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Home My WebLink AboutStaff Report 2306-1620CITY OF PALO ALTO CITY COUNCIL Special Meeting Monday, August 07, 2023 Council Chambers & Hybrid 5:30 PM Agenda Item 6.PUBLIC HEARING: Adoption of an Ordinance Amending Section 9.68.010 (Purpose) and Section 9.68.040 (Just Cause Evictions Required) in Palo Alto Municipal Code Chapter 9.68, Rental Housing Stabilization, to Reduce the Minimum Time Period Required for Renters to Qualify for Just Cause Eviction Protections. CEQA status—exempt under CEQA Guidelines Section 15061(b)(3). City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Planning and Development Services Meeting Date: August 7, 2023 Report #:2306-1620 TITLE PUBLIC HEARING: Adoption of an Ordinance Amending Section 9.68.010 (Purpose) and Section 9.68.040 (Just Cause Evictions Required) in Palo Alto Municipal Code Chapter 9.68, Rental Housing Stabilization, to Reduce the Minimum Time Period Required for Renters to Qualify for Just Cause Eviction Protections. CEQA status—exempt under CEQA Guidelines Section 15061(b)(3). RECOMMENDATION Staff recommends that the City Council adopt the attached Ordinance (Attachment A) amending Section 9.68.010 (Purpose) and Section 9.68.040 (Just Cause Evictions Required) in Palo Alto Municipal Code Chapter 9.68, Rental Housing Stabilization, to reduce the minimum time period required for renters to qualify for just cause eviction protections. BACKGROUND On June 5, 2023, the City Council introduced Ordinance No. 55891 to extend just cause eviction protections to more rental units in Palo Alto when compared with state law and to establish a security deposit limit for unfurnished rental units. Additionally, Council directed staff to return in August 2023 on the Consent calendar with an ordinance that halves the minimum time period for renters to qualify for just cause eviction protections; City Council directed reducing the timeframe for which a renter must lawfully and continuously occupy a rental unit from twelve (12) months to six (6) months. City Council also directed halving other rental unit occupancy timeframe exemption periods when a new adult renter(s) is added to existing rental unit leases. For additional details and discussion, please see the June 5, 2023 Council report and the June 5, 2023 Council meeting minutes.2 1 Ordinance No. 5589 -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, Introduced June 5, 2023, Passed June 19, 2023: https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=48257&dbid=0&repo=PaloAlto 2 City Council Report, 06/05/2023 (Item #13): https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=12530. ANALYSIS For renters covered by the Palo Alto just cause eviction protection ordinance, these local eviction protections require landlords to: •Terminate tenancies only for “just cause,” which could be either “at fault,” usually when the renter is in non-compliance with their rental agreement, or “no fault,” when the reason is justifiable but not within the renter’s control, •Give renters notice of their right to just cause evictions in the future, •State the specific just cause reason justifying an eviction in a termination notice sent to a renter, •Provide renters with the opportunity to cure a curable lease violation prior to issuing a termination notice, and •Provide financial relocation assistance or a rent waiver to renters in cases of a “no fault” just cause termination. As directed by City Council on June 5, 2023, staff prepared a draft ordinance (Attachment A) that reduces the rental unit occupancy timeframe for renters to qualify for Palo Alto’s just cause eviction protections. The draft ordinance (Attachment A) amends Palo Alto’s recently adopted just cause eviction protection ordinance to reduce the minimum time period required for renters to qualify for just cause eviction protections from twelve (12) months to six (6) months for Palo Alto renters. The minimum time period is also halved for instances when a new adult renter(s) is added to existing rental unit leases. This reduced timeframe recognizes the potential for housing instability in the event of a no-fault eviction, including the initial outlay of overall move-in costs, especially for cost-burdened renters. The minor code amendments are limited to PAMC Sections 9.68.010 and 9.68.040(b) and (d). Palo Alto’s just cause eviction protections remain more protective than those in state law enacted through California Assembly Bill 1842 (2019), the Tenant Protection Act, because more Palo Alto rental circumstances qualify for eviction protections than those outlined in state law. TIMELINE If City Council takes action to approve the draft ordinance (Attachment A), the second reading is tentatively scheduled for August 21, 2023. The ordinance would become effective 30 days after the second reading, tentatively September 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. As previously reported, 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 significant resource impacts to the City Attorney’s office. POLICY IMPLICATIONS STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Not Yet Approved 1 9 8 9 Ordinance No. _____ The Council of the City of Palo Alto ORDAINS as follows: th Cycle Housing Element policies and programs; and Not Yet Approved 230803 sm 010 2 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, L. 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, M. On June 5, 2023, the City Council directed staff to draft an ordinance that further extends just cause eviction protections by reducing the occupancy timeframe for Palo Alto renters to qualify for eviction protections when compared with the timeframe outlined in California Assembly Bill 1482 (2019), N. On August 7, 2023, the city found that the ordinance was not in conflict with and was more protective than California Assembly Bill 1482 (2019) in regard to the number of rental units and rental circumstances receiving eviction protections and relocation assistance, 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, O. On June 5, 2023, the City Council directed staff to draft an ordinance that further extends just cause eviction protections by reducing the occupancy timeframe for Palo Alto renters to qualify for eviction protections when compared with the timeframe outlined in California Assembly Bill 1482 (2019), P. The City Council finds and determines that this amendment to the 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. Subdivision (b) of Section 9.68.010 (Purpose) of Palo Alto Municipal Code Chapter 9.68 (Rental Housing Stabilization) in Title 9 (Public Peace, Morals and Safety) is hereby amended to read as follows (new text underlined and deletions struck-through): 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 renters 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 to Not Yet Approved 230803 sm 010 3 minimize displacement of renters 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, to and extend them to renters living in qualified residential rental units that received a certificate of occupancy within the last fifteen years, and to reduce the minimum occupancy time period for renters to qualify for eviction protections. SECTION 3. Subdivision (b) and (d) of Section 9.68.040 (Just Cause Evictions Required) of Palo Alto Municipal Code Chapter 9.68 (Rental Housing Stabilization) of Title 9 (Public Peace, Morals and Safety) is hereby amended as follows (new text underlined and deletions struck- through): 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: […] (b) Protection for renters. Notwithstanding any other law, after a renter has continuously and lawfully occupied a residential rental unit for 12 6 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 12 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 6 months or more. (2) One or more renters have continuously and lawfully occupied the residential rental unit for 24 12 months or more. […] (d) Notice. A landlord subject to this section shall provide notice to the tenant renter, 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 all of the Not Yet Approved 230803 sm 010 4 tenants renters have continuously and lawfully occupied the property for 12 6 months or more or at least one of the tenants renters has continuously and lawfully occupied the property for 24 12 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.” […] SECTION 4. 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 5. 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 6. This ordinance shall be effective on the thirty-first day after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ City Attorney City Manager Not Yet Approved 230803 sm 010 5 ____________________________ Director of Planning and Development Services ____________________________ Director of Community Services ____________________________ Director of Administrative Services