Editorial News Alert: Cudahy Votes for New Rental Registry Fee, Second Vote Still Needed
Editorial News Alert
Cudahy Votes for New Rental Registry Fee, Second Vote Still Needed
By Janet M. Gagnon,
Senior Vice President, Government Affairs & External Relations
On December 3rd, the Cudahy City Council voted 4-0 with Mayor Jose Gonzalez abstaining, to pass an ordinance establishing a new rental registration fee for multifamily properties built on or prior to February 1, 1995. The City Council must vote a second time on the ordinance to make it final. This is the last chance for owners with rental properties in Cudahy to make their voices heard against this extremely expensive and bloated new bureaucracy by emailing the full City Council and urging them to adopt a complaint-based registry instead.
According to the draft ordinance, beginning on February 1, 2025 a pro-rated monthly rental registry fee will be charged to multifamily rental housing providers for the period through June 30, 2025. Starting on July 1, 2025 and each year thereafter, the fee will be due on an annual basis. The initial fee amount has been set at $126 per rental unit per year. Penalties for late registration will be on an increasing basis: (1) 30 days late equals 10% penalty, (2) 31 to 60 days late equals 25% penalty, and (3) more than 60 days late equals 50% penalty.
Duplex owners that are living onsite in one of the two units will be charged a lower registration fee of $91 for their unit. However, duplex owners must still register the unit with the City each year.
This new ordinance will create a hugely expensive bureaucracy within the City. Salaries for the five staff positions involved all exceed $120,000 annually and the total price tag for the program is estimated at $520,000 per year. The reason for these hugely expensive costs is that the program was designed based on East Palo Alto and Oakland. These cities have DOUBLE the amount of area median incomes ($103,248 and $96,288) and average rents ($2,795 and $2,581) as Cudahy (AMI $49,596 and average rent $1,476). Clearly, these other cities can well afford a Cadillac program with exorbitant fees placed on the backs of their rental housing providers and renters. This is in strong contrast to Cudahy where its small businesses and residents have fewer financial resources.
This new bureaucracy dwarfs existing spending by the city on citywide sidewalk repairs and maintenance ($247,964), community services ($293,005) and code enforcement ($276,407). Surely these other programs should receive more support from the city rather than spending upfront costs on this new bloated bureaucracy to track a mere 4,194 rental units in the city.
It would make far more economic sense and provide much greater benefit to renters by using the $900,000 in American Rescue Plan Act funds that the city already has in hand to create a direct rental assistance program for low-income renters facing sudden job loss, illness or injury.
The proposed program will also penalize ALL rental housing providers (good and bad) as well as all renters (who will be required to pay their fair share of the new registration fee) by requiring registration of ALL rental units register rather than only those that have received complaints from renters for being non-compliant with existing rent stabilization and Just Cause eviction restrictions.
A complaint-based registry would require far fewer staff to administer as a fewer properties would be impacted. Also, it would properly target accused “bad actor” owners with City staff confirming any accusations prior to issuing penalties. In addition, it will allow for immediate recognition of problem properties as well as the number of renters impacted.
AAGLA zealously advocated for this far less expensive and better targeted complaint-based approach prior to the meeting with its formal comment letter (see attachments) as well as in-person at the December 3rd meeting. Unfortunately, such clear reasoning fell on deaf ears at the City Council. Apparently, the City Council is much more concerned with creating a bloated bureaucracy to punish all mom-and-pop rental housing providers even when they have done nothing wrong and are struggling to keep rents as low as possible to continue providing naturally occurring affordable housing.
Such unnecessary and severe additional costs will only drive more existing mom-and-pop owners out of business and their properties into the hands of developers to be replaced with luxury housing that existing renters will be unable to afford. These new costs will only fuel more gentrification and lead to more relocation of low-income renters. The fact that the City Council would rather blindly charge ahead with such an expensive and overreaching program without even trying a less expensive approach first is elitist, reckless and abusive towards small, independent rental housing providers and long-term, existing renters.
We urge all rental housing providers with properties in Cudahy to immediately email and call the full City Council to express their outrage at such reckless and extreme behavior in creating this bloated and overreaching registration program and registry fee. We also urge you to educate your renters about this new cost and have them contact the City Council to voice their opposition as well.
This article is for informational purposes only. If you have any questions regarding your property or specific tenancies and the requirements of any local law changes described herein, please consult with an attorney.
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