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HomeMy WebLinkAboutCC RES 00-006RESOLUTION NO. 00-6 CITY COUNCIL RESOLUTION APPROVING PALM DESERT RENT REVIEW COMMISSION RESOLUTION AMENDING PALM DESERT RENT REVIEW GUIDELINE SECTION 101(B) AND ADDING A NEW GUIDELINE SECTION 101(C) WHEREAS, the City Council has adopted Chapter 9.50 of the Palm Desert Municipal Code providing for mobilehome park rent review; and WHEREAS, the Rent Review Board may adopt, promulgate, amend or rescind administrative rules to effectuate the purposes and policies of section 9.50, subject to the approval of the City Council, under section 9.50.050(f) of the Palm Desert Municipal Code, and WHEREAS, the Palm Desert Rent Review Commission held a study session on Thursday, December 17, 1998, to consider certain amendments to the Palm Desert Rent Control Guidelines, and WHEREAS, the Commission has determined that it is proper for an applicant to seek a discretionary hardship rent increase under Guideline section 101(B), only after the applicant has sought a hardship rent increase under Guideline section 101(A), and WHEREAS, the Commission has noted, with concern, that applicants have, in the past, sought a discretionary hardship increase without first seeking a hardship rent increase, and WHEREAS, the Commission believes that it is appropriate to permit applicants to seek and obtain capital improvement rent increases under certain situations as set forth in this resolution. WHEREAS, the Palm Desert Rent Review Commission adopted the amendments attached to this resolution as Exhibit "A" following a public hearing held October 26, 1999 and recommends, pursuant to Palm Desert Municipal Code Section 9.50.050(F), that the City Council approve those amendments. NOW, THEREFORE, the City Council of the City of Palm Desert approves the following amendments to the Palm Desert Rent Review Guidelines: PROPOSED AMENDMENT TO GUIDELINE 101(B) B. Discretionary Hardship Increases. It shall be presumed that the rent increases allowed by Palm Desert Municipal Code Section 9.50.060 and the hardship (MNOI) increases allowed by subdivision A of this section of the guidelines enable landlords to receive a fair return on RMPUB' DS P•• 160793 Resolution No. 00-6 their property. However, once a landlord has applied for and provided all necessary information for consideration of a hardship (MNOI) increase under subdivision (A) of this section, then and only then may a landlord be entitled to present evidence and arguments to the Board in support of a discretionary hardship application rebutting this presumption. Interested third parties may also attend the hearing and present evidence and arguments for or against the landlord. Acknowledging that what constitutes a fair return on property is debatable, the Board may consider any and all evidence or arguments it deems relevant to valuing the landlord's property such that the result is in conformity with existing law and operates to prevent a confiscatory taking. Relevant methods for valuing a landlord's property may include, but are not limited, to the following: 1 Present Fair Market Value 2. Capitalization of Income 3. Comparable Sales 4. Replacement Cost 5. Original Investment If a landlord successfully rebuts the presumption that the mandatory rent increase provided by Palm Desert Municipal Code Section 9.50.060 and the hardship rent increase authorized by subdivision A of this section of the guidelines provides the landlord with a fair return on his or her property, or for other good and sufficient reasons the Board may award the landlord a discretionary rent increase in the amount the Board deems necessary to achieve a fair return. PROPOSED AMENDMENT TO GUIDELINE 101(C) C. Capital Improvement Increase. Without regard to whether a landlord qualifies for an increase pursuant to Guideline Section 101(A), a landlord who invests new or additional money into mobilehome park facilities may file a petition for a capital improvement increase. Upon the filing of a capital improvement increase petition by a landlord, the Board may permit a capital improvement rent increase in order that the landlord receive a fair and reasonable return on expenditures for capital improvements where those capital improvements are for one of the following, only: 1. The capital improvements are new and did not exist before, and have been approved by a two-thirds vote of the tenants of the particular mobilehome park, based on one vote per mobilehome space; or RMPU-B'.DSP• 160793 -2- Resolution No. 00-6 2. The capital improvements are to modernize, upgrade or refurbish already existing improvements and have been approved by a majority vote of the tenants of the particular mobilehome park, based on one vote per mobilehome space; or 3. The capital improvements are "involuntary" improvements, such as, but not limited to: (a) improvements required by a governmental entity such as a required sewer connections, handicapped access or the earthquake retrofit; or (b) unreimbursed expense for repair of damage from natural disaster. A landlord shall not be entitled to receive a rent increase based on capital improvements alone except for capital improvements of the type listed in this section. Any capital improvement increase granted under this section shall not be subject to an automatic CPI increase. Any capital improvement increase granted under this section shall remain in existence only so long as necessary to reimburse the cost of the improvement plus a fair return to the owner. PROPOSED AMENDMENT TO GUIDELINE 101(D) D. Notification of Residents. Consistent with Section 9.50.070 of the Palm Desert Municipal Code, a landlord seeking a hardship or discretionary hardship increase pursuant to this section of the guidelines shall attest in writing to the Board at the time his or her petition is filed that he or she has served on each affected resident written notice that the landlord is applying to the Board for a hardship or discretionary hardship rent increase, that said petition may be obtained or reviewed, and that the affected residents have a right to be present at the hearing and to present arguments or evidence to the Board for or against the sought increase. Landlords shall notify residents of the hearing date once it is set. Failure to comply with such notice requirements shall be grounds, in the Board's discretion, for rescission of any rent increase granted pursuant to this section of the guidelines. BE IT FURTHER RESOLVED that said amended guideline sections shall become effective upon the date of adoption of the appropriate City Council resolution. RMPLB DSP• 160793 -3- Resolution No. 00-6 PASSED, APPROVED and ADOPTED at a regular meeting of the City council of the City of Palm Desert, California, on the 13th day of January, 2000, by the following roll call vote: AYES: FERGUSON, KELLY, SPIEGEL, CRITES NOES: NONE ABSENT: NONE ABSTAIN: BENSON BUFORD CRITES, MAYOR City Palm Desert, California ATTEST: By : L01) Rac elle D. Klassen, Acting City Clerk' APPROVED AS TO FO By: DAVZ,B`J. ERW, City Attorney City of Palm Desert, California RM1'U13 DSP'•160793 -4- Resolution No. 00-6 EXHIBIT "A° PALM DESERT RENT REVIEW COMMISSION RESOLUTION NO. RRC 1 , AMENDING PALM DESERT RENT REVIEW GUIDELINE SECTION 101(B) AND ADDING A NEW GUIDELINE SECTION 101(C) WHEREAS, the City Council has adopted Chapter 9.50 of the Palm Desert Municipal Code providing for mobilehome park rent review; and WHEREAS, the Rent Review Board may adopt, promulgate, amend or rescind administrative rules to effectuate the purposes and policies of section 9.50, subject to the approval of the City Council, under section 9.50.050(f) of the Palm Desert Municipal Code, and WHEREAS, the Palm Desert Rent Review Commission held a study session on Thursday, December 17, 1998, to consider certain amendments to the Palm Desert Rent Control Guidelines, and WHEREAS, the Commission has determined that it is proper for an applicant to seek a discretionary hardship rent increase under Guideline section 101(B), only after the applicant has sought a hardship rent increase under Guideline section 101(A), and WHEREAS, the Commission has noted, with concern, that applicants have, in the past, sought a discretionary hardship increase without first seeking a hardship rent increase, and WHEREAS, the Commission believes that it is appropriate to permit applicants to seek and obtain capital improvement rent increases under certain situations as set forth in this resolution. NOW, THEREFORE, the Palm Desert Rent Review Commission recommends, pursuant to Palm Desert Municipal Code Section 9.50.050(f), that the City Council approve the following amendments to the Palm Desert Rent Review Guidelines: PROPOSED AMENDMENT TO GUIDELINE 101(B) B. Discretionary Hardship Increases. It shall be presumed that the rent increases allowed by Palm Desert Municipal Code Section 9.50.060 and the hardship (MNOI) increases allowed by subdivision A of this section of the guidelines enable landlords to receive a fair return on their property. However, once a landlord has applied for and provided all necessary information for consideration of a hardship (MNOI) increase under subdivision (A) of this section, then and only then may a landlord be entitled to present evidence and arguments to the Board in support of a discretionary hardship application rebutting this presumption. RAMPUB\DSP 156153 Resolution No. 00-6 Exhibit "A" Interested third parties may also attend the hearing and present evidence and arguments for or against the landlord. Acknowledging that what constitutes a fair return on property is debatable, the Board may consider any and all evidence or arguments it deems relevant to valuing the landlord's property such that the result is in conformity with existing law and operates to prevent a confiscatory taking. Relevant methods for valuing a landlord's property may include, but are not limited, to the following: 1. Present Fair Market Value 2. Capitalization of Income 3. Comparable Sales 4. Replacement Cost 5. Original Investment If a landlord successfully rebuts the presumption that the mandatory rent increase provided by Palm Desert Municipal Code Section 9.50.060 and the hardship rent increase authorized by subdivision A of this section of the guidelines provides the landlord with a fair return on his or her property, or for other good and sufficient reasons the Board may award the landlord a discretionary rent increase in the amount the Board deems necessary to achieve a fair return. PROPOSED AMENDMENT TO GUIDELINE 101(C) C. Capital Improvement Increase. Without regard to whether a landlord qualifies for an increase pursuant to Guideline Section 101(A), a landlord who invests new or additional money into mobilehome park facilities may file a petition for a capital improvement increase. Upon the filing of a capital improvement increase petition by a landlord, the Board may permit a capital improvement rent increase in order that the landlord receive a fair and reasonable return on expenditures for capital improvements where those capital improvements are for one of the following, only: RMPLBDSP•156153 1. The capital improvements are new and did not exist before, and have been approved by a two-thirds vote of the tenants of the particular mobilehome park, based on one vote per mobilehome space; or 2. The capital improvements are to modernize, upgrade or refurbish already existing improvements and have been approved by a majority vote of the tenants of the particular mobilehome park, based on one vote per mobilehome space; or -2- Resolution No. 00-6 Exhibit "A" 3. The capital improvements are "involuntary" improvements, such as, but not limited to: (a) improvements required by a governmental entity such as a required sewer connections, handicapped access or the earthquake retrofit; or (b) unreimbursed expense for repair of damage from natural disaster. 4. Upon request by the landlord to convert a mobilehome park from septic or cesspool to sewer. A landlord shall not be entitled to receive a rent increase based on capital improvements alone except for capital improvements of the type listed in this section. Any capital improvement increase granted under this section shall not be subject to an automatic CPI increase. Any capital improvement increase granted under this section shall remain in existence only so long as necessary to reimburse the cost of the improvement plus a fair return to the owner. PROPOSED AMENDMENT TO GUIDELINE 101(D) D. Notification of Residents. Consistent with Section 9.50.070 of the Palm Desert Municipal Code, a landlord seeking a hardship or discretionary hardship increase pursuant to this section of the guidelines shall attest in writing to the Board at the time his or her petition is filed that he or she has served on each affected resident written notice that the landlord is applying to the Board for a hardship or discretionary hardship rent increase, that said petition may be obtained or reviewed, and that the affected residents have a right to be present at the hearing and to present arguments or evidence to the Board for or against the sought increase. Landlords shall notify residents of the hearing date once it is set. Failure to comply with such notice requirements shall be grounds, in the Board's discretion, for rescission of any rent increase granted pursuant to this section of the guidelines. RMPLB`,DSP\156153 -3- Resolution No. 00-6 Exhibit "A" BE IT FURTHER RESOLVED that said amended guideline sections shall become effective upon the date of adoption of the appropriate City Council resolution. AewAPPROVED and ADOPTED this// day of ` , 1999. RMPLB'.DSP, 156153 l .,�.; William J. Adams -4- ref