City of Santa Monica
California

Staff Report
3449

Review Potential Goals and Policy Options for Existing Housing Stock and Consider Role of New Housing Models

Information

Department:Development Review 3Sponsors:
Category:04. Study Sessions

Recommended Action

Recommended Action

Staff recommends that the City Council review and discuss potential goals and policy options for protecting the Citys existing housing stock and consider what role new housing models may have in the production of housing that consists of both affordable and market rate units serving the full range of family and household sizes in the City.

 

Staff Report Body

Executive Summary

Southern California is experiencing a severe housing crisis that is driving the cost of living beyond the reach of an increasing share of the population.  This is particularly acute in attractive areas like Santa Monica.  Among the City’s highest priorities is the protection of the community’s existing housing stock, particularly rent-controlled housing, while also promoting the production of housing that consists of both affordable and market rate units serving the full range of family and household sizes. 

 

On December 18, 2018, Council held a study session on corporate housing in response to growing concerns about the erosion of the City’s supply of affordable housing due to market pressures.  Council specifically expressed concerns about adverse impacts of renovation of rent-controlled housing and the construction of new housing that appeared to be designed to facilitate temporary occupancy.  Council gave direction to bring back options for protecting existing rent-controlled units, amending the corporate housing definition, revising the Zoning Ordinance to address new housing models, and enhancing enforcement measures.

 

This study session report provides an overview of staff’s analysis of new housing models and presents concepts for addressing new housing models in follow up to Council’s corporate housing study session and discussions on SRO housing that occurred earlier this year. As part of this study session, staff recommends that Council discuss the following:

  1. Policy Goals
    1. Confirm the City’s intent to encourage production of new housing to serve the full range of family and household sizes while protecting the City’s existing rental-housing stock, and particularly affordable / rent-controlled units, from negative impacts associated with new housing market trends.
    2. Reaffirm that the City’s residential neighborhoods should be protected from negative impacts associated with temporary occupancy and certain commercial uses.
  2. Lease Duration
    1. Assess benefits of requiring property owners to offer minimum one-year leases for all rental units, or for existing rental units, including rent-controlled units.
    2. Consider whether to permit medium-term housing (tentatively defined as leases between 31 and 365 days) and, if yes, identify parameters for such use.
    3. Confirm requirement that leases be with natural persons for all rental units, or existing rental units, including rent-controlled units .
  3. Unit Size

a.  Assess whether market-rate micro units are a desirable and necessary component of Santa Monica’s housing stock and, if yes, identify parameters for such use.

4.     Consider whether there is support for new housing models not included above and, if yes, identify parameters for such uses.

 

Following Council discussion, staff will establish the parameters for an ordinance to amend the Municipal Code; gather feedback from the Planning Commission, Housing Commission, and Rent Control Board; and then return with a draft ordinance for Council consideration.

 

Background

Summary of Council Direction on Corporate Housing

On August 14, 2018, as part of direction to examine statutory renter protections for outdated definitions and compensations, and in light of rapidly intensifying market pressures on local rents, Council directed staff to study what constitutes “corporate housing” and “short-term rentals” under the Municipal Code – both are currently prohibited land uses.

 

On December 18, 2018, Council held a study session to review and discuss potential goals and policy options to guide preparation of an updated corporate housing ordinance.  Council direction to staff was wide-ranging and included the following:

 

·         Provide recommendations on how to facilitate innovative housing types without displacing existing residents.

·         Require minimum one-year leases for rent-controlled units and a requirement that leases be made only to natural persons.

·         Return with an Interim Zoning Ordinance to create a new “medium-term housing” definition that is a commercial use prohibited in all residential zones.

·         Provide recommendations on how to protect all existing rental units from conversion to medium-term housing,” including potential regulation of incremental permits for floor-plan changes that may lead to use as medium-term housing.

·         Recommend increased fines and penalties for use of rent-controlled properties for unpermitted medium-term housing, including failure to submit buyout offers made to tenants occupying rent-controlled units to the City as required. Require that buyout offers be submitted to the Rent Control Board when presented to the tenant.

·         Consider new regulations to restrict advertising of unlawful corporate housing.

·         Review feasibility of a vacancy tax for leaving residential units vacant.

·         Assess enforceability of potential new regulations.

This staff report focuses on land use regulations directly related to medium-term housing and new housing models. Advertising prohibitions and penalties for violations of local law will be associated with any model adopted and included in any ordinance proposed.  Consideration of a residential vacancy tax is a separate analysis not included here. 

 

Summary of Council Action on SRO Housing

On May 14, 2019, Ordinance No. 2610 was adopted to establish a prohibition on Single-Room Occupancy uses that are not 100% Affordable Housing Projects or specialized housing in all Zoning Districts. Direction to staff was provided to expeditiously conduct comprehensive analysis of both new housing models and existing regulations and to provide options for instituting new or amended zoning regulations to support development of a diverse range of housing types for all income levels and household sizes, including consideration of whether smaller units should be included as part of the City’s overall housing stock.

 

Links to the following Council discussions about Corporate Housing and Single-Room Occupancy Housing are provided in Attachment “A”:

·         City Council Study Session, Corporate Housing, December 18, 2018

·         City Council Staff Report, SRO Housing, March 26, 2019

·         City Council Staff Report, SRO Housing, April 23, 2019

·         City Council Staff Report, SRO Housing, May 14, 2019

 

Housing Policy and the Need to Develop a Range of Housing Types

The dimensions of the housing crisis extend far beyond Santa Monica.  California Governor Gavin Newsome recently said, “The high price of housing and rent makes it almost impossible for many families to live in the communities where they work. Housing costs are a huge impediment to businesses finding and attracting workers. And families see how their paycheck doesn’t go nearly as far as it should. I’ve long said that California must use every tool in its toolbox to confront the housing affordability crisis.”

 

Santa Monica has long been committed to doing its share and more to keep Santa Monica an inclusive and affordable community despite mounting market pressures.

Through a variety of discussions over the years with community input at the Council, Planning Commission, and Housing Commission, a need has been identified for development of new affordable housing and specialized housing for all household sizes, as well as market-rate multi-family apartments for all household sizes near transit in Santa Monica. These discussions have occurred at Council, Planning Commission, and Housing Commission most recently in the context of discussions regarding market-rate Single Room Occupancy (SRO) uses, the 2017 Downtown Community Plan, the 2015 Zoning Ordinance update, various amendments to the City’s Affordable Housing Production Program (AHPP), and preparation of the City’s Housing Element.

 

As documented in the December 18, 2018 Council staff report, there is a need for a variety of housing types to serve permanent residents and temporary residents, including residents in the city for the purposes of education, healthcare, or any other kind of business.  Recently, several new housing trends have emerged that seek to address the housing affordability gap that exists in the Southern California region, and specifically, the westside.  As rents have continued to increase, housing providers have proposed increasingly creative models to allow the opportunity to live in Santa Monica and immediately surrounding areas.

 

Changing Regional Housing Trends

Housing development trends in the local and regional context show a shift toward higher density multi-family projects intended to offset rising land value and construction costs. Regionally, development trends illustrate movement toward smaller average unit size, including movement toward micro-units, particularly in high-density, expensive metropolitan markets where proximity to work and school, neighborhood amenities, and public transportation, are key factors. While housing models have long included SRO housing  micro unit housing concepts that provide affordable housing in urban centers, or serve as a housing type for supportive and transitional housing, emerging trends show that in higher density metropolitan areas, a focus has been on development of market-rate rental apartment projects with smaller-sized units that reflect a balance between location, overall unit square footage, and building amenities.  In addition to the trend toward smaller units, there has been a move towards co-living models that are based on smaller living spaces, whether individual or shared. 

 

Discussion

In order to be responsive to Council’s direction to ensure the protection of existing rent-controlled units while also providing options for innovative housing models that do not displace existing tenants, the following sections present policy options for Council’s consideration.  This section concludes with a proposed framework to address this multi-faceted issue.

 

Protection of Existing Housing Stock

As a city with approximately 71% of its residents in rental housing, the City has maintained a long-standing commitment to protecting tenants and existing housing stock, particularly in rent-controlled housing.  Within the context of a statewide housing shortage and associated impacts on housing affordability, the City has an interest in ensuring that this valuable resource is retained for permanent housing to the greatest extent possible. As such, the following policy options, or any combination of options, are presented for Council consideration:

 

A.     Prohibit medium-term housing (tentatively defined as leases between 31 and 365 days) and new housing models in existing rent-controlled units. 

This option would provide land use protections for tenants of existing rent-controlled units by explicitly addressing Council’s concerns regarding the loss of rent-controlled housing due to a combination of market pressures and outdated definitions in the Municipal Code. As a point of reference, according to the 2010 American Community Survey, there were approximately 51,000 housing units in Santa Monica, of which approximately 13,000 units were owner-occupied.  The Santa Monica Rent Control Board’s most recent annual report indicated there were 27,445 units subject to rent control law at the end of 2018.

 

B.     Prohibit medium-term housing and new housing models in all existing rental housing units.

This option would apply to all existing rental housing stock, including multi-unit rental housing and ownership units, such as single unit dwellings and condominiums, that are being rented to tenants.  Staff has observed changes in floor plans for recently approved housing projects that appear to be a precursor to dividing units for multiple tenants/leases.  Extending protections to all existing rental housing would be consistent with Council’s policy intent to offer incentives for housing production that is available for permanent, long-term residents.

 

C.    Either Option A or B plus regulations to protect residential neighborhoods from the impacts of new housing trends.

This option is intended to provide broader protections for the City’s residential neighborhoods, particularly Ellised units to the extent allowed by law, which are potentially vulnerable to conversion to other uses that may not be in keeping with the purpose of residential neighborhoods for long-term, permanent housing stock.

 

Concepts for Consideration: Duration of Lease

As detailed in the December 18, 2018 Council staff report, there is a segment of the housing market seeking “medium-term” housing options of between 31 days and 365 days (consumers of this housing model include relocated employees; younger workers holding jobs for shorter durations and/or workers who are working under more flexible employment models and therefore seeking housing with greater durational flexibility; those looking for interim housing while they search for permanent housing, and those seeking extended vacations in home-like settings). Council should consider the following policy options:

 

A.     Require property owners to offer minimum leases of one year

This option will affirm that the City’s housing stock is intended for the provision of long-term permanent housing. Council should consider whether this option should apply to all rental units, including new construction, or existing rental units, including rent-controlled units.

 

B.     Allow property owners more flexibility in duration of lease

There are circumstances where requiring a one-year lease may not be practical given the varying needs of tenants. As a result, Council may want to consider providing flexibility in duration of lease by lowering the minimum lease term to a time period of less than a year.  Another possibility may be a hybrid approach where initial leases are required to be one-year but reduce to minimum of 31 days after the first year.

 

Create New Medium-Term Housing Definition

Regardless of whether Council is interested in medium-term housing, the existing definition of “corporate housing” is too specific and presents challenges in enforcement.  As a result, a new definition for “medium-term housing” will need to be created in the place of “corporate housing”.  The duration of lease for medium-term housing should be considered by Council.  As context, the Municipal Code already defines short-term vacation rentals as 30 days or less. If there is interest in defining long-term permanent housing with lease duration of at least one year, a logical definition for medium-term housing would be leases between 31 and 365 days.  However, Council may also choose to define the maximum duration of lease as something less than 365 days.

 

Leasing to Natural Persons

An associated concept to duration of lease is regarding who may sign a lease.  Similar to regulations adopted by the Rent Control Board in August 2018, Council could consider requiring that leases for rental units only be to natural persons.  This would further re-affirm that the City’s housing supply is largely intended for long-term, permanent housing and not corporate entities, which may encourage use of rental units for other than long-term housing. Council should consider whether this option should apply to all rental units, including new construction, or existing rental units, including rent-controlled units.

 

Concepts for Consideration: Medium-Term Housing Parameters

As a policy matter, the City provides process and development standard incentives for housing projects.  If is the intent of Council to encourage housing production while providing flexibility in lease terms, there are limitations that Council may wish to consider in order to ensure that new construction includes a mix of both medium-term and longer-term housing.  If there is interest in allowing medium-term housing in new construction, the following are presented as policy options for Council consideration:

 

A.     Allow medium-term housing in new construction in certain commercial zones or all commercial zones citywide.

With a base assumption that medium-term housing would be prohibited in residential neighborhoods to protect from negative impacts associated with temporary occupancy and certain commercial uses, if Council was interested in allowing medium-term housing, an option would be either allowing this kind of housing in all commercial areas citywide or only in certain zones.  Providing limitations as to location would provide a relief valve for pressure to locate medium-term housing in residential neighborhoods.  As such, there may be circumstances that Council believes is appropriate to allow this kind of housing if consistent with policy objectives.

 

B.     Allow medium-term housing in a percentage of units in new construction, or no limit on number.

If medium-term housing is allowed, a consideration is parameters on how much should be allowed in a project.  If viewed within the context of Council’s support of housing production intended to increase the City’s housing supply, it may be appropriate to limit the number of units in a project that could be reserved for medium-term housing.  As an alternative, if Council believes that prohibiting medium-term housing in all existing rental housing units including multi-unit rental units and ownership units, such as condominiums and single-unit dwellings – that are being rented to tenants is sufficient, then there could also be no limit on how much of a new project could have medium-term housing units. As a point of reference, according to the 2010 American Community Survey, there were approximately 51,000 housing units in Santa Monica, of which approximately 13,000 units were owner-occupied.  The Santa Monica Rent Control Board’s most recent annual report indicated there were 27,445 units subject to rent control law at the end of 2018.

 

C.    Allow medium-term housing in new construction, but with higher affordable housing obligations, or keep affordable housing obligations the same.

Due to the shorter lease duration, it stands to reason that the economics of a project that includes some or all medium-term housing are different than a project that may have lower turnover in units.  As a result, Council should consider whether it would be appropriate to study whether such projects could withstand higher affordable housing obligations.  As an alternative, Council could also choose to keep affordable housing obligations the same (i.e. not taking medium-term housing into consideration).  Changes to affordable housing obligations would require a new nexus study.

 

Concepts for Consideration: Market-Rate Micro units with Common Area Amenities

On March 26, April 23, and May 14, 2019, Council discussed the issue of Single-Room Occupancy (“SRO”) Housing projects in the context of several applications in the Downtown that had been submitted.  Ultimately, Council voted to enact an ordinance prohibiting market-rate SRO projects pending further study of the issue.  The SRO Housing definition in the Zoning Ordinance contemplated transitional housing and similar projects as evidenced by the specific standards in SMMC Section 9.31.330.  This use classification was not intended to allow entire buildings of market-rate units without certain common area amenities.  As noted above, addressing the regional housing crisis requires some flexibility in unit types, size of living spaces, and amenities.  Within metropolitan housing markets, trends have developed that include smaller units associated with common area amenities.

 

Staff reviewed of peer cities’ approach to micro-units, specifically, ordinances for San Francisco, Los Angeles, Berkeley, and West Hollywood.  The ordinances were instructive in shaping the concepts presented herein for unit size and common area amenities.  Most of the ordinances refer to the Building Code to establish a minimum unit size (150 SF) and also do not require common area amenities.  San Francisco was an exception in that their ordinance defines a micro-unit with reduced square footage (fully contained units with bathroom and kitchen) with living area of less than 220 SF.  These micro-units are allowed in very limited circumstances (e.g. student housing, affordable housing).  The term micro-unit for purposes of this report will refer to fully contained units with bathroom and kitchen in order to distinguish between living units that may not contain individual kitchen and bathroom facilities that is traditionally associated with Single-Room Occupancy units or housing and the City’s current use classification for SRO housing projects.

 

Micro-units, if developed with complimentary amenities, could provide a more affordable market rate response to the shortage of housing.  If Council supports incorporating this emerging housing type into the range of permissible unit types, staff would bring back an ordinance at a future meeting to add this new use classification and associated standards. The following options regarding micro-units are presented for Council’s consideration:

 

A.                 Allow micro-units in new construction or not at all

If Council believes that micro-units are a desired component of Santa Monica’s housing stock, allowing micro-units would create opportunities for a diversity of households to live in Santa Monica.  As a starting point and within the context of protecting existing housing supply, Council could consider allowing micro-units only in new construction projects or within changes of use from commercial use to residential use.  As an alternative, micro-units could also be prohibited.

 

B.     If micro-units are allowed, permit as a singular use type or part of a mix of units.

If micro-units are allowed, Council should consider in what manner they would be allowed – as a single building type or as part of a mix.  Micro-units allowed as a single building type would allow flexibility for innovative housing types without the restriction of typical physical layouts and also increase the number of overall housing units produced due to their smaller size.  However, allowing micro-units as part of a mix of units would also provide a greater diversity of housing units within individual projects to meet the diverse housing needs of the City and allow developers to meet market demand in a variety of ways. As background information, the requirement for a unit mix for Tier 2 projects has been in place since the 2015 Zoning Ordinance Update and the 2017 Downtown Community Plan.  Prior to that, there were relatively few two- and three-bedroom units produced in the city.

 

C.    If micro-units are allowed, require special standards such as minimum and maximum unit size, required amenities within the unit, and required common area amenities.

If micro-units are allowed, Council should consider special standards that may apply.  In researching peer cities’ ordinances and as a starting point, staff has identified parameters that may be of interest to Council including minimum and maximum unit size, required amenities within the unit, and required common area amenities.  The primary concern regarding micro-units has been quality of life for tenant, specifically the lack of community socializing space and minimal amenities in the unit.  Special standards would address the inherent micro-unit tradeoff of private living space to common living area with a focus on livability.

 

D.                If micro-units are allowed, allow in certain zones or citywide.

Council should consider in which zones micro-units would be appropriate within the context of protecting existing housing supply in residential neighborhoods.  Commercial zones are largely where the greatest amount of development activity is occurring and where the majority of future housing production is likely to occur.  In providing direction on geographic limitations on locating micro-units, Council should also consider the likely tenant profile of micro-unit occupants especially with large healthcare and educational employers in the city, in addition to the tech industry.

 

Concepts for Consideration: New Housing Models

Staff has researched co-living models in the region and also in other jurisdictions to evaluate how co-living could potentially be introduced as a housing model with defined rules and regulations in order to create more housing options and in turn create more diversity in the city’s housing stock. While there are different corporate entities that offer or market co-living situations, these kinds of projects are typically distinguished by a greater number of bedroom than in traditional multi-family units, particularly in a new construction context, allowance for leasable bedrooms, and flexibility in lease term.  

 

Peer Cities Research – Co-Living

Staff conducted a review of peer cities’ approach to the co-living concept, which centers around renting bedrooms in a larger multi-unit residential or mixed-use project; where one or two individuals can enter a lease agreement for a single bedroom (with or without a private bath) and use shared kitchen and bath facilities, and common living spaces with other tenants who typically each enter into separate leases. Specifically, staff reviewed ordinances for a number of cities that rely on group housing or group residential definitions and do not currently have special development or use standards that would differentiate it from traditional multi-unit dwelling units. In contrast, San Francisco and San Jose both have regulations that provide more specific parameters for co-living. San Jose adopted regulations earlier this year as a way to test whether this housing type helps the municipality address the housing crisis in the Bay Area. The following summarizes several of the key components of these cities’ ordinances:

 

City of San Jose defines “Co-Living Community” as a residential community where individual secure bedrooms are rented to one or two persons. Special standards include the following:

·         Co-living communities contain bedrooms that are provided for an established duration with a lease agreement. Individual bedrooms that contain a full kitchen facility are not considered a co-living community.

·         A co-living community must have common open space and shared full kitchen facilities must serve a minimum of six bedrooms and must include interior common space.

·         Minimum amount of common area required per bedroom. An individual bedroom may not have an external entryway.

·         Bedrooms are minimum 100 SF in size; average 275 SF in size; and maximum 400 SF in size.

·         Increased bicycle parking requirements; reduced vehicle parking requirements; and stipulation for Transportation Demand Management program requirements.

·         Each bedroom within a Co-Living Community is considered a separate living quarter to be occupied by permanent residents (lease terms are not stipulated).

·         Each bedroom is intended to be a unit for Regional Housing Need Allocation purposes, and will, subject to further study, be equivalent to dwelling units under the city’s Inclusionary Housing Ordinance.

·         Co-Living Community established as a permitted use in San Jose’s Downtown subject to a Special Use Permit for new development.

 

San Francisco’s zoning ordinance permits co-living, subject to its group housing definition:

“A Residential Use that provides lodging or both meals and lodging, without individual cooking facilities, by prearrangement for a week or more at a time, in a space not defined by this Code as a dwelling unit. Such group housing shall include, but not necessarily be limited to, a Residential Hotel, boardinghouse, guesthouse, rooming house, lodging house, residence club, commune, fraternity or sorority house, monastery, nunnery, convent, or ashram. It shall also include group housing affiliated with and operated by a medical or educational institution, when not located on the same lot as such institution…”

 

·         Residential Use is defined as a use category that provides housing for San Francisco residents, rather than visitors, including dwelling units, group housing, senior housing, homeless shelters, etc.

·         Density limitations are established to regulate the number of bedrooms in a group housing project and limitations vary by zoning district.

·         Group housing can also be defined as student housing or 100% affordable housing and in certain zoning districts, group housing is not permitted unless it is a student housing or 100% affordable housing subtype.

 

Research - Membership-Based Transitory Housing

Staff has received inquiries from companies that are proposing housing models that are neither permanent housing nor hotels and as such, the Zoning Ordinance does not perfectly address the proposed use. These hybrid models are being proposed in commercial zoning districts (as opposed to residential neighborhoods) and typically involve persons renting a bed in a large common area with shared kitchens and bathrooms.  The model is an evolution of existing subscription-based extended stay hotels.  Members pay a monthly fee and can choose to stay in any available location for a few days, a week, or extend to several weeks but it is clear that these models are not intended for long-term permanent housing.  Under the City’s current regulations, stays of less than 30 days could potentially be considered a violation as the use might be more akin to lodging or vacation rentals.  The companies have shared that the average length of stay is typically several weeks. However, these kinds of uses have both residential and commercial elements as the model evolves to accommodate travelers, tenants transitioning between employment, and others looking for medium-term accommodations.  As a result, this kind of use appears to be an evolution of hostels and similar lodging facilities and are more in line with commercial instead of residential uses.  If there is interest, Council could direct staff to further explore accommodating and simplifying the process for these kinds of accommodations, which could potentially alleviate some of the pressure for temporary housing in residential neighborhoods.

 

Policy Options – New Housing Models

If Council is interested in accommodating new housing models as a desirable component of Santa Monica’s housing stock, the following are policy options for Council consideration:

 

A.     Allow new housing models in new construction or not at all.

In order to protect existing housing supply, Council should consider limiting new housing models to within new construction, or within changes of use from commercial to residential uses.  However, if Council would prefer to reaffirm that existing and future housing rental units are intended only for long-term, permanent housing, it would not be appropriate to accommodate new housing models that largely have an emphasis on flexibility in duration of lease and options for shared living quarters.

 

B.     If new housing models are allowed, consider certain zones or citywide.

If new housing models are allowed, similar to micro-units, there may be value in providing geographic limitations as to where this land use may be located.  Given that these new housing models can have varying impacts on adjacent residential neighborhoods and within the context of the City’s incentives for housing production in areas with access to high frequency transit and access to daily needs, Council should consider limiting these uses to certain commercial zones, or all commercial zones citywide only and prohibiting such uses in residential zones.

 

C.    If new housing models are allowed, consider special limitations.

If new housing models are allowed, some limitations on the use may be considered including limitations on occupancy, requirements for amenities within units and in common areas, and other considerations that increase livability in a co-living or membership-based transitory housing setting. Since the living quarters may only include leasing of beds with shared kitchens, bathrooms, and living areas, it is important that there are requirements in place that ensure the livability of such housing types.

 

Staff Recommendation

Table 1 summarizes staff’s recommendation on all of the above concepts with respect to duration of lease, whether micro units should be allowed, and whether new housing models should be allowed.  This recommendation also provides staff’s recommendation as to how these concepts could be addressed in existing and future housing supply with recommendations on geographic limitations.

 

 

 

 

Regulating Advertising of Medium-Term Housing

Council can also prohibit advertising of leasing activity that is in violation of local law.

 

Remedies

Regardless of the regulatory policy choice ultimately chosen, it is equally important to further buttress available remedies to ensure that violations are appropriately deterred. While a significant set of remedies are currently available for violations of the Zoning Ordinance, each remedy has its limitations.  Currently, violations of the Zoning Ordinance are subject to all of the following remedies:

1.     Administrative Enforcement by Citations (SMMC Chapter 1.09) or Compliance Order (SMMC Chapter 1.10).

2.     Criminal Prosecution, with a maximum fine of $500 and/or imprisonment of up to 6 months for each violation.

3.     Permit Suspension or Revocation.

4.     Civil Lawsuit to enjoin the violation.

 

Historically, the City has principally relied upon Administrative and Criminal enforcement tools.  While such tools are effective in many situations, each contains limitations.  Administrative remedies – generally up to $1,000 per violation – are relatively quick and easy to impose; however, due to the limitations in fine amounts and the limited judicial process available to enforce such fines, they are less effective against entrenched violators.  Criminal prosecution can be a powerful remedy; however, the serious congestion in the criminal courts system creates significant delays and, at times, inadequate judicial attention to even serious cases.  While permit suspensions and revocations can have powerful consequences (e.g. a business operating without a permit), such consequences still need to be enforced by administrative, criminal or civil means.

 

Civil remedies have not historically been a favored tool by enforcement staff because it can be a much slower process, comparatively far more staff-time intensive, and, generally, a win only results in a court enjoining the violation.  Such an outcome does not provide meaningful deterrence against serious and entrenched violators.

 

Staff recommends that the Council consider meaningfully enhancing the City’s civil remedies in the two following ways.  First, staff recommends that the Council consider adoption of significant civil penalties.  While administrative penalties are limited by state law, and criminal penalties are limited by both state law and the City Charter, far less limitations apply to the adoption of civil penalties.  A significant civil penalty could provide meaningful deterrence against violations, especially against violations largely motivated by economic incentives.

 

Second, the City Attorney’s Office will examine and consider the appropriateness of receivership and forfeiture processes as remedies for very serious and entrenched violations.  In situations involving, among other things, serious health and safety violations (e.g. slum housing), state law authorizes local enforcement agencies to request a court-appointed receiver to take over a property, remedy the violations, and, if necessary, sell the property to pay for the remediation costs, administrative costs and fines.  See California Health & Safety Code §§ 17980 – 17992.  While this remedy is available in only rare and extreme cases, the City Attorney’s Office will also explore ways to expand the availability and use of this remedy to address serious violations of local law that harm the community’s general welfare.

 

Next Steps

Once staff receives clear policy direction from Council, staff will draft redline changes and seek input from the Planning Commission, Housing Commission, and Rent Control Board prior to bringing back an ordinance for adoption at a future Council Meeting.

 

Financial Impacts and Budget Actions

There is no immediate financial impact or budget action necessary as a result of the recommended action.

 

Meeting History

Sep 10, 2019 5:30 PM  City Council Regular Meeting
draft Draft