City Council Reviews Renter Protections and Rosy Economic Outlook

The Beverly Hills City Council returned to the question of what to do about COVID-19 renter protections, including an eviction moratorium and rent increase freeze, at a Feb. 15 Study Session. Later in the day, the Council reviewed a new economic update showing that the city’s main revenue streams nearly rebounded to pre-pandemic levels prior to the omicron wave.

The Council first adopted eviction protections for renters in March 2020 near the start of the pandemic. At the time, analysts and policymakers worried that economic lockdowns could lead to a tidal wave of evictions. Since then, the Council has adopted newer versions of the protections, passing a moratorium on evictions and rent increases most recently in September 2020.

The ordinance bars landlords from evicting tenants for nonpayment of rent, provided the tenants can prove that COVID-19 substantially impacted their ability to do so. It also prohibits no-fault evictions, except if the eviction is necessary for the health and safety of tenants, neighbors, or the landlord. Finally, the ordinance imposes a moratorium on annual rent increases for rent stabilized units.

The ordinance set the end date for the protections for when the city ends the current local emergency, but the Council was asked at the Feb. 15 Study Session to reexamine that deadline. Council members largely expressed support for ending the moratoria on May 31.

City Council members have also voiced concern over the possibility of back-to-back rent increases by landlords. Each year, the city calculates rent increases for rent stabilized units based on the Consumer Price Index (CPI). For units that have delayed rent increases twice over the course of the moratorium, landlords could effectively raise the rent twice in one go–once for each deferred increase. City staff have calculated that this could mean some tenants would face an increase by as much as 8%.

Mayor Robert Wunderlich proposed at a Jan. 18 meeting a gradual approach to rent increases, though he said on Feb. 15 that the numbers were subject to some change.

“I think there should be some opportunity to make up for what would have been scheduled rent increases but for the moratorium, but I also think we have to mitigate it,” Wunderlich said.

The City Council will vote on an amended COVID-19 renter protection ordinance on May 31.

The City Council reviewed the city’s fiscal situation, which has improved markedly from the same time a year ago.

Without taking into account the recent omicron surge, the city has seen a return in tax revenue from its “Big Four” sources, namely transient occupancy tax (TOT; a levy on hotel guests paid by hotels), property tax, business license tax, and sales tax. Driven by “significant increases” in hotel taxes and sales taxes, overall Big Four tax revenues are up 38% for the time period between July and December 2021 when compared to the same period a year prior, Director of Finance Jeff Muir told the City Council.

While TOT taxes have still not returned to pre-pandemic levels, other tax revenue sources “have significantly recovered” when compared to the beginning of the pandemic. The city collected $81.3 million in taxes from the Big Four revenues, nearly $3 million more than a year before.

Given current economic trends, the city projects ending the fiscal year with a nearly $7 million surplus, Muir told the Council. Councilmember Julian Gold noted that the projected surplus came after the city anticipated a $7.5 million deficit, representing a $15 million turnaround.

“I think we as a council were very prudent in the deferrals that we made,” said Councilmember Lester Friedman. “We kept the same level of services, yet we did do some deferrals that were very prudent. We see that we are on a very strong financial standing right now.”

Finally, the City Council approved a letter to the state that will buy the city time in coming into compliance with a 2016 state organic food waste disposal law, Senate Bill 1383. The law requires organic food waste be reduced by half of its 2014 levels by 2020. Under the law, residents and businesses must have access to recycling programs for food scraps, food-soiled paper, landscaping waste, and other organic waste materials.

The letter, a Notice of Intent to Comply, allows the city a grace period to comply with the law. The letter lays out a timeline for providing commercial businesses and multi-family properties with a two-container organic waste collection service. The city plans on distributing the remaining organic waste containers to businesses by Dec. 31. The city will begin passing out containers to multi-family properties in September with the goal of completing distribution by Dec. 31.

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