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HomeMy WebLinkAboutStaff Report 2303-1133 City Council Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: Planning and Development Services Meeting Date: June 5, 2023 Report #:2303-1133 TITLE PUBLIC HEARING: Adoption of an Ordinance Amending Section Palo Alto Municipal Code Chapter 9.68, Rental Housing Stabilization, to Clarify the Definitions of At-Fault and No-Fault Just Cause for Evictions, Extend Just Cause Eviction Protections and Tenant Relocation Assistance to More Rental Units in Palo Alto than Offered by State Law, and Adopt a Security Deposit Limit for Unfurnished Rental Units in Palo Alto. Environmental Assessment: Exempt under CEQA Guidelines Section 15061(b)(3). RECOMMENDATION Staff recommends that the City Council: 1. Adopt the attached Ordinance (Attachment A) amending Palo Alto Municipal Code (PAMC) Chapter 9.68, Rental Housing Stabilization, to clarify the definitions of at-fault and no-fault just cause for evictions, extend just cause eviction protections and tenant relocation assistance to more rental units in Palo Alto than offered by state law, and adopt a security deposit limit for unfurnished rental units in Palo Alto. EXECUTIVE SUMMARY At its November 29, 2021 meeting, City Council endorsed for implementation a package of rental protection policies. These policies add more certainty, stability, and fairness in the Palo Alto rental market for both renters and landlords. Within that larger package of rental focused policies, Council directed staff to return with the following: •An ordinance to establish a local limit to the amount of a security deposit charged for unfurnished rental units in Palo Alto to one and a half times (1.5x) the monthly rent; and •An ordinance to extend just cause eviction protections to more rental units in Palo Alto by including protections to rental units that received a Building Department certificate of occupancy within the past 15 years. Given that both ordinances relate to rental housing stabilization, staff proposes reorganizing the existing PAMC Chapter 9.68, Rental Housing Stabilization, to include both policy changes in a Item 13 Item 13 Staff Report        Item 13: Staff Report Pg. 1  Packet Pg. 125 of 406  single ordinance (Attachment A). The incorporation of these policy changes would make Palo Alto consistent with and more protective of renters in some rental circumstances than what is offered by state law. BACKGROUND On November 29, 2021, City Council directed staff to study or implement a package of rental protection policies.1 Within that larger package of rental protection policies, Council included direction to staff to return to Council with ordinances pertaining to security deposit limits and just cause eviction protections. City Council prioritized staff returning with the just cause eviction protections, and staff used this opportunity to also bring forward the security deposit limit changes. For the current status of the other Council directed rental package policy work, please see Attachment B. Below is a summary of the relevant state security deposit limit and just cause eviction protections and the City Council directed local amendments.2 Security Deposit Limit California Civil Code section 1950.5 currently limits security deposit amounts that a landlord can charge for rental units to two times the monthly rent.3 City Council directed staff to return with an ordinance that applied a local limit to the amount of a security deposit that can be charged for unfurnished rental units in Palo Alto to one and a half times (1.5x) the monthly rent, which is lower than the limit of two times (2x) the monthly rent in current state law. Just Cause Eviction Protections California Assembly Bill 1482 (AB 1482), the Tenant Protection Act of 2019,4 regulates the lawful reasons for evictions for many rental units in California. These reasons are referred to as “just cause” protections and are broken into two categories. One type of just cause eviction is where the renter is “at-fault” for non-compliance with their rental agreement; the other is a “no-fault” eviction that is based on things not within the renter’s control. For those rental circumstances 1 City Council Meeting Minutes, 11/29/21: https://www.cityofpaloalto.org/files/assets/public/agendas-minutes- reports/agendas-minutes/city-council-agendas-minutes/2021/11-november/20211129/20211129amccs.pdf City Council City Manager Report ID # 13786, 11/29/21: https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council- agendas-minutes/2021/11-november/20211129/20211129pccs.pdf City Renter Protection Policy Development Webpage: https://www.cityofpaloalto.org/Departments/Planning- Development-Services/Long-Range-Planning/Renter-Protection-Policy-Development 2 The summary provided is for general informational purposes only and does not constitute legal advice. Contact an attorney to obtain advice on any particular legal matter. 3 California Civil Code section 1950.5: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=1950.5. 4 California Assembly Bill 1482 (2019): https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB1482. Item 13 Item 13 Staff Report        Item 13: Staff Report Pg. 2  Packet Pg. 126 of 406  covered by AB 1482, as codified and amended in section 1946.2 of the California Civil Code,5 landlords can only evict renters with "just cause". AB 1482 just cause eviction protections do not extend to all rental circumstances. For example, the following rental circumstances are not protected: 1. A unit occupied for less than 12 months, 2. Certain single family homes not owned by a corporation or trust, 3. A duplex where one of the units is the owner’s principal residence from the beginning of tenancy, and 4. A unit that received a Building Department certificate of occupancy within the past 15 years. Of the four rental circumstances listed above, City Council directed staff to return with an ordinance to extend protections to rental units that received a Building Department certificate of occupancy within the past 15 years. Human Relations Commission (HRC) Recommendations On February 9, 2023, the HRC recommended that City Council extend AB 1482 just cause eviction protections to more rental circumstances beyond what Council directed on November 29, 2021; namely, to renters in rental units occupied for less than 12 months and to renters of single family homes not owned by a corporation. The HRC also discussed other renter policies and made additional recommendations related to the effectiveness of the City’s existing renter protections.6 HRC representatives and the City’s Human Services staff will present the HRC’s full recommendations to City Council later in the year for Council direction. The proposed draft ordinance follows Council’s direction in 2021 and does not currently incorporate the HRC recommendations. DISCUSSION Incorporating the security deposit limit and the just cause eviction protections necessitated reorganizing the existing PAMC Chapter 9.68, Rental Housing Stabilization. Staff also included administrative adjustments and text edits, such as section renumbering and adding in subsection titles to PAMC Chapter 9.68. The existing PAMC Chapter 9.68, Rental Housing Stabilization, is currently available online.7 The draft ordinance (Attachment A) includes the entire PAMC Chapter 9.68, Rental Housing Stabilization as proposed to be codified. To assist with draft ordinance 5 California Civil Code section 1946.2: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1946.2.&lawCode=CIV 6 For more specifics, refer to the HRC February 9, 2023 meeting minutes and the April 27, 2023 meeting minutes whereby one February 9, 2023 HRC motion was clarified: https://www.cityofpaloalto.org/Departments/Community-Services/Other-Services/Commissions/Human- Relations-Commission/HRC-Current-Year-Agendas-and-Minutes 7 Palo Alto Municipal Code Chapter 9.68, Rental Housing Stabilization: https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-0-0-66765 Item 13 Item 13 Staff Report        Item 13: Staff Report Pg. 3  Packet Pg. 127 of 406  review, the draft ordinance includes underlines (for text that is new or moved) and strikeouts (for text to be removed or that was moved). The highlights of the revised ordinance include: •Revised purpose statement section; •Revised definition section with new terms and clarifications to existing terms; •Relocation of the non-applicability (exemption) language in the existing “residential rental unit” definition to the sections on one-year lease and existing relocation assistance for 10 units or more; •Renumbering of several sections; •Addition of new just cause evictions section consistent with state law; •Addition of a new relocation assistance section that is consistent with state law, and •Addition of a new security deposit limit section. The draft ordinance reflects reorganization of the existing tenant relocation assistance section for 10 units or more by adding the exemption language noted in number three above and removing the redundant definition of “no-fault eviction.” Other than these minor revisions, the existing provisions for tenant relocation assistance remain unchanged. The draft ordinance does not make substantive changes to the other provisions in PAMC Chapter 9.68. Security Deposit Limit To integrate the security deposit limit into the existing PAMC Chapter 9.68, Rental Housing Stabilization, staff proposes a new section in the existing code to reflect the City Council proposed policy. Refer to the proposed PAMC Section 9.68.060, Security deposit limit. Staff has also included a definition of “security” in PAMC Section 9.68.020, Definitions. If adopted, the security deposit limit of one and a half times (1.5x) the monthly rent would be applicable to all new tenancies for all unfurnished rental units in Palo Alto as of the ordinance effective date. The state limits the maximum potential security deposit for unfurnished rental units to two times (2x) the monthly rent. It is currently unknown what rental unit property owners/managers charge as a security deposit for new tenancies in Palo Alto – it could be up to the maximum allowed, or less. The effect of this policy would be to help reduce the total move- in costs for unfurnished rental units in Palo Alto, if the maximum security deposit would otherwise be charged. Just Cause Eviction Protections To integrate the just cause eviction protections in AB 1482 into the existing PAMC Chapter 9.68, Rental Housing Stabilization, for rental units that received Building Department occupancy approval within the past 15 years, the following are included in the draft ordinance: •Amendments to definitions, including adding the definitions of “at-fault” and “no-fault” just cause eviction from AB 1482 and removing the former definition of “no-fault,” Item 13 Item 13 Staff Report        Item 13: Staff Report Pg. 4  Packet Pg. 128 of 406  •Amendments to the purpose section to clarify that the ordinance restates and expands AB 1482 to make the eviction protections in AB 1482 permanent in Palo Alto and extend them to all renters in Palo Alto not otherwise exempted by AB 1482 and living in rental units that were built and received Building Department occupancy approval within the past 15 years, and •Findings that the ordinance would be more protective than AB 1482, as required by AB 1482. The following existing exemptions in AB 1482 are replicated in the draft ordinance: 1. A unit occupied for less than 12 months; 2. Certain single family homes not owned by a corporation or trust; and 3. A duplex where one of the units is the owner’s principal residence from the beginning of tenancy. While the eviction protections in AB 1482 are already in effect for many rental units in Palo Alto, creating a local version helps to provide local transparency of rental unit policy. If adopted, the just cause eviction protections in AB 1482 would be in effect under local ordinance for all applicable renters in Palo Alto with the added inclusion of renters in rental units that were built and received Building Department occupancy approval within the past 15 years. AB 1482 Carry-over Provisions for Just Cause Evictions The preparation of a local just cause eviction ordinance requires the inclusion of some existing provisions from AB 1482. In addition to making refinements to the definitions in the revised PAMC chapter, the other notable additions made for consistency with state law include: •Notice of Rights – landlords must provide notice to renters of their right to receive a statement of the just cause for terminating a tenancy in the future, which may take the form of a lease provision or an addendum to the lease, •Notices to Terminate Tenancy – actual termination notices for a just cause eviction must include the specific just cause reason for terminating the tenancy, •Opportunity to Resolve Issue – landlords need to give the opportunity for renters to cure any curable lease violation prior to issuing a notice to terminate tenancy for just cause, and •Relocation Assistance - landlord shall provide relocation assistance or rent waiver, both equivalent to one month’s rent, for a no-fault just cause eviction. Community Outreach Staff initiated a Renter and Landlord Survey – Fall 2022/Winter 2023, which remains open beyond the publication of this report. This short survey is oriented toward learning more about renters Item 13 Item 13 Staff Report        Item 13: Staff Report Pg. 5  Packet Pg. 129 of 406  and landlords in Palo Alto, publicizing overall rental unit policy development work, and asking a few questions that will help with future community outreach efforts for rental policy work.8 In the survey, staff placed information about existing Palo Alto policies - the City’s tenant/landlord mediation services program and the local Tenant Relocation Assistance (TRA) requirements. The mediation services program is long-standing for many years and the local TRA requirements has been in effect since 2018. Staff found that almost half of the respondents were not aware of the City’s mediation services program and almost three-quarters of respondents were not aware of the City’s local TRA requirements. These initial survey results have helped to inform staff on the increased degree of community engagement efforts needed to ensure awareness of existing City rental policies for both renters and property owners/property managers, as well as the anticipated significant community outreach effort necessary to inform community members of any new rental policies. If the draft ordinance is adopted, future community outreach will include use of the City’s recently created Housing newsletter, Uplift Local, the City’s website, announcements sent to utilities customers, and social media channels. Staff will also include the ordinance in a series of stakeholder meetings with the California Apartment Association and the Palo Alto Renters’ Association and others. Additionally, outreach can be folded into the City’s community engagement efforts on Council’s requested Rental Registry Program (RRP). Implementation/Enforcement Following Council adoption, staff will notify landlords and tenants through mailing lists that have been created through the City’s continuing work on the rental registry. Staff will also host a community meeting in late summer or fall to answer questions about the subject ordinance and use that opportunity to communicate other meaningful requirements that renters and landlords should know. This ordinance will be enforced privately. Meaning, any dispute concerning a landlord’s compliance with these provisions would be addressed between the tenant and the landlord. The tenant could seek mediation support offered by the City or pursue legal action if warranted. City staff would not be engaged in ensuring compliance of these new provisions. This approach is similar to how the City addresses other local renter protection provisions of the code, such as tenant relocation assistance and the requirement to offer a one-year lease. 8 City of Palo Alto Renter and Landlord Survey – Fall 2022/Winter 2023: https://www.surveymonkey.com/r/RENTERLANDLORD2022. Item 13 Item 13 Staff Report        Item 13: Staff Report Pg. 6  Packet Pg. 130 of 406  TIMELINE If City Council takes action to approve the proposed ordinance, the second reading is tentatively scheduled for June 19, 2023. The ordinance would become effective 30 days after the second reading, tentatively July 20, 2023. FISCAL/RESOURCE IMPACT The draft ordinance was prepared using existing City staffing resources. No additional staff or budget resources are necessary to adopt and codify the ordinance. If adopted, staff would conduct community outreach regarding the new regulatory requirements for landlords and protections for tenants; this too could be absorbed in the department’s budget. It is anticipated that City staff would not be involved in the enforcement of this ordinance. If the City Council were interested in directing staff to enforce this or other local renter protection ordinances, additional fiscal impact analysis would be required. It is anticipated city enforcement would substantially impact the City’s Code Enforcement program, require additional managerial support in planning and have resource impacts to the City Attorney’s office. POLICY IMPLICATIONS Pursuing renter protection policy work is consistent with the goals in the City’s 2030 Comprehensive Plan to provide adequate housing for all. Additionally, the renter protection policy work is consistent with the policies and programs in the Council adopted 2023-2031 Housing Element. Therefore, it is anticipated that this action would support the implementation of the Housing Element. These topics are considered a means to affirmatively further fair housing within Palo Alto, as well as a means by which to promote certainty, stability, and fairness in the rental market. STAKEHOLDER ENGAGEMENT While preparing this report, staff sent email notifications to identified stakeholders informing them of this draft ordinance and encouraged them to participate. Staff included a brief promotion of the City’s overall rental unit policy development work in the November 2022 and in the May 2023 Utility & Community Announcements.9 Staff placed an ad in the Daily Post newspaper on May 26, 2023, 10 days in advance of the hearing. Public comments were received at the February 9, 2023 HRC meeting. The public comments did not directly pertain to Council’s specific direction to prepare the security deposit limit and just cause eviction protection ordinance provisions. However, the comments did reflect the broader community sentiments in favor or against implementing specific renter protection policies. 9 Utilities Department Utility & Community Announcements (UCAs) are short promotional blurbs included in monthly residential bills. The November 2022 and May 2023 Utility & Community Announcements are online: https://www.cityofpaloalto.org/files/assets/public/utilities/bill-inserts/nov-2022-uca.pdf and https://www.cityofpaloalto.org/files/assets/public/utilities/bill-inserts/may-2023-uca.pdf. Item 13 Item 13 Staff Report        Item 13: Staff Report Pg. 7  Packet Pg. 131 of 406  ENVIRONMENTAL REVIEW The California Public Resources Code § 21065 includes a definition of a “project” as subject to the California Environmental Quality Act (CEQA) if it is an activity directly undertaken by a public agency which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. This project is exempt from the provisions of the CEQA, pursuant to Section 15061(b)(3) of the CEQA Guidelines, because it can be seen with certainty that there is no possibility that the ordinance will have a significant effect on the environment. ATTACHMENTS Attachment A: Draft Ordinance - Just Cause Eviction and Security Deposit (Strikeout, Underlined, Annotated Version) Attachment B: Renter Protection Policy Work Status Update APPROVED BY: Jonathan Lait, Planning and Development Services Director Item 13 Item 13 Staff Report        Item 13: Staff Report Pg. 8  Packet Pg. 132 of 406  Not Yet Approved Ordinance No. _____ Ordinance of the Council of the City of Palo Alto Amending Chapter 9.68 (Rental Housing Stabilization) to Clarify the Definitions of At-Fault and No-Fault Just Cause for Evictions, Extend Just Cause Eviction Protections to More Rental Units in Palo Alto than Offered by State Law, and to Enact a Security Deposit Limit for Unfurnished Rental Units in Palo Alto The Council of the City of Palo Alto ORDAINS as follows: SECTION 1. Findings and Declarations. The City Council finds and declares as follows: A. Renters represent a significant percentage of Palo Alto’s population; B. Landlords provide a significant community service by providing rental housing in the City of Palo Alto; C. Palo Alto has great diversity in residential rental property and rental unit types, ranging from single-family homes, accessory and junior accessory dwelling units, to properties with multi-family apartment buildings containing a variety of rental units; D. There is a need to ensure that housing is provided for people of all income levels, and affirmatively further fair housing; E. The Palo Alto rental market is one of the most expensive in the country, which is one factor that can lead to potential renters being unable to afford standard rental unit move - in costs; F. The Palo Alto rental market is one of the most expensive in the country, which is one factor that can lead to renters at risk of displacement; G. The city desires to implement policies for certainty, stability, and fairness in the rental market for renters and landlords; H. A significant number of renters in Palo Alto are low-income and cost-burdened; I. Move-in costs for unfurnished residential rental units commonly include first and last month's rent plus a security deposit of up to two months’ rent, leading to high initial move in costs , J. The State of California created eviction protections for some rental units in Palo Alto but not others through the enactment of California Assembly Bill 1482 (2019), which currently automatically sunsets in 2030, Item 13 Attachment A - Draft Ordinance - Just Cause Eviction and Security Deposit (Strikeout, Underlined, Annotated Version)        Item 13: Staff Report Pg. 9  Packet Pg. 133 of 406  Not Yet Approved 230516 sm 010 2 K. The city is making significant investments on an ongoin g basis regarding rental unit protection, preservation, and production and will also soon need to implement the 6 th Cycle Housing Element policies and programs; and L. On November 29, 2021, the City Council held a public meeting to discuss a variety of renter protection measures and directed staff to draft a Security Deposit Limit ordinance that caps the maximum allowed security deposit for unfurnished rental units in Palo Alto to one and one half times (1.5x) the monthly rent, whereas California Civil Code se ction 1950.5 allows for the maximum security deposit for unfurnished units to be two times (2x) the monthly rent, M. On November 29, 2021, the City Council held a public meeting to discuss a variety of renter protection measures and directed staff to draft a response to California Assembly Bill 1482 (2019) by preparing an Eviction Reduction/Just Cause ordinance for Palo Alto to extend state eviction protections to properties built and receiving occupancy within the last fifteen (15) years, but does not include rental units occupied less than a year or single family homes not owned by a corporation or renters who live in a duplex when one unit is owner occupied, N. On February 9, 2023, the Human Relations Commission held a public meeting to discuss the effectiveness of existing renter protections in Palo Alto and recommended that the City Council adopt the extensions described by the City Council on November 29, 2021 in addition to several other extensions, O. The city, while still retaining local definitions in some cases, adjusted the previous Palo Alto definitions of at-fault and no-fault just cause eviction in order to be consistent with California Assembly Bill 1482 (2019) for the purposes of consistency, transparency, legal clarity, P. The city finds that the Eviction Reduction/Just Cause and Security Deposit Limit ordinance is not in conflict with and is more protective than California Assembly Bill 1482 (2019) in regard to the number of rental units receiving eviction protections and relocation assistance, the limitations on security deposits for unfurnished residential rental units, and, in some circumstances, in regard to the Tenant Relocation Assistance (TRA) dollar amount required if a tenant received a no-fault just cause eviction, and because the ordinance is permanent and does not contain the California Assembly Bill 1482 (2019) automatic sunset in 2030, Q. The City Council finds and determines that the Eviction Reduction/Just Cause and Security Deposit Limit ordinance codified in Palo Alto Municipal Code Chapter 9.68 (Rental Housing Stabilization) is adopted pursuant to the city’s authority to protect the public health, safety, and welfare. SECTION 2. Chapter 9.68 (Rental Housing Stabilization) of Title 9 (Public Peace, Morals and Safety) is hereby amended as follows: Commented [Staff1]: Required finding per Civ Code 1946.2(g)(1)(B). Item 13 Attachment A - Draft Ordinance - Just Cause Eviction and Security Deposit (Strikeout, Underlined, Annotated Version)        Item 13: Staff Report Pg. 10  Packet Pg. 134 of 406  Not Yet Approved 230516 sm 010 3 9.68.010. Purpose. (a) It is found and declared that there is a growing shortage of, but increasing demand for, housing in the city of Palo Alto. Such shortage and increased demand, coupled with increasing inflation, have placed substantial pressure on those residents of Palo Alto seeking rental housing. This council finds that tenantrenters are entitled to a contractual relationship with a landlord that offers some assurance of stability and fair treatment under the terms of a written lease so as toto minimize displacement of tenantrenters into a rental housing market which affords them few and expensive options. (b) Council further finds that the provisions of California Assembly Bill 1482 (2019), as codified and later expanded in the Civil Code of the state of California, offers important protections from instability and displacement to renters. The provisions of that bill as they relate to eviction reduction are restated and expanded below, to make the protections permanent in the city of Palo Alto and extend them to renters living in qualified residential rental units that received a certificate of occupancy within the last fifteen years. 9.68.020. Definitions. For purposes of this chapter, the following terms are defined as follows: (a) “Landlord” means an owner, lessor, or sublessor, or the agent, representative, or successor of any of the foregoing persons who receives, or is entitled to receive, rent for the use and occupancy of any rental unit or portion thereo f the owner or property manager exercising effective control over the terms and conditions of the tenancy of a residential rental unit, including a person with such control delegated through a durable power of attorney. (b) "Rent" means the consideration, including any bonus, benefit, or gratuity demanded or received by a landlord, for or in connection with the use or occupancy of a residential rental unit. (c) "Rent increase" means any additional rent demanded of or paid by a renter for a residential rental unit. (d) "Residential rental unit" means any housing structure occupied as a dwelling or offered for rent or lease as a dwelling, whether attached, detached, single or multiple-family."Rental unit" means a dwelling unit in the city of Palo Alto with the land and appurtenant buildings thereto and all housing services, privileges, and facilities supplied in connection with the use or occupancy thereof, which unit is in a multiple-family dwelling (including a duplex), boardinghouse, lodginghouse, or mobilehome park. The term "rental unit" shall not include: (1) A single-family dwelling; (0) Rooms or accommodations in hotels, boardinghouses, or lodginghouses which are rented to transient guests for a period of less than thirty days; Commented [Staff2]: This definition is adopted from Chapter 9.72 (Mandatory Response to Request for Discussion of Disputes between Landlords and Tenants). Commented [Staff3]: This definition is also adopted from Chapter 9.72. Commented [Staff4]: These exceptions have been removed from the "Definitions" section because each section below now states its specific exemptions. This ensures that the exceptions in preexisting local protections remain largely unaffected by the addition of new exceptions in state protections. Item 13 Attachment A - Draft Ordinance - Just Cause Eviction and Security Deposit (Strikeout, Underlined, Annotated Version)        Item 13: Staff Report Pg. 11  Packet Pg. 135 of 406  Not Yet Approved 230516 sm 010 4 (0) Dwelling units in a condominium, community apartment, planned development or stock cooperative as defined in Chapter 21.40, or in a limited equity stock cooperative as defined in the California Business and Professions Code; (0) Dwelling units in which housing accommodations are shared by landlord and tenant; (0) Housing accommodations in any hospital, extended care facility, asylum, nonprofit home for the aged, or in dormitories owned and operated by an institution of higher education, a high school or an elementary school; (0) Housing accommodations rented by a medical institution which are then subleased to a patient or patient's family; (0) Dwelling units whose rents are controlled or regulated by any government unit, agency, or authority, or whose rent is subsidized by any government unit, agency, or authority; or (0) Dwelling units acquired by the city of Palo Alto or any other governmental unit, agency or authority and intended to be used for a public purpose. (l)(e) “Tenant” "Renter" means a person or entity entitled by written or oral agreement to occupy a residential rental unit to the exclusion of others. (f) “Just cause” to terminate a tenancy means either of the following: (1) “At-fault just cause”, which means any of the following: (A) Default in the payment of rent. (B) A breach of a material term of the lease, as described in paragraph (3) of Section 1161 of the California Code of Civil Procedure, including, but not limited to, violation of a provision of the lease after being issued a written notice to correct the viola tion. (C) Maintaining, committing, or permitting the maintenance or commission of a nuisance as described in paragraph (4) of Section 1161 of the California Code of Civil Procedure. (D) Committing waste as described in paragraph (4) of Section 1161 of the California Code of Civil Procedure. (E) The renter had a written lease that terminated on or after July 1, 2023, and after a written request or demand from the landlord, the renter has refused to execute a written extension or renewal of the lease for an additional term of similar duration with similar provisions, provided that those terms do not violate this chapter or any other provision of law. (F) Criminal activity by the renter on the residential rental unit, including any common areas, or any criminal activity or criminal threat, as defined in subdivision (a) of Section 422 of the California Penal Code, on or off the residential rental unit, that is directed at any landlord or agent of the landlord. Commented [Staff5]: This definitions of "just cause" come directly from state law. Section 1956.2 (g)(1)(B)(i) of the Civil Code requires our local definition of "just cause" to be consistent with state law. Commented [Staff6]: To be replaced with effective date. Item 13 Attachment A - Draft Ordinance - Just Cause Eviction and Security Deposit (Strikeout, Underlined, Annotated Version)        Item 13: Staff Report Pg. 12  Packet Pg. 136 of 406  Not Yet Approved 230516 sm 010 5 (G) Assigning or subletting the premises in violation of the renter’s lease, as described in paragraph (4) of Section 1161 of the California Code of Civil Procedure. (H) The renter’s refusal to allow the landlord to enter the residential rental unit as authorized by Sections 1101.5 and 1954 of the California Civil Code, and Sections 13113.7 and 17926.1 of the California Health and Safety Code. (I) Using the premises for an unlawful purpose as described in paragraph (4) of Section 1161 of the California Code of Civil Procedure. (J) The employee, agent, or licensee’s failure to vacate after their termination as an employee, agent, or a licensee as described in paragraph (1) of Section 1161 of the California Code of Civil Procedure. (K) When the renter fails to deliver possession of the residential rental unit after providing the landlord written notice as provided in Section 1946 of the California Civil Code of the renter’s intention to terminate the hiring of the real property, or makes a written offer to surrender that is accepted in writing by the landlord, but fails to deliver possession at the time specified in that written notice as described in paragraph (5) of Section 1161 of the California Code of Civil Procedure. (2) “No-fault just cause,” which means any of the following: (A) Intent to occupy the residential rental unit by the landlord or their sibling, spouse, domestic partner, children, grandchildren, parents, grandparents, father-in-law, mother-in-law, son-in-law, or daughter-in-law, provided the landlord is a natural person . (B) Permanent withdrawal of the residential rental unit from offer for rent or lease pursuant to California Government Code sections 7060-7060.7. (C) The landlord complying with any of the following: (i) An order issued by a government agency or court relating to habitability that necessitates vacating the residential rental unit. (ii) An order issued by a government agency or court to vacate the residential rental unit. (iii) A local ordinance that necessitates vacating the residential rental unit. (D) Intent to demolish or to substantially remodel the residential rental unit. “Substantially remodel” means the replacement or substantial modification of any structural, electrical, plumbing, or mechanical system that requires a permit from a governmental agency, or the abatement of hazardous materials, including lead- based paint, mold, or asbestos, in accordance with applicable Item 13 Attachment A - Draft Ordinance - Just Cause Eviction and Security Deposit (Strikeout, Underlined, Annotated Version)        Item 13: Staff Report Pg. 13  Packet Pg. 137 of 406  Not Yet Approved 230516 sm 010 6 federal, state, and local laws, that cannot be reasonably accomplished in a safe manner with the renter in place and that requires the renter to vacate the residential rental unit for at least 30 days. Cosmetic improvements alone, including painting, decorating, and minor repairs, or other work that can be performed safely without having the residential rental unit vacated, do not qualify as substantial rehabilitation. (g) “Security” means any payment, fee, deposit, or charge, including, but not limited to, any payment, fee, deposit, or charge, except as provided in Section 1950.6 of the California Civil Code, that is imposed at the beginning of the tenancy to be used to reimburse the landlord for costs associated with processing a new renter or that is imposed as an advance payment of rent, used or to be used for any purpose, including, but not limited to, any of the following: (1) The compensation of a landlord for a renter’s default in the payment of rent. (2) The repair of damages to the premises, exclusive of ordinary wear and tear, caused by the renter or by a guest or licensee of the renter. (3) The cleaning of the premises upon termination of the tenancy necessary to return the unit to the same level of cleanliness it was in at the inception of the tenancy. (1)(4) To remedy future defaults by the renter in any obligation under the rental agreement to restore, replace, or return personal property or appurtenances, exclusive of ordinary wear and tear, if the security deposit is authorized to be applied thereto by the rental agreement. 9.68.030. Requirement of offering one-year written leases. (a) Offer. If a tenant renter or prospective tenant renter wishes to rent a residential rental unit from a landlord and if said landlord wishes to rent said residential rental unit to said renter tenant or prospective rentertenant, the landlord must offer to the renter tenant or prospective renter tenant a written lease which has a minimum term of one year. Such offer must be made in writing. Signing of a lease which has a minimum term of one year shall be considered an offer in writing. (b) Acceptance. If the renter tenant or prospective renter tenant accepts the offer of a written lease which has a minimum term of one year, this acceptance must be in writing. Signing a lease which has a minimum term of one year will be considered an acceptance. (c) Rejection. If the renter tenant or prospective renter tenant rejects the offer for a written lease which has a minimum term of one year, this rejection must be in writing, and the landlord and renter tenant or prospective renter tenant may then enter into an agreement, oral or written, that provides for a rental term of less than one year. Commented [Staff7]: This definition of "security" comes directly from state law. Item 13 Attachment A - Draft Ordinance - Just Cause Eviction and Security Deposit (Strikeout, Underlined, Annotated Version)        Item 13: Staff Report Pg. 14  Packet Pg. 138 of 406  Not Yet Approved 230516 sm 010 7 (d) Rent. If the landlord and renter tenant enter into a written lease which has a minimum term of one year, such lease must set the rent for the residential rental unit at a rate or rates certain and these rates shall not be otherwise modified during the term of such lease. (e) Renewal of Leases. If both the landlord and the renter tenant wish to continue the rental relationship, upon the expiration of the initial written lease which has a minimum term of one year, a lease shall be offered again in accordance with the procedures of Section 9.68.030(a) through (d): (1) Leases with a term of one year shall be offered annually. (2) Leases with a term longer than one year shall be renewable at the expiration of each lease period for a minimum term of one year. (3) A landlord shall offer annually a written lease with a minimum term of one year to a renter tenant who rejected an initial offer of a written lease with a minimum term of one year but who has rented a unit from the landlord for a period of at least twelve months. (f) Applicability. This section shall not apply to: (1) A residential rental unit which is rented on the effective date of the ordinance codified in this chapter, provided, that (A) if the unit is rented subject to a written lease, when the lease in effect for such a unit expires, the ordinance codified in this chapter shall then apply; and (B) if the unit is rented without a written lease, within thirty days after the effective date of this section, the landlord shall offer a written lease to the renter tenant in accordance with this section; (2) An owner-occupied unit that is rented to a renter tenant for less than one year; (3) A residential rental unit occupied by a renter tenant who subleases that unit to another renter tenant for less than one year; (3)(4) A single-family dwelling; (5) Rooms or accommodations in hotels, boardinghouses, or lodginghouses which are rented to transient guests for a period of less than thirty days; (6) Dwelling units in a condominium, community apartment, planned development or stock cooperative as defined in Chapter 21.40, or in a limited equity stock cooperative as defined in the California Business and Professions Code; (7) Dwelling units in which housing accommodations are shared by landlord and tenant; (8) Housing accommodations in any hospital, extended care facility, asylum, nonprofit home for the aged, or in dormitories owned and operated by an institution of higher education, a high school or an elementary school; (9) Housing accommodations rented by a medical institution which are then subleased to a patient or patient's family; (10) Dwelling units whose rents are controlled or regulated by any government unit, agency, or authority, or whose rent is subsidized by any government unit, agency, or authority; Commented [Staff8]: The previous definition of "rental unit" in Chapter 9.68 contained the exceptions in paragraphs (4)-(11). To keep the applicability of this section consistent, the exceptions from the previous definition are added here. Item 13 Attachment A - Draft Ordinance - Just Cause Eviction and Security Deposit (Strikeout, Underlined, Annotated Version)        Item 13: Staff Report Pg. 15  Packet Pg. 139 of 406  Not Yet Approved 230516 sm 010 8 (11) Dwelling units acquired by the city of Palo Alto or any other governmental unit, agency or authority and intended to be used for a public purpose ; (4)(12) A residential rental unit where tenancy is an express condition of, or consideration for employment under a written rental agreement or contract. 9.68.040. Just-cause evictions required. (a) Applicability to residential rental units. This section shall apply to all residential rental units, except not any of the following: (1) Transient and tourist hotel occupancy as defined in in subdivision (b) of Section 1940 of the California Civil Code. (2) Housing accommodations in a nonprofit hospital, religious facility, extended care facility, licensed residential care facility for the elderly, as defined in Section 1569.2 of the California Health and Safety Code, or an adult residential facility, as defined in Chapter 6 of Division 6 of Title 22 of the Manual of Policies and Procedures published by California’s State Department of Social Services. (3) Dormitories owned and operated by an institution of higher education or a kindergarten and grades 1 to 12, inclusive, school. (4) Housing accommodations in which the renter shares bathroom or kitchen facilities with the owner who maintains their principal residence at the residential rental unit. (5) Single-family owner-occupied residences. (6) A property containing two separate dwelling units within a single structure in which the owner occupied one of the units as the owner ’s principal place of residence at the beginning of the tenancy, so long as the owner continues in occupancy, and neither unit is an accessory dwelling unit or a junior accessory dwelling unit. (7) A residential rental unit that is alienable separate from the title to any other dwelling unit, provided that both subparagraphs (A) and (B) below apply: (A) The owner is not any of the following: (i) A real estate investment trust, as defined in Section 856 of the California Internal Revenue Code. (ii) A corporation. (iii) A limited liability company in which at least one member is a corporation. (iv) Management of a mobilehome park, as defined in Section 798.2 of the California Civil Code. (B) The renters have been provided written notice that the residential property is exempt from this section. (i) Notice must be given using the following statement: “This property is not subject to the just cause eviction requirements of Chapter 9.68 of the Palo Alto Commented [Staff9]: This entire section is largely a direct adaptation of state law. A few procedural elements have been simplified. Commented [Staff10]: The language in this subdivision comes directly from state law, but excludes the state's exemption for buildings receiving a certificate of occupancy in the last 15 years. Commented [Staff11]: Council requested that eviction protections only apply to a single family residence if it is owned by a corporation. State law's similar limitation is restated here. Item 13 Attachment A - Draft Ordinance - Just Cause Eviction and Security Deposit (Strikeout, Underlined, Annotated Version)        Item 13: Staff Report Pg. 16  Packet Pg. 140 of 406  Not Yet Approved 230516 sm 010 9 Municipal Code. This property meets the requirements of Section 9.68.040 (a)(7) of the Palo Alto Municipal Code and the owner is not any of the following: (1) a real estate investment trust, as defined by Section 856 of the California Internal Revenue Code; (2) a corporation; (3) a limited liability company in which at least one member is a corporation; or (4) management of a mobilehome park, as defined in Section 798.2 of the California Civil Code.” (ii) The notice required under clause (i) may, but is not required to, be provided in the rental agreement. (8) Housing restricted by deed, regulatory restriction contained in an agreement with a government agency, or other recorded document as affordable housing for persons and families of very low, low, or moderate income, as defined in Section 50093 of the California Health and Safety Code, or subject to an agreement that provides housing subsidies for affordable housing for persons and families of very low, low, or moderate income, as defined in Section 50093 of the California Health and Safety Code or comparable federal statutes. (b) Protection for renters. Notwithstanding any other law, after a renter has continuously and lawfully occupied a residential rental unit for 12 months, the landlord of the residential rental unit shall not terminate the tenancy without just cause, which shall be stated with specificity in the written notice to terminate tenancy. If any additional adult renters are added to the lease before an existing renter has continuously and lawfully occupied the residential rental unit for 24 months, then this subdivision shall only apply if either of the following are satisfied: (1) All of the renters have continuously and lawfully occupied the residential rental unit for 12 months or more. (2) One or more renters have continuously and lawfully occupied the residential rental unit for 24 months or more. (c) Opportunity to cure. Before a landlord issues a notice to terminate a tenancy for just cause that is a curable lease violation, the landlord shall first give notice of the violation to the renter with an opportunity to cure the violation pursuant to paragraph (3) of Section 1161 of the California Code of Civil Procedure. If the violation is not cured within the time period set forth in the notice, a three-day notice to quit without an opportunity to cure may thereafter be served to terminate the tenancy. (d) Notice. A landlord subject to this section shall provide notice to the tenant, which may take the form of a lease provision or an addendum to a lease, and which shall include the following, in no less than 12 -point type: “California law limits the amount your rent can be increased. See Section 1947.12 of the Civil Code for more information. Local law also provides that after Commented [Staff12]: Subdivisions (b)-(d) are adapted from state law. Item 13 Attachment A - Draft Ordinance - Just Cause Eviction and Security Deposit (Strikeout, Underlined, Annotated Version)        Item 13: Staff Report Pg. 17  Packet Pg. 141 of 406  Not Yet Approved 230516 sm 010 10 all of the tenants have continuously and lawfully occupied the property for 12 months or more or at least one of the tenants has cont inuously and lawfully occupied the property for 24 months or more, a landlord must provide a statement of cause in any notice to terminate a tenancy. See Chapter 9.68 of the Palo Alto Municipal Code for more information.” (e) Dispute resolution. Nothing in this chapter abrogates the responsibility of landlords to comply with the requirements of Chapter 9.72 (Mandatory Response to Request for Discussion of Disputes between Landlords and Tenants) of the Palo Alto Municipal Code. As applicable, a renter may request mandatory discussion of rental housing disputes by filing a written request for dispute resolution according to section 9.72.040 (Dispute Resolution Process). 9.68.050. General relocation assistance or rent waiver for no-fault eviction. (a) Applicability. This section shall be applicable only to tenancies for which just cause is required to terminate the tenancy under section 9.68.040 (Just-cause evictions required), except it shall not apply to a tenancy when relocation assistance payment is available to the renter through section 9.68.060 (Relocation assistance for evictions without at-fault just cause in structures or lots containing 10 or more residential rental units) and the assistance available through section 9.68.060 is greater in value than the assistance available through this section. (b) Relocation assistance for renters. (1) Form of assistance. If a landlord issues a termination notice based on a no- fault just cause described in section 9.68.020 (f)(2), the landlord shall, regardless of the renter’s income, at the landlord’s option, do one of the following: (A) Assist the renter to relocate by providing a direct payment to the tenant as described in section 9.68.050 (b)(3). (B) Waive in writing the payment of rent for the final month of the tenancy, prior to the rent becoming due. (2) Notice required. If a landlord issues a notice to terminate a tenancy for no- fault just cause, the landlord shall notify the renter of the renter’s right to relocation assistance or rent waiver pursuant to this chapter. If the landlord elects to waive the rent for the final month of the tenancy as provided in section 9.68.050 (b)(1), the notice shall state the amount of rent waived and that no rent is due for the final month of the tenancy. (3) Amount. (A) The amount of relocation assistance or rent waiver shall be equal to one month of the renter’s rent that was in effect when the landlord issued the notice to terminate the tenancy. Any relocation assistance shall be provided within 15 calendar days of service of the notice. Commented [Staff13]: This section largely restates the tenant relocation assistance available in section 1946.2 of the Civil Code. Commented [Staff14R13]: Section 1946.2(g)(2) of the Civil Code provides that units "shall not be subject to both a local ordinance requiring just cause for termination of a residential tenancy and this section." In order to ensure that both the city's and the state's relocation assistance options are available to tenants, the city must restate the state's relocation assistance. Commented [Staff15]: This means that this section will cover buildings receiving a certificate of occupancy in the last 15 years, unlike state law. Item 13 Attachment A - Draft Ordinance - Just Cause Eviction and Security Deposit (Strikeout, Underlined, Annotated Version)        Item 13: Staff Report Pg. 18  Packet Pg. 142 of 406  Not Yet Approved 230516 sm 010 11 (B) If a renter fails to vacate after the expiration of the notice to terminate the tenancy, the actual amount of any relocation assistance or rent waiver provided pursuant to this section shall be recoverable as damages in an action to recover possession. (C) The relocation assistance or rent waiver required by this section shall be credited against any other relocation assistance required by any other law. (4) Effect of noncompliance. A landlord’s failure to strictly comply with this subdivision shall render the notice of termination void. 9.68.035 9.68.060 Relocation assistance for no-fault evictions without at-fault just cause in structures or lots containing 10 or more residential rental units. (a) Applicability. This section shall be applicable only to structures or lots containing 10 or more residential rental units. This section shall not apply to any of the following: (1) A single-family dwelling; (2) Rooms or accommodations in hotels, boardinghouses, or lodginghouses which are rented to transient guests for a period of less than thirty days; (3) Dwelling units in a condominium, community apartment, planned development or stock cooperative as defined in Chapter 21.40, or in a limited equity stock cooperative as defined in the California Business and Professions Code; (4) Dwelling units in which housing accommodations are shared by landlord and tenant; (5) Housing accommodations in any hospital, extended care facility, asylum, nonprofit home for the aged, or in dormitories owned and operated by an institution of higher education, a high school or an elementary school; (6) Housing accommodations rented by a medical institution which are then subleased to a patient or patient's family; (7) Dwelling units whose rents are controlled or regulated by any government unit, agency, or authority, or whose rent is subsidized by any government unit, agency, or authority; or (8) Dwelling units acquired by the city of Palo Alto or any other governmental unit, agency or authority and intended to be used for a public purpose. (b) For purposes of this section , a "no-fault eviction" means an action by a landlord to recover possession of a rental unit for any reason other than the following: (1) The tenant has failed to pay rent to which the landlord is legally entitled. (2) The tenant has violated a lawful obligation or covenant of the tenancy. (3) The tenant has refused the landlord reasonable access to the unit for the purposes of making repairs or improvements, for any reasonable purpose Commented [Staff16]: The previous definition of "rental unit" in Chapter 9.68 contained the exceptions in paragraphs (1) through (8). To keep the applicability of this section consistent, the exceptions from the previous definition are added here. Commented [Staff17]: The city is required to make our "no-fault" definition consistent with state law. Item 13 Attachment A - Draft Ordinance - Just Cause Eviction and Security Deposit (Strikeout, Underlined, Annotated Version)        Item 13: Staff Report Pg. 19  Packet Pg. 143 of 406  Not Yet Approved 230516 sm 010 12 as permitted by law, or for the purpose of showing the rental unit to any prospective purchaser or tenant. (4) The tenant is permitting a nuisance to exist in, or is causing damage to, the rental unit. (5) The tenant is using or permitting a rental unit to be used for any illegal purpose. (6) The landlord seeks in good faith to recover possession of the rental unit in order to comply with regulations relating to the qualifications of tenancy established by a governmental entity, where the tenant is no longer qualified. No fault evictions shall include, without limit ation, actions in which the landlord seeks in good faith to recover possession of the rental unit: (7) To demolish or otherwise permanently withdraw the rental unit from offer for rent or lease pursuant to California Government Code sections 7060-7060.7. (8) To perform work on the building or buildings housing the rental unit that will render the rentable unit uninhabitable; (9) For use and occupancy by the landlord or the landlord's spouse, grandparents, brother, sister, father-in-law, mother-in-law, son-in-law, daughter-in-law, children, or parents provided the landlord is a natural person. (10) For no specified cause. (c)(b) Amount required. Whenever a landlord seeks an eviction for any reason other than to comply with regulations relating to t he qualifications of tenancy established by a governmental entity or at-fault just cause, as defined in this Chapter, other than temporary displacement of 31 days or fewer, the landlord shall provide a relocation assistance payment as follows: (1) Unit Type Amount 0 bedrooms $7,000 1 bedroom $9,000 2 bedrooms $13,000 3 or more bedrooms $17,000 If the residential rental unit is occupied by two or more tenantrenters, the landlord shall provide each tenantrenter with a proportional share of the required payment. One half of the payment shall be paid at the time that the landlord provides notice of its intent to seek no-fault a qualifying eviction; the remainder of the payment shall be paid to each tenantrenter when that tenantrenter vacates the unit. (2) Notwithstanding subsection (dc)(1), each residential rental unit that, at the time the landlord provides notice of its intent to seek no-faultan eviction subject to this section, is occupied by a low-income household as defined in Chapter 16.65, a tenantrenter who is 60 years of age or older, a tenantrenter who is disabled within the meaning of Government Code section 12955.3, or a Commented [Staff18]: Preexisting section 9.68.035 (Relocation assistance for no-fault eviction) has its own definition of "at-fault just cause." There is only one preexisting, local at-fault just cause with no mirror in the new definition: 9.68.035(b)(6). That has been added as an exception here to keep the coverage of this section consistent. Item 13 Attachment A - Draft Ordinance - Just Cause Eviction and Security Deposit (Strikeout, Underlined, Annotated Version)        Item 13: Staff Report Pg. 20  Packet Pg. 144 of 406  Not Yet Approved 230516 sm 010 13 tenantrenter who is a minor, shall be entitled to a single additional relocation payment of $3,000. This amount shall be divided equally among the qualifying (i.e. low-income, elderly, disabled, or minor) tenantrenters. In order to receive this additional payment a qualifying tenantrenter must provide written notice to the landlord of his or her eligibility along with supporting evidence within 15 days of receiving the landlord's notice. The entirety of this additional payment shall be paid within 15 days of the tenantrenter's written notice to the landlord. (d)(c) Notice. Prior to or at the same time that the landlord provides notice of its intent to seek no-faultan eviction subject to this section, the landlord shall serve on the tenantrenter a written notice describing the rights described in this section. The failure to provide this notice shall not ope rate as a substantive defense to an eviction pursuant to California Government Code sections 7060- 7060.7. (e)(d) Annual adjustment. Commencing July 1, 2019, the relocation payments specified in this section shall increase annually at the rate of increase in the "rent of primary residence" expenditure category of the Consumer Price Index (CPI) for all urban consumers in the San Francisco-Oakland-San JoseHayward Region, not seasonally adjusted, for the preceding calendar year. Current rates shall be published on the city's website. (f)(e) Request for waiver. A landlord may request a waiver or adjustment of the relocation assistance payment required by this section only upon a showing that strict application of its requirements would effectuate an unconstitutional taking of property or otherwise have an unconstitutional application to the property. Requests for waiver or adjustment must be submitted in writing to the director of planning and development services together with supporting documentation at least 90 days before the proposed termination of tenancy. Requests shall be acted on by the city council. (g)(f) Authority to regulate. The director of planning and development services may issue regulations implementing this section. 9.68.070. Security deposit limit. (a) Applicability. This section applies to security for leases of all residential rental units. (b) Limits. A landlord may not demand or receive security, however denominated, in an amount or value in excess of an amount equal to one and a half months’ rent, in the case of unfurnished rental units, in addition to any rent for the first month paid on or before initial occupancy. (c) Security deposit purposes. The landlord may claim of the security only those amounts as are reasonably necessary for the purposes specified in subdivision 9.68.020 (g). The landlord may not assert a claim against the renter or the security for damages to the premises or any defective conditions that preexisted the tenancy, for ordinary wear and tear or the effects thereof, whether the wear and tear preexisted the tenancy or occurred during the tenancy, or for the Commented [Staff19]: These updates reflect the methodology currently used by staff. Item 13 Attachment A - Draft Ordinance - Just Cause Eviction and Security Deposit (Strikeout, Underlined, Annotated Version)        Item 13: Staff Report Pg. 21  Packet Pg. 145 of 406  Not Yet Approved 230516 sm 010 14 cumulative effects of ordinary wear and tear occurring during any one or more tenancies. 9.68.040 9.68.080 TenantRenter's remedies. (a) Defense to Action to Recover Possession. Failure of a landlord to comply with any of the provisions of this chapter shall provide the tenantrenter with a defense in any legal action brought by the landlord to recover possession of the residential rental unit. (b) Defense to Action to Collect Rent. Failure of a landlord to comply with any of the provisions of this chapter shall provide the tenant renter with a defense in any legal action brought by the landlord to collect rent. (c) Injunctive Relief. A tenant renter may seek injunctive relief on his or her own behalf and on behalf of other affected tenants renters to enjoin the landlord's violation of this chapter. (d) Remedies are Nonexclusive. Remedies provided in this section are in addition to any other existing legal remedies and are not intended to be exclusive. 9.68.050 9.68.090 Nonwaiver. Any waiver or purported waiver by a tenantrenter of rights under this chapter prior to the time when such rights may be exercised, except a rejection of a one -year lease offered in accordance with Section 9.68.030, shall be void as contrary to public policy. SECTION 3. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid. SECTION 4. The Council finds that this project is exempt from the provisions of the California Environmental Quality Act (“CEQA”), pursuant to Section 15061 of the CEQA Guidelines, because it can be seen with certainty that there is no possibility that the ordinance will have a significant effect on the environment. SECTION 5. This ordinance shall be effective on the thirty-first day after the date of its adoption. INTRODUCED: PASSED: Item 13 Attachment A - Draft Ordinance - Just Cause Eviction and Security Deposit (Strikeout, Underlined, Annotated Version)        Item 13: Staff Report Pg. 22  Packet Pg. 146 of 406  Not Yet Approved 230516 sm 010 15 AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ City Attorney City Manager ____________________________ Director of Planning and Development Services ____________________________ Director of Community Services ____________________________ Director of Administrative Services Item 13 Attachment A - Draft Ordinance - Just Cause Eviction and Security Deposit (Strikeout, Underlined, Annotated Version)        Item 13: Staff Report Pg. 23  Packet Pg. 147 of 406  May 11, 2023 Page 1 of 4 Renter Protection Policy Work Status Update (dated May 11, 2023) On November 29, 2021, the City Council adopted a package of rental protection policies.1 The policies are summarized below. Since that Council meeting, staff have focused primarily on the three policies identified by Council as priorities. Some policies are also identified for incorporation into Housing Element programs. Policy Brief Description Work Status 1 Rental Registry Program (RRP) (CC Motion #E) HIGH PRIORITY Establish a program that gathers information on rental units in City for purposes identified by Council. In progress. Council referred the design and implementation to the Policy & Services Committee, including proposed fees, resources, and timeline. P&S Committee provided feedback in September 2022.2 RRP Program Development Phase I - RFP released March 2023. Proposals received April 2023 and are currently under review. Community meeting in March 2023. Draft enabling ordinance prepared. Ordinance public hearings in Spring/Summer/Fall 2023. RRP Program Development Phase II – This future phase will include community outreach, City budgeting and staffing, and RRP software development. RRP Program Implementation Phase I – This future phase will include 1 City Council Meeting Minutes, 11/29/21: https://www.cityofpaloalto.org/files/assets/public/agendas-minutes- reports/agendas-minutes/city-council-agendas-minutes/2021/11-november/20211129/20211129amccs.pdf City Council City Manager Report ID # 13786, 11/29/21: https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council- agendas-minutes/2021/11-november/20211129/20211129pccs.pdf City Renter Protection Policy Development Webpage: https://www.cityofpaloalto.org/Departments/Planning- Development-Services/Long-Range-Planning/Renter-Protection-Policy-Development 2 Policy & Services Committee Meeting City Manager Report ID # 14139, 09/13/22: https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/policy-and- services-committee/2022/20220913/20220913ppsr.pdf Item 13 Attachment B - Renter Protection Policy Work Status Update        Item 13: Staff Report Pg. 24  Packet Pg. 148 of 406  May 11, 2023 Page 2 of 4 Policy Brief Description Work Status community outreach, RRP launch, and rental unit initial registrations. RRP Program Implementation Phase II – This future phase will include community outreach and RRP reporting. HRC discussed the RRP at their February 2023 meeting as part of their Motion I Council referral, see Item 8 below. 2 Expand Tenant Relocation Assistance (CC Motion #B) HIGH PRIORITY Update existing local ordinance to extend tenant relocation assistance requirements to properties with ten units or more Completed. Updated ordinance that expanded Tenant Relocation Assistance codified in the Palo Alto Municipal Code Section 9.68.035.3 HRC discussed Tenant Relocation Assistance at their February 2023 meeting as part of their Motion I Council referral, see Item 8 below. 3 Eviction Reduction (CC Motion #C) PRIORITY Create local ordinance to expand eviction protections in AB 1482 to include rental units receiving occupancy within the last 15 years. In progress. Preparation of draft local ordinance underway. Ordinance first reading and second reading Spring/Summer 2023. HRC discussed Eviction Reduction at their February 2023 meeting as part of their Motion I Council referral, see Item 8 below. 4 Anti-Rent-gouging (CC Motion #D) Consider preparation of a local ordinance to expand the number of units covered by AB 1482 rent increase limitations. Not started. Council referred the anti-rent gouging topic to the Policy & Services Committee, including the review and discussion of measures to address loopholes. This work is incorporated 3 Palo Alto Municipal Code Section 9.68.035 Relocation assistance for no-fault eviction: https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-0-0-66806. Item 13 Attachment B - Renter Protection Policy Work Status Update        Item 13: Staff Report Pg. 25  Packet Pg. 149 of 406  May 11, 2023 Page 3 of 4 Policy Brief Description Work Status into the Housing Element workplan. Staff anticipates work on this topic starting Summer 2023. HRC discussed Rent Increases at their February 2023 meeting as part of their Motion I Council referral, see Item 8 below. 5 Security Deposit Limit (CC Motion #F) Create a local ordinance that limits the locally allowable amount of security deposit charged for unfurnished rental units to 1.5 times the monthly rent. In progress. Preparation of draft local ordinance underway. Ordinance first reading and second reading Spring/Summer 2023. 6 Fair Chance Ordinance (CC Motion #H) Consider preparation of a local ordinance that supports fair chance policies. Not started. Council referred the fair chance policy topic to the Policy & Services Committee, including a staff analysis of consequences and unintended consequences. This work is incorporated into the Housing Element workplan. Staff anticipates work on this topic starting Summer 2023. HRC discussed Fair Chance at their February 2023 meeting as part of their Motion I Council referral, see Item 8 below. 7 Right to Counsel (CC Motion #G) Provide tenants with legal assistance in housing-related cases. Ongoing. Ongoing to identify ways to support County efforts on right to counsel. Santa Clara County recently won a grant in Spring 2023 to investigate the Right to Counsel topic. City staff will coordinate with the County regarding investigation findings. Item 13 Attachment B - Renter Protection Policy Work Status Update        Item 13: Staff Report Pg. 26  Packet Pg. 150 of 406  May 11, 2023 Page 4 of 4 Policy Brief Description Work Status City staff met with the recently formed Bay Area Housing Finance Authority in Spring 2023, which is preparing a Bay Area Eviction Study, the results of which will likely explore the Right to Counsel topic. City staff will coordinate with BAFHA regarding the study findings. City staff joined the Santa Clara County Eviction, Tenant/Landlord Disputes, & Rent Relief Collaborative that meets monthly and discusses the Right to Counsel topic. 8 Improving Implementation of Existing Renter Protection Policies (CC Motion #I) City review and assessment of the implementation of existing renter protection policies. In progress. Council referred this implementation review and assessment to the Human Relations Commission. HRC discussed many existing and new Renter Policies at their February 2023 meeting as part of their Motion I Council referral.4 HRC recommendations will be brought to City Council for direction in 2023. 4 For more specifics, refer to the Human Relations Commission February 9, 2023 meeting minutes and the April 27, 2023 meeting minutes whereby one February 9, 2023 HRC motion was clarified: https://www.cityofpaloalto.org/Departments/Community-Services/Other-Services/Commissions/Human- Relations-Commission/HRC-Current-Year-Agendas-and-Minutes. Item 13 Attachment B - Renter Protection Policy Work Status Update        Item 13: Staff Report Pg. 27  Packet Pg. 151 of 406