Get me rewrite!

Longer than a Wagner opera.

Harder to follow than a Faukner novel.

Less definitive than a Beckett play.

We could go on, but we’re sure our readers realize by now that we’re talking about last Tuesday/Wednesday’s Council meeting devoted to the “rental crisis” held at the Kofman auditorium, where heat and light, literally and metaphorically, were in short supply.

The Merry-Go-Round was not one of the diehards who earned the Croix de Kofman by sticking around until the meeting, which began at 7 p.m., fizzled out at 4 a.m.  In fact, we waited for the City to post the video, intending to summarize for this week’s column the key decisions made by Council in a series of bullet points.

As it turns out, we don’t need any bullet points – because Council made only one decision:  to extend the moratorium on rent increases and “no-cause” evictions adopted in November for another 60 days.  Indeed, after the Council members unanimously approved extending the moratorium, they never took another vote.

As a result, despite marshalling a host of public speakers to support its position, neither side got what it wanted.  The tenants didn’t get an ordinance prohibiting landlords from raising rents by more than a specified percentage of the increase in the Consumer Price Index.  Nor did they get an ordinance permanently prohibiting landlords from evicting tenants except for “just cause.”  By the same token, the landlords didn’t get a decision to leave all issues relating to rent increases and evictions to the Rent Review Advisory Committee.

Instead, after three hours of discussion, Council sent back the three ordinances drafted by staff for a complete re-write.  The Council members undoubtedly would argue – and some may even believe – that they gave sufficient “direction” to enable staff to perform this task.  In fact, what staff will have is Community Development Director Debbie Potter’s notes of the responses given when she attempted – at around 3 a.m. – to elicit a “consensus” on a list of issues raised by the proposed ordinances.

Since Council never actually voted on any of the issues identified by Ms. Potter, it will be up to her to ascertain the elected officials’ collective druthers as best as she can.  It will then be up to the drafters in the City Attorney’s office to craft language that implements Council’s preferences (at least as Ms. Potter has been able to discern them).

To quote Robert Redford’s slogan in “The Candidate,” there’s got to be “a better way” for Council to conduct business.

Later, we’ll offer what we call the “special verdict” approach to writing a rent control and eviction ordinance.  But, first, we’ll present the highlights – if you can call them that – of last week’s Council meeting.

First, rent control.  One might have expected that the starting place would be for Council to decide whether to set any cap at all on annual rent increases, and, if so, what the cap should be.  Once that decision had been made, Council could turn to prescribing the procedures by which a landlord could get approval for charging more than the otherwise allowable maximum if necessary to obtain a “fair return.”

But our elected officials chose to do it backwards and take up the procedural issue first.  Only Vice Mayor Frank Matarrese supported the first option presented by staff:  requiring a landlord who proposes to raise rents above a specified maximum to submit her proposal to the RRAC for a non-binding recommendation.  A short while ago, the majority of Council members might have found this option appealing.  (Indeed, as recently as last May, they all agreed that “strengthening the RRAC” was what needed to be done).

No more.  We’d like to believe that the Council members were persuaded by our columns about the folly of using the RRAC as a means to control rents.  But we’d be kidding ourselves.  More likely, it was the realization that tenant advocates – by now, formally organized as the Alameda Renters Coalition – weren’t going to be satisfied with cosmetic “improvements” to the RRAC – and that 51% of Alamedans, some of whom vote in municipal elections, are renters.

In any event, Ms. Ashcraft, seconded by Councilman Jim Oddie, suggested a hybrid between staff’s first option and its second (requiring a landlord whose rental units are not covered by the Costa-Hawkins Act to file a petition for a rent increase to be ruled upon by a staff-appointed hearing officer).  Any landlord who wants to increase rents more than a specified amount would begin by seeking “mediation” through the RRAC.  For those rental properties covered by Costa-Hawkins – e.g., single-family homes and condominiums and apartment buildings constructed after 1995 – that would be the end of it.  But for those properties that aren’t covered, there would be a second step:  If the “mediation” failed to produce an agreement between landlord and tenant, the rent increase proposal would be sent to an “arbitrator” for a binding decision.

As it happens, three other Bay Area cities – Hayward, Los Gatos, and San Jose – have adopted a similar procedure by which mediation occurs first, followed (if necessary) by arbitration.  If anyone on Council or staff knew – or had even investigated – the effectiveness of the two-step process in these three cities, they weren’t saying.  But Mayor Trish Spencer ended up endorsing Ms. Ashcraft’s idea, as did Councilman Tony Daysog.

So Ms. Potter got her first “consensus” point.

But there are still a lot of gaps remaining to be filled in before a feasible procedure can be spelled out.  We put “mediation” and “arbitration” in quotes for a reason:  the terms are not self-defining, and each has its own set of permutations to choose from.  Maybe devising a workable set of procedural rules is not beyond the capabilities of the City Attorney’s office – but that isn’t all Council left staff to decide.

Specifically, Council gave no “direction” about what factors the decision-maker – in this case, the arbitrator – should consider in determining whether to allow a proposed rent increase.  Nor did it discuss what costs, if any, a landlord should be allowed to pass through to tenants in addition to an otherwise permissible rent increase.  As we pointed out last week, other Bay Area cities’ rent control ordinances typically cover these issues; the drafts presented to Council did not.  And since Council ignored the topic at the meeting, staff is pretty much free to include whatever it wants in the next round of draft ordinances.

Three of its members having endorsed the mediation/arbitration process, Council then had to determine the level of rent increase that would trigger the landlord’s duty to submit a proposed rent increase to the RRAC.

On this question, the “consensus” – everywhere but on the dais – was clear:  the figure should be tied to increases in the Consumer Price Index.  The staff report pointed out that this is how seven of nine California cities set the maximum allowable rent.  The spokespersons for the Alameda Renters Coalition and the statewide “Tenants Together” advocacy group urged that Alameda do it this way, too.  And none of the landlord speakers argued that tying rent increases to CPI increases deprived landlords of a “fair return.”

But our Council members took their own route.  They quickly agreed that 8% – the figure they’d picked for the moratorium – was too high.  But then it became just another numbers game.  Councilwoman Ashcraft proposed 5%, which was the maximum rent increase permitted by the Los Gatos ordinance.  (She didn’t say why Alameda should take Los Gatos, of all places, as our model).  That was fine with Mayor Spencer.  Councilman Daysog initially pressed for 12% over two years, then moved to 6% annually.  But when Ms. Ashcraft objected that incomes weren’t rising that fast – of course, they weren’t rising by 5% either (except for Alameda firefighters and cops in good years) – Mr. Daysog backed off.  Lo and behold, another “consensus” had emerged.

An example of principled decision-making it was not.

(Where was Vice Mayor Matarrese in all of this?  He continued to insist that mediation conducted through the RRAC would solve all problems.  Indeed, the Vice Mayor appeared so enamored of mediation that there were times when we suspected that, if it was up to him, he’d call off the next election and let a “professional mediator” sit down with the candidates and work out who should sit on Council).

We would like to report that, when Council moved from rent control to eviction protection, the discussion became more coherent and the “direction” was clearer.

Alas, no such luck.  Rather than debating the broader policy issues relating to “just cause” eviction, Council dwelled on ways to avoid a repeat of the cause célèbre that occurred soon after the moratorium was adopted:  the planned eviction, by means of 60-day notices to vacate, of 30 or so tenants from an apartment building at 470 Central Avenue.  At the time, the new landlord explained that he needed to clear out the renters in order to make “renovations” to the property, but tenant advocates contended that the real reason was to bring in new tenants to whom the landlord could charge higher rents.

After the story made the TV news, Council promptly amended the moratorium ordinance to eliminate the “loophole” upon which the landlord had relied.  It then looked to staff to draft a permanent ordinance designed to prevent a similar incident from happening again.

Only one of the draft laws prepared by the City Attorney went as far as the tenant advocacy groups wanted and prohibited “no cause” evictions altogether.  The other two continued to allow a landlord to terminate a tenancy by serving a 30- or 60-day notice at the end of the lease term even if a tenant had complied with all the terms of her lease.  But these drafts included two provisions designed, as Ms. Potter put it, to “disincentivize” landlords from replacing current tenants with new, higher-paying renters.  If the landlord went through with a “no cause” eviction, she could not charge the new tenant more than the prior tenant had been paying (plus the “maximum allowable rent increase” that year), and she had to offer “relocation assistance” to the displaced tenant.

When this item came before Council, the elected officials made all the right noises – for example, Mr. Oddie proclaimed that he wanted to “protect moral rights to occupancy” – but no one supported the proposal for a complete ban on “no cause” evictions.  Instead, the discussion centered on the provisions conditionally allowing them.

The landlords’ chief spokesperson, Oakland lobbyist Greg McConnell, had teed up a threshold issue for Council to consider.  Mr. McConnell asserted that the Costa-Hawkins Act already prohibited a landlord who had used the notice procedure to evict current tenants from raising rents to new tenants.  If this was true, the first condition established by the proposed ordinances allowing “no cause” evictions was unnecessary.  Indeed, it provided no further protection than existing law.

But was it true?  The Act – which Mr. McConnell took credit for writing – contains language that can be read to support his position.  It creates an exception to the landlord’s right to “establish the initial rental rate” in a case where “the previous tenancy has been terminated by the owner by notice pursuant to Section 1946 . . . ,” which happens to be the statute allowing termination upon 30-days notice.

So there was a legal issue to resolve – and Council had its own staff lawyer, Assistant City Attorney Michael Roush, sitting right there at the table.  Naturally, Mayor Spencer asked Mr. Roush to respond to Mr. McConnell’s argument.  “I think we have a disagreement,” he replied.  When Ms. Spencer pressed for a more definitive answer, Councilman Daysog came to Mr. Roush’s rescue – “We should do further research on this so you feel comfortable because you are our legal expert,” Mr. Daysog said – and Mr. Roush grasped at the lifeline.  “Perhaps we can just leave that issue,” he said.  And so they did.

(Is it too soon for us to renew our call for Council to hire an outside law firm capable of providing expert advice about statutes like the Costa-Hawkins Act?  Too often, when our elected officials ask even the most basic legal questions of the City Attorney or her staff, the response is that the in-house lawyers need to do more research.  What, pray tell, have they been doing these past many months?)

Remaining was the issue of “relocation assistance.”  This part of the proposed law took the prize for complexity.  A tenant forced to move as the result of a “no cause” or “no fault” eviction (ordinance no. 2) or a “no-fault” eviction (ordinance no. 3) would be entitled to a “relocation fee” consisting of $1,500, adjusted annually for CPI increases, plus one month’s rent for every year the tenant had lived in the building, up to a maximum of four months’ rent.  But a tenant could choose to waive all or part of the fee and remain in the building for an additional one month for every year of her tenancy, up to a maximum of four months.

You can imagine what happened when our Council members got to sink their teeth into this section.  Councilman Daysog wanted to exempt “mom-and-pop” landlords from the obligation to provide “relocation assistance.”  Councilwoman Ashcraft objected.  Mayor Spencer wanted to make the “relocation fee” a flat amount not tied to the length of tenancy.  Councilman Daysog complained that wasn’t fair to long-term tenants.  Ms. Ashcraft agreed.

Observing that “we’re creating a byzantine ordinance,” Vice Mayor Matarrese proposed – you guessed it – leaving the issue to the RRAC.  And Councilman Oddie?  “I can go either way,” he said.  Told by Mayor Spencer that his colleagues were evenly split, Mr. Oddie finally said, “Then I’ll go with staff’s recommendation.”

It was, after all, close to 4 a.m.

When we got to the end of the video, we found ourselves scratching our head:  Why did this meeting last so long and accomplish so little?

We expect that we’ll be able to read somewhere that it’s all Mayor Spencer’s fault.  But unless you can convince us that Marie Gilmore would have cut off public speakers in mid-sentence as soon as their two minutes were up or that she would have prevented her colleagues from reading their prepared remarks off their iPads, we’re not buying it.  (Ms. Gilmore, of course, would have banned audience applause, but that would have saved, what, a minute?)

When the issue is as important, and as contentious, as rent control and eviction protection, the meeting is sure to take a long time.  But staff must have known that in advance.  In such a case, the obvious thing to do is to schedule the meeting to begin earlier, or even to break it into two separate sessions.  We hope staff learned its lesson.

Moreover, we believe that there are ways to make even a long meeting run more efficiently.  Our preference, of course, would be for the Legislature to amend the Brown Act to allow Council members to discuss the language of draft ordinances among themselves before the meeting so they don’t have to edit them from the dais.  We realize that’s not going to happen.

So here’s our suggestion:  Have staff prepare ahead of time a list of the specific policy choices Council needs to make.  Have the mayor inform Council members that she’s going to go down the list, one-by-one, and call for a vote on each item.  Limit Council discussion to 15 minutes per issue, take the vote, and go on to the next issue.  At the end, give the completed list to staff and tell them to draft a law reflecting the policy decisions Council has made.

The lawyers among our readers (at least those with an actual law degree) will recognize the similarity between this procedure and a “special verdict” used at trial.  Rather than simply vote for the plaintiff or the defendant, the jury is given a form with specific questions drawn from the elements of the cause of action or affirmative defense.  Once the jury has answered the questions, the judge enters judgment based on the special verdict.

We entertain some hope that this kind of procedure would work for Alameda Council meetings.  Ms. Potter demonstrated this week that she is able to put together, even at 3 a.m., a list of the relevant policy choices.  Ms. Spencer has shown, and sometimes been criticized for, a willingness to push a matter to a conclusion.  Maybe next time around Council can use the “special verdict” method.  If so, all of us – even Councilman Oddie, who told the crowd he’s been losing sleep worrying about rent control and evictions – would be able to rest easier – and sooner.

References:

Staff report: 2016-01-05 staff report re proposed ordinances

Draft ordinances: 2016-01-05 – Ordinance 12016-01-05 – Ordinance 22016-01-05 – Ordinance 3

 

 

About Robert Sullwold

Partner, Sullwold & Hughes Specializes in investment litigation
This entry was posted in City Council, Housing and tagged , , , , , , , , , , . Bookmark the permalink.

3 Responses to Get me rewrite!

  1. MP says:

    “On this question, the “consensus” – everywhere but on the dais – was clear: the figure should be tied to increases in the Consumer Price Index. The staff report pointed out that this is how seven of nine California cities set the maximum allowable rent. The spokespersons for the Alameda Renters Coalition and the statewide “Tenants Together” advocacy group urged that Alameda do it this way, too. And none of the landlord speakers argued that tying rent increases to CPI increases deprived landlords of a “fair return.”

    How seven of nine cities regulate rents is hardly a consensus. At most, it is a not-quite-consensus among the very tiny minority of California cities that have rent control. However the Council ends up, they are not in or out of the “consensus” just because they do not adhere to the experiments of that tiny minority of cities. In fact, I think I heard more than one council-member mentioning not wanting to copy of the models of those cities whose results have been debatable at best. Finally, I don’t think that landlords’ alleged failure to argue that a CPI based rent control would generally deny them the constitutional minimum “fair return” was somehow an admission that there is a consensus on having a CPI based rent control in Alameda.

  2. BMac says:

    Robert, I generally agree with most of what you have written.

    If it was Ezzy-Ashcraft, seconded by Oddie, who proposed ditching the staff options in favor of “RRAC plus binding arbitration” it is only because they were indulging the Mayor’s desire to see things still go through the RRAC, seemingly at all costs. Ezzy-Ashcraft and Oddie seemed basically ready to move forward with Option 2 w/ a 5% threshold. In searching for a third vote, they had to either keep a high number (Daysog) or stick with the RRAC (Spencer).

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