REPORT TO COUNCIL
SUBJECT
Title
Action on an Urgency Ordinance Establishing a Temporary 45-day Moratorium on Evictions for the Non-payment of Rent and No-Fault Evictions for Residential Tenants with incomes affected by the novel coronavirus (COVID-19), approval of an Ordinance to establish the eviction regulations for a longer term and Related Budget Amendment
Report
BACKGROUND
On February 10, 2020, the Santa Clara County Public Health Officer declared a public health emergency in Santa Clara County from COVID-19 and on March 4, 2020, the Governor declared a State of Emergency in California due to the threat of COVID-19. After additional directives from federal, state, and local health officials, many events were cancelled, schools were closed, and residents were advised to avoid public gatherings and stay home to prevent spread of the virus. On March 16, 2020, the Health Officer of the County of Santa Clara directed all individuals living in the county to shelter at their place of residence except to provide or receive essential services. The County Health Officer further directed all business and governmental agencies to cease non-essential operations at physical locations in the county. Shortly thereafter, on March 19, 2020, the Governor ordered that the entire state of California to shelter in place until further notice.
The loss of wages caused by the effects of COVID-19 will impact many Santa Clara residents’ ability to pay rent in a timely manner, leaving tenants vulnerable to eviction and homelessness. For all residential renters facing eviction due to the nonpayment of rent, the ordinance creates an affirmative defense if they can demonstrate a substantial loss in income as a result of any of the following: 1) job loss; 2) a reduction of compensated hours of work; 3) employer’s business closure; 4) missing work due to a minor child’s school closure; or 5) other similarly-caused reason resulting in a loss of income due to COVID-19 that resulted since adoption of the urgency ordinance.
DISCUSSION
The City of Santa Clara has been severely impacted by the ongoing COVID-19 health crisis. The effects on the global economy and supply chains are impacting many Bay Area companies in both technology and non-technology sectors. With businesses moving towards working from home, less of the workforce will be patronizing restaurants and other retail establishments that employ hourly workers, which is expected to lead to hourly cutbacks and potentially layoffs. Many tenants/residents have already experienced sudden loss of income and increased healthcare costs due to the crisis, and further impacts are anticipated.
Santa Clara is committed to protecting its residents from potential displacement during the COVID-19 Emergency. An urgency ordinance establishing a temporary moratorium on evictions for tenants affected by the COVID-19 would provide tenants with a short-term protection from eviction and help Santa Clara avoid increasing its homeless population while providing some stability to households during an uncertain time. During this state of emergency, and in the interests of protecting the public health and preventing transmission of the coronavirus, it is essential to avoid unnecessary displacement of tenants. Prohibiting evictions on a temporary basis is needed until the spread of the virus can be minimized, emergency restrictions are lifted, and the local economy can begin to stabilize.
Direction was given to the City Attorney to prepare an urgency ordinance instituting a temporary moratorium on evictions in the City of Santa Clara for renters facing financial hardship due to COVID-19. The ordinances presented for City Council’s consideration would establish a temporary moratorium on the eviction of residential tenants within Santa Clara, effective immediately, for nonpayment of rents if that tenant meets the criteria listed in the ordinance related to COVID-19. The moratorium established by the Urgency Ordinance shall remain in effect for a period of forty-five (45) days from the date of enactment. Along with the Urgency Ordinance, staff is recommending that Council enact an ordinance to establish the eviction protections for a longer basis. A summary of the approved regularly adopted ordinance will be published for Council adoption on the April 7, 2020 Council agenda.
Of these legislative actions, the urgency ordinance and regular ordinance contain the provisions of the eviction moratorium, including the purpose, scope and type of protection offered to affected tenants. Staff is recommending that the City Council adopt an urgency ordinance to establish the moratorium, which will go into effect immediately upon adoption and an identical moratorium through the regular ordinance adoption process. The ordinances contain the following provisions:
Urgency Ordinance:
• Goes into effect immediately, March 24, 2020.
• Will expire 45 days later, on May 8, 2020, unless extended by City Council resolution.
• City Manager may return to enable Council to consider an extension for a longer period as may be required by changing conditions.
Regular Ordinance:
• Introduced on March 24, 2020.
• Adoption proposed for April 7, 2020.
• If adopted, ordinance goes into effect 30 days after adoption, May 7, 2020.
• The regular ordinance will be set to expire on August 5, 2020, unless extended by ordinance
The legislation will apply to all residential tenants renting in a building or portion of a building that is used as a home, residence or sleeping place in Santa Clara for periods in excess of seven days. Residential tenants will be provided protections related to nonpayment due to financial hardship resulting from COVID-19.
Eviction Protections
Tenant Responsibility - Affected tenants must prove that they have suffered a substantial loss of income due to COVID-19 in order to receive eviction protections under the moratorium:
1) Income Impacted by COVID-19 - a tenant must present documentation that supports job loss, reduction of hours, missing work due to a minor child’s school closure or a state/local requirement to stay indoors for those over 65 years old.
2) Evidence of Loss of Income - In order to show loss of income, a tenant must provide documentation or other objectively verifiable proof. Examples of that are providing copies of bank statements that illustrate a drop in income, employer pay stubs showing the same, a letter from an employer notifying tenant of reduction of compensable hours, or other documentation that proves that tenant has not been generating the same level of income due to COVID-19.
Timing of Notification and Documentation -The tenant may argue as an affirmative defense in an unlawful detainer action that they are an Affected Tenant by providing documentation to the Landlord verifying substantial lost income. Examples of documentation may include, but are not limited to, a letter form employer citing COVID19 as a reason for reduced work hours or termination, employer paycheck stubs, or bank statements.
During the moratorium, landlords and tenants are encouraged to discuss with each other the impacts of COVID-19 on their income and to negotiate a reasonable plan to pay the rent. These efforts will save time, expense, anxiety and uncertainty for both parties. This is an opportunity for both sides to work together during this difficult time where no one is at fault for these circumstances resulting from COVID-19.
Tenant Landlord Services -The Housing and Community Service Division currently manages an Agreement with Project Sentinel for Tenant-Landlord Dispute Resolution Services. The Dispute Resolution Services Program provides counseling and dispute resolution services to renters and landlords. Services include counseling services on rights and responsibilities, information and referral services, educational services, and various dispute resolution alternatives including tenant/landlord mediation. The Program helps to assure that City residents are treated in accordance with all applicable federal, state and local laws. The proposed budget amendment would allow staff to potentially amend its current Agreement, if necessary, to increase the amount of the Agreement to accommodate additional services required to mediate the new ordinances.
Office hours for counseling and case intake are from 9:00 a.m. to 12:00 p.m. and 1:00 p.m. to 4:00 p.m., Monday - Friday. Mediations are held at City Hall or other City facilities, or at the Project Sentinel office. All services are neutral and confidential and are provided through the agency’s Santa Clara office, which currently employs a staff of eight trained and experienced case managers, supervised by the Director of Dispute Resolution Programs.
The City is also exploring a collaborative effort with other Santa Clara County cities/jurisdictions to address the administrative, tenant support and enforcement efforts of the proposed ordinance.
Outreach -Community Development Staff will conduct outreach related to the new ordinances by leveraging existing email lists, mailing notices to all landlords of rental properties citywide and utilizing the full complement of city department social media accounts to spread the message to landlords and tenants throughout the city. In addition, throughout the term of the ordinance, City staff will connect affected tenants with resources provided by its nonprofit and community partners.
ENVIRONMENTAL REVIEW
The ordinance regulates eviction of tenants from existing rental units and its adoption is an administrative activity that does not result in a direct or indirect physical change to the environment. Therefore, this action is exempt from environmental review under CEQA per the CEQA Guidelines section 15378(b)(5).
FISCAL IMPACT
Funding of $100,000 is recommended for the administration of this ordinance and will be used for third-party services to assist tenants and landlords as discussed above. The budget amendment below allocates funding from the Budget Stabilization Reserve to the Housing and Community Services Division Contractual Services Budget to fund the aforementioned costs.
Budget Amendment
FY 2019/2020
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Current |
Increase/ (Decrease) |
Revised |
|
General Fund |
|
|
|
|
|
|
|
|
|
Expenditures |
|
|
|
|
Housing and Community Services Division Contractual Services |
$202,622 |
$100,000 |
$302,622 |
|
Budget Stabilization Reserve |
$80,069,512 |
($100,000) |
$79,969,512 |
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|
|
|
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COORDINATION
This report has been coordinated with the City Attorney’s office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Adopt an Urgency Ordinance Establishing a Temporary Moratorium on Evictions for the Non-payment of Rent and No-Fault Evictions for Tenants affected by the novel coronavirus (COVID-19).
2. Introduce an Ordinance Establishing a Temporary Moratorium on Evictions for the Non-payment of Rent and No-Fault Evictions for tenants affected by COVID-19.
3. Approve the related FY 2019/20 budget amendment in the General Fund to increase the Housing and Community Services Division Contractual Services budget by $100,000 and decrease the Budget Stabilization Reserve by $100,000.
4. Authorize the City Manager to enter into agreements as needed to address the administrative, tenant support and enforcement efforts of the proposed ordinances up to a maximum of $100,000.
Staff
Reviewed by: Ruth Mizobe Shikada, Assistant City Manager
Approved by: Deanna Santana, City Manager; Brian Doyle, City Attorney
ATTACHMENTS
1. Emergency Moratorium Ord 3-24-20
2. Regular Moratorium Ordinance 3-24-20