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HomeMy WebLinkAboutStaff Report 3.B 11/05/20180 r • za5$ DATE: November 5, 2018 TO: Honorable Mayor and Members of the City Council FROM: John C. Brown, City Manager r SUBJECT: Letter Requesting Governor Brown Extend Emergency Anti -price Gouging Restrictions RECOMMENDATION It is recommended the City Council approve, and execute the attached letter BACKGROUND Housing advocates, and groups and individuals concerned with housing affordability in Sonoma County and Petaluma, have addressed the City Council in the past asking for local regulation on rental units. Following the October 2017 fires, concerns expressed to the City Council have expanded to include rent gouging and tenant evictions. In February, 2018, the City Council considered regulations to provide protection for tenants from unjust evictions, but deferred from a decision at that time, relying instead on existing provisions of state law, including emergency anti -price gouging regulations imposed by the Governor. In October, 2017, Governor Brown declared a state of emergency in those counties affected by the October fires, and imposed anti -price gouging regulations. Those regulations imposed a ten (10) percent cap on rental increases; increases of greater amount are illegal, and can be prosecuted by local District Attorneys' offices. These regulations have been extended through December 4, 2018, when they are currently set to expire. DISCUSSION: State emergency anti -price gouging protections are linked to last year's gubernatorial declaration of emergency, which will need to be extended again for the emergency protections to continue. Petaluma's declaration of emergency expired earlier this year; any emergency regulations the City Council might adopt would need to be justified on new, housing -based findings of necessity. At the October 15, 2018 meeting, the Council was again encouraged to adopt local tenant protections. The City Council has thus far been reluctant to implement more permanent, local regulations related to rental housing, indicating an interest in a statewide solution to the problem. The Council has thus far been satisfied that state anti -price gouging regulations are providing the protection that tenants may need. The Council asked staff to prepare a letter requesting the Governor to extend emergency anti -price gouging regulations. As noted, if the City Council wishes to implement emergency legislation, findings of necessity which quantify the scope of the problem locally will need to be made. These finding may be difficult to make, given the dearth of Petaluma -specific statistics. Staff contacted the District Attorney's Office to quantify the extent to which rent gouging is occurring in Petaluma. We were advised that records are not kept on the basis of situs; the statistics obtained are for the whole of Sonoma County. Over the past year, the District Attorney's Office received over 320 tenant complaints of rent gouging. Those complaints resulted in 18 cases during that time. Those include 10 criminal or civil complaints that are currently being investigated, and 8 criminal or civil cases that were filed. The Council has indicated it wishes to pursue a gubernatorial extension to current emergency protections and, if those protections are not extended, to consider its options for moving forward thereafter. The attached letter was drafted with that goal in mind, and is provided for consideration and approval. As a seven -signature letter, it will need to be signed by the Council as a group, at the same time, to avoid a Brown Act compliance issue. FINANCIAL IMPACTS There are no calculable financial impacts to the City associated with the recommended action. ATTACHMENTS 1. November 5, 2018 Letter to Governor Brown 2 David Glass Mayor Chris Albertson Teresa Barrett Mike Healy Gabe Kearney Dave King Kathy Miller Councihnen:bers City Manager's Office 11 English Street Petaluma, CA 94952 Phone (707) 778-4345 Fax (707) 778-4419 E -Mail.• citymgr&i petaluma.ca.us Economic Development Phone (707) 778-4549 Fax (707) 778-4586 Housing Division Phone (707) 778-4555 Fax (707) 778- 4586 Information Technology Division Phone (707) 778-4417 Fax (707) 776-3623 Risk Management Division Phone (707) 776-3695 Fax (707) 776-3697 CITY F PETALUMA POST OFFICE BOX 61 PETALUMA, CA 94953-0061 November 5, 2018 The Honorable Edmund G. Brown, Jr., Governor State Capitol Building, Suite 1173 Sacramento, CA 95814 Dear Governor Brown: You know, as well as any of us living in Sonoma County, the devastation caused by the October 2017 fires. Thousands lost homes and were displaced. A year later, thousands are still displaced and struggle to put their lives back together. You also know an already tight and unaffordable housing market here in the North Bay has been exacerbated by the fires, and intense competition for rental housing exists. As sad as the loss of life and property, loss of a sense of security, and uncertainty about the future for fire victims, are those who would take advantage of the fires for their own gain. We applaud your leadership in 2017, and again this past April, in recognizing this problem and your efforts to protect innocent victims and all North Bay area renters from price -gouging. We write you today to request that you again extend your emergency anti -price gouging order from its scheduled December 4 expiration by an additional 90 days so the protections you have provided can remain in place through the transition from your administration to the next. We know from talking to our residents that the protections provided by your emergency orders have been a disincentive to landlords who would have otherwise increased rents beyond the ten (10) percent limit you imposed. Weare aware of one mobile home park owner in our City who is poised to announce a 45% rent increase on December 5. Landlord and property management associations around the state have cooperated with your order, and have notified their members of both its limitations and the consequences of violation. We also know that protections in the law were necessary, because there have been those who've ignored the law, attempted to extract exorbitant rent increases from their tenants, and have been subject to the intervention of the District Attorney's Office to prevent rent gouging. We understand that the Sonoma County District Attorney's Office has received over 320 tenant complaints of rent gouging in the past year. The DA's Office indicates v they are currently investigating 10 criminal or civil complaints, and have filed 8 criminal or civil cases. These numbers may not seem great, but if they are multiplied by the number of counties subject to your emergency order last October, the result is that a significant number of Californians have benefitted from, and have been protected by, your anti -price gouging order. On behalf of ourselves, our residents who rent, and our community as a whole, we respectfully ask that you continue these protections, and extend your emergency anti -price gouging order by an additional 90 days. Sincerely, David M. Glass, Mayor Chris Albertson, Councilmember Gabe Kearney, Councilmember Kathleen Miller, Councilmember Michael Healy, Vice Mayor Teresa Barrett, Councilmember Dave King, Councilmember D