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HomeMy WebLinkAbout2003-04-01 City Council (2)TO:HONORABLE CITY COUNCIL ATTN:FINANCE COMMITTEE FROM: CITY MANAGER DEPARTMENT: COMMUNITY SERVICES DATE:APRIL 1, 2003 CMR: 191:03 SUBJECT:MANDATORY RESPONSE TO REQUEST FOR DISCUSSION OF DISPUTES BETWEEN LANDLORDS AND TENANTS ORDINANCE’S EVALUATION REPORT RECOMMENDATION Staff recommends that Council" 1. Approve the continuation of the Mandatory Discussion of Disputes Between Landlords and Tenants Ordinance (also ~known as the Mandatory Response Ordinance); and 2. Authorize the City Manager or his designee to execute any contracts, contract amendments or an)’ other necessary documents to implement Council’s action. BACKGROUND The City Council, at its October 15, 2001 meeting, passed the Mandatory Response Ordinance, which would provide a neutral forum for discussing issues, including, but not limited to, rent increases. The ordinance amended the Rental Stabilization Ordinance by requiring landlords to provide written notification to tenants about their rights and responsibilities and eliminating the exemption of condominiums. The ordinance also required landlords having more than one single-family home rental to register with the City. The Council requested that Project Sentinel conduct an evaluation of the progam upon completion of a year, at which time the City Council would decide whether or not to continue the progam. DISCUSSION Project Sentinel has completed the first year evaluation of the progam (Attachment 1). The Mandatory Response Progam Evaluation contains the following statistics: 1. The number and kinds of contacts; 2. The number of cases opened, types of cases and case outcomes; CMR: 191:03 Page 1 of 2 3. Evaluations from the parties involved; and 4. Responses from participating mediators. Project Sentinel concludes that the program is working and has produced a high rate of resolution: 62.5% as compared to the overall rate of resolution in the voluntary mediation program, 38.1%. There have been positive responses from both program participants and mediators and there have been no retaliation claims brought to the attention of the program. The City, through the Community Services Department’s Human Services Division, continues outreach to the landlord/tenant community by providing Tenant Guides in all the libraries and community centers and by distributing information through utility bill inserts to Palo Alto residents explaining the Mandatory Response Program. This coming year, the Tenant Guide will be located on the City’s website as well. RESOURCE IMPACT During the Mandatory Response Program pilot year, Project Sentinel administered the new program with no additional cost to the City. It receives Human Services Resource Allocation Process (HSRAP) funding that will end on June 30, 2003. Project Sentinel is requesting HSRAP funding for the next two-year cycle. The request for funding is currently part of the C i~"s budget cycle. ATTACHMENTS Attachment One: Project Sentinel’s Mandatory Response Program Evaluation Report PREPARED BY: Kathy Espinoza-Howard, Director of Human Ser¥ices DEPARTMENT HEAD: PAUL THILTGEN Director of Community Services CITY MANAGER APPROVAL:--- E ILY HARRISON Assistant City, Manager CMR: 191:03 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 THE FIRST YEAR OF THE MANDATORY RESPONSE PROGRAM A REPORT TO THE PALO ALTO CITY MANAGER INTRODUCTION For several years prior to 2001, there was a public debate in Palo Alto over perceived concerns about the status of rental housing tenants. In 2001, a proposed Ordinance was drafted in response to these concerns. The Ordinance required landlords to participate in a dispute resolution process with their tenants. It also imposed related notice and registration requirements on the landlords, to ensure that tenants were aware of the program. A final version of this Ordinance came before the City Council in October and November 2001, after a study group of interested parties suggested various changes. After vigorous debate from various segments of the community, including landlords and tenants, the Ordinance was passed. The final title of the Ordinance was "Mandatory Response to Request for Discussion of Disputes Between Landlords and Tenants." That title was shortened in subsequent communications to the Mandatory Response Ordinance. In the form approved by the City Council, the Mandatory Response Ordinance establishes a dispute resolution process for certain specified disputes, including rental increases, repairs and maintenance, privacy concerns and security deposits. It applies to landlords who operated at least two rental-housing units in the City of Pato Alto. 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 agreement if they do chose to remain. 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 program. , Annual Report to City Manager Re: Mandatory Response Program February 13, 2003 Page 2 The Ordinance requires a report from the City Manager within fourteen months after the Ordinance’s effective date of January 4, 2002, describing the status of implementation, with any recommended changes or amendments to the scope of the Ordinance. Project Sentinel was contracted to administer the Mandatov Response Program, with the expectation that the volunteer conciliators and mediators for the program would come from the existing Palo Alto Mediation Program, °’PAMP." This current report from Project Sentinel describes the first year of experience in administering the program. IMPLEMENTATION Project Sentinel opened the program and was ready to accept cases as of the January 4, 2002 start date. By that date, the necessary petition forms and procedures were in place. In conjunction with Human Services, a summary of the Ordinance, with the petition form and instructions, was prepared and placed on the City’s website. An initial outreach in the form of a utility bill insert was drafted and circulated with the January utility bill. A second utility bill insert was utilized in August, in a format specifically designed to draw the attention of landlords to the registration requirements. In the beginning weeks of the program, Project Sentinel and PAMP held special trainings for the conciliators and mediators who were interested in participating in the program. The agency modified its database to track the cases opened within the program and to report more detailed statistics for those cases. Also, the agency developed survey forms for the parties who participated in the program. An evaluation survey was also created for those parties who initially requested program packets but subsequently failed to file petitions. Human Services secured translations of the notice language in those languages specified in the Ordinance, and these documents are now available for use by landlords and tenants. In June, Project Sentinel presented an interim report to the Human Relations Commission, at the request of the commission. Copies of the various forms, including the evaluation forms, are attached. Annual Report to City Manager Re: Mandatory Response Program February 13, 2003 Page 3 SUMMARY OF PROGRAM RESULTS JANUARY 4,2002 THROUGH JANUARY 20,2003 Statistics for the program performance are set forth in the following tables: Table I: Analysis of Initial Contacts TYPE Total Tenant-Landlord!Rental Housing initial calls 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 623 303 48.6% 7O Annual Report to City Manager Re: Mandatory Response Program February 13, 2003 Page 4 Table II: Case Outcomes TOTAL NUMBER OF MRP CASES OPENED Number withdrawn by requesting party after counseling and prior to conciliation Number withdrawn by requesting party after conciliation efforts Number of MRP cases resolved in conciliation Number of MRP cases mediated to agreement Number of MRP cases mediated to impasse Number of MRP cases which were set for mediation in which one or both parties left immediately after the opening statement Number dismissed by administrator as inappropriate for this program Number of cases still pending Number of retaliation claims raised 28 [33.7% of the total of 83 LL/T cases opened during this period] 4 7 8 4 0* 3 0 *In one case, the landlord left very shortly after the opening statement because the same issue had been recently mediated to impasse with another tenant in the same building. The case is included in the "mediated to impasse" category. Annual Report to City Manager Re: Mandatory Response Program February 13, 2003 Page 5 Table III: Types of Cases Opened Rental Increase Deposit Repairs/maintenance Utilities Occupants Parking/storage Privacy Quiet enjoyment Use of common areas 0 15 0 Analysis of Evaluations from Parties Project Sentinel has received only four evaluations returned by parties who requested a packet and then did not open a case. All four rated overall contacts with Project Sentinel staff as "excellent." In response to the question about why he/she did not open a case, one respondent answered that "the effort would be too much .... [M]y possibilities seemed to be limited." This person also indicated that the dispute had been partially resolved since contacting the program. The three other respondents answered that the owner resolved the situation after the tenant made the initial contact with the MRP. Annual Report to City Manager Re: Mandatory Response Program February 13, 2003 Page 6 The agency has received nine post-conciliation surveys, five from tenants and four from owners. The surveys sent to parties whose cases ended in conciliation ask the parties to rate program staff and the conciliator assigned to the case. Two tenants rated program staff and the conciliator as %xcellent," the other three tenants rated both as "good." Three stated that the conciliation process resolved the dispute; one said it did not, and one indicated "n!a." All five indicated they would use or recommend the program in the future. Of the four owners who responded in conciliated cases, two rated program staff as "excellent," one rated staff as "gOod," and the fourth owner rated the staff as "fair." One owner indicated that conciliation resolved the dispute, and stated he/she would use or recommend the program in the future. Two owners indicated that the dispute was partially resolved and that they would use the program in the future. The fourth owner rated the conciliator as "poor," but stated that the conciliation process partially resolved the dispute. This owner stated that he/she would not recommend or use the program in the future. The agency has received twenty-one post-mediation survey forms. These surveys ask the parties to rate program staff, and the conciliators who handled the initial stage, as well as the mediators who handled the final stage. Nine of these surveys were returned by tenants; ten from owners and two from parties who viewed themselves as "other." Five tenants rated the program staff as ~excellent," four rated staff as "good." The ratings of the conciliator ranged from "excellent" to "fair," with one rated "poor." All nine said they would use or recommend the program in the future. One stated, "Great service, thank you." Three other tenants also included statements expressing gratitude for the existence of the program. All of the owners responding to the post-mediation survey rated the staff and conciliators on their cases as "excellent" or "good," with the exception of one who rated the conciliator as °~fair." Seven owners or property managers stated they would use the program in the future, three others answered "maybe." One respondent identifying himself/herself as "other" rated staff as "good" and indicated that "maybe" he/she would use the program again, the other rated staff as %xcellent" and said he/she would recommend the program in the future. The most important response from the parties is whether they would use the program again in the future, because it indicates their overall attitude about the program, regardless of the results. The overwhelmingly favorable responses are summarized as follows: Annual Report to City Manager Re: Mandatory Response Program February 13, 2003 Page 7 Table IV: Percentage Who Would Use The Program Again or Recommend to Others % Who would recommend the program % Maybe would recommend the pro~am % Would not recommend the program TENANTS 100 % [!4 out 14] LANDLORDS 7!.4% [10 out of 14] 21.46% [3 out of 14] 7.1% [1 out 14] OTHERS 50% [1 out 2] 5O% [ 1 out of 2] Response from Mediators During the debate over the Ordinance in the fall of 2001, there was public disagreement within the PAMP over the value of the MRP. However, since the program began in January 2002, the mediator group has responded to the need for both conciliators and mediators, and all mandatory cases have been fully staffed. The members of the mediator group were offered the opportunity to provide input for both the June report and for this current report. Four members of PAMP responded in June. The reaction from these respondents, who at that time had individually worked on between one and three cases, was positive. When asked how the MRP has affected his/her performance as a mediator, one member responded that It’s a stimulus. Same skills and techniques; but issues can be more complex. Annual Report to City Manager Re: Mandatory Response Program February 13, 2003 Page 8 Another mediator noted that her experience caused her to re-examine her approach in other cases, and to hope that further training on aspects of the program would be available. Another mediator indicated that the issue of required attendance was not a major obstacle in the mediation he conducted, and that on an overall basis the parties behaved in a manner similar to his experience in mediations under the voluntary program. The fourth member responded that she had not experienced any negative impact from the mandatory program, and that "[L]eaming conciliation is a great new skill." The program received a detailed message from one volunteer in December 2002, who had conciliated four cases and acted as co-mediator in ~o. She indicated that, My general experience of both conciliation and mediation, in most cases, was that both parties respected the process and discussed their issues in good faith. Two landlords expressed offence at having been mandated to attend appearing to feel that their good faith or honesty were somehow in question. They did however proceed to participate fully in the mediation process. This mediator also observed reluctance by property managers on some occasions to go beyond pre-set limits on settlement. Another mediator responded, I believe the fears that the mandatory program would negatively affect the original program have proven unfounded. A mediation has proven to be a mediation, however it is initiated -- parties have mediated in good faith whether they came voluntarily or through mandate. I suppose I’m saying that they may not come in with an ideal mediative viewpoint, but may leave with it. Conclusions and Recommendations The overall experience of the program is that it is quietly and successfully working. The program has produced a high rate of resolution in mandatory cases and it has received a high level of favorable survey responses from those parties who have participated. Initially, the fear was raised that parties in mandatory dispute resolution would not be open to resolving their problems because they did not voluntarily choose the process. Annual Report to City Manager Re: Mandatory Response Program February t3, 2003 Page 9 However, the actual rate of resolution in MRP cases has been high. Of the 24 cases closed to date that were properly within the jurisdiction of the program, 15 were resolved in conciliation or mediation, a rate of 62.5%. In the last calendar year, the overall rate of resolution for landlord-tenant cases in the voluntary mediation program was actually lower. The resolution rate when the parties voluntarily participated was only 38.1%, [21 out of 55]. Thus, the concern that parties "forced" to enter dispute resolution would not settle, has to date been unfounded. We also have evidence that the existence of the MRP has indirectly promoted resolution of disputes, since we know from the surveys that four other tenants resolved their dispute after contacting the program, without formally opening a case. At the time of debate over the ordinance, some parties predicted that many owners or managers would walk out of the mediation as soon as their mandate to stay for the opening statement was observed. However, in the twelve mediations held to date, no party has left immediately after the opening statement. As noted, one manager did leave very soon after, but that was in a case where the same issue with a different tenant had been fully mediated to impasse only a few days earlier. Another sign that the program is working has been the positive response from both parties and conciliators and mediators. Both the parties and the mediators have returned positive evaluations, and a large majority of parties indicated they would utilize the program in the future. In addition to the above factors, the positive experience of the program is further documented by the absence of any retaliation claims brought to the attention of the program, either from tenants or from any other party to the MRP. Retaliation from parties who were unhappy about being required to participate was a concern raised during the debate over the Ordinance, but there have been no such claims raised to date. The type of cases being opened under the MRP almost certainly reflects the nature of the rental housing market during this last year. As noted above in Table III, the two largest categories are maintenance/repairs and deposits. 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 first year, a significant number of landlord/tenant cases opened by Project Sentinel remained within the voluntary jurisdiction, rather than the MRP. As noted above in Tables I and II, approximately 51% of the initial calls and 66% of the cases Annual Report to City Manager Re: Mandatory Response Program February 13, 2003 Page 10 have been handled this year within the voluntary jurisdiction. In many instances, the subject matter was outside the MRP, or the owner did not operate two rental properties. In a few cases, the initiating party requested the voluntary process rather than the mandatory process. In the first eight months of the program, there was some anecdotal and circumstantial evidence to raise a concern about whether.tenants are aware of the existence of the Mandatory Response Program as an option. The Ordinance was structured to require landlords to notify tenants of the rights, as the primary method to draw attention to the program in the tenant community. In the first six months of the program, landlords were not voluntarily registering as required by the Ordinance, which raises a question about whether they were voluntarily meeting their notification obligations. In a situation where a large public housing provider did send notice of the program to all tenants on its properties, there was a conspicuous response from tenants in the form of multiple contacts to our program staff. When the August utility insert was mailed, there was a dramatic increase in landlord registration, from less than 10 to the current number of 159. The program experienced a concurrent increase in case activity. In the eight months prior to the insert, the total of MRP cases opened was ten. In the subsequent period of four and a half months, the number of cases opened increased to eighteen. These results illustrate the importance of outreach in making the program useful to the community. In light of these experiences, Project Sentinel recommends that the City support further outreach activities, targeted to both the tenant and the landlord community. In the course of administering the program, one issue has arisen regarding the content of the ordinance. Project Sentinel recommends that an appropriate amendment to the Ordinance be considered. Section 9.72.080(g) of the Ordinance currently defines °’Residential Rental Property" as, [A]ny housing structure occupied as a dwelling or offered for rent...whether attached, detached, single or multiple-family. In one case, the question arose whether the ordinance applied to multiple rooms rented in the same house, with shared bathroom and kitchen facilities. The program requested and received an opinion from the City Attorney on the issue. A copy is attached. However, Project Sentinel believes it would be helpful if the City Council decided whether to make a direct decision regarding whether to include or exclude such rental arrangements from the scope of the MRP. Annual Report to City Manager Re: Mandatory Response Program February 13, 2003 Page 11 Respectfully Submitted on February 13, 2003, Martin Eichner Director of Dispute Resolution Progams Encls. Cc:City Council Members Ariel Calonne, City Attorney Kathy Espinoza-Howard, Director of Human Services Eve Agiewich, HRC Chair