HomeMy WebLinkAboutStaff Report 2311-228919.SECOND READING: Adoption of an Ordinance Amending the Palo Alto Municipal Code to
Add Chapter 9.65 and Amend Chapter 9.72 to Establish a Mandatory Registry Program
of Residential Rental Units in the City of Palo Alto; CEQA Status - Exempt under CEQA
Guidelines Section 15061(b)(3) (FIRST READING: November 27, 2023 PASSED 6-1, Tanaka
No).
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: December 18, 2023
Report #:2311-2289
TITLE
SECOND READING: Adoption of an Ordinance Amending the Palo Alto Municipal Code to Add
Chapter 9.65 and Amend Chapter 9.72 to Establish a Mandatory Registry Program of Residential
Rental Units in the City of Palo Alto; CEQA Status - Exempt under CEQA Guidelines Section
15061(b)(3) (FIRST READING: November 27, 2023 PASSED 6-1, Tanaka No).
RECOMMENDATION
In accordance with City Council’s prior action on November 27, 2023, staff recommends
approval on second reading of the attached Ordinance (Attachment A). The Ordinance amends
the Palo Alto Municipal Code (PAMC) to add Chapter 9.65 (Residential Rental Registry Program)
and amends Chapter 9.72 (Mandatory Response to Request for Discussion of Disputes Between
Landlords and Tenants) to establish a mandatory rental registry program of residential rental
units in the City of Palo Alto.
BACKGROUND
On November 27, 2023, City Council held a public hearing on the Rental Registry Program (RRP),
which included a first reading of a draft Ordinance to establish the program.1 In a vote 6-1
(Tanaka no), City Council took the following actions:
1. Adopted an Ordinance establishing a mandatory rental registry program that collects
rental unit information for multi-family units and single-family rental units, enables cost
recovery fees, and allows for enforcement;
2. Directed staff to commence with a phased implementation initially with multi-family
housing (3-units and above), and return to Council to evaluate the potential expansion
to all rental properties including single-family homes at the end of year two;
3. Directed staff to return to Council with a contract for professional services,
authorization for one new full-time position in FY 2024-2025, and resolutions as detailed
in the staff report;
1 City Council City Manager Report # 2308-1904, November 27, 2023:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=13307.
4. Directed staff to survey existing enforcement mechanisms and Ghost House (extended
vacancy) data collection in other jurisdictions and return to Council by end of calendar
year 2024; and
5. Amend Attachment A to include an event-based registration on unlawful detainers and
rent increases.
In summary, City Council approved the draft Ordinance with minor text amendments, provided
RRP implementation direction to the City Manager, and requested additional staff research
efforts.
ANALYSIS
Staff updated the draft Ordinance (Attachment A) to reflect City Council action on November
27, 2023. The updates add any increase in rent and the filing of an unlawful detainer complaint
as two additional events for which landlords would be required to amend their rental unit
registrations. Therefore, the four events listed specifically in the Ordinance that would
necessitate landlord event-based reporting are as follows:
•Any increase in rent,
•A notice to quit is sent to a renter,
•An unlawful detainer complaint is filed, or
•An eviction.
TIMELINE
If approved, the Ordinance would become effective on the 31st day after the second reading,
tentatively January 11, 2024.
FISCAL/RESOURCE IMPACT
As discussed in the November 27, 2023 City Manager Report, implementing the RRP will have a
fiscal impact due to the need for new software, consultant services, and new staff resources.
Staff will return to City Council for consideration of a professional services contract and/or
authorization of a new 1.0 full-time equivalent employee in FY 2024 - FY 2025. Staff will also
return to City Council for RRP participation fee establishment on a per rental unit basis. Given
that City Council directed staff to initially waive RRP participation fees, the City would need to
provide funding until corresponding revenue can support the program.
STAKEHOLDER ENGAGEMENT
Staff conducted community outreach and stakeholder engagement regarding the Rental
Registry Program, as discussed in the November 27, 2023 City Manager Report. Staff will
continue to conduct ongoing community outreach and stakeholder engagement activities in
conjunction with program development and implementation.
ENVIRONMENTAL REVIEW
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: Ordinance Adopting Residential Rental Registry Program
APPROVED BY:
Jonathan Lait, Planning and Development Services Director
Not Yet Approved
Ordinance No. _____
Ordinance of the Council of the City of Palo Alto Adopting Chapter 9.65
(Residential Rental Registry Program) and Amending Chapter 9.72 (Mandatory
Response to Request for Discussion of Disputes Between Landlords and
Tenants) to Establish a Mandatory Registry Program of Residential Rental Units
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 and accessory and junior accessory dwelling units to properties
with multi-family apartment buildings containing a variety of unit types;
D. There is a need to ensure that housing is provided for people of all income levels and to
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 renters being at risk of displacement;
F. The City desires to implement policies for certainty, stability, and fairness in the rental
market for renters and landlords;
G. The City finds value in having an updated registry of rental units and landlord contact
information, for purposes such as informing City housing policy updates and assisting with
renter/landlord mediation services;
H. The City and State have instituted existing renter protections, and the City has an interest
in understanding the extent of awareness of these protections in the community and the
status of implementation;
I. A significant number of renters in Palo Alto are low-income and cost-burdened;
J. The City makes a significant investment on an ongoing basis regarding rental unit
protection, preservation, and production and will also soon implement the 6th Cycle
Housing Element policies and programs;
K. The City hosted public hearings to gain feedback on the Rental Registry Program, including
before the Human Relations Commission on September 23, 2021 and May 24, 2023, the
Planning & Transportation Commission on April 28, 2021 and May 31, 2023, City Council
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on November 8, 2021, November 15, 2021, and November 29, 2021, the Policy & Services
Committee on September 13, 2022, and the Housing Ad Hoc on August 31, 2023; and
L. The City Council finds and determines that the Residential Rental Registry Program
ordinance codified in Palo Alto Municipal Code Chapter 9.65 (Residential Rental Registry
Program) is adopted pursuant to the authority to protect the public health, safety, and
welfare.
SECTION 2. Chapter 9.65 (Residential Rental Registry Program) of Title 9 (Public Peace, Morals
and Safety) is hereby adopted as follows:
9.65.010. Purpose.
The purpose of this chapter is to adopt a residential rental registry program for the
city of Palo Alto, which will allow the city to:
(a) Learn about the Palo Alto residential rental landscape as it is experienced by
renters and landlords;
(b) Make data-informed policy decisions that protect public health, safety, and
welfare for the residents of Palo Alto and that support certainty, stability, and
fairness in the residential rental market for renters and landlords;
(c) Support community awareness of existing renter protections;
(d) Support the implementation of the city’s Housing Element goals, policies, and
programs, including providing information available to inform the city’s
significant investments in rental unit protection, preservation, and production.
9.65.020. Definitions.
For purposes of this chapter, the following terms are defined as follows:
(a) “Landlord” means 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) “Rental registry information” means the information required to be submitted
to the city of Palo Alto by a landlord pursuant to this chapter.
(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. The term “residential rental unit” shall not include an attached
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bedroom of a landlord-occupied dwelling where the landlord and renter(s) share
living facilities.
(e) “Renter” means a person or entity entitled by written or oral agreement to
occupy a residential rental unit to the exclusion of others.
9.65.030. Registration of residential rental units.
(a) Initial Registration of Residential Rental Units. The landlord of each residential
rental unit within the city of Palo Alto shall register the unit within the annual
open registration period established by the City Manager or their designee.
Registration must be completed using forms provided by the city, which may take
the form of a secure website, and which may be amended from time to time.
Registration is complete only when all rental registry information has been
provided to the city and all outstanding fees and penalties, if applicable, have
been paid.
(b) Renewal Registration. The landlord of each residential rental unit within the city
of Palo Alto shall renew the registration of each unit annually within the annual
open registration period established by the City Manager or their designee.
(c) Rental Registry Information Submission.
(1) At minimum, the following information shall be provided as part of the
initial and renewal registration of a residential rental unit:
i. The address of each residential rental unit,
ii. The name and contact information of the property owner and
property manager or landlord, as applicable.
(2) In addition to requiring the minimum information described in paragraph
9.65.030 (c)(1), the City Manager or their designee shall have the authority
to require or request additional information at initial or renewal
registration which may help to achieve the intended purpose of this
chapter.
(3) The City Manager or their designee shall have the authority to require
rental registry information to be submitted in a particular manner or on a
particular platform, such as on a secure website or through paper-based
forms, which may be amended from time to time.
(d) Event-based Registration Amendments.
(1) At minimum, landlords shall amend the registration of their residential
rental unit within 10 calendar days whenever one of the following events
occurs in relation to that residential rental unit:
i. Any increase in rent,
ii. A notice to quit is sent to a renter,
iii. An unlawful detainer complaint is filed, or
iv. An eviction.
(2) The City Manager or their designee shall have authority to designate
additional events which will require landlords to amend the registration of
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their residential rental units and which may help to achieve the intended
purpose of this chapter.
(e) Affidavit. Each initial and renewal registration and event-based registration
amendment shall be accompanied by an affidavit signed by the landlord
declaring under penalty of perjury that the information provided is true and
correct.
(f) Fees.
(1) For the sole purpose of reimbursing the city of Palo Alto for the reasonable
costs of maintaining residential rental unit registration records and related
administrative systems, and program administration, the landlord of each
residential rental unit to which this chapter applies shall pay a fee upon
initial and renewal registration in an amount to be set by the Palo Alto city
council.
(2) Notwithstanding paragraph (1) of this subsection, the city council may, in
its discretion, waive or reduce the fees for initial or renewal registration to
help achieve the intended purpose of this chapter.
(3) A landlord may not seek recovery of this fee from the renter(s) in
occupancy of their residential rental unit(s).
9.65.040. Rental registry information privacy.
The City will only affirmatively publish or disseminate rental registry information in
the aggregate, except that rental registry information describing individualized
residential rental units may be shared or distributed in the following circumstances:
(a) Individualized rental registry information regarding a renter’s tenancy at a
specific residential rental unit may be shared with that renter;
(b) The status of whether the City has or has not received rental registry
information regarding a residential rental unit may be shared with the public;
and
(c) As required by the California Public Records Act, individualized rental registry
information may be disclosed pursuant to a request.
9.65.050. Penalties.
(a) Penalties for Delinquency. Any landlord operating in the city that fails to
register or amend their residential rental units in accordance with this Chapter
shall pay, in addition to the amount of the registration fee, a penalty in an
amount to be determined by ordinance or resolution.
(b) Penalty Waiver. The City Manager or their designee shall have discretion to
waive this penalty fee for good cause and if the City Manager or their designee
determines that waiving the penalty fee would promote the purpose of this
chapter.
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(c) Action to Collect. If a landlord fails to comply with the fee requirements of this
Chapter, the city may refer the matter to a collection agency and/or the city
attorney may file a civil action against any landlord. Penalties may be added to
the residential rental unit registration fee. Penalties will become due and
payable along with the registration fee.
(d) Remedies Cumulative. All remedies prescribed under this Chapter shall be
cumulative and the use of one or more remedies by the city shall not bar the
use of any other remedy for the purpose of enforcing the provisions of this
Chapter.
SECTION 3. Chapter 9.72 (Mandatory Response to Request for Discussion of Disputes
Between Landlords and Tenants) of Title 9 (Public Peace, Morals and Safety) is hereby
amended as follows:
9.72.050. Property registration.
(a) The landlord of each residential rental property within the city shall register
the unit or units with the city according to the requirements of Chapter 9.65
(Residential Rental Registry Program), regardless of whether the residential
rental property is listed in Section 9.72.030. The registration shall include the
name and mailing address of the owner or owners of the property, as well as
the name, mailing address and contact telephone number of the person
having the legal authority to effectively resolve disputes arising under this
chapter.
For the sole purpose of reimbursing the city of Palo Alto for the reasonable
costs of maintaining property registration records and related administrative
systems, the owner or manager of each residential rental unit to which this
chapter applies shall pay a fee in an amount to be set by the Palo Alto city
council.
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.
Not Yet Approved
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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
____________________________
Director of Planning and Development
Services
____________________________
Director of Administrative Services