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Pi ED
C I T Y
O F O A K L A N D
cl^l^m AGENDA REPORT
T D : Officeof theCityAdministrator
A T T N : DeannaJ . Santana
F R O M : CommunityandEconomicDevelopment
Agency
D A T E :
October
25,
2011
RE A
Resolution
Approving An
Amendment
To The
Rent Adjustment
Program
Regulations
Revising
Regulation10.2.2(3)
(Appendix
A)Regarding
Justifying
Rent
IncreasesFor CapitalImprovementsTo CorrectHazardousOr
Uninhabitable Conditions
S U M M A R Y
The currentrentordinance allows owners topassthrough the cost of major repairs as a
Capital
Improvementsrentincrease. There is alimitedexception to
Capital
Improvement increases set
forth
inAppendixA of the
Regulations.
The exception isforrepairsthatwouldbe considered
Priority andPriority2 by a
City
ofOakland HousingCode Enforcement Inspector. These
repairs areidentifiedas hazardous or inhabitable conditions.' On
July
14, 2011, the Rent
Board
voted
5-1 to adopt changes to the regulations,which clarifytenantresponsibilityforreporting
Priority andPriority2conditions andlandlordresponsibilityforrepair ofsaidconditions. In
addition,itclarifiesthe scope and authority of the HearingOfficerinmaking decisions about
Priority andPriority2conditionswhichhave not been cited by a Code Enforcement Inspector.
FISCAL IMPACT
The
proposedamendments
to the Capital
Improvement regulations
have
no
direct fiscal impact.
B A C K G R O U N D
Underthe Rent Ordinance,CapitalImprovements materially add to the valueo fthe property and
appreciably prolongsusefullifeoradaptsit to new
building
codes. The costs of improvements
are amortized over 60 months and must
primarily
benefittenants.
Examplesof
eligible
CapitalImprovements include:
Exteriorpainting
Permanently
affixed
equipment
Repairs completed to comply
with
Code requirements
'
Rent
Adjustment
Regu lat ions,
Appendix,
Section
10.2.2
(3) 2.7 2.8
Item:
C E DCommittee
October 25,2011
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Deanna J. Santana
C E D A :
Amendment toCapitalImprovement Regulations Page 2
Repairs consideredPriority 1andPriority2conditions may not be consideredCapital
Improvements. Priority1and
Priority
2conditions are defined inAppendixA ofthe Regulations
asfollows(the
list
o fPriority 1and2conditions is included as AttachmentAto this
agenda
report):
2.7 Priority1Condition: TheCityofOaklandHousingCode Enforcement
Inspectors
determine housing condition(s)/ repair(s) as a
Priority
1 condition when housing
condition(s)/repair(s) areidentifiedas a major
hazardous
or inhabitable condition(s). A
Priority
1 conditionmustbe
abated
immediately by correction, removal or
Disconnection.
ANoticeto Abatew i llalways be issued.
2.8 Priority2Condition: TheCityofOaklandHousing Code Enforcement
Inspectors
determine housing conditions(s)/repair(s) as a
Priority
condition when housing
condition(s) /repairs(s) areidentifiedas majorhazardousor inhabitable condition(s)
that
may be deferred by anagreement
with
the Housing Code enforcement Section.
KE Y ISSUESAND
IMPACTS
Tenant responsibility for reporting
Priority
and
Priority
2conditions.
Landlordresponsibilityfo rrepairing code violations before oraftera citation is issued
within
specified
time fi*ames.
The authoritythatHearingOfficerswouldhaveto determine ifrepairsmeetthedefinition
o fPriority
orPriority2conditions without citation ofCity
Building
Services
Inspector.
Rent
Board
Discussion
of CapitalImprovements
A tthe regular meeting oftheHousingResidentialRent andRelocationBoard H R R R B )held on
February 24, 2011, the Board decided to hold apublic
forum
onCapitalImprovements. The
purposeof theforumwas to consider possibleamendmentsto the Capital Improvements
regulations to
clarify
the responsibilities of
landlords,tenants,
and HearingOfficerswhen
addressing
Priority
1and
Priority
2conditions.
Adiscussion ofCapitalImprovements took place at the Regular meeting ofthe
H R R R B
held on
Apr i l 14, 2011. Priorto the meeting, an
announcement
was posted on the Rent Adjustment
Websiteinvitingwritten comments to be considered by theBoard. In addition, written
notificationwas mailed to six landlord and
five
tenantorganizations. Written comments were
submitted by two landlord organizations and fourtenantorganizations.
Afterthe discussion, theBoardvoted toforma committee to further discuss possible
amendmentsto Capital Improvement
Regulafions.
Item:
CE DCommittee
October2 5, 2011
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DeannaJ .
Santana
C E D A :Amendment to
Capital
Improvement Regulations Page 3
Board Action
O nJune 9, 2011, the
Capital
Improvement Committee held a meeting and voted unanimously to
adopt the draft proposed changes to regulations regardingPriority andPriority
2
condifions
submitted by
Staff
O n
July
14,2011,the Committee presented their recommendations to adopt
Staff
proposed
regulations. The
Board
voted 5-1 to adopt the Committee's recommendations.
Effecto fRegulationChanges
TheBoard
adopted the changes to
allow
a
fair
and balancedapplicationofthe
Capital
Improvement
Regulations.
The exact language oftheproposed new regulafions isincludedas
Attachment
A
to this report; staff summarizesthosechanges asfollows:
Repairs
for
Code
Violations
Repairs
forcode
violafions
may not be considered capital improvements iftherepairs were
performed in order to correct aPriority
orPriority
2
condition,providedthatthetenantproves
thefollow ing:
1. Theconditionwas not caused by thetenantand was cited byCity BuildingInspectors
as aPriority
orPriority2
condition;
2. Thetenantproduces
factual
evidence todemonstratethathad the unit been inspected
bya
City
BuildingInspector, the Inspector
would
have determinedthatthecondition
was aPriority orPriority
2
condition;
3. Thetenant
notified
thelandlordofthecondition inw r i fingor provedthattherewere
exceptionalcircumstancesthatprohibitedthe
tenantfrom
submitting needed repairs
in
writing;
and
4. Thelandlordfailedto complete repairswithina reasonable time.
Reasonable
Time
Frames
for
Repairs
Reasonable time frames are determined asfollows:
1. The
condifion
is repaired
within
thefime
framespecified
by a
Building
Services
Inspector;
2. Repairs are completed 90 days afternoficeof
condifion
is
received,
unless efforts to
Item:
C E D
Committee
October 25,2011
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DeannaJ .Santana
C E D A :Amendment to
Capital
Improvement Regulations Page 4
Complete
repairs areunsuccessfiildue to circumstances beyond the landlord's
control;
3.
Repairs of
conditions
considered health and safetyviolafionsare completedwithin15
Business
days, unless thetenantcan prove a shorter time is reasonable based on the
Hazardousnatureofthecondition;and
4. Attempts to get the required permits or approval are evidence of
good
faithand
Landlordsare not penalizedfordelays by the approving government agencies.
Authorityof
Hearing
Officers
WhenPriority orPriority2conditions are not cited by a
City
BuildingServices Inspector, the
HearingOfficermay do thefollow ing:
1. Consider
factual
evidencethatdemonstratesthathad the property been inspected by
aCity
BuildingInspector, the inspectorwouldhave determined thecondifionto be
a
Priority orPriority
2
condition;and
2. Require expert testimony to decide
i fa
conditionis aPriority orPriority2
condition.
SUSTAINABLE
OPPORTUNITIES
Pursuant to
City
Coun cilResolufionN o .74678C . M. S . ,adopted December 1, 1998, staff
encouragesproperty owners tooperatesustainable projects. StabilizingOakland's existing
residential
tenancies
wi l l
continue tostabilizeneighborhoods. Thechanges
in
the
Capital
Improvement Regulations are consistentwiththe goal ofallowingproperty owners tooperate
sustainable projects,
while stabilizing
Oakland's residential tenancies.
Economic
Preserve the
affordable
housing inventoryfor families,seniors, and disabled
people in the
City
ofOakland;
Protect
tenantsfrom
exorbitantrentincreaseswhileencouraging owners to invest
in
the housing stock oftheCity.
Environmental
Mitigate
adverseenvironmental impacts resultingfromexisting rental housing;
Encourage cohesion and vested interest
o f
owners and
tenants
in established
neighborhoods.
Item:
C E D Committee
October 25,2011
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Deanna
J .
Santana
C E D A :Amendment to
Capital
Improvement Regulations Page 5
Social Equity
Improve the landscape and climate of
Oakland's
neighborhoods by encouraging
long
term tenancies
in
rental housings.
Assist low and
moderate
income
families
to
save
money to become homeowners.
DISABILITYANDSENIORCITIZEN
ACCESS
The
City's
Rent Adjustment staff complies with legal requirements to provide
access
to all Rent
Adjustment Program services for people with disabilities and to
ensure
thatthe units rented to
people with disabilities complywithapplicable codes. TheJustCause forE victionOrdinance
and theE llis
A ct
Ordinance provide special protections against evictions and relocation benefits
for
seniors and people with disabilities.
RECOMMENDATION(S) ANDR A T IO N A L E
Staff
recommends
that
the
City Counciladopt
the
Resolution.
The
changes
in the
Capital
Improvement Regulations provide clarity to
tenants,
landlords, and Hearing
Officers.
A C T IO N R E Q U E S T E D O FT H E CITY
COUNCIL
Staff
requeststhatthe
City
Coun ciladoptthe attached Resolution approving theamendmentto
the Rent Adjustment Regulations.
Respectfully
submitted,
Walter S. Cohen, Director
Community and
Economic
Development
Agency
Reviewed
by:
Michele
Byrd,
Deputy
Director
HousingandCommunity
Development
Prepared
by:
Connie
Taylor,
Program
Manager
Housing
andCommunity Development
D ivision
A P P R O V E D
A N D
F O R W A R D E D
T O
T H E
C O M M U N I T Y
A N D E C O N O M I C D E V E L O P M E N T C O M M I T T E E :
Office
of the
City
Administrator
Item:
C E D
Committee
October25,2011
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Attachment
ExistingRegulationto bedeleted
[Repairs
completed
Inorder tocomply
with
the Oakland Housing Code may be
considered
capitalimprovements.Iftherepairsareconsideredas Priority 1 or1 condltion(s)as
defined
in
this
resolution;then
the
repairs
may not be
eligible
for
consideration
as
capital
improvements.]
NewRegulations
CAPITALIMPROVEMENTS
FOR
CODEVIOLATIONS
REGULATIONS
10.2.2
Eligible
capital improvements
include,
but are notlimitedto, the
following
items:
3.
. Except as set
forth
in
this subsection, repairs completed in order to
comply
with
the
Oakland HousingCodemay be considered capital improvements. Repairsforcodeviolations
may not be considered capital improvements
if
the Tenant proves thefollowing:
a. That a repair was performed to correct a
Priority
lor 2
Condition
thatwas not
created bythe Tenant,
which
may be demonstrated by any of thefollow ing:
theconditionwas cited by aCity Building
Services
Inspector as a
Priority
or
2 Condition;
the Tenant produces
factual
evidence to show
that
had the property or unit
been inspected by a
CityBuildings
Services Inspector, the Inspector
would
have determined theconditionto be a
Priority
or
2 Condition,
but the
HearingOfficermay determinethat
in
order to decide if
a
conditionis a
Priority
or
2 Condition
expert testimony is required, in
which
case the
HearingOfficermay require such testimony.
b. That the Tenant
informedthe Owner oftheconditionin
writing;
otherwise provesthatthe landlord knew ofthe
conditions,
or
provesthattherewere exceptional circumstancesthatprohibited thetenant
from
submitting needed repairs in
writing;
and
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c. That the Own er failed to repair the condition within a reasonable time after the
Tenant informed Owner of the condition or the Owner otherwise knew ofthe
cond ition. A reasonable time is determined as follows:
i. If the con dition was cited by a City Building Services Inspector and the
Inspector required the repairs to be performed
with
in a particular time
frame, or any extension thereof, the time frame set out by the Inspector is
deemed
a reasonable time ; or
ii. Ninety (90) days after the Owne r received notice o ft he condition or
otherwise learned of th e condition is presumed a reasonable time unless
either ofthe following apply:
(1) the violation rema ined unabated ninety (90) days after the date of
notice to the Own er and the O wner demon strates timely, good faith
efforts to correct the violation within the ninety (90) days but such
efforts were
unsuccessful
due to the nature ofthe work or
circumstancesbeyond the Owne r's con trol, or the delay was
attr ibutable to other good cause;o r
(2) the Tenant dem onstrates that the violation was an imme diate threat
to the health and safety of
occupants
ofthe property, fifteen (15)
business
days is presum ed a reasonable tim e unless:
(a) the Te nant proves a shorter tim e is reasona ble based on
the hazardous nature of the cond ition, and the
ease
o f
correct ion,
o r
(b) the Owner demonstrates timely, good faith efforts to
correct the violation within the fifteen (15) business days
after notice but such efforts were
unsuccessful
due to the
nature of the work or circumstances beyond the Owne r's
control, or the delay was attributable to other good cause.
iii.
If an Ow ner is required to get a building or othe r City perm it to pe rform
the work, or is required to get approval from a government agency
before comm encing work on the
premises,
the Ow ner's attempt to get
the required p ermit or approv al within the tim elines set out in (I) and (II)
above
shall be deeme d evidence of good faith and the O wner shall not be
penalized
for delays attr ibutable to the action of th e approving
governmen t agency.
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| L D
Approved as to FormrflfTd Legali ty
211U0CT13 pw Oakland City Council
R E S O L U T I O N NO. C .M.S.
RESOLUTION APPROVING AN AMENDMENT TO THE RENT ADJUSTMENT
PROGRAM REGULATIONS
REVISING
REGULATION 10.2.2 3) APPENDIX
A) REGARDING JUSTIFYING RENT INCREASES FOR CAPITAL
IMPROVEMENTS
TO CORRECT HAZARDOUS OR UNINHABITABLE
CONDITIONS
W H E R E A S , the Rent Adjustment Program Regulations ( Regulations ) provide
that
a
landlord may not
pass
along capital improvements undertaken in order to repair a hazardous
condition, referred to in the Regulations as Priority
1
or Priority 2 Conditions (Regulation
10.2.2,
subsection 3 (Appendix A); and
W H E R E A S , the Housing, Residential Rent and Relocation Board ( Rent Board ) has
considered appeals of hearing officer decisions
that
involve interpretations of Regulation
10.2.2,
subsection 3; and
W H E R E A S , the landlord and tenant parties to the appeals and membersoftheRent
Board
have disagreed over the interpretation of Regulation 10.2.2, subsection 3 and the
procedures for allowing or disallowing repairs to Priority 1Priority 2 Conditions; and
W H E R E A S ,more specifically the disagreements of interpretation have included:
whether a citation of the conditionfromthe city is required in order to disallow the repair as a
capita
improvement, whether prior notice to the landlordofthecondition is required, and
whether the landlord should have a reasonable opportunity to make the repair prior to being
denied the costoftherepair as a capital improvement; and
W H E R E A S ,the City Council and Rent Board believes it is in the best interests of Rent
Adjustment Program and landlords and tenants to revise Regulation 10.2.2, subsection 3
suchthat
the landlord must know of the Priority
1
or Priority 2 Condition prior, which notice is
not required to be made through a citation, and
that
the landlord should have a reasonable
time
following notice to repair the conditions; and
W H E R E A S ,the Rent Board at its meeting of July 28, 2011 approved the amendment
to the Regulations set out in Attachment A; and
W H E R E A S , the Rent Board hereby requests
that
the Oakland City Council approve
amendment to the Regulations amending and restating Regulation 10.2.2, subsection 3 to
read as set out in Attachment A attached hereto and made aparthereof; now therefore be it
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R E S O L V E D :
That the City Counc il hereby approves the ame ndment to the R ent
Adjustm ent Prog ram R egu lations set out in Attachment A, and be it
F U R T H E R R E S OL V E D : That said ame ndme nt s hall be effective se ve n (7) daysafter
the date of City Council approval.
IN C OU N C IL ,
O A K L A N D ,
C A L IF ORN IA ,
P A S S E D B Y T H E F O L L O W I NG
V O T E :
A Y E S - B R O O K S , B R U N N E R , D E LA F U E N TE , K A P L A N , K ERNI G H AN, NAD EL ,
S C H A A F , A N D P R E S I D E N T RE ID
N O E S -
A B S E N T -
A B S T E N T I O N -
ATTEST:
L A T O N D A
S IM M O N S
City Clerk and Clerk
ofthe
Counci l of
the City of Oakland, California