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HomeMy WebLinkAbout8.2 - 3338 COVID-19 Related Moratoriums Page 1 of 4 STAFF REPORT CITY COUNCIL DATE: August 18, 2020 TO: Honorable Mayor and City Councilmembers FROM: Linda Smith, City Manager SUBJECT: Informational Item: COVID-19-Related Moratoriums on Rent Increases and Late Fees Prepared by: John Stefanski, Assistant to the City Manager EXECUTIVE SUMMARY: The City Council will receive an informational report on the COVID -19-related moratoriums on rent increases and late fees enacted by various cities and counties in the East Bay. STAFF RECOMMENDATION: Receive the report and provide direction to Staff on any next steps. FINANCIAL IMPACT: None. DESCRIPTION: At the July 21, 2020 City Council Meeting, the City Council directed Staff to prepare an informational item on COVID-19-related moratoriums on rent increases and late fees employed by various cities and counties in the East Bay. This request was made following public comment requesting a City Council discussion on potentially enacting a local, temporary six-month moratorium on rent increases and late fees for tenants facing COVID-19 hardships. The same public comment provided an anecdote that larger, corporate property owners in Dublin were, allegedly, increasing rents and assessing additional late penalties during the COVID-19 pandemic. Staff reached out to the public commenter's property manager directly who stated that there have been no rent increases since March and there are no plans to increase rent at this time. The property manager further elaborated they are not assessing late fees for rent. Said property owner has implemented a process for any tenant to document any COVID-19-related financial hardship and create a special rent payment plan. Page 2 of 4 State Policy Context Governor Newsom issued Executive Order (EO) No. N-28-20 (as amended by EO N- 66-20 and EO N-71-20) which lifted state law restrictions on local government ordinances limiting residential and commercial evictions through September 30, 2020. Such ordinances limiting residential and commercial evictions may only apply to circumstances in which the eviction is based on nonpayment of rent due to a substantial decrease in income or medical expenses caused by COVID-19 or the governmental response to COVID-19 (e.g. Shelter-In-Place Orders). EO-37-20 which delayed, similarly to local ordinances, residential nonpayment evictions statewide expired on May 31, 2020. However, local ordinances continue to apply such protections. In addition to executive action, the Judicial Council of California issued Emergency Rule 1(b) stating that California courts may not issue summonses on complaints for unlawful detainer (eviction) except where the courts find that the action is necessary to protect health and safety. This rule is set to expire on August 14, 2020, at which time any action taken by the Governor and Legislature may establish further tenant protections during the pandemic. Local Policy Context On March 1, 2020, the Alameda County Health Officer declared a Public Health Emergency due to the Novel Coronavirus (COVID-19). On March 16, 2020, the Alameda County Health Officer issued an Order (Order) directing all individuals living in the County to shelter at their place of residence, subject to certain exceptions, and which has since then been amended several times. In response to the Orde r and the evidence of community acquired transmission within Alameda County, the City Manager acting in her capacity as Director of Emergency Services, proclaimed the existence of a local emergency within the City of Dublin. The City Council ratified this declaration on March 18, 2020. The Order required all businesses, except certain essential businesses, to cease all activities beyond minimum basic operations. While over the preceding months the Health Officer has permitted certain sectors of the econom y to re-open, the Order’s larger economic ramifications continue to impact resident and business incomes throughout the region, state, and country. The State Employment Development Department reported the unemployment rate in the Oakland -Hayward-Berkeley Metropolitan Division for the month of June was 13.4 percent, up from 3.1 percent for the same period in the year prior. At an individual level, obligations of leases and mortgages remain at their pre-pandemic levels, resulting in some individuals facing eviction from their homes or shuttering their businesses due to COVID-19-related economic and health impacts impacting their ability to pay. Recognizing this, the County of Alameda Board of Supervisors adopted a County -wide moratorium on residential evictions on March 31, 2020. This Moratorium was subsequently amended and extended several times and will expire on December 31, 2020. Under this eviction moratorium, residential tenants may not be evicted for not paying rent only if the tenant has experienced a COVID-19 related hardship. Examples of Page 3 of 4 COVID-19 hardships include a reduction or loss of income due to reduced hours or layoffs, or if the tenant or someone they are caring for is being treated for the disease. Rent in arrears from non-payment may be repaid over a 12-month period following the end of the public health emergency. In addition, landlords may not assess a late fee on any outstanding rent during the moratorium period. Eleven of the 14 cities in Alameda County have adopted local eviction moratoriums. Of these 11, nine cities currently employ a moratorium on late fees, as Table 1 indicates below: Table 1: Eviction & Late Fee Moratoriums (Alameda County) City Locally Adopted Eviction Moratorium (Residential) Locally Adopted Eviction Moratorium (Commercial) Late Fee Moratorium Alameda Yes Yes Yes Albany Yes Yes Yes Berkeley Yes Yes Yes Dublin No No No Emeryville Yes Yes No Fremont Yes No Yes Hayward Yes Yes Yes Livermore Yes Yes No Newark Yes Yes Yes Oakland Yes Yes Yes Piedmont No No No Pleasanton No No No San Leandro Yes Yes Yes Union City Yes Yes Yes In addition to passing a local moratorium on evictions, the cities of Alameda, Albany, and Oakland passed COVID-19-related measures which freeze or limit rent increases for tenants of certain properties. The individual measures by each City vary in terms of eligibility. Albany, for example, initially froze rent increases only for those residential and commercial tenants who can demonstrate negative financial impacts related to C OVID- 19. The residential rent freeze expired on July 28, 2020; however, the rent freeze exists for commercial tenants until September 30. Alameda and Oakland’s rent increase caps, part of existing rent stabilization programs and passed in concert with other COVID-19 renter protections, are applied regardless to COVID-19 circumstances. Page 4 of 4 Table 2: Rent Freeze/Caps (Alameda County) City Rent Freeze/Cap Period Alameda Residential Rent Freeze Until January 1, 2021 Albany Residential and Commercial Rent Freeze Until July 28, 2020 (Residential). Until September 30, 2020 (Commercial) Oakland Linked to CPI (2.7%) Until June 30, 2021 Contra Costa County enacted a countywide eviction and late fee moratorium (for both residential and commercial tenants) as well as a residential rent freeze through September 30, 2020. Next Steps This item is presented as an informational item only. The City Council may provide additional direction, if any, to Staff on potential next steps. STRATEGIC PLAN INITIATIVE: None. NOTICING REQUIREMENTS/PUBLIC OUTREACH: None. ATTACHMENTS: None.