Correspondence - #33 - Laserfiche WebLink

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Orozco, Norma From: Tim Johnson <tjohnson@jlkrllp.com> Sent: Monday, September 20, 2021 5:27 PM To: Hernandez, Johnathan; Sarmiento, Vicente; Penaloza, David; Mendoza, Nelida; Lopez, Jessie; Bacerra, Phil; Phan, Thai; eComment Cc: Ridge, Kristine; Mendoza, Steven Subject: Agenda Item 33 (Rent Stabilization Ordinance & Just Cause Eviction) Council/Mayor (cc City Manager Ridge and Asst City Manager Mendoza)... You will be discussing Item #33 on Tuesday for the possibility of enacting multiple ordinances that will likely impact both tenants and landlords in our city, today and in the future. I urge you to slow this process down and analyze it to make sure that anything approved is what is desired and for the best of our residents as well as property owners. I am worried that this is such a big item and that it may be enacted with one quick vote- likely with mainly those who are involved with either a tenant advocacy group or a property owner advocacy group chiming in. The majority of residents of Santa Ana are likely not involved with either side's advocacy groups but instead just regular citizens of our city. I am pretty adept at reading these proposed ordinances but this has taken me time to read and understand since I first started looking at this Thursday evening after the agenda came out. I am sure that many other residents who are just now looking at this to determine if it is a good thing or not. By the time they realize even what it is, you may be voting on it. Please slow this process down to get true community input. Our state already has some tenant protections in place as you know. This obviously goes above and beyond those protections. I am concerned that the allowed rent increase is the LOWER of 3% or 80% of CPI. That means if CPI is 3% in a given year, that rent can only be increased by 2.4%for a qualifying property. The max a qualified property may be increased in any given year is 3%... the maximum. This would be the case even if we experience high inflation and the CPI is high. This is a big disparity between the state requirements of 5% plus a CPI factor. Some may feel this is a good thing while others will think the opposite. This seems too much IMO and may end up in some landlords having to skimp on repairs, maintenance, and other items in order to make everything work. When we are these low interest rate times, it seems that there should not be an issue, but these low rates will not last. Further, ask yourself every time a water or trash increase is proposed how much each of those is going up. If it is larger than 3% or 80% of CPI, this will be very difficult on landlords. Or everytime that there is a property bond measure passed -those are all costs that are incurred by landlords. We need to have a balance though -to protect tenants and also allow property owners to invest in our community. Covid has been difficult for both sides. The appeal/exception process will likely turn into a "too expensive" item for a landlord to go through also and as such, the relief is likely not true relief for the property owner because all costs of that appeal hearing are to be passed on to the landlord. Perhaps it would be better to delay a quick implementation of this ordinance and instead choose the option to have a very thought out process to determine what is best for our tenants and our property owners. I am also ultimately very concerned about the fiscal cost to this item if approved as is. Specifically, the last sentence of the Staff Report on this item indicates that "the hiring of at least 25 staff following the due diligence process as directed in the Resolution." I initially thought that it was a typo that this program would take AT LEAST 25 staff. Assuming that the all in cost of a staff person averages $100K, that is $2.5M plus the cost of office space and other items- cost of staff and their benefits will only be the beginning of the fiscal impact. This will be a very high recurring cost center for our city that is already going to struggle when the Measure X sales tax rate starts to decrease in the future. We need to control annual recurring costs- or at least consider the entire picture for the betterment of the entire community. Having said all of that, I encourage the city to continue to deploy its rent relief funds in an efficient manner and look for ways to help tenants in our city. Tenants are struggling. When tenants struggle that also means landlords struggle. I 56