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Agenda 04/26/2022 Item #11E (Draft Ordinace for Proposed Local Rental Ordinance)04/26/2022 EXECUTIVE SUMMARY Recommendation for the Board to consider the attached draft Local Rental Ordinance which would require landlords to give their tenants 60 days written notice for rent increases over 5 percent and provide guidance to the County Attorney and staff on any changes prior to advertising the ordinance for a public hearing. OBJECTIVE: To support Collier County tenants impacted by rent increases. CONSIDERATIONS: The cost of housing is on the rise throughout not only Collier County but also Florida and nationwide. Comparing Collier County to Lee County, Collier continues to have some of the highest rents and least number of affordable units in southwest Florida. For example, in Lee County an affordable 2/2 rental unit for a household earning the County’s current Area Median Income (AMI) of $84,300 the affordable rent is $1,231 per month with 77 units available per Zillow.com (April 18, 2022). In comparison to Collier County where a 2/2 affordable rental, based on the AMI of $98,600, is $1,583 per month with only 5 units of this type available. (Zillow.com, April 18, 2022). The total inventory of available units in Collier is 682, including all home types available from management companies and private landlords. Our ever-changing and increasing rental rates in Florida has prompted Miami-Dade County to enact a rental ordinance addressing termination and rental increases. At the April 4, 2022, the Affordable Housing Advisory Committee reviewed and discussed the proposed Miami-Dade ordinance and requested that staff bring this to the BCC for consideration. Subsequently at the April 12, BCC meeting it was requested that the County Attorney work with staff to review the Miami-Dade ordinance and bring it back to the Board for consideration. A rental ordinance will enable the County to refer violators to the Code Enforcement board for formal action should the landlord not provide a 60-day notice for rent increase above 5% for those in a month-to- month lease. Staff has completed an analysis and has identified the following for consideration: 1. Collier County has a significant number of units available through private landlords that would most likely would be impacted at a much higher rate for potential noncompliance, as those apartment complexes with management companies historically provide sufficient notices for rent increases and lease termination, as evidenced by notices seen by staff administering the ERA and ARP program. 2. Requiring landlords to provide such notice may impact eviction cases. 3. Enforcement action of this Ordinance may be difficult since it will be incumbent upon the tenant to notify and provide documentation to the County for action to occur. 4. Staff capacity to investigate and enforce remains unknown at this time and may re quire future board action to increase Code Enforcement staff to handle enforcement and investigative actions. 5. The success of the ordinance has not been evaluated in Miami-Dade and Collier County could benefit from seeing the impact on this County before enacting such an Ordinance. 6. Staff reviewed other state laws and found that Kansas requires a 30-day notice for rent increase only for month-month tenants but does not cap the amount of an increase that is allowable. The 11.E Packet Pg. 413 04/26/2022 state of Pennsylvania allows for rent increases if the amount of notice a landlord must provide before an increase may be made is specified in the lease. Massachusetts law states a landlord may increase rent on an at-will tenant if a 30-day notice is provided, but there is no cap on the amount of increase allowed under state law. The proposed Ordinance provides as follows: A residential landlord that proposes to increase the rental rate by more than five percent at the end of a lease for a specific term, must provide 60 days written fair notice to the tenant before the tenant must either: (1) accept the proposed amendment; (2) reach an acceptable compromise; or (3) reject the proposed amendment to their tenancy. If the required 60 days written fair notice has been provided and the tenant has not agreed to the proposed amendment or an acceptable compromise, the landlord may impose the proposed amended term(s) or require the tenant(s) to vacate the residence. The requirements of this ordinance shall apply within the unincorporated areas of Collier County. Except as set forth herein, all other provisions set forth in part II of chapter 83, Florida Statues, as such may be amended, shall govern residential tenancies. If this item is approved, staff will bring back the proposed ordinance seeking approval to advertised and bring back to the Board for a public hearing. FISCAL IMPACT: Advertising fees are estimated to be $600. There would be an additional fiscal impact if additional Code Enforcement staff is necessary to administer. GROWTH MANAGEMENT IMPACT: There is no Growth Management impact. LEGAL CONSIDERATIONS: The proposed ordinance was drafted by the County Attorney and mirrors the Miami-Dade Ordinance. In keeping with general Board policy, I limited the ordinance to unincorporated Collier County. The Board can, if it wishes, make it County-wide. With that noted, this item has been reviewed by the County Attorney, is approved as to form and legality and requires majority vote for approval. -JAK RECOMMENDATION: To direct the County Attorney and staff to explore the possibility of a Local Rental Ordinance which would require landlords to give their tenants 60 days written notice for rent increases over 5 percent. Prepared by: Jacob LaRow, Housing and Grant Development Manager, Community and Human Services Division ATTACHMENT(S) 1. Rental Notice Ordinance (DOCX) 11.E Packet Pg. 414 04/26/2022 COLLIER COUNTY Board of County Commissioners Item Number: 11.E Doc ID: 22013 Item Summary: Recommendation for the Board to consider the attached draft Local Rental Ordinance which would require landlords to give their tenants 60 days written notice for rent increases over 5 percent and provide guidance to the County Attorney and staff on any changes prior to advertising the ordinance for a public hearing. (Jacob LaRow, Community & Human Services Housing & Development Manger) Meeting Date: 04/26/2022 Prepared by: Title: Manager - Federal/State Grants Operation – Community & Human Services Name: Kristi Sonntag 04/19/2022 6:10 PM Submitted by: Title: Manager - Federal/State Grants Operation – Community & Human Services Name: Kristi Sonntag 04/19/2022 6:10 PM Approved By: Review: Operations & Veteran Services Kristi Sonntag Additional Reviewer Skipped 04/19/2022 6:07 PM Public Services Department Kristi Sonntag PSD Level 1 Reviewer Skipped 04/19/2022 6:07 PM Community & Human Services Kristi Sonntag CHS Review Completed 04/19/2022 6:11 PM Public Services Department Tanya Williams PSD Department Head Review Completed 04/20/2022 8:03 AM County Attorney's Office Jeffrey A. Klatzkow Level 2 Attorney Review Completed 04/20/2022 8:32 AM Office of Management and Budget Debra Windsor Level 3 OMB Gatekeeper Review Completed 04/20/2022 8:30 AM Growth Management Operations Support Geoffrey Willig Additional Reviewer Skipped 04/20/2022 9:43 AM County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 04/20/2022 12:49 PM County Manager's Office Dan Rodriguez Level 4 County Manager Review Completed 04/20/2022 12:59 PM Board of County Commissioners Geoffrey Willig Meeting Pending 04/26/2022 9:00 AM 11.E Packet Pg. 415 ORDINANCE NO. 2022-_____ AN ORDINANCE OF THE BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLORIDA, REQUIRING LANDLORD TO GIVE TENANT’S 60 DAYS WRITTEN NOTICE OF A RENTAL INCREASE IN EXCESS OF 5%; PROVIDING FOR APPLICABILITY; PROVIDING FOR CONFLICT AND SEVERABILITY; PROVIDING FOR INCLUSION IN THE CODE OF LAWS AND ORDINANCES; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, it is the intention of this Board to provide all Collier County tenants with a fair notice if their rents are to increase by more than 5%; and WHEREAS, approximately half of the housing in Collier County are rent units; and WHEREAS, according to a 2017 study by ULI, 40 percent or 58,685 households in Collier County are considered “cost burdened”, which, according to the United States Department of Housing and Urban Development, includes households who pay more than 30 percent of their income for housing and may have difficulty affording necessities such as food, clothing, transportation, and medical care; and WHEREAS, since the coronavirus-2019 (COVID-19) pandemic, there has been an influx of people to Florida from states with higher wages and cost of living which has caused an upsurge in rental rates in Collier County; and WHEREAS, according to the websites RedFin and Zillow , the average rent in Collier County for a 2/2 , as of April 19, 2022, was $2,950 ; and WHEREAS, part II of chapter 83, Florida Statutes, commonly known as the “Florida residential Landlord and Tenant Act” (“the Act”), applies to the rental of residential dwelling units and sets forth the rights and duties of landlords and tenants; and WHEREAS, the Act does not provide specific notification requirements for landlords seeking to increase rental rates; and WHEREAS, to assist renters, Collier County proposes to enact an ordinance that requires 60 days written notification be given by Collier County residential landlords to their tenants prior to increasing the tenants’ rent beyond 5 percent; and WHEREAS, other states including Alabama, Alaska, Arizona, California, Indiana, Iowa, Kansas, Massachusetts, Missouri, New Hampshire, New Jersey, New Mexico, North Dakota, Ohio, 11.E.1 Packet Pg. 416 Attachment: Rental Notice Ordinance (22013 : Rental Ordinance) Pennsylvania, Rhode Island, South Dakota, and Texas, have issued laws that require landlords to provide notice to their tenants prior to increasing their rents; and WHEREAS, accordingly, this Board desires to require that residential landlords in unincorporated Collier County who proposes to increase the rents of their tenants by five percent or more shall provide such tenants with advance written notice of such increase. NOW THEREFORE, BE IT ORDAINED BY THE BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLORIDA, that: SECTION ONE: Title and Citation This Ordinance shall be known and cited as “The Collier Fair Notice to Tenant Ordinance.” SECTION TWO: Findings The Board hereby ratifies and reaffirms the above whereas clauses and incorporates them as if fully set forth herein as the Board’s legislative findings. SECTION THREE: Fair Notice to Tenant on Rent Increase More Than Five Percent A residential landlord that proposes to increase the rental rate by more than five percent at the end of a lease for a specific term, or during a tenancy without a specific duration, must provide 60 days written fair notice to the tenant before the tenant must either: (1) accept the proposed amendment; (2) reach an acceptable compromise; or (3) reject the proposed amendment to their tenancy. If the required 60 days written fair notice has been provided and the tenant has not agreed to the proposed amendment or an acceptable compromise, the landlord may impose the proposed amended term(s) or require the tenant(s) to vacate the residence. SECTION FOUR: Applicability of Ordinance The requirements of this ordinance shall apply within the unincorporated areas of Collier County. Except as set forth herein, all other provisions set forth in part II of chapter 83, Florida Statues, as such may be amended, shall govern residential tenancies. SECTION FIVE: Conflict and Severability In the event this Ordinance conflicts with any other ordinance of Collier County or other appliable law, the more restrictive shall apply. If any phrase or portion of the Ordinance is held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and such holding shall not affect the validity of the remaining portion. SECTION SIX: Inclusion in the Code of Laws and Ordinances The provisions of this Ordinance shall become and be made part of the Code of Laws and Ordinances of Collier County, Florida. The sections of the Ordinance may be renumbered or relettered 11.E.1 Packet Pg. 417 Attachment: Rental Notice Ordinance (22013 : Rental Ordinance) to accomplish such, and the word “ordinance” may be changed to “section,” “article,” or any other appropriate word. SECTION SEVEN: Effective Date This Ordinance shall become effective upon receipt of notice from the Secretary of State that this Ordinance has been filed with the Secretary of State. PASSED AND DULY ADOPTED by the Board of County Commissioners of Collier County, Florida, this _____day of _________________2022. ATTEST: BOARD OF COUNTY COMMISSIONERS CRYSTAL K. KINZEL, CLERK COLLIER COUNTY, FLORIDA By: __________________________ By: _____________________________ , Deputy Clerk William L. McDaniel, Jr., Chairman Approved as to form and legality: _______________________________ Jeffrey A. Klatzkow, County Attorney 11.E.1 Packet Pg. 418 Attachment: Rental Notice Ordinance (22013 : Rental Ordinance)