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DOWDALL LAW OFFICES A PROFESSIONAL CORPORATION ATTO R N EYS AT LAW City Council of the City of Santa Ana City of Santa Ana September 16, 2021 Page 30 (ii) Maintenance and repair was below accepted standards to cause significant deterioration in the quality of services provided. (iii) Other expenses were unreasonably high or low notwithstanding the application of prudent business practices. (B) Exceptional Circumstances in the Base Year. The gross income during the base year was disproportionately low due to exceptional circumstances. In such instances, adjustments may be made in calculating base year gross rental income consistent with the purposes of this Chapter. The following factors shall be considered in making such a finding: (I) If the gross income during the base year was lower than it might have been because some residents were charged reduced Rent. (ii) If the gross income during the base year was significantly lower than normal because of the destruction of the premises and/or temporary eviction for construction or repairs. (iii) The pattern of Rent increases in the years prior to the base year and whether those increases reflected increases in the CPI. (iv) Base period Rents were disproportionately low in comparison to the base period Rents of other Rental Units in the City. (v) Other exceptional circumstances. Utilization and requirements for "exceptional' circumstances fails to comply with the California Constitution requirements for fairness to property owners to allow for a fair return based on prevailing rents at the inception of a rent control law. The Constitution pays lip service to property owner rights by assuring that upon the inception of rent control, park owners have the right to establish and adjudicate a base rent to account for prevailing and general market conditions. Requiring exceptional circumstances is not recognized. The cases clearly show this. The city of Santa Ana is bound by this authority and should be anxious to comply with its legal responsibilities under the California Constitution. What is a Veza adiustment? Rent controls must allow Park owners and all landlords to establish beginning rental rates at general market conditions and to adjudicate those rates to be fair and unassailable. This constitutional entitlement exists to assure that all Park owners start at the same point under the same conditions. It assures that most of the park owners and landlords who have voluntarily moderated their rent levels to points at less than prevailing rates will have the opportunity to reestablish prevailing rents under mandatory rent regulations. This was the holding of the court in Vega v. City of West Hollywood. Park owners are allowed to prove market value as of base year date. All of the owners may do so. All have the constitutional right to start under rent controls at prevailing market rent. Typically, the flood of "Vega" applications constitutes what appears to be a widespread response to rent controls by maximizing rents, while in fact Park owners are merely acting under -30-