Victory Alert: Pomona Rejects Rental Registry & Reconsiders Rent Stabilization
Victory Alert
Pomona Rejects Rental Registry & Reconsiders Rent Stabilization
By Janet M. Gagnon, Esq.
Chief Corporate Affairs Officer & SVP, Government Affairs
On October 21st, the Pomona City Council rejected the rental registry and permanent rent stabilization ordinance on a vote of 4-to-3 with City Council Members Lorraine Canales, Steve Lustro, Debra Martin, and Elizabeth Ontiveros-Cole voting in opposition to the proposal. However, Mayor Tim Sandoval pledged that he would bring back the proposed permanent rent stabilization ordinance at the very next meeting (anticipated to be on November 3rd or sooner) for another vote. We urge all rental housing providers in Pomona to immediately send emails opposing the proposed permanent ordinance due to several substantial flaws, including the extremely excessive and unfounded relocation fees.
AAGLA strongly opposed the rental registry and permanent ordinance attending multiple city council meetings, sending formal comment letters to the full City council and Red Alerts to our membership. We also worked with other colleagues in the area, including the San Gabriel Valley Economic Partnership that spoke against the rental registry.
In addition, several local rental housing providers attended the meeting and spoke against the rental registry and permanent rent stabilization ordinance. This active participation by local owners was the key to defeating the rental registry and delaying the permanent rent stabilization ordinance as it emboldened the City Council members to vote NO despite the presence of tenant activists, including Pomona United for Stable Housing (PUSH). To defeat the rent stabilization ordinance for a second and final time, we need even more participation! Please email the full City Council today and put it on your calendar to show up at the November 3rd meeting to speak!
TAKE ACTION NOW!!!
Please email the full City Council to urge them to reject the proposed rent stabilization ordinance as currently worded and send it back for additional revisions, including changing relocation fees to 2 months’ worth of rent for Eligible Tenant and 3 months’ worth of rent for Qualified Tenants. Click here to send an email.
If the link to send an email does not work with your system, please use the attached Pomona City Council Emails list below to copy and paste their email addresses into your email.
Email is your chance to give your personal story of being a rental housing provider and how a Rental Registry program and these unreasonable relocation fees will harm your small business and ability to provide affordable housing.
REASONS TO OPPOSE
Relocation Fees Are Excessive
- No small owner can afford to pay thousands of dollars in relocation fees on top of the cost to conduct major repairs! The proposed relocation fees are extremely excessive and completely unworkable for small owners. They would force many small rental housing providers to sell their property rather than conduct major repairs or being able to move into the property during times of personal need.
- According to CoStar data, a national aggregator of residential and commercial rental data, the average rent for a one-bedroom unit in a multifamily building with 20 or fewer units in Pomona is $1,020. That means that the relocation fee of $15,377 for a Qualified Tenant at 80% median income is over 14 months’ worth of rent. A Qualified Tenant with 3 years at the property is $12,998, which would be over 12 months’ worth of rent. The regular renter with 3 years at the property is $6,164, which is over 6 months’ worth of rent. The regular renter at 80% median income is $8,074, which is more than 7 months’ worth of rent.
- The City should conduct a cost study to determine the real costs for a renter to move due to a No-Fault eviction. Such relocation is necessary for the housing provider to keep the property in a safe and habitable condition when it requires major repairs. To prevent such work from being done with excess relocation fees will cause these properties to fall into disrepair and ultimately be sold “as is” for demolition. The City will lose affordable rental housing for working families.
- Until and unless a cost study is conducted, the City should adopt relocation fees that are 2 months’ worth of rent for Eligible Tenants and 3 months’ worth of rent for Qualified Tenants or should delay any new permanent ordinance. Relocation fees must reflect the actual cost for renters to relocate and should not be artificially inflated to prevent owners from conducting major repairs needed or moving into the unit in times of personal need.
- Small owners with 20 or fewer units should only be required to pay 50% of relocation fees as they cannot afford such outrageous amounts. Small owners do not have the same access to capital as corporations or institutional investors, yet they provide some of the most affordable housing for working families. The City must support preservation of affordable housing by properly recognizing the substantial financial differences for small, mom-and-pop owners.
Capital Improvements – Cost Recovery Insufficient
Capital improvements involve major systems that are necessary for the preservation of the entire property to continue as rental housing supply as well as improving living conditions for existing renters. The inclusion of a dollar maximum monthly increase in addition to a percentage increase makes this process unworkable for most rental housing owners. The proposed flat amount cost recovery of just $100 per month does not reflect the actual costs for such major improvements and would make it impossible for rental housing owners to recover these costs over any reasonable period. In addition, a flat amount of $100 will only grow less reflective of true costs over time. This limit is particularly damaging to smaller owners that do not have a sufficient number of units over which to allocate and collect this increase.
Housing providers should urge the City Council to eliminate the flat dollar amount as a maximum and allow the existing percentage limit of 10% to remain as the maximum increase allowance for capital improvement costs.
Administrative Fines Are Excessive
The current amount of $1,000 per violation per day is simply too high for most rental housing providers that are non-corporations to be able to pay without forcing the sale of their properties.
Housing providers should urge the City Council to remove “per day” as part of these civil penalties or to create a tiered fee structure based on the number of units existing at the property where the violation is claimed to have taken place. Also, the City Council should add a progressive disciplinary ladder based on a first warning, second warning process that does not have any fines or has substantially reduced fines attached to it.
Attorney’s Fees and Court Costs Must Be Allowed
Litigation is expensive and attorney’s fees are particularly burdensome. This is also true for rental housing providers trying to defend themselves against false and/or frivolous lawsuits. To provide equity for all parties, housing providers should urge the City Council to change the existing language to allow attorney’s fees and court costs for the “prevailing party”.
This article is for informational purposes only. If you have any questions regarding your property or specific leasing issues and the requirements of any legal changes described herein, please consult with an attorney.