Letter: Recommendations for Tenant Protections in Davis

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(This letter was submitted to the Social Services Commission Subcommittee by Legal Services of Northern California ).

Thank you for inviting Legal Services of Northern California (“LSNC”) to comment on the Social Services Commission subcommittee’s report on improving tenant protections in Davis. The lack of deed-restricted affordable housing makes it extremely difficult for low- income residents to find and keep housing in Davis. This perpetuates the City’s patterns of segregation and excludes disadvantaged communities from opportunity. While the long-term solution to this issue requires commitment to the development of affordable housing in Davis, the City must also act now to assist the residents who are currently struggling.

On December 18, 2023, and January 9, 2024, LSNC met with the Social Services Commission’s subcommittee to discuss potential recommendations to improve the City’s tenant protections. The following memorandum highlights the research completed by LSNC on some of the topics discussed. In summary, LSNC recommends that the City:

1. Adopt a rent control ordinance that is more protective than the Tenant Protection Act;
2. Improve Code Enforcement’s effectiveness in enforcing code compliance complaints; and
3. Better regulate the City’s rental market through the Rental Resources Program and limiting the amount of fees charged to create tenancies.

Rent Control

While the Tenant Protection Act (“TPA”) protects many tenants in Davis, the subcommittee should consider recommending that the City adopt a rent control ordinance¹ to supplement the TPA. This section will describe some of the policy gaps in the TPA and suggest ways that a local ordinance could better protect local renters.

Improving Just Cause and Rent Cap Protections

The TPA imposes basic “just cause” protections and rent cap protections. Generally, just cause protections mean that once a tenant has lived in a unit continuously for 12 months, a landlord cannot evict them unless the landlord alleges an allowable just cause reason in the eviction notice. (Civil Code § 1946.2(a)-(b).) Additionally, if the landlord is evicting the tenant for a “no-fault” just cause reason (i.e., owner intends to move in, substantially remodel the property, etc.), the landlord must provide 1-months’ rent in relocation benefits to the tenant. (Civil Code § 1946.2(d).) The rent cap protections limit how much a landlord can raise rent during any 12-month period, which is the lower of 10% or 5% plus the annual CPI. Currently, the limit is 9.2%. (Civil Code § 1947.12(a).)

To supplement these protections, the City can make just cause protections effective at move-in, impose higher relocation benefits, and lower rent caps. We encourage the City to use Fairfax’s ordinance, Inglewood’s ordinance, and Larkspur’s ordinance as models. (See Just Cause Evictions and Rent Stabilization Program at Chapters 5.54 and 5.55 of the Fairfax Municipal Code: https://codelibrary.amlegal.com/codes/fairfax/latest/fairfax_ca/0-0-0-1272; Just Cause Eviction Protections at Article 9 of the Inglewood Municipal Code: https://library.qcode.us/lib/inglewood_ca/pub/municipal_code/item/chapter_8- article_9?view=all; and Rent Stabilization and Just Cause Eviction and Tenant Protection at Chapters 6.20 and 6.30 of the Larkspur Municipal Code: https://larkspur.municipal.codes/Code/6.)

Protecting the Tenants in Exempted Housing

The TPA only applies to “covered housing,” which leaves many types of housing exempt. Generally, the rent cap and just cause protections do not apply to newer housing (i.e., 15 years old or younger), dormitories, deed-restricted low-income housing, certain owner- occupied housing, and certain single-family homes and condos.² (Civil Code §§ 1946.2(e); 1947.12(d).) Additionally, the just cause protections do not apply to certain hotel occupancy

housing, certain care facility housing, and additional owner-occupied housing. (Civil Code § 1946.2(e).) This means that the just cause requirements and rent caps in the TPA already apply to by-the-bed leases, certain accessory dwelling units, and certain single-family homes, if the units are older than 15 years old. But the exemptions leave many units in Davis without TPA protections.

Unfortunately, the City is not able to impose rent caps on many of the TPA exempted properties because the Costa-Hawkins Rental Housing Act prevents local jurisdictions from applying rent caps to properties that were built after February 1, 1995 and properties that are “alienable separate” from other units (i.e., single-family homes and condos). (Cal. Civ. Code § 1954.52(a).) However, if the City wants to protect tenants in exempted housing, the City could impose just cause requirements on many TPA exempted properties since Costa Hawkins does not limit a local jurisdiction’s ability to impose just cause protections. (Civil Code §§ 1946.2(g)(1)(B); 1947.12(m).) We are not aware of any ordinances that currently cover all of the allowable TPA exempted properties (i.e., housing with Low-Income Housing Tax Credits for all protections, single-family homes for just cause protections, etc.), but we understand that several cities have or are considering them.

Creating an Enforcement Mechanism

The TPA lacks strong enforcement mechanisms. Considering there is no rent board or state agency enforcing the TPA, tenants must interpret the law and advocate for themselves. For example, if a landlord serves a rent increase notice or an eviction notice, there is no enforcement body to tell the parties if the notice is legally sufficient. This means that if the tenant wants to enforce their rights, they would either need to sue their landlord or defend themselves in an unlawful detainer (i.e., an eviction lawsuit). Both options are extremely risky for the tenant, meaning tenants often refrain from asserting their rights.

If the subcommittee recommends and the City chooses to adopt a rent control ordinance, LSNC strongly encourages the City to create an enforcement mechanism and hearing right outside of the judicial process. Specifically, the City could require landlords to submit their notices to the City and empower a local enforcement body to make determinations on the legal sufficiency of the notices. (See San Jose Municipal Code § 17.23.600 and Part 5 of Chapter 17.23:https://library.municode.com/ca/san_jose/codes/code_of_ordinances?nodeId=TIT17BUC O_CH17.23REDIMEARDWUNEXMOMOPA.) This could be an elected rent board, an existing Commission, or a group of City staff. We encourage the City to use San Jose’s ordinance and practices as a model. (See Rental Dispute Mediation and Arbitration for Dwelling Units Excluding Mobilehomes and Mobilehome Parks at Chapter 17.23 of the San Jose Municipal Code.)

In summary, LSNC encourages the subcommittee to consider recommending that the City adopt a rent control ordinance that improves TPA protections, applies to TPA exempted properties (when possible), and creates an enforcement mechanism and hearing right outside of the judicial process.

Code Enforcement

A robust code enforcement agency is vital to ensuring landlords provide tenants with habitable housing. Currently, the Davis’s Code Enforcement is part of the Police Department and the City’s Code Enforcement ordinance provides for the state’s minimum amount of relocation assistance when a tenant is displaced due to uninhabitable living conditions. (Davis Municipal Code § 18.11.100: https://library.qcode.us/lib/davis_ca/pub/municipal_code/item/chapter_18-article_18_11- 18_11_100; Health & Saf. Code, §§ 17975- 17975.10.)

First, we encourage the subcommittee to recommend that the City commit its Code Enforcement Department to higher rates of inspection and enforcement. Technically, tenants can make complaints online. (https://www.cityofdavis.org/city-hall/police-department/code- enforcement.) However, historically, our clients have had a hard time getting Davis Code Enforcement to inspect units and enforce safety standards. The City can require Code Enforcement to report the number of physical inspections completed based on tenant complaints. Also, the City could consider moving Code Enforcement out of the Police Department and into another Department (i.e., Social Services and Housing Department, Building Department, etc.).

Second, we encourage the subcommittee to recommend that the City update its Code Enforcement ordinance using West Sacramento’s ordinance as a model. (See Nuisance Abatement Code at Title 19 of the West Sacramento Municipal

Code: https://ecode360.com/43208171#43208171.) This ordinance provides for clearer enforcement procedures and higher relocation assistance for tenants who are displaced due to uninhabitable living conditions.

Last, we encourage the subcommittee to recommend that the City commit to advancing payment to displaced tenants due to uninhabitable living conditions and recover that payment from the owner. Currently, there is no immediate financial assistance when a tenant is displaced due to uninhabitable living conditions and the landlord fails to pay the required relocation assistance. This creates a deterrent effect because low-income tenants reasonably fear that if they call Code Enforcement, they will become immediately homeless without financial help.

The Sacramento County Code states that the Code Enforcement agency “may” advance payment to displaced tenants, but the City of Davis could require that the agency advance payment in these situations. (See Sacramento County Municipal Code §16.20.525: https://library.qcode.us/lib/sacramento_county_ca/pub/county_code/item/title_16- chapter_16_20-article_5?view=all.)

In summary, LSNC encourages the subcommittee to recommend that the City improve its Code Enforcement by committing to higher rates of inspection and enforcement, adopting a more robust Code Enforcement ordinance, and advancing payment to displaced tenants when landlords fail to pay required relocation assistance.

Rental Market Regulation

LSNC encourages the subcommittee to consider additional ways that the City can prevent landlords from taking advantage of low-income tenants.

First, the City could expand its already existing Rental Resources Program. By expanding registration requirements, the City could gather more data to ensure that landlords are complying with required laws. By creating a method for tenants to register properties where they are currently residing, the City could gather more accurate data and increase revenue for the Social Services and Housing Department. Last, by increasing the inspection rates in the Rental Property Inspection Program, the City could better encourage property owners to provide habitable housing to tenants. These are a few examples of how expanding the Rental Resources Program would better protect tenants in the City of Davis.

Second, the City could regulate the additional fees associated with creating a tenancy. Currently, security deposits are regulated and capped by Civil Code section 1950.5. Security deposits are broadly defined as fees that are “imposed at the beginning of the tenancy to be used to reimburse the landlord for costs associated with processing a new tenant or that is imposed as an advance payment of rent, used or to be used for any purpose . . ..” (Civ. Code § 1950.5.)

This statute does not preempt municipalities from adopting more protective regulations. (People Tannenbaum, 23 Cal. App. 4th Supp. 6, 9; holding that “nothing in [Civ. Code § 1950.5] shows an intention to fully and completely occupy the field of security deposits.”) The City could clarify that fees charged to view the unit before move-in are regulated by this state law, apply the security deposit caps to more tenancies, lower the security deposit cap, and implement an enforcement mechanism similar to the one described in the rent control section.

In summary, LSNC encourages the subcommittee to consider expanding its already existing Rental Resources Program and regulating the additional fees associated with creating a tenancy.

Conclusion

Legal Services of Northern California recommends that the City adopt a rent control ordinance that:

• Applies just cause protections effective at the beginning of the
• Imposes higher relocation benefits when a tenant is evicted for a no-fault
• Imposes a lower rent cap than the
• Applies just cause protections to allowable TPA exempted properties (i.e., housing with Low-Income Housing Tax Credits, single-family homes, etc.).
• Applies rent caps to allowable TPA exempted properties (i.e., housing with Low- Income Housing Tax Credits that were built after 1995).
• And, creates an enforcement mechanism and hearing right outside the judicial

Legal Services of Northern California also recommends that the City improve its Code Enforcement agency by:

• Increasing rates of inspection and
• Requiring Code Enforcement to report the number of complaints made and physical inspections completed.
• Moving Code Enforcement out of the Police
• Adopting an ordinance with clearer enforcement
• Adopting an ordinance with higher relocation benefits for tenants who are immediately displaced due to uninhabitable living conditions.
• And, adopting an ordinance that commits to paying relocation benefits to tenants who are displaced, but have not been paid by their landlord within the required

Last, Legal Services of Northern California recommends that the City better regulate the City’s rental market by:

• Expanding the Rental Resources Program by requiring landlords to report additional information and requiring additional types of landlords to register.
• Creating a method for tenants to register properties where they are currently
• Increasing the inspection rates in the Rental Property Inspection
• Clarifying that fees charged to view the unit before move-in are regulated by existing state law.
• Applying the security deposit caps to more
• Lowering the security deposit
• And, implementing an enforcement mechanism and hearing right like the one described in the rent control section.

Please let us know if you have any questions or concerns. We hope to continue working with you as you develop and consider tenant protections that will greatly benefit our client community.

Sincerely,

Brielle Mansell, Managing Attorney

Yuriy Rubanov Senior Attorney

Ella Beckman, Staff Attorney

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