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Home My WebLink About11/26/2019 Item 1, Lopes Wilbanks, Megan From:Johnson, Derek From: James Lopes < Sent: Monday, November 25, 2019 23:56 To: Johnson, Derek <djohnson@slocity.org> Subject: Re: Questions about SLO City Rent Increases Hi Derek, I appreciate your summary of a complex situation. I hope that you don't think that I have prevaricated or lapsed in professional planning practice. I can ease your concern a bit, if you follow my encouragement to read and understand the notice of rent increases. It appears to be from the City - the Housing Authority (HASLO), not from the owner. The huge scale of rent increase is required by HASLO. The amount, established by the City, can and should be termed exorbitant, as it would almost certainly be if it were sent by an owner to tenants in a private complex. I think it is a fair observation that this controversy comes directly from the City's actions. I am humbled that you assume my career included affordable housing laws and practices. That field of planning was intricate and conducted by specialists outside the door and down the hall. I rely on your specialists,as perhaps you do, to apply policies with skill but also heart. What I know is that people are suffering and will suffer financially, socially and personally due to the current regime of policies and laws here in the City of San Luis Obispo. As we look at the sources of our affordable housing crisis, we might seek to re-balance the benefits which are enjoyed by property developers and owners, against those endured by their clients, the buyers and renters. I would be glad to include HASLO staff as the guardian of the latter groups, if I plainly see them working on behalf of tenants rather than operating in roles that simply work with or on behalf of the owners. I do have some difficulty understanding your point that both kinds of tenancies are exempt from AB 1482, yet your following statement says that, "Section 8 renters are not affected by a rent increase..." If that is the case, then how is it that Section 8 tenants received a notice requiring a 300+ percent rent increase? This notice did not say anything about their rent remaining the same, or that the increase will be paid by HUD. If you have not seen this notice, you would see that the notice lists the HASLO share of rent to remain the same amount, rather than contributing a greater share toward market-rate rent. You would see that HASLO is seeking the rent increase on behalf of property owners. How is HASLO guaranteeing to these tenants that it is looking out for their interests? It sent a notice very short on explanation and full of acronyms. Its construction and choice of bureaucratic language implies a self- 1 serving obscurity from public scrutiny, protest and/or litigation. Further, the tenants and the public have no clue about the real circumstances, unless they are affordable housing scholars or practitioners. Some clarity on what is happening to whom would be useful, if I have interpreted this somewhat accurately. I agree that we can work together on housing affordability, and to begin I would appreciate if the City staff commit to applying common sense protections to its clients, the tenants, over the profit interests of the owners. I would like to see the City staff moving toward innovation in this regard. It is not the essence of city government to just coast with the tides of laws and daily practice. It is essential to practice innovation for the public's interest. For instance, an earlier, longer, more gradual series of rent increases might be a way to avoid the shock which is now upon the Poinsettia tenants. It would also be compelling for staff to heartily seek and support an urgency ordinance to minimize the rent increases within the broad intent of the new law. Tomorrow night, I am looking forward to a proactive, heart-felt presentation which is clear and positive, unencumbered with minutiae. Thank you again for extending me the courtesy of your email. Please forward this to City Council if your email was. James Lopes On 11/25/2019 12:45 PM, Johnson, Derek wrote: Hello James, Thank you for your email and we received email correspondence on Friday about the HASLO increase. Unfortunately, you have mistakenly associated the issues as being initiated by the City. Rather, it is HASLO that is working on preserving affordability and HASLO’s mission is to house people and they do everything that they can do make sure that they fulfill that mission. HASLO is a strong supporter of AB 1482. As background, Poinsettia is a Section 42 Tax Credit Project under a Section 42 TCAC Regulatory Agreement. Additionally, 17 of the 20 apartments participate in contracts with the Section 8 Rent Subsidy program. Both Section 42 Projects and units under contract for rent subsidies (Section 8) are exempt from AB 1482. The Section 8 renters are not affected by a rent increase because their share of the payment remains the same despite a rent increase – 30% of their actual income. The rent increase is paid by HUD. As you well know, affordability terms have covenants that run for a number of years, in the case of this property, 30 years and they expire in January 2020. HASLO has been proactively tracking this covenant and ensuring that they remain affordable and using what tools they have as they cannot force a property to be affordable forever. What does that mean? All of the units with the exception of three are funded by vouchers and unless changes were made to the rent structure, the majority 2 would likely go full market (AB1482 exempts tax credit properties and it is unclear how AB 1482 applies in instances when a property converts to market). The City Council will be holding a special meeting tomorrow night to consider enacting the parallel provisions of 1482 locally via a urgency ordinance until such time at the new state law take effect on January 1, 2020. We just recently became aware of reports to CRLA that there are 13 other units that are allegedly experiencing preemptive action related to 1482. Let’s hope in the future that we can work together and provide accurate information to our community as we have professionals who tirelessly work to build and preserve affordable housing and that is exactly what they are trying to accomplish in this instance. I trust you will forward this information to the media so that they have accurate basis for any reporting. Sincerely yours, Derek Johnson City Manager, BCC: CC From: James Lopes < Sent: Monday, November 25, 2019 9:02 Subject: Questions about SLO City Rent Increases Hi Friends in the News Media and City of SLO, I recently learned that my affordable housing neighbors are being slapped with 300%+ rent increases, right before the holidays. They live in an "affordable" apartment complex at Poinsettia Street. The project was apparently required as a condition of the Edna- Islay development. And now, the rumor is that some "term" of requiring affordable units will be expiring. The units were not dedicated to the City - Why not?? Why is the City of SLO requiring exorbitant rent increases from the renters who occupy those few affordable homes which the City obtains from developers? 3 Why does the City treat the recipients of its affordable housing strategy like human "units?" Why would the City Housing Authority (HASLO) send anxious tenants such incoherent notices, with no explanation except that they are doing it? Why would HASLO apparently time the notice (10/18/19) three days after Governor Newsom signed the law (10/15/19) prohibiting rent increases after March, 2019, this year? What kind of city do we live in that the affordable housing strategy essentially evicts low-income tenants? Why would they do this Scrooge-like maneuver at the start of the Christmas season? What assurance do affordable housing tenants have for some financial security when they are not even given leases to count on consistent rent? Why are low-income people not given fair dignity to live in the same affordable units which our city council, planners and bureaucrats claim as their best solution, their only victory against unaffordable housing in SLO? Who in the SLO City government can be proud of this rent increase, in defense even brag that they run a humane program? What will our City Council do to stop this inexcusable action, and correct the course HASLO is on? I will deeply appreciate any answers you can find to my questions and concerns. James Lopes 4