Item 25 - Rent Stabilization and Just Cause Eviction Ordinances

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Ordinance No. NS - ____ Page 24 of 46 (b) No later than June 30th each year, beginning with the year 2022, the City shall announce the amount of allowable re nt increase based on subsection (a) herein, which shall be effective as of September 1 st of that year. Section 8-1998.23141 – Reasonable Rate of Return. This ordinance allows for an annual adjustment of residential real property or mobilehome space rent of up to three percent (3%), or eighty (80%) of the change in the Consumer Price Index, whichever is less. A Consumer Price Index-based increase is found and determined to provide a just and reasonable return on a n owner’s property, and has been adopted to encourage good management, reward effi ciency, and discourage the flight of capital, as well as to be commensurate with returns on comparable investments, but not so high as to defeat the purpose of curtailing excessive rents and rental increases. Notwithstanding the foregoing, however, any owner of residential real property or a mobilehome park who contends that the limit on rental increases set forth in Section 8-1998.13140 above will prevent the owner from receiving a fair and reasonable return on their property may petition for relief from the cap set forth in section 8-1998.13140 pursuant to the procedures set forth in section 8- 1998.3this Division. Section 8-1998.33142 – Fair Return Petition for Rent Increase. (a) An owner of residential real property or a mobilehome park owner may petition for a rent increase in excess of that provided in section 8 -1998.1 in order to obtain a fair and reasonable return on their property (“Fair Return Petition”). Such Fair Return Petition shall be on an application form prescribed by the City Manage r and shall be decided by the City Manager, or their designee (“City Manager”). Owner shall provide a copy of any Fair Return Petition submitted to the City to the applicable tenant(s), and provide City with proof of completing such service to the applica ble tenant(s). The tenant(s) will then have thirty (30) days from the date of receiving the Fair Return Petition to reply or provide additional materials to the City in response to the Fair Return Petition. The applicant shall bear the burden of establis hing that a rate increase in excess of that provided in section 8-1998.1 is necessary to provide the applicant with a fair and reasonable return on their property, including by providing an independent financial report and verified financial data demonstra ting that without such an increase, they will not realize a fair and reasonable return on their property. (b) Applicant shall be responsible for all costs associated with the City’s review of the Fair Return Petition. Upon receipt of a Fair Return Petition, the City Manager shall determine the anticipated costs of review and if the employment of expert(s) will be necessary or appropriate for a proper analysis of the applicant’s request. If the City Manager so determines, the City Manager shall also deter mine the anticipated costs of employing such expert(s). The resulting figure shall be EXHIBIT 2