News from the Mountain View Rental Housing Committee August 2017 July – September 2017

News from the Mountain View Rental Housing Committee

Background:

On November 8, 2016, the residents of the City of Mountain View voted to adopt Measure V, also known as the Community Stabilization and Fair Rent Act (CSFRA), to stabilize rents and to provide just cause eviction protections for certain rental units in Mountain View.

Effective April 5, 2017, rent levels and rent increases for covered rental units, built before February 1, 1995 must comply with the CSFRA. Single family homes, condominiums, and duplexes are not covered by the CSFRA.

For more background go to the Mountain View website:

http://www.mountainview.gov/council/rental_housing_committee/default.asp

Rental Housing Committee Meeting 07/10/2017

The meeting was called to order at 7:00pm, roll call taken, minutes approved from the previous meeting, and then for the next hour oral communication from the public was heard by the committee which included any subject that was not on the agenda.  These subject matters were broad in nature however many pertained very closely to the issues of rent stabilization and the community.  This part of the meeting and its’ hour long time span is mentioned in this report only to emphasis the importance of this subject to the people.

The first item on the agenda of unfinished business from the June 19th meeting began when further modifications were made to the Petition and Hearing Processes which will now be formally changed by the Staff so that by the next meeting these procedures can be either be adopted or once again revised.

The next item on the agenda was to determine a ‘Fair Rate of Return’ standard for the landlords.  This is very important in that it could allow the landlords to raise rents higher then what is allowed under the CSFRA by petitioning the city with a list of rising expenses that resulted in declining revenues in the past years.  ‘Expenses’ is the key word and defining this word was tonight’s issue.  Per the CSFRA, expenses can include property tax, ongoing maintenance costs and certain improvements to the property, and further, this law has given discretionary powers to the RH Committee for determining additional expenses that could also be included.  This evening the RH Committee staff presented an expanded list of numerous expenses that they felt should be considered as part of the landlord’s petition package which then brought many people in attendance of this evening’s meeting, wanting to voice their opinion.  This generated hours of discussions from both renters and landlords articulating their views very passionately, very intensely and sometimes very volitively.

No decision was made this night and at about 12:00am the Rental Housing Committee was adjourned to reconvene again on July 24, 2017

Rental Housing Committee Meeting 07/24/2017

This meeting was called to order at 7:00pm with a packed room of both renters and landlords.

Unfinished Business –

6.1

Because little was accomplished at the previous meeting of 7/10 the discussion went immediately to the ‘Unfinished Business’ of the evening’s agenda which continued the discussion of regulations for the Petition and Hearing Process and defining a Fair Rate of Return Standard for the landlords. 

With the guidance and approval of the legal team, the staff presented their recommendations for the above to the committee, however one of the members wished to propose a different approach in defining the Fair Rate of Return Standard.  Rather than using the suggested CPI ‘All’ index which follows costs that he felt did not accurately reflect housing profits, he proposed using the index specific to the rental housing market which would/could overestimate the numbers. 

This generated lengthy discussions and other proposals from each of the RHC members.  The legal team listened and cautioned of potential litigation as the suggestions drifted away from the original recommendations that had been challenged and tested in other courts.

Further discussions and other alternatives were offered however when the vote was taken this new proposal of using the rental housing market index was approved by a decision of 3-2.

Upon hearing this outcome the public in the courtroom made it clear they were unhappy with this decision and were quite vocal.

6.2

RHC acknowledged that they have received the report from the Mountain View City Council for reimbursement of advanced funding.  The RHC was designed to run independently of the City and will pay for its’ own costs by annual fees from the rent-controlled apartments.

New Business –

7.1

The effective date of Measure V is in question:

After Measure V passed in the November election, December 23, 2016 was the effective date for the measure to be enacted.  That date is now in question because of a lawsuit that was filed 2 days before the law was to take effect. 

The lawsuit brought a temporary restraining order which blocked the measure for about 4 months.  Finally on April 5th a court lifted this suspension and since that date the City of Mountain View has informally accepted April 5th as the implementation date for Measure V. 

Renters and landlords now see different dates for Measure V’s effective date and attorneys for both are requesting clarity from the RHC committee and all are heading to court.

Rental Housing Committee Meeting 08/24/2017

This meeting was called to order at 7:00pm, roll call was taken and minutes were approved.

Oral Communication from the Public was presented passionately by both renters and landlords and among numerous subjects included some of the following concerns: one renter has filed a lawsuit against his landlord for overpayment, mobile homes should be covered under Measure V, landlords have no incentives to upgrade or improve their properties with the CSFRA in place.

New Business-

7.1 Introduction of Budget Process – Ms. Kong, Mountain View’s Finance and Administrative Services Director presented a report reconfirming that any upfront costs that the RHC was currently generating and that the City was covering, would be fully reimbursed through this committee’s proceedings.  Early in October City Staff will present an RHC proposed budget to this committee for approval by October23rd.   

Unfinished Business-

6.1 Adopt Regulations for a Vega Adjustment Standard to be incorporated into the Fair Return Standard

This standard was to help landlords who had kept their rents at or below market rates and   now because of Measure V the rent roll back is hurting these landlords the most and causing ‘disproportionately low rents’.

Defining ‘disproportionately low rents’ is part of the Vega Standard so the City Staff looked to other rent control cities for their approach to this definition and found some of the cities have used data from HUD, the Department of Housing and Urban Development.  Their data is used to help in the definition and as a baseline calculate Section-8 housing vouchers.

Some members of the RHC stated using HUD data for this application is not acceptable and pointed out that these numbers seemed unrealistically low and although in some parts of Santa Clara County they may be accurate, they are not accurate in Mountain View. 

A few other approaches were suggested, some extremely overly complicated which produced further discussions.  All members of the RHC voiced their concerns pertaining to this complex issue but as the evening wore on a vote was taken and approved using HUD data for individual unit adjustment.

Rental Housing Committee Meeting 09/11/2017

This meeting was called to order at 7:40pm, roll call was taken and minutes from July24, and August 28th were approved.

Oral Communication from the Public – the subject discussed tonight was that some of the landlords are now passing thorough the utilities to the renters as part of their rent.

Unfinished Business –

9.1 Consideration of Establishing the Effective Date of the Community Stabilization and Fair Rent Act – The RHC deliberated and announced they had decided the effective date of this act is December 23, 2016

New Business-

10.1 Proposed Information Technology System including Database/Registry – Due to the scope and breadth of the CSFRA, implementation could require a reliable well-functioning IT system and currently all cities in California with Rent Stabilization programs use one. 

An IT system will require up front capital and ongoing operating costs.  To the extent that a system is not implemented or is not sufficiently robust, it is likely that greater staffing resources will be needed to handle the various tasks of the CSFRA.

Because of the potential expense, could there be other departments that could also benefit from this program?

The staff will bring to the next meeting additional information for the RHC’s consideration

10.2 Proposed Staffing Plan – After the report was given and discussion was concluded the following proposed staffing plan was approved:

  • 1 Program Manager
  • 2 Administrative Analyst I/II
  • 1 Office Assistant II

10.3 CSFRA Fee Methodology and Program – After the report was given and discussion was concluded the RHC approved:

Setting the same fee for both full and partially covered units.  This methodology would treat Fully and Partially Covered Units the same and establish the same fee for both types of covered units under the CSFRA that would recover the cost of the program. To ensure full funding of CSFRA program the Rental Housing Fees for a total of 16,788 Covered multi-family rental units would amount to the FY 2017-18 Budget divided by the total amount of units. This calculation is simple and easy to implement.

— Tamara Lewis, Observer

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