of the cases involved increases. However, issues such as repairs and failure to return deposits impact the ability of tenants to obtain and retain rental housing in very important ways. During this year, the majority of landlord!tenant cases opened by Project Sentinel remained within the voluntary jurisdiction, rather than the MRP. A total of 59 voluntary cases were opened, versus 27 mandatory cases. This result arose primarily because the owner did not operate two rental properties, or because the subject matter was outside the MRP. The pro~am remains concerned about the extent to which the pro~am is known in the community. The HRC training for landlords to be held this month should provide an excellent opportunity to increase the awareness of the pro~am among housing providers. Project Sentinel continues to recommend that the City support further outreach activities, particularly those targeted to the tenant community. Respectfully Submitted on March 8, 2004, Martin Eichner Director of Dispute Resolution Pro~ams ORDINANCE NO. ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO ADDING CHAPTER 9.72 TO TITLE 9 [PUBLIC PEACE, MORALS AND SAFETY] OF THE PALO ALTO MUNICIPAL CODE RELATING TO MANDATORY RESPONSE TO REQUEST FOR DISCUSSION OF DISPUTES BETWEEN LANDLORDS AND TENANTS The Council of the City of Palo Alto does ORDAIN as follows: SECTION i. Chapter 9.72 is hereby, added to Title 9 [Public Peace, Morals And Safety] of the Palo Alto Municipal Code to read as follows: CHAPTER 9.72 MANDATORY RESPONSE TO REQUEST FOR DISCUSSION’OF DISPUTES BETWEEN LANDLORDS AND TENANTS 9.72.010 Purposes and Findings. declares as follows: The City Council finds and (a) There is an imbalance between the supply of and demand for rental housing in the City of Palo Alto. The imbalance is the result of both a shortage of rental housing and overwhelming market demand. (b) The imbalance between supply and demand creates an imbalance of bargaihing power between landlords and tenants. (c) As a result of these market and bargaining power imbalances, Palo Alto tenants may be unwilling or unable to assert their legal rights and other concerns to their landlords. (d) Communication between landlords and tenants is impaired as a result. Moreover, the Palo Alto rental housing market is less responsive to the needs of tenants because ~customer service" is not needed to attract and retain tenants. (e) These impacts are detrimental to the health, safety and genera! welfare of Palo Alto and the surrounding region because the stability, security and quality of housing opportunities are reduced. 011205 sm 0052770 1 (f) These impacts can be reduced by improving communications between landlords and tenants through a fair and reliable process for the conciliation and mediation of disputes. (g) Because effective communication must be ~two- way," it is essential that all affected parties be required to participate in mediated dispute resolution. (h) In order to further assure improved communications it is necessary to protect the parties to mediation from retaliation for exercising the rights afforded by this chapter. (i) The City Council recognizes that it is important to monitor and improve the processes established in this chapter on a periodic basis. 9.72.020 Mandatory Discussion of Rental Housfng Disputes. All persons (landlords and tenants) residing in, owning, or managing residential rental property to which this chapter applies shall participate in the conciliation and mediation of rental housing disputes as provided in this chapter. The definitions applicable to this chapter appear in Section 9.72.080. 9.72.030 Applicability. This chapter shall apply to residential rental property as follows: (a) Any residential rental property containing two or more dwelling units, except two-unit residentia! rental property in which one of the units is owner-occupied or (b) Any residential rental property that is owned by a person or legal entity that owns two or more residential rental properties within the City. 9.72.040 Dispute Resolution Process. (a) Any tenant or landlord may request mandatory discussion of rental housing disputes by filing a written request for dispute resolution within 21 days of learning the facts that give rise to the dispute. The request must be filed O11205 sm 0052770 2 with the City’s Facilitation Administrator, and must provide enough factual information to outline the basic issue or issues being raised. (b) Within 7 days of receiving a written request for dispute resolution, the Facilitation Administrator wil! notify both tenant and landlord that a case has been opened and will provide a copy of the request to the responding party. The Facilitation Administrator will also initiate a conciliation process, to be undertaken by the Facilitation Administrator, other City staff, or a Mediator, before mediation is scheduled. (c) The Facilitation Administrator will not open dispute resolution, or will order dispute resolution closed, when it is clear from the written request that there is no substantial factual basis for the dispute, or when the dispute involves the actions or behavior of persons, or conditions, that are not within the control or responsibility of the parties; or when the dispute is frivolous, malicious or" vexatious; or when further proceedings are not, in the sole judgment of the Facilitation Administrator, likely to be productive. Both parties will be notified of the Facilitation Administrator’s action and shall have access to the case summary forms used by the Facilitation Administrator, which will not contain any confidential communications from the parties. The Facilitation Administrator will also order dispute resolution closed if the parties agree to engage a mediator of their own choice, so long as the party who requests the mediator agrees in writing to bear all costs related to that service. (d) The Facilitation Administrator will promptly assign the request to’ a mediator who will contact all relevant parties to conciliate and mediate the dispute. The Facilitation Administrator shall have the authority to combine different disputes or different parties in the interest of efficiently addressing the disputes, provided that any party may, for reasons of confidentiality or otherwise, opt out of a combined mediation involving more than one tenant or landlord by notifying the Facilitation Administrator. All communications between the Facilitation Administrator and the parties as well as between the mediator or conciliator and the parties shall be confidential and subject to the confidentiality guarantees set forth in California Evidence Code sections 703.5 and 1115-1128, as they may be amended or superseded. The mediator assigned to the case will promptly investigate and if necessary disclose any conflict of interest or potential conflict of interest to the parties as soon as the conflict or potential conflict becomes O11205 sm 0052770 3 known to the mediator. At the time of disclosure, the parties will have the option of waiving any such conflict as long as the waiver is in writing. The City shall not be obligated to incur any financial obligation in order to assign a mediator. A mediator will not be assigned if there are not qualified volunteers available without cost to the City or parties. (e) No mediation will be scheduled until at least 14 days after the parties are notified in order to allow time for conciliation efforts before mediation. Unless all parties agree in writing to waive the time limit, the initial mediation session will be conducted within 28 days of the date the written request for dispute resolution is filed. The landlord’s business location shall be considered so that the mediation will be scheduled at a reasonably convenient time taking into account the distance that the landlord must travel to attend the mediation. (f) If a mediation session is "held, the mediator shall provide the parties with an opening statement explaining the nature of the process and the ground rules. Thereafter the mediator will determine the manner and course of the session, including whether to meet with the parties in caucus, provided that the general guiding principle will always be to provide the parties with a full opportunity to air the concerns giving rise to the dispute. (g) The landlords and/or tenants involved in the dispute shall be obligated to personally appear at a mediation session scheduled by a mediator. All parties must participate in the mediation session until completion of the mediator’s opening statement. Al! parties appearing must have the legal authority to resolve disputes arising under this chapter. Participation in mediation shall be voluntary in all respects after the opening statement. The Mediator may, with the consent of all parties, scheduleadditional sessions as needed. (h) No party shall be obligated to reach any specific agreement, or to reach any agreement at all, as a result of participating in conciliation or mediation communications. If an agreement is reached, it will be stated in writing by the mediator or by the parties.Any such agreement shall be confidential and will not be enforceable or usable for any purpose outside the dispute resolution process, unless al! signatories agree that the document can be disclosed or used in other proceedings. O11205 sm 0052770 4 9.72.050 Property Registration. (a) The landlord of each residential rental property within the City shall register the unit or units with the City, regardless of whether the residential rental property is listed in section 9.72.030. The registration shall include the name and mailing address of the owner or owners of the property, as well as the name, mailing address and contact telephone number of the person having the legal authority to effectively resolve disputes arising under this chapter. (b) For the sole purpose of reimbursing the City of Palo Alto for the reasonable costs of maintaining property registration records and related administrative systems, the owner or manager of each residential rental unit to which this chapter applies shall pay a fee in an amount to be set by the Palo Alto City Council. 9.72.060 Retaliation Prohibited. No landlord or tenant who has been a party to conciliation and mediation of rental housing disputes pursuant to this chapter may undertake or cause any type of retaliatory act or omission against another party as a result of the other party having invoked or participated in the dispute resolution process. The Facilitation Administrator upon request shall review an act or omission, including a notice of eviction or an unlawfu! detainer action, which occurs within six months of the party’s participation in conciliation and mediation of rental housing disputes, unless the eviction or action is the result of the unjustified failure or refusal to pay rent. In the event that the Facilitatio~ Administrator concludes that there is sufficient evidence to investigate an act or omission of retaliation under this provision, the relevant facts will be referred to the city attorney for appropriate remedial action. 9.72.070 Notice of Tenant’s Rights. (a) Every rental agreement, lease, or other written document evidencing or changing the terms of tenancy for a Residential Rental Property to which this chapter applies shall include or be accompanied by the following: A notice summarizing the rights afforded by this chapter, including but not limited to the protection against retaliation; and the name, address and telephone number of the Facilitation Administrator. The Facilitation Administrator shall prepare and publish acceptable notification language, including the name, address 011205 sm 0052770 5 and phone number of the City’s Facilitation Administrator. The notification shall be capitalized text at least 14 points in size and shall state: ~THE PALO ALTO MUNICIPAL CODE GIVES YOU THE RIGHT TO MEDIATION OF DISPUTES BETWEEN LANDLORD AND TENANT. YOU MUST REQUEST MEDIATION WITHIN 21 DAYS OF LEAR!qING ABOUT THE FACTS THAT CREATED THE DISPUTE.CONTACT THE CITY OF PALO ALTO’S FACILITATION ADMINISTRATOR [name, address and phone] FOR FURTHER INFORMATION. THE PALO ALTO MUNICIPAL CODE PROTECTS YOU FROM RETALIATION FOR EXERCISING YOUR RIGHT TO MEDIATION." (b) The notification shall be provided in English, Spanish, Chinese and Russian in the translated form prepared and published by the Facilitation Administrator. (c) Failure to provide this notification shall result in an automatic extension of the 21 day time limit for filing a written request for dispute resolution ~ursuant to section 9.72.040(a). The automatic extension shall remain in effect until 21 days after written notification is provided by the landlord. (d) Failure to provide the notification shall be punishable pursuant to Palo Alto Municipal Code section 1.08.010 only if the landlord has been given written notification from the City that informs the landlord of its obligations pursuant to this section. The written notification to the landlord may be provided by any reliable means of communication, but shal! be deemed received if sent via certified mail, postage prepaid, return receipt requested. The written notification may be in the form of a copy 6f this chapter. Copies of this chapter shall be provided to any Palo Alto landlord or tenant without cost upon request. 9.72.080 Definitions. For the purpose of this chapter, the following terms are defined as follows: (a) ~Conciliation" means a confidential telephone call or other contacts by a mediator or the Facilitation Administrator with a landlord and tenant for the purpose of resolving a renta! housing dispute. O11205 sm 0052770 6 (b) ~Facilitation Administrator" means the person or entity responsible for the routine case intake, mediator assignment and other administrative duties of the dispute resolution process established by this chapter. (c)~Landlord" means the owner or property manager exercising effective control over the terms and conditions of the tenancy of a residential rental property, including a person with such control delegated through a durable power of attorney. (d) ~Mediation" means a meeting in which landlord and tenant have the opportunity to communicate with a mediator and each other in a face-to-face setting at a neutra! location in order to resolve a rental housing dispute under ground rules designed to protect the confidentiality and neutrality of the communications. (e) ~Mediator" means a person who is certified to have completed at least 40 hours of basid mediation training with subsequent advanced training, and who has also participated as a mediator or co-mediator in at least I0 mediations conducted under the auspices of a recognized community or commercial mediation program, and who has agreed (in a form acceptable to the Facilitation Administrator) to a statement of mediation ethics and principles, including an acknowledgement of the duty to disclose any conflicts of interest in any specific case. (f) ~Rental Housing Dispute" means a fact-based grievance raised by any tenant, owner, or property manager regarding the occupancy or use of rental property limited to rental rate increases, deposits, repairs and maintenance, utilities, occupants, parking and storage facilities, privacy, quiet enjoyment, or use of common areas. (g) ~Residential Rental Property" means any housing structure occupied as a dwelling or offered for rent or lease as a dwelling, whether attached, detached, single or multiple- family. (h) ~Tenant" means the person or entity entitled to occupy a residential rental property at the time that the rental housing dispute arises. // // O11205 sm 0052770 7 9.72.090 Penalties. (a) infractions 1.08.010. Violations of this chapter shall be punishable as pursuant to Palo Alto Municipal Code section SECTION 2. The City Manager is directed to return to the City Council in approximately 12 months with a status report on the implementation of this Ordinance. The status report shall be provided no more than 14 months after the effective date of this Ordinance. The status report should include any recommendations for amendment of the scope of issues defined as Rental Housing Disputes. SECTION 3. Any fees imposed pursu@nt to this Ordinance shall be for the purpose of cost recovery only and shall not exceed the cost of providing any services. This section is declaratory of existing law. SECTION 4. The Council finds that this ordinance is exempt from the provisions of the California Environmental Quality Act because it can be seen with certainty that there is no possibility that the ordinance will have a significant effect on the environment. // // // // // // // // // // // O11205 sm 0052770 8 SECTION 5. This ordinance shall be effective on the third day of January, 2002. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Mayor APPROVED: City Attorney City Manager Director of Community Services Director of Administrative Services 011205 sm 0052770