60A - EXECUTIVE ORDERS FOR COVID-19

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continue to work closely with state and local officials in keeping residents housed. As such, we request very specific remedies to our concerns. 1. GOVERNMENTS' SHORT-TERM RESPONSE OF COVID-19 DOES NOT CONSIDER IMPACTS ON HOUSING PROVIDERS 'There are several voluntary initiatives (Safe at Home guidelines) and existing regulations that provide stable pricing in the housing industry during this crisis. Unfortunately, hasty government responses to COVID-19 have resulted in prioritizing tenants and banks over taxpaying property owners. It is widely known that an overwhelming amount of rental housing providers are "mom and pop" (independent rental owners) and they do not have the cash nor credit to defer their expenses for more than a month. Rental housing providers remain ineligible for mortgage relief and federal aid (CARES Act), while they still have ongoing expenses with devastating consequences as shown below: Mortgage payments Property Taxes Insurance Utilities Employees and contractors Maintenance and supplies Security property Tax liens Loss of personal income and life savings Tarnished credit reports Deferral of capital improvements Inability to pay employees Breach of contract with contractors The cascading effects of nonpayment of rent are further summarized by the LA Times Editorial Board: It's not just renters. Landlords need help, too. As written, the City's rent freeze applies to all tenants regardless of their ability to pay (i.e. means - testing). Minor revenue balancing efforts within reason are needed to keep businesses solvent. While foreclosures are banned at the moment, there is little relief for rental housing providers. In fact, federal relief only applies to 27,000 rental housing properties out of approximately 22.7 million nationwide .2 Many lenders continue to demand payment and foreclosures will only become an eventuality. We request that City Council revise the order to allow housing providers the reasonable flexibility to rebalance their property mix. 2. THE CITY'S RENT CONTROL ORDER VIOLATES STATE LAW The City's Executive Order 2-2020 is not in conformance with state law or executive orders issued by the Governor of California. The City cites the authority to enact rent control through Executive Order N-28- 20. While it authorizes local government to impose substantive limitations on residential or commercial evictions, no such authority exists in the order to regulate rental rates. The Costa -Hawkins Rental Housing Act (Cal. Civ. Code § 1954.50, et. seq.) limits the ability of local governments to regulate rents in the following ways: Single family homes, condominium units, and housing built after February 1, 1995 are exempt from local rent controls (see Cal. Civ. Code § 1954.52); Rental property owners have the right, known as vacancy de -control, to set the initial rent following vacancy (see Cal. Civ. Code § 1954.53). ' The LA Times Editorial Board, "Los Angeles Times," Los Angeles Times, April 15, 2020, https://www.latimes. com/opinion/story/2020-04-15/coronavirus-landlord-renter-bailout. 2 "FHFA Moves to Provide Eviction Suspension Relief for Renters in Multifamily Properties," Public Affairs (Federal Housing Finance Agency, March 23, 2020), https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Moves-to-Provide-Eviction-Suspension-Relief-for- Renters-i n-Mu Itifam i I y-Properties. asp x) 60A-5