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HomeMy WebLinkAbout1395 - ORDINANCES - 9/4/1991 ORDINANCE NO. 1395 AN ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING SECTION 4.00 . 060 (c) OF THE PALM SPRINGS MUNICIPAL CODE, AND ADDING SECTION 4. 08. 060(D) (6) OF THE MUNICIPAL CODE DEFINING "YEAR OF APPLICATION" FOR PURPOSES OF HARDSHIP RENT ADJUSTMENTS. THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, DOES ORDAIN AS FOLLOWS: SECTION 1. Section 4.02. 060(c) of the Palm Springs Municipal Code, relating to allowable rent increases for rental units subject to the City's rent control ordinance, :is hereby amended to read as follows: "4 . 08 . 060. Extraordinary hardship increases. . . (c) Allowable Rent Increases. Upon filing of an individual hardship petition by a landlord, the Commission shall permit rent increases, unless otherwise proscribed by law, such that the landlord's net operating income for the year of application as defined in Section 4 . 08. 060 (d) will be increased by fifty percent(50%) of the increase in the Consumer Price Index over the base year. The increase in the CPI shall be calculated by dividing the most recently reported monthly figure at the time of the close of the hearing by the monthly figure for September of the base year. In making any adjustment pursuant to this section, the Rent Review Commission shall consider the effects of rent adjustments pursuant to Section 4.08. 040. " SECTION 2. Chapter 4 .08 of the Palm Springs Municipal code relating to definitions utilized in determining hardship rental increases under the City's rent control ordinance is hereby amended by adding thereto a new section to be numbered Section 4 . 08. 060(d) (6) , and reading as follows: 114 ,.00. 060 Extraordinary hardship increases (d) Definitions. . . . (6) 'Year of Application' for purposes of this Section shall mean the Petitioner's/Applicant's normal fiscal year immediately preceding the commencement of the hardship application period as defined in Section 4 . 08 . 060 (q) within which the petition/application for a hardship rent increase is filed, unless another period is found by the Rent Review Commission or any designated hearing officer to be more appropriate. " SECTION 3. EFFECTIVE DATE. This Ordinance shall take full force and effect on September 4, 1991, upon i-L, adoption by 'the City Council. This Ordinance is adopted as an argency Ordinance for the immediate preservation of the public peace, health, and safety based upon the following facts: (1) Security of tenure and security from excessive rent increases as reflected in the Palm Springs Rent Control Ordinance, Chapter 4 . 08 of the Palm Springs Municipal Code, is essential to the public health, safety and welfare. Ord. No. 1395 ]Page 2 (2) Landlords are currently authorized to submit applications or petitions for hardship rent :increases such that the landlord's net operating income (NOI) will be increased by fifty percent (50%) of the increase in the Consumer Price Index (CPI) over the base year. Unfortunately, nowhere does the ordinance specify which calendar year shall be used for comparison to the base year in determining whether a hardship rent increase is appropriate. Put differently, the Ordinance does not clef ine the appropriate "year of application" . In light of this ambiguity, it is unclear how long a landlord may wait from the time he allegedly suffers a hardship justifying a rent increase to the actual processing of a petition or application for a hardship rent increase. This ambiguity has created numerous problems in the administration of the rent control ordinance. (3) Theoretically, under the current ordinance, landlords could go back several ,years in designating their "yeas of application" . Thus, the Rent. Review Commission would be in a position of adjudicating the propriety of a hardship rent increase based upon financial data presented for a calendar year which had long since elapsed. This presents proof problems as the data may be incomplete. Similarly, the landlord may be unable to answer ambiguities in the data due to the lapse of time. (4) Tenants within the City of Palm Springs presently :remain under a significant financial uncertainty concerning :rent increases pursuant to hardship petitions under the current ordinance. Again, the current ordinance permits a petition for a hardship application relating to years which have long since elapsed. The tenants may thus find themselves saddled with rent increases relating to such periods without any means for guarding against or anticipating such increases. The tenants moreover will have little, if any, ability to challenge the propriety of the expenses alleged as forming the ]basis for a hardship due to the amount of time elapsed or the inaccessibility of the financial data or records. Thus„ the amendments proposed herein will encourage landlords to be diligent in processing hardship petitions. This, in turn, will have the salutary effect of lessening the financial uncertainties faced by tenants under the ordinance. (5) The lack of an explicit definition of the "year of application" also creates an appearance that the ordinance is operating retroactively. All relief issued by the Rent Review Commission must be prospective in operation and effect Pursuant to Section 4.08. 070 (f) (4) . The Rent Review Commission determines, and then awards, prospective .relief to remedy a previously-suffered hardship. An amendment to the ordinance explicitly defining which prior year(s) may be designated as the "year of application" will remove even the appearance of retroactivity in Commission rulings. (6) The hardship application period will reopen in September 1991 and will remain open through January 1992. The City thus needs to approve the proposed amendment to its rent control ordinance at the earliest possible opportunity in relation to the reopening of the hardship application period such that petitioning landlords will be advised at the outset their "year of application" must conform to the:, strictures of the ordinance as amended herein. This, in turn, will provide tenants with the protection indicated above as necessary for the effective operation of the rent control ordinance. Ord. No. 1395 Page 3 SECTION 4. PUBLICATION. The City Clerk is hereby ordered and directed to certify to the passage of this ordinance, and to cause the same or a summary thereof or a display advertisement, duly prepared according to law, to be published in accordance with law. Adopted this 4t.h day of September , 1991. AYES: Councilmembers Broich, Hodges, Murawski , Neel and Mayor Bono NOES: None ABSENT: None ATTEST: CITY OF PALM SPRINGS-r- CALIFORNIA - 7, B'y i CJ REVIEWED & APPROVED: kk I HEREBY CERTIFY that the foregoing Ordinance 1395 was duly adopted by the City Council of the City of Palm Springs, California, in a meeting held on the 4th day of September, 1991, and that same was duly published in the DESERT SON, a newspaper of general circulation on September 11, 1991. L /4UDITH SUNICH City Clerk