HOUSING REPORT CITY OF WEST HOLLYWOOD - Provided by the Rent Stabilization and Housing Division
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HOUSING REPORT CITY OF WEST HOLLYWOOD Provided by the Rent Stabilization and Housing Division Published November, 2017
Table of Contents Introduction The City of West Hollywood has demonstrated feedback received are used to ensure the its commitment to maintaining existing City’s programs continue to address West housing while at the same time developing Hollywood’s housing needs. new permanent affordable housing. Since incorporation, the City has protected tenants The Rent Stabilization and Housing Division against large rent increases and unwarranted administers the City's Housing Programs INTRODUCTION 2016 evictions, and set minimum property including the Rent Stabilization Ordinance maintenance standards and other measures (RSO), Inclusionary Housing Program, and 1 2 10 aimed at improving quality of residential life, a Affordable Housing Trust Fund. The City core value of the City. addresses housing needs for moderate, low, INTRODUCTION TRENDS AFFECTING ACTIVITIES OF RENT and very-low income earning individuals and HOUSING STABILIZATION & HOUSING West Hollywood has six goals and 26 households in the community by limiting rent programs addressing housing needs. These increases through the RSO, requiring affordable goals and programs were developed through housing in new housing developments 1, and by an extensive and inclusive community process collaborating with non-profit housing providers in 2013 and are intended to meet housing to create housing opportunities for those in 1 needs for 2014 – 2021. greatest need. The Division also works with other Divisions in the City to preserve tenancies HOUSING GOALS FOR 2014 TO 2021 for vulnerable households and support property • Provide Affordable Rental Housing owners in maintaining their buildings. 16 18 20 • Maintain and Enhance the Quality of the In 1996, the state limited the City’s ability to Housing Stock and Residential Neighborhoods control rents through the Costa-Hawkins Act. FUNDING RENT STABILIZATION LEGAL SERVICES AND • Encourage a Diverse Housing Stock to The Act allows landlords to increase rents to AFFORDABLE HOUSING COMMISSION LEGISLATIVE AFFAIRS Address the Needs of All Socioeconomic what they want when a unit becomes vacant. Segments of the Community Initial rents reported for rent stabilized one- • Provide for Adequate Opportunities for New bedroom apartments in West Hollywood have Cover and Table of Contents photos by Tony Coelho Construction of Housing increased 28 percent on average since 2013. 2 This has prevented community members • Provide for a Governmental Environment from being able to move to other housing in that Facilitates Housing Development and West Hollywood when their housing needs Preservation change. Rents have also increased in the areas • Promote Equal Access to Housing for All surrounding West Hollywood and all over the Westside of Los Angeles in general. This 22 RENT STABILIZED HOUSING 26 LOOKING AHEAD TO 2017 29 REFERENCES (citations) The City hosts two community conversations on housing at the beginning of each year. situation makes it extremely difficult for renters whose housing needs change to find new The events are open to all members of the housing that fits their needs and remain in the INVENTORY AND RENT community and comments, suggestions, and West Hollywood area.
Affordability is a Statewide Issue In the regional context, West Hollywood is a increased vacancy rates in many regions. In small real estate market that contributes a small Southern California, however the situation is TRENDS number of units to the overall housing stock different. Features that are unique to California’s in the Los Angeles region. Therefore, the cost housing market alter the supply-demand TRENDS AFFECTING HOUSING of both for-sale and rental housing in West balance and keep the markets tight. One factor Hollywood is subject to regional pressures as is that there is the constriction of overall housing well as those within the borders of the city. In supply that comes from regulatory and zoning AFFECTING HOUSING recent years, California has outpaced the nation controls. A result of constraints on housing in job growth as well as economic output.5 As production is that the Los Angeles region in 2015 the economy prospers, home prices increase had the lowest rate of housing production in the and housing affordability decreases. Builders nation.6 respond, but, in general, the incentives and constraints they face affect the mix of homes, This shortage threatens to push many families leading to more higher-priced homes and an into poverty. While the state’s overall poverty undersupply of lower-priced homes than needed rate is 16%, when high housing costs are California is experiencing a statewide housing crisis. The regionally. included in the calculation, that rate increases state leads the nation in homelessness, poverty rates, to 21%. 7 Affordability is especially challenging 2 Not enough new housing is built in California. in Los Angeles County, where inflation 3 rental overcrowding, and populations experiencing Nationally, outside of California, production adjusted housing prices have risen 27% in the severe rent burden. It also has the largest shortage of of 5+ unit buildings has been at the highest last 13 years while inflation adjusted wages affordable rental homes.3 According to the California level since 1987. 5 This new supply has led to have declined 7%.8 Housing Partnership Corporation, every county in TRENDS AFFECTING HOUSING California has an affordable housing shortfall.4 This is PRIOR TO 2015 ACTIONS IN 2015 TO 2017 due to supply-side issues such as the elimination of Berkeley Alameda (new) redevelopment funds, and demand-side issues such as Beverly Hills Mountain View (new) an overall increase in the number of renters. Campbell Richmond (new) NOTICEABLY, IN 2016 East Palo Alto Santa Rosa (new) SEVERAL COMMUNITIES Fremont Berkeley (strengthened) CONSIDERED Hayward East Palo Alto (strengthened) Los Angeles Oakland (strengthened) IMPLEMENTATION OF Los Gatos San Jose (strengthened) OR STRENGTHENED Oakland Beverly Hills (strengthened) RENT STABILIZATION Palm Springs Burlingame (failed) ORDINANCES. San Francisco San Mateo (failed) San Jose Santa Monica photo by Tony Coelho Thousand Oaks West Hollywood
Trends in West Hollywood Unemployment Rate, Los Angeles County 14.0% West Hollywood has prioritized rent stabilization In 2016, rent charged for non-rent stabilized 12.0% and affordable rental housing since incorporation apartments in West Hollywood averaged $3,070 10.0% 33 years ago. However, the City cannot control per unit. Market-rate apartments are units built 8.0% regional and state trends driving housing market after July 1, 1979, as units built before this date 6.0% TRENDS AFFECTING HOUSING dynamics. Despite a Rent Stabilization Ordinance are governed by the RSO. On average, 2016 4.0% and a variety of other policies, affordability market-rate rents saw an increase of around 2.0%. remains a challenge in West Hollywood. In a 1.9% over 2015 prices. 0.0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2016 Study, 75% of survey respondents stated there is not enough housing within their price- Market-rate rents tend to fluctuate due to range. In addition, there is a lack of agreement several variables including the number of local about the type of multifamily development vacancies and potential renters, as well as the Rate of Turnover, Rent Stabilized Units in West Hollywood residents want in their neighborhoods.9 rental-price for nearby comparable units. In 3,500 addition, factors involving the southern California The city’s housing affordability challenges regional economy can have consequences. On 3,000 remain constant. Between 2000 and 2016, the average, one-half of all households in the Los 2,500 City’s population grew by 0.4%, far slower than Angeles region move every 5 years (US Census). 2,000 the County rate of 7.6%.10 Since 1990, the This rate of movement may or may not be 4 proportion of West Hollywood renters verses reflected in the vacancies in West Hollywood 1,500 5 homeowners has remained constant at 78% market-rate and rent-stabilized apartments. 1,000 renters and 22% owners. This is in contrast to However, it is clear that the rate RSO Los Angeles County, which has 45.5% renters apartments turn over in West Hollywood mirrors 500 versus 54.5% owners.11 the unemployment rate in Los Angeles County. 0 TRENDS AFFECTING HOUSING In bad economic times, residents could struggle 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 In 2015, the California Department of Finance to find work and become rent-challenged. When estimated there were 23,012 households in the economy is good, more residents are able to West Hollywood. Approximately 40.5% of afford rent and they remain in their current Average Increase in Rent Following a Vacancy West Hollywood households in the city earn lower incomes, and housing. $500 another 16.9% of households earn moderate $468 $450 income. The remaining 42.7% of households $375 $406 earn above moderate income (also referred to $400 $335 $325 as Market-Rate Income). $350 $350 $300 $265 $265 $293 $228 $224 $234 Distribution of Household Income in West Hollywood $250 $229 $200 $188 Very Low Low Moderate Above Moderate $150 (>50 – 80% AMI) (>80 – 120% AMI) $133 $129 (0-50% AMI) (>120% AMI) $100 Percent of Households 12 24.8% 15.7% 16.9% 42.7% $50 Number of Households 5,707 3,613 3,889 9,826 $0 (estimated) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
However, when the economy is doing well there In West Hollywood, nearly 53% of renters are As of November 7, 2016, 124 Rent Stabilized 2, 3, and 4 Unit Properties in West Hollywood is also intensified housing pressure. Current rent burdened, paying 30% or more of their properties with two, three, PROPERTY Properties Units residents earning adequate incomes and new income on housing costs.13 Rent burden falls and four units have been TYPE residents moving into the region seek housing especially hard on West Hollywood residents that they can afford. This creates increased earning lower income14 ($48,525 or less, single removed from West 2 units 415 830 demand and the supply of housing in West person household). Cost burdened renters are Hollywood’s rental market. 3 units 198 594 TRENDS AFFECTING HOUSING 2015 Hollywood and the Los Angeles region has not at a significant risk in the short term (potentially This represents 14% of 4 units 175 700 kept pace with this demand. In this situation, risking displacement in the face of rising costs properties with two, three, TOTAL 788 2124 landlords are able to increase the initial rent related to housing and other daily essentials, and four units, and 61% of following a vacancy thereby creating an overall food, medications) and in the long term (limiting all properties removed from rise in housing cost. their ability to build wealth, and ladders to home ownership). the rental market using the Average increase in rent received by landlords Ellis Act in West Hollywood. following a vacancy in RSO units in West With 78% of residents renting their housing Eighty-nine of the two, Hollywood is presented in the chart on page 5. and 75% of rental housing being rent stabilized, three, and four unit Status of Rent Stabilized 2, 3, and 4 Unit Properties When the economy is doing well, there is the City’s Rent Stabilization Ordinance is a Previously Removed from the Rental Market properties removed remain higher demand for housing and housing costs primary means of ensuring rents rise at a level rise following a vacancy at a higher rate than in tenants are able to pay, while ensuring owners off the rental market PROPERTY Properties Off Market/ Converted to Demolished/ unchanged or have been TYPE Removed Unchanged Single-Family Site Rebuilt economic downturns. This prevents residents a return on their investment. However, rent whose housing needs change, but who can stabilization can only limit rent increases as converted to single-family Duplex 88 41 28 19 otherwise pay their rent and are earning a long as a tenant remains in his or her unit. homes; 35 have been Triplex 19 6 4 9 6 decent salary from moving to housing that 7 demolished and rebuilt. Fourplex 17 9 1 7 better fits their needs. TOTAL 124 56 33 35 Removal of Rental Units from the Market TRENDS AFFECTING HOUSING 2015 Under the State’s Ellis Act, property owners A review of City records indicated the most have the right to remove rental buildings from common property types removed in West the rental market. From January 1, 1986 to Hollywood are properties with two, three, and The table (right) highlights Properties Removed from the Rental Market Using the Ellis December 31, 2016, 203 rent-stabilized four units. These properties either were the status of properties Ellised Act (*) and Current Uses as of October 12, 2016 properties with 764 units were removed from converted to single-family homes or remained between 1986, when the Ellis the West Hollywood Rental Market. In 2016, unchanged and off-market.15 Approximately 12 PROPERTY Properties Units Current Proposed Act came into effect, and STATUS Ellised Ellised Units Units eight buildings with 29 apartments were percent of rent-stabilized properties in West October 12, 2016 removed from the rental market. Hollywood, 788 properties with 2,124 units, have Change of Use 16 126 128 22 two, three, and four units (duplex, triplex, and The “Change of Use” category Converted to SFR 37 96 45 0 includes properties converted to quadruplex, respectively). uses such as bed and breakfast New Construction 45 187 391 0 lodging, non-profit affordable STATUS (November 7, 2016) PERCENT PROPERTIES housing, and commercial or hotel New Construction 21 94 80 298 uses. The “Proposed Units” category Pending Off Market or converted to a single family home 51.7% 105 includes projects currently under construction, approved for Off Market 68 186 186 0 New and pending condominiums 31.0% 63 (No Changes to construction, and currently under New and pending apartments 1.5% 3 review by the City. Property) Returned to market 7.9% 16 Returned to 16 75 72 0 Market Change of Use (commercial, bed & breakfast, affordable housing) 7.9% 16 TOTAL 203 764 902 320 Total 100% 203
Sneak Peek at 2017 Legislative Advocacy to In the 2017 legislative session, City staff and the Reform the Ellis Act City's lobbyist in Sacramento, Helyne Meshar & Associates, collaborated with Assemblymember As a team, Rent Stabilization and TRENDS AFFECTING HOUSING 2015 Richard Bloom on Ellis Act reform. AB 982 would Housing, Legal Services and have extended the Ellis Act 1 year notice to Legislative Affairs, and the City’s vacate, currently provided to senior and disabled legislative advocate in Sacramento tenants, to all tenants living in the building. actively encourage the California Currently, the Ellis Act allows all other tenants 120 days. The bill was introduced in the legislature to reform the Ellis Act and Assembly on February 16, 2017. The California support tenant’s rights legislation. Apartment Association (CAA) objected to aspects in the bill and proposed amendments Reforming the State Ellis Act requires that were not acceptable to Assemblymember action by the California legislature. Bloom or the City of West Hollywood. Assemblymember Bloom opted to hold the bill Since its adoption in 1986, the Ellis until the 2017-18 session so he could work on Act has been unchanged. Ellis Act amendments with the City, other allies, and CAA. reform has been a priority of the City The bill could be heard in the Housing and Council for many legislative cycles; 8 Community Development Committee as early as 9 however, recent proposals to amend January, 2018. the Act have failed in part because of strong opposition from real estate and property owner interest groups. TRENDS AFFECTING HOUSING On January 23, 2017, the City Council directed staff to increase lobbying efforts and return to City Council with a request for increased funds if necessary. Amendments the City will lobby for include extending the Ellis Act relocation period to one year for Sacramento, California Capitol building dome detail all tenants on a property when at On March 9, 2017, the City hosted a community least one household qualifies.16 forum focused on the impacts of the State’s Ellis Act on West Hollywood. The forum was free and all members of the community were invited. A panel of experts including Assemblymember Richard Bloom and Senator Ben Allen were in photo by Tony Coelho attendance to hear concerns and issues from the community.
ACTIVITIES RENT STABILIZATION AND HOUSING DIVISION A MAJOR PART OF THE in the City Hall lobby and on HEARINGS ON MAXIMUM RENT STABILIZATION AND the City’s website. It contains ALLOWABLE RENT AND HOUSING DIVISION’S information for prospective RENT DECREASES tenants, current tenants, Hearings are held if a tenant ROLE IS PROVIDING and developers about or landlord wants to ascertain INFORMATION TO ACTIVITIES affordable housing. Handouts the legal maximum allowable THE PUBLIC. contain information about rent (MAR) for a unit or if a During calendar year 2016, inclusionary and affordable tenant believes they have staff members spoke with housing programs, referral had a substantial reduction 13,696 individuals, of whom information for Section 8 in housing services and are 7,877 were tenants, 5,012 vouchers, housing rights, due a decrease in rent. The RENT STABILIZATION AND were landlords, and 807 were brokers, lawyers, or other interested parties. and information from the Department of Consumer Affairs on how to become Rent Stabilization and Housing Division coordinated the HOUSING DIVISION hearings process with the tenant ready (how to improve Legal Services Division, which In Calendar Year 2016 one’s credit and rental history). held 87 hearings in 2016. 807 BROKERS, HOME SECURE GUIDING NEW PROPERTY LAWYERS The City offers low-income 5,012 AND OTHER 7,877 OWNERS, TENANTS AND The Rent Stabilization Ordinance protects tenants from LANDLORDS 6% TENANTS seniors and disabled residents 36% 58% safety and security devices PROSPECTIVE MULTI-UNIT unlawful eviction and sets a limit on annual rent increases. such as no-slip strips and HOUSING BUYERS 10 11 The City continues to administer the ordinance and to help grab bars in the bathroom, All new owners and new and security deadbolts and tenants in rent-stabilized tenants know and exercise their rights. window locks on doors and apartments receive an windows free of cost. information packet introducing Constituent Contacts them to West Hollywood’s Rent The Inclusionary Housing Program requires 20 percent ACTIVITIES RENT STABILIZATION AND HOUSING DIVISION Totaled 13,696 Stabilization program. The OFFERING RSO BUILDING of new residential development to be deed-restricted for packet contains a fact sheet, BLOCKS SEMINARS a guide to Rent Stabilization, lower and moderate households or, in certain instances, RESIDENTIAL RENTAL The City’s ongoing efforts a voter registration form and the developer may pay a fee. Fees are collected in the City’s REFERRALS PROVIDED to communicate with and a welcome letter. In 2016, the inform the members of the Division mailed welcome Affordable Housing Trust Fund and used to partner with FREE-OF-COST community resulted in 13 The Division maintains a list of packets to 137 new landlords non-profit housing providers to construct new, 100 percent available rental units in West workshops that were free- and 1,715 new tenants. of-cost for the participants. affordable apartment buildings. Hollywood. Updated weekly, The popular Building Blocks it is free-of-cost for owners RENT REGISTRATION FEES program, offered in both to post their rental listings Fees collected from rent- English and Russian, helps to and free-of-cost for potential stabilized units fund the Rent educate tenants, landlords, renters to use. Stabilization program. In 2016, and other community the 16,832 rent stabilized units members. Topics include photo by Tony Coelho MAINTAINING THE CITY’S generated $1,887,424 in rent Emergency Preparedness for HOUSING INFORMATION registration fees. For units Apartment Buildings, Tenants rented under Section 8, only CENTER 101 Workshop, Pets 101, and the landlord portion of the fee The Division’s housing Reasonable Accommodations is collected, which is $60. information center is located for Disabled Tenants. Owner-occupied units do
ACTIVITIES RENT STABILIZATION AND HOUSING DIVISION not pay the registration fee parties and witnesses to the TRACKING RENTAL STATUS ENERGY EFFICIENCY AND innovative housing financing through the City's website, and in 2016, there were 1,315 alleged harassment. Because TO MONITOR NEW RENTS WATER CONSERVATION aimed at identifying new funding press releases, and at the units with this exemption. In tenant harassment is a criminal AFTER EACH VACANCY In 2016, the City provided sources and approaches to first City Council meeting in 2017, the registration fee will offense, no charges will be The Rent Stabilization Division information and links on increasing housing affordability, January. Invitations are sent increase from $120 to $144 filed unless the Legal Services maintains digital records of energy efficiency and water and an analysis of City records by electronic mail to all City per unit per year. This will be residential properties. Each conservation on its website, to ensure units are being Commissioners and Board the first increase since 1993 time the owner rents a unit with outreach to RSO property properly registered. Members, and community and is lower than the AGA for they must file a Re-Registration owners on HERO financing for members who signed up for the same time-period (if the of New Tenancies in a Unit energy efficiency upgrades. ENGAGING THE updates when they participated AGA was applied the annual form, which includes the move- COMMUNITY in the 2012/13 General Plan registration fee would be $180). in date, the initial rent paid, CONDUCTING SPECIAL Annually the City hosts two and Housing Element Update. Landlords will be able to pass and housing services provided community conversations on The winter rent stabilization STUDIES AND INITIATIVES through to tenants one-half (parking, storage, laundry, housing to create a forum to newsletter, mailed to all rent of the increase, increasing etc.). Both the landlord and the ▶ Reinvestment in Aging discuss pressing issues such stabilized addresses and the tenant’s share of the tenant must sign the form. After Apartment Buildings as increased rents, tenant all rent stabilized landlords registration fee from $5 a verification and processing of Almost 91 percent of housing displacement, affordable (about 17,000 addresses, month to $6. the form by the City, the parties stock in the city is at least 30 housing requirements in new 1,900 landlords), includes the receive a letter of confirmation. years old, a time-threshold developments, and other announcement. Displacement TENANT REGISTRATION This information is stored in the when housing generally shows housing related topics. These caused by the Ellis Act is FEE REBATES City’s database as a record of signs of aging and requires meetings are free-of-cost a pressing concern, as is The RSO allows landlords the move-in rent and housing major upgrades to the physical to the participants and all addressing homelessness. to pass through to tenants services provided for the structure and systems. In 2016, members of the community Participants express a desire 12 the Division completed a study for more housing that is 13 one-half of the registration tenancy. The City requires all are encouraged to attend. The fee per unit in $5 increments new tenancies to be registered. to identify incentives the City conversations are held at the inclusionary and non-profit per month. Very low-income If a tenant is not registered, could provide to encourage beginning of the calendar year, owned affordable housing, tenants who are over 62 Division and City Prosecutor the landlord cannot apply rent landlords to reinvest in aging one at the West Hollywood incentives for property owners years of age or disabled may are satisfied that all of the increases. In 2016, the Division rent-stabilized apartment Park Community Room and to maintain existing apartment ACTIVITIES RENT STABILIZATION AND HOUSING DIVISION obtain an annual rebate if they elements of the offense can be received and processed 1,715 buildings. the other at Plummer Park. buildings, and programs to paid registration fees to their proven beyond a reasonable re-registrations. The events are announced help seniors age in place. landlord in the previous year. A doubt. While few complaints ▶ Seismic Retrofit Program tenant has up to three years to are ultimately prosecuted, the Recognizing the need to PARTICIPATING IN THE file for this rebate. In 2016 there investigation frequently alerts ensure apartments will tenants and landlords to their RENT CONSORTIUM survive a major earthquake, were 365 tenants granted Each year, City Staff meet registration fee rebates. rights and responsibilities the City initiated a study of under the RSO and helps bring with staff from Berkeley, seismic retrofitting in West parties into compliance. In Oakland, San Francisco, Hollywood in 2015. This study TENANT HARASSMENT Santa Monica, Los Angeles, 2016, the Division received 11 is currently underway and the The City of West Hollywood and East Palo Alto. In 2016, tenant harassment complaints. City anticipates the release investigates complaints of topics discussed included of a draft ordinance requiring tenant harassment. A tenant current court cases The Division also collaborates property owners to upgrade may initiate an investigation by affecting rent stabilization, with other City Divisions, apartment buildings for filing a harassment complaint collaboration on new including Legal Services, earthquake safety in 2017. at the Rent Stabilization public legislation and responding Building and Safety, and Code counter. Once received, a to proposed legislation, and Compliance to respond to ▶ Research into Affordable tenant harassment complaint recent changes or issues situations, such as high-impact Housing Strategies is assigned to staff who review affecting each jurisdiction’s renovations, that sometimes Special studies and research the allegations made in the RSO. could lead to incidents of in 2016 included a study of complaint, and may contact tenant harassment.
ACTIVITIES RENT STABILIZATION AND HOUSING DIVISION PROVIDING NEW HOUSING OPPORTUNITIES AFFORDABLE HOUSING In recent years the amount of $47,386 annually. Additionally, PRODUCTION IN 2016 affordable housing produced 16.9% or 3,889 households through the Inclusionary Housing qualify as moderate income, In 2016, 77 new affordable Program has increased from 108 earning less than $59,232. Inclusionary Housing units in 2013 to 322 units by the The City of West Hollywood Increase Total units were produced through end of 2016. An additional 99 Most new residential administers an Inclusionary Units the City’s inclusionary affordable units are anticipated in development in West Housing Program in which housing program. 2017 and 2018. Hollywood is out of reach developers are required to Recent Increase 1986-2013 108 108 to low and moderate wage make a percentage of newly in Number of Most of this new housing households. 54% of new 2014-2016 214 322 constructed housing units Inclusionary Housing Need in has been located along West residential development in available to low and Units 2017-18 99 421 West Hollywood 17 Hollywood’s commercial corridors 2016 was market-rate 2-10 moderate-income and not within existing residential unit condominium buildings households. In an effort to neighborhoods. Importantly, the providing the City’s Affordable Percent of Households new affordable housing units Housing In-Lieu Fee instead of generate a mix of income levels within residential Nonprofit Developers & California Department of produced through Inclusionary affordable units onsite. When Very Low Above Moderate areas, builders must Affordable Housing Housing and Community AMI >120% Housing have made it possible affordable units are included Development’s (HCD) AMI 0-50% locate affordable units (or In 2016, construction began for the City to offer permanent in new buildings, those units inclusionary units) throughout on a new 22-unit affordable Predevelopment Loan Program, housing project, which will as well as the County of the building. In addition, serve a very low-income Los Angeles Community 24.8% access must be available population including persons Development Commission and 14 to all building amenities, 42.7% 15 living with HIV/AIDS, mental HCD’s Infill Infrastructure Grant regardless of renter economic Program, plus 21 project-based 15.7% health challenges, and status and/or income level. rental vouchers. In addition, the transitional age youth The number of inclusionary emerging from foster care City committed $2 million in 16.9% housing units in West and at risk of homelessness. affordable housing trust funds Hollywood will increase in as a local match to leverage Low ACTIVITIES RENT STABILIZATION AND HOUSING DIVISION Financing for the project will Moderate AMI the coming years, primarily over $7.2 million from the AMI >50 – 80% come from the Los Angeles >80 – 120% Movietown Senior Housing (construction), photo courtesy of Hunter Kerhart in mixed-use buildings in County Housing Innovation California Tax Credit Allocation the commercial areas along Fund (LACHIF) and the Committee. affordability to lower and become available when the Santa Monica Boulevard. Estimated Number of Households moderate income households building is completed. When facing displacement from West the In-Lieu fee is paid new Above Moderate Hollywood due to the Ellis Act. affordability is postponed until Affordable Housing in West Hollywood Very Low AMI 0-50% AMI >120% the fee can be utilized. Although housing production in Approved to be Built Under Construction Existing West Hollywood has performed Because of high demand for 800 better than anticipated in the housing in West Hollywood, 5,707 state’s current planning cycle non-profit housing providers 710 600 9,826 for housing (State Regional struggle to compete with Housing Needs Assessment, or developers. Therefore, meeting 22 75 3,613 RHNA 2013-202118), affordability West Hollywood’s needs for 400 is still an issue. The California housing requires an ongoing 437 24 366 322 3,889 Department of Finance multi-faceted approach of rent 200 estimates 40.5% or 9,320 stabilization, inclusionary housing 150 Low Moderate AMI households in West Hollywood units, non-profit affordable 0 AMI >50 – 80% are Very Low or Low income, housing, and advocating for state >80 – 120% Affordable Inclusionary HACoLA/HUD 1222 Fairfax Rent Stabilized earning less than $29,616 or and federal funding. Non-Profit Housing Section 8 Section 8
AFFORDABLE HOUSING Hollywood. To qualify for these the supply by approximately two FUNDING AFFORDABLE HOUSING DEVELOPMENT FUNDING – funds, each allocation approved to one. The state has developed STATE OF CALIFORNIA by the City Council, a project a competitive scoring process COLLABORATIVE REPORT must have at least 60% of units to determine which applicants The State’s four housing affordable for low and moderate- receive the credits. The scoring agencies, the California Tax income households, with 20% of includes points for projects that Credit Allocation Committee those units reserved for low-income serve lower income tenants, (TCAC), the California Debt Limit households. The Affordable leverage public and private funds, FUNDING Allocation Committee (CDLAC), Housing Trust Fund continues include high-energy efficiency the Department of Housing to enable new housing projects features, and for developers who and Community Development including the Blue Hibiscus have previously received the AFFORDABLE (HCD), and the California project, a 22-unit development credits, among other factors. The Housing Finance Agency that will serve a mixed very-low California Tax Credit Allocation (CalFHA), have collaborated income population including Committee (CTCAC) administers to collect and analyze data on persons living with HIV/AIDS, the federal and state Low-Income the costs of building affordable mental illness, and transitional Housing Tax Credit Programs. HOUSING housing in the state.19 The report age youth emerging from foster suggests that several factors care and at risk of homelessness. Developments in West including land cost, community Hollywood that have been opposition, building quality and LOW-INCOME HOUSING recently built using tax credits durability, and economies of TAX CREDITS include the Courtyard at La Brea scale, affect the costs of building The Low Income Housing Tax and the inclusionary housing DEVELOPMENT 16 affordable housing as well as Credits (LIHTC) Program is a units in the Huxley, the Dylan 17 creating challenges to building federal program, which provides and Movie Town Seniors. affordable housing. tax credits to developers of affordable rental housing. The tax ADDITIONAL FUNDING As an ongoing strategic goal of the City of West Hollywood, Currently, it is necessary to credits are for the first 10 years of SOURCES leverage several sources a minimum 30-year compliance Similar to the LIHTC Program, the Rent Stabilization and Housing Division works with period during which rent and HOME Funds and Section 8 FUNDING AFFORDABLE HOUSING DEVELOPMENT of funding in order to help private and nonprofit developers to develop, preserve, address the huge demand for income restrictions apply. Project-Based Vouchers are HUD housing and the high costs The LIHTC Program, although (federal) programs administered and rehabilitate affordable housing. of development. The sections established in the U.S. Internal locally through the Community below discuss some of these Revenue Code (IRC), is structured Development Commission of the possible funding sources. such that state-allocating County of Los Angeles and the Affordable housing developed agencies administer most aspects Housing Authority of the County in West Hollywood has utilized a of the program, including income of Los Angeles. These additional combination of these and other and rent compliance, with the funding sources are available funding sources. Internal Revenue Service (IRS) through competitive application providing oversight and guidance. processes. Developers achieve CITY OF WEST HOLLYWOOD Local administration allows higher scores for projects that AFFORDABLE HOUSING states to address affordable include a certain number TRUST FUND housing needs specific to their of units for special needs The Affordable Housing Trust populations. populations. Buildings in photo by Tony Coelho Fund, established 31 years ago West Hollywood developed by the City Council, serves as a Some states, including California, using these funds include the source of funds for the creation have established tax credit Courtyard at La Brea (32 units), and support of permanently programs in addition to the Janet L. Witkin Center (17 units) affordable housing in West federal program. In California, the and Blue Hibiscus (22 units). demand for tax credits exceeds
HEARING APPEALS The Commission also other Cities do? What are the The Rent Stabilization announces the annual general key RSO concerns? Commission’s priority is to hear adjustment. The annual • Information on Owner RENT appeals of rent adjustment general adjustment is 75% of Occupancy RENT STABILIZATION COMMISSION hearings. Tenants or landlords the increase in the Consumer • Non-smoking Apartments may appeal the hearing Price Index rounded to the officer’s decision to the Rent nearest quarter (0, 0.25, 0.50, • Section 8 Updates Stabilization Commission 0.75). In 2016, the annual • Commissioner Training STABILIZATION on any application for rent general adjustment was set at (Robert's Rules of Order/By adjustment. The hearing 1.25 percent. Laws/Brown Act) officer’s decision may • Emergency Preparedness be appealed for any one Newsletters were sent to for Apartment Dwellers (In of three reasons: if the landlords and tenants in connection with Public Safety) COMMISSION applicant believes the July and in December 2016 • Illegal Units & Impacts decision was made in error; announcing the general (Including Parking & Safety) if the determination is not adjustment and the security • Review Annual Report reasonably supported by the deposit interest rates. evidence; or if the decision in • Outreach - targeted specifically to different groups some way violates the RSO. CONDUCTING ANNUAL RENT STABILIZATION • Building Blocks - Increased 18 In 2016, the Commission heard Outreach 19 COMMISSION 11 appeals. Eight of these cases STUDY SESSION • Short Term Rentals were appeals of rent-decrease • What is the market pressure (November 10, 2016) hearing decisions, seven cases affecting the RSO? Each year the Commission were on Maximum Allowable conducts a study session to RENT STABILIZATION COMMISSION The Rent Stabilization Commission provides a forum for Rent determinations, and one determine possible topics case was on a compliance THINGS TO KNOW tenants and property owners to appeal decisions issued determination. and compiles these into EDUCATIONAL SERIES Suggested Priorities for the by the hearing examiner concerning rents, property remainder of the fiscal year. In 2014, the Rent Stabilization IMPLEMENTING THE Commission agreed with staff maintenance, housing services, and other important At the annual study session, to use the Rent Stabilization RENT STABILIZATION the Commission developed landlord-tenant issues. The Commission also reviews the Commission meetings on ORDINANCE (RSO) the following top 17 ongoing WeHo-TV as an educational City's Rent Regulations to propose appropriate changes In addition to hearing appeals, and new priorities for the tool. In 2016, staff continued to better implement and enforce the law. the Commission has other remainder of fiscal year 2016. to make presentations responsibilities in relation to covering topics that are of • Appeals (Hearings) the implementation of the RSO. high interest to the public The Commission announces • Harassment based on data received from the annual interest rate on • Periodic review of existing the counter contacts and tenant security deposits statutes/regulations telephone inquiries. These that are held by landlords. • RSO - Notice of last Things to Know educational photo by Tony Coelho The interest rate for 2016 registrations presentations discuss was 0% because of the low • Annual Affordable Housing Relocation Benefits, the Re- interest rates offered at banks Update registration process, Leases throughout the region. and Maintenance, Mediation, • Code Enforcement- What and Hoarding.
LEGAL SERVICES AND LEGISLATIVE AFFAIRS DIVISION RENT ADJUSTMENT HEARINGS One of the ways in which the reduction in rent. This RSO prevents unlawful rent process may also be used to LEGAL SERVICES & increases is through its rent determine the Maximum adjustment hearings process. Allowable Rent (MAR) and If an owner eliminates or whether the landlord has substantially reduces a retained rent in excess of the LEGISLATIVE housing service or fails to MAR. The hearings are held perform required at city hall and are heard by a maintenance, a tenant may neutral hearing examiner. apply for a corresponding DIVISION 2016 Rent Adjustment Hearing Statistics Hearings Filed Hearings Held 2016 113 99 2015 113 87 2014 106 74 2013 97 56 Hearing Requests Withdrawn 11 14 22 15 The City’s Legal Services and Legislative Affairs Division Postponed to later date or dismissed administratively 3 12 10 26 20 21 provides legal services to the City to support the enforcement of rent stabilization laws, including tenant harassment complaints. The Division is comprised of MEDIATION staff attorneys, a governmental affairs liaison, support LEGAL SERVICES AND LEGISLATIVE AFFAIRS DIVISION Many problems can be solved through a combination of staff, and a mediator who provides free-of-cost mediation through a communication telephone calls and face-to- and negotiation process face meetings. Attempts are services to help resolve landlord-tenant disputes made to resolve most rent in which a neutral third between businesses and residents, and other disputes. party assists participants to adjustment applications prior The City also contracts with Bet Tzedek legal services resolve disputes. Mediation to scheduling a hearing. In is confidential, voluntary 2016, the City’s mediator held for the provision of free-of-cost legal services to assist and requires parties who 15 formal mediations. Typical with eviction issues, when appropriate. will bargain in good faith. issues for mediation include The mediator does not tell maintenance, parking, pets, parties what to do, but rather roommates, and relocation assists them in identifying when tenants must move out and creating mutually due to fires, fumigation, or beneficial solutions to their other habitability concerns. conflict. The City’s mediator The mediator also deals photo by Tony Coelho spoke with approximately with issues involving photos by Tony Coelho 1,000 individuals in 2016, and condominium homeowner resolved 440 conflicts associations.
RENT INCREASES AND VACANCY DECONTROL RESIDENTIAL HOUSING INVENTORY AND RENT Size Units % Rent Stabilized Apartments RENT STABILIZED Rent-stabilized 0 bedroom 2,430 15 properties in 15,234 1 bedroom 8,999 53 West Hollywood 2 bedroom 4,862 29 Owner HOUSING INVENTORY 2016 3 bedroom 473 3 Occupancy, 4 + bedroom 20 0 Section 8, Other AND RENT Totals 16,784 100 1,550 The chart below shows the household income needed in 2016 to pay the rent in rent-stabilized units broken down by number of bedrooms. Affordability was defined by using the housing industry standard of 30 percent of gross household income. According to the American Community Survey, there are Pre -1996 Tenants 2016 New Renters $150,120 a total of 24,039 Residential Housing Units in the City of Household $103,040 Income Needed 22 West Hollywood.20 Of these 16,784 fall under the City’s to Afford Rent in $63,600 $79,080 $63,760 23 $48,080 Rent Stabilization Program.21 2016 $33,920 $36,040 0 bedroom 1 bedroom 2 bedroom 3 bedroom RESIDENTIAL HOUSING INVENTORY AND RENT Year Increase Units The chart on the left illustrates the increased Differences number of apartments that have had rents brought 2016 +345 11,256 to market rates. 2015 +119 10,911 In the 21 years since Costa-Hawkins has been in effect, Numbers are cumulative 2014 +244 10,792 64 percent of West Hollywood apartments have had at 2013 +295 10,548 least one market-rate increase upon vacancy. 2012 +349 10,253 2011 +181 9,904 Under the RSO, existing tenancies may be given an 2010 +219 9,723 annual rent increase that is limited to 75% of the increase 2009 +397 9,504 in the Consumer Price Index (CPI) rounded to the nearest 2008 +427 9,107 quarter (0, 0.25, 0.50, 0.75). However, under California’s 2007 +543 8,680 Costa-Hawkins Act, effective since 1996, State law allows photo by Tony Coelho 2006 +693 8,137 the rent to increase to what the market will bear upon vacancy. 22 Rent stabilization requirements are then reset 2005 +654 7,444 at the new rent level, creating a greater increase in the 2004 +834 6,790 rents charged for newly rented units versus those where 2003 +942 5,956 the tenant has remained in the same apartment for a 2002 +1,104 5,014 number of years. 2001 +1,000 3,910
RENT STABILIZED APARTMENTS IN 2016 ANNUAL GENERAL ADJUSTMENT WEST HOLLYWOOD BY NUMBER OF BEDROOMS – 2016 RESIDENTIAL HOUSING INVENTORY AND RENT The AGA is in effect from September 1 to August 31. Each year before July 1, the Rent Stabilization Commission announces the amount of the adjustment so landlords who are Pre -1996 Tenants 2016 New Renters Numbers are in dollar amounts current with their registration fees can start giving 30-day advance increase notices by August 1. To find out what the current AGA is, visit www.weho.org/rsh or call the City’s 0 BEDROOMS 1,590 Rent Stabilization and Housing Information Coordinators at 323-848-6450. 1,402 1,490 1,108 1,194 1,150 1,226 1,287 962 1,005 1,103 1,140 918 791 808 818 824 834 840 848 4.50% 692 715 743 760 781 781 4.00 3.75 3.75 4.00% 3.50 3.50% 3.25 3.00 3.50 2.75 2.75 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 3.00% 3.25 2.75 2.75 2.25 2.50% 2.25 2.00% 2.50 1.75 1 BEDROOMS 1,977 2.00 1.25 1.75 2.25 2.25 1.25 1.25 1,682 1,777 1.50% 1,387 1,484 1,570 1,160 1,229 1,326 1,366 1,360 1,410 1.50 1.25 1.00 1,083 919 928 1.00% 1.25 853 853 864 883 894 901 912 756 780 811 830 0.75 1.00 0.50% 0.75 0.75 0.00% 0 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 24 2,398 2,576 25 2 BEDROOMS 2,125 2,246 1,716 1,752 1,836 1,781 1,867 2,007 2016 SECURITY DEPOSIT INTEREST 1,514 1,636 1,362 1,217 1,226 1,238 1,106 1,150 1,179 1,193 1,202 1,007 1,040 1,081 1,136 1,136 The City of West Hollywood’s Rent Stabilization 2016 0.% Ordinance requires that tenants be paid 0.% RESIDENTIAL HOUSING INVENTORY AND RENT interest on their security deposits by January 2014 0.% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 0.% 31 of each year in an amount determined by 2012 0.% the City based on prevailing interest rates. The 0.25% 3,660 3,753 rate is determined by averaging the interest 2010 0.25% 3,454 0.50% 3 BEDROOMS percentage paid by five local banks to their 3,005 2008 0.50% 2,838 2,815 2,830 2,873 customers for regular savings accounts. The 0.50% 2,646 2,566 1,909 2,210 2,151 Rent Stabilization Commission announces the 2006 0.50% 1,642 0.50% 1,437 1,469 1,509 1,509 1,528 1,562 1,582 1,594 1,614 1,626 required interest rate annually, and notifies 1,338 1,381 2004 0.50% the City’s landlords and tenants by mail in 0.50% December of each year. 2002 0.75% 1.25% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2000 5.75% 4.25% The above charts show the yearly average rents paid by long term, pre-1996 tenants who are still in 1998 4.75% their units. It compares these average rents to the average move-in rents paid by new tenants in rent- 5.00% stabilized buildings broken down by the number of bedrooms in the unit. The average rent amounts for 1996 4.75% pre-1996 tenants were determined by taking the December 31, 1995 MAR (Maximum Allowable Rent) and 5.00% imputing all of the subsequent Annual General Adjustments (AGA) through 2016. The rent amounts for 7/85 – 12 /94 3.25% new tenancies were determined by averaging the rent levels listed by landlords on Re-Registration of 0% 2% 4% 6% New Tenancies in a Unit forms required for new tenancies.
Looking Ahead Specific Actions the Division Will Take in 2017 to 2017 • Continue to educate tenants, landlords and members of the public LOOKING AHEAD TO 2017 about the rent stabilization program. • Initiate a study of financing various innovative housing types to provide insight on any alternative ways to support housing opportunities. Since incorporation in 1984, the City of West Hollywood • Explore a tenant’s option-to-purchase program for West Hollywood. has been committed to protecting and enhancing • Establish a requirement that landlords provide a plan to ensure a affordable housing opportunities with an emphasis building remains habitable when major renovations are planned. on rent stabilization laws. Looking ahead to 2017, the • Introduce guidelines for landlords who wish to buy-out households. Rent Stabilization and Housing Division will continue to • Increase awareness of City rental requirements for all rental housing in administer the RSO and inclusionary housing programs, the City. 26 providing community education, policy analysis, and • Continue exploring incentives to encourage reinvestment in rent- 27 implementation of program components. stabilized buildings, upgrading plumbing, electrical, roofing and other major systems. In 2017, the Los Angeles region and California as a • Continue the Home Secure Program by providing low-income seniors and disabled residents with bathroom grab bars and other safety and LOOKING AHEAD TO 2017 whole will face serious challenges in the availability security upgrades. of housing for very low, low, and moderate-income • Collaborate with the Building and Safety Division and Planning Division households. To help address these challenges, the City to develop a program to retrofit existing buildings for earthquake/ of West Hollywood will remain committed to the RSO seismic upgrades. and the development and preservation of affordably • Administer the Building Blocks Educational Series. priced housing, and to supporting residents to continue • Collaborate with nonprofit developers on future affordable housing. to live and thrive in the community. • Support legislative advocacy efforts to encourage lawmakers to revise the Ellis Act and other rent stabilization and housing acts, and to create a permanent source of funding for affordable housing. • Continue implementing the Aging in Place/Aging in Community 5-Year Strategic Plan. photo by Tony Coelho
THE CITY OF WEST HOLLYWOOD REFERENCES: CITY COUNCIL page 1 1 Generally, paying the affordable housing in-lieu page 4 12 Southern California Association of Governments, Mayor Lauren Meister fee is an option for projects with 10 or fewer 5th Cycle Regional Needs Assessment Final residential units. Allocation Plan, 1/1/2014 – 10/1/2021 Mayor Pro Tempore John Heilman Council member John J. Duran 2 Rent for new tenancies in one bedroom page 6 13 United States Census Bureau/American Fact REFERENCES \ CITATIONS Council member John D’Amico apartments built prior to July 1, 1979 increased Finder. “Selected Housing Characteristics, Year on average from $1,570 in 2013 to $1,977 in 2016. 2015.” 2011-2015 American Community Survey Council member Lindsey P. Horvath 5-Year Estimates. U.S. Census Bureau’s American page 2 3 Mission Impossible? Meeting California’s Community Survey Office, 2010. Web. 24 RENT STABILIZATION COMMISSION Housing Challenge. Southern California February 2017. http://factfinder2.census.gov. Association of Governments. October, 2016 Chair Richard Maggio http://www.scag.ca.gov/Documents/ 14 City of West Hollywood. General Plan 2035: Vice-Chair David Gregoire CaliforniaHousingSummitReport.pdf 2013-2021 Housing Element Technical Appendix. Robert Bergstein December 2013. Web. 17 March 2017. http:// 4 California Housing Partnership Corporation www.weho.org/home/showdocument?id=15166. Alexander Gurfinkel Website. https://chpc.net/ Stephanie Harker 15 November 7, 2016 City Council report Chart on Page Josh Kurpies page 3 5 USC Lusk Center For Real Estate Casden Real 3, 51.7% of removed properties remain off-market Estate Economics Forecast 2016 Multifamily unchanged or converted to single family homes. Gail Sanes Report. USC Lusk Center for Real Estate. Beacon Economics. www.lusk.usc.edu/casden (accessed page 8 16 The Ellis Act allows seniors and disabled tenants 28 STAFF January 22, 2017) one year to relocate; all other tenants currently have 120 days. 29 City Manager Paul Arevalo 6 California’s High Housing Costs: Causes and Consequences. California State Legislative page 15 17 Southern California Association of Governments, Human Services and Rent Stabilization Department Analyst’s Office. Mac Taylor. March 17, 2015. 5th Cycle Regional Needs Assessment Final Director Elizabeth Savage www.lao.ca.gov/reports/2015/finance/housing- Allocation Plan, 1/1/2014 – 10/1/2021 costs/housing-costs.aspx Rent Stabilization and Housing Division CITY OF WEST HOLLYWOOD ACKNOWLEDGEMENTS 18 In the current state housing cycle (RHNA), Manager Peter Noonan 7 California Housing Partnership Corporation minimums were allocated based on mass transit. Website. https://chpc.net/ For example, on the Los Angeles Westside the City of Santa Monica received the bulk of ACKNOWLEDGEMENTS 8 Mission Impossible? Meeting California’s anticipated new housing growth, in part, because Co -writer/editing Sharon Collins Housing Challenge. Southern California of the new Expo light rail line. Beverly Hills, in Association of Governments. October, 2016 contrast, received only 3 units. Photos courtesy of the City of West Hollywood http://www.scag.ca.gov/Documents/ Photography Tony Coelho CaliforniaHousingSummitReport.pdf page 17 19 California Department of Housing and Community Graphic Design Joanne Shannahoff Development. “Affordable Housing Cost Study: page 4 9 City of West Hollywood Multi-Unit Housing Analysis of the Factors that Influence the Cost Resident Survey. Maslin, Maullin, Metz & of Building Multi-Family Affordable Housing in Associates. 11-21-2016 http://weho.granicus. California” (October 2015). http://www.hcd.ca.gov/ com/MetaViewer.php?view_id=&event_ id=960&meta_id=128467 page 22 20 2009-2013 American Community Survey 5-Year Estimates. 10 Profile of the City of West Hollywood. Southern California Association of Governments. May, 2015 21 A unit is considered part of the rent stabilization https://www.scag.ca.gov/Documents/ program if it was constructed prior to January 1, WestHollywood.pdf 1979. 11 Profile of the City of West Hollywood. Southern page 23 22 California Civil Code §1954.53 California Association of Governments. May, 2015 https://www.scag.ca.gov/Documents/ WestHollywood.pdf 2017 published by City of West Hollywood Rent Stabilization and Housing Division
City of West Hollywood California 1984 2016 ANNUAL REPORT City of West Hollywood Rent Stabilization and Housing City of West Hollywood 8300 Santa Monica Boulevard West Hollywood, California 90069 Telephone: (323) 848-6400 TTY hearing impaired (323) 848-6496 www.weho.org Facebook “f ” Logo CMYK / .eps Facebook “f ” Logo CMYK / .eps @wehocity City of West Hollywood Rent Stabilization and Housing (323) 848-6450 HOURS Monday to Thursday 8:00 am to 5:00 pm Every Friday 8:00 am to 4:30 pm
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