Item 26 - Long-Term Implementation Plan for the Rent Stabilization and Just Cause Eviction Ordinances

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Long-Term Implementation Plan for the Rent Stabilization and Just Cause Eviction Ordinances September 6, 2022 Page 4 2 9 3 0 used a consultant to conduct a fee study to determine the rental registry fee amount. However, the exact rental registry fee for the City will not be known until after a work plan is created (Recommendation # 4) and a fee study is conducted (Recommendation # 5). Based upon the fee study, the rental registry fee will be set as conservatively as possible to reduce financial impacts on tenants and landlords. Specifically, the fee will be as low and lean as possible so as to not create an unnecessary burden on tenants and landlords. Where staff can identify opportunities to contract out for services to keep the fee and costs as low as possible, staff will enter into consultant agreements. Staff will also identify ways to build upon other existing activities across the city to administer the ordinances. Staff intends for this fee to have a minimal financial impact on tenants and landlords. The fee study and ultimately the rental registry fee itself will be guided by these principles. RSG found that the program surplus and deficits varied on an annual basis in the Sample Jurisdictions that were surveyed. Years in which the programs operate at a deficit will be subsidized by the City. Years in which the program collects a revenue surplus can be addressed by holding the funding as reserves to account for future deficits, as well as reducing the rental registry fee in the subsequent fiscal year. Staff will prepare annual financial reports summarizing budgeted expenses, actual expenses, revenue, and reserves, if any. In addition, the City will allow landlords to pass-through no more than 50% of a unit’s rental registry fees to the tenant as a rent surcharge prorated over twelve months. Allowing for the cost sharing of the rental registry fee appears to be an industry standard, with the intention of promoting equity and shared responsibility amongst tenants and landlords. For example, if 50% of the registry fee is passed through to the tenant, and the total rental registry fee amount is $180, $90 would be passed-through to the tenant. When this is divided by 12 months, it equals an additional $7.50 per month for the City to monitor and ensure compliance for the tenant’s rent stabilized unit. The rental registry will be used to communicate the pass-through fee in a user-friendly system. Staff will also monitor landlord’s compliance with charging their tenants this pass-through fee in order to mitigate the risk of landlords charging their tenants 100% of the rental registry fee. RSG identified other considerations to be taken into account in regards to a rental registry fee. For example, the City may establish a fee for fully and partially covered units and/or make certain units exempt from paying a rental registry fee. Generally, a fully covered unit refers to rental units where both the RSO and JCEO apply, and partially covered units refer to units where only the JCEO applies. The City may also consider making certain units exempt from paying the rental registry fee, such as rental units occupied by rent- subsidized tenants (e.g. Housing Choice Voucher / Section 8). 4. Develop a Work Plan Providing staff for a Rental Housing Board (Recommendation #1), creating a rental registry (Recommendation # 2), and collecting rental registry fees (Recommendation # 3), will be included in an overall work plan to administer the ordinances. The City currently