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Agenda 05/24/2022 Item # 9A (Ordinance - Notice to Tenant Ordinance relating to landlords)05/24/2022 EXECUTIVE SUMMARY Recommendation to consider an Ordinance to establish a Notice to Tenant Ordinance relating to landlords providing written notice of rent increases over five percent (5%) to tenants with leases of one year or longer. (This item is a companion item to items 11C and 11D) OBJECTIVE: To consider an Ordinance in support of long-term County tenants who are impacted by rent increases. CONSIDERATIONS: As background, the cost of housing is on the rise not only in Collier County but also in Florida and nationwide. Comparing Collier County to other areas in Florida, Collier continues to have some of the highest rents and the least number of affordable units in southwest Florida. A recent article in the Washington Post identified the Naples-Marco Island Metro Area as having the highest rental increases in the nation. The residential rental rates in the area have increased by thirty -nine percent (39%) from the first quarter of 2020 to the first quarter of 2022. Redfin economists have stated in a rece nt Washington Post article, the reason behind the rent increases is “the pandemic was kind of a pause on the economy and now that things are reopening, inflation is picking up, rents are going up and people are realizing they don’t have as much disposable income as they might have thought they had.” Housing specialists cite the reason for rent increases as (a) demand, (b) pricey and competitive home buying market has priced many would-be-homebuyers out of the market, (c) expiration of rent freezes and other measures that kept rents lower during the pandemic are now expired, and (d) wealthy renters who are able to pay more (high paying industries to allow people to work from anywhere thus the migration from high paying markets like Chicago and New York to more affordable areas). This fast-changing market has caused increases in rental rates and as such communities across the nation and Florida are enacting rental ordinances to address termination periods and rent increase notification requirements. Currently, two (2) communities have enacted ordinances and one (1) community has an ordinance scheduled for adoption. On April 26, 2022, the Board of County Commissioners (“Board”) approved Agenda Item #11E and authorized staff to move forward with advertising an ordinance to establish a Fair Notice to Tenant Ordinance requiring landlords to provide a 60-day fair notice for tenants in long-term leases experiencing a five percent (5%) or greater rent increase. On May 10, 2022, Agenda Item #9B, the Board voted down the Ordinance 3-2 and directed staff to facilitate public input and bring the Ordinance back at the next scheduled meeting for reconsideration. On May 16, 2022, staff held a Public Meeting in conjunction with members of the Affordable Housing Advisory Committee (AHAC). A quorum was not present. The meeting was attended by 16 persons on Zoom (2 AHAC members) and 15 community members, including 4 members of the AHAC. The feedback received included: 1. A residential landlord that proposes to increase the rental rate by more than five percent (5%) at the end of a lease for a term of one year or longer must provide sixty (60) days written notice to the tenant and remove all options to accept, compromise or reject as stated in Section III of the initial proposed Ordinance 2. Provide a statement in the written notice to tenants providing them the phone number and website for assistance programs offered through the County Community and Human Services Division 3. A rental cap would be beneficial 4. Landlords should provide a 60 day notice to tenants when they are planning to list the property 9.A Packet Pg. 90 05/24/2022 for sale, because a majority of the properties are being sold out from under tenants 5. Code enforcement action should be taken when Notice is not provided 6. A 60 day notice would allow people to find alternative housing, relocate children in daycare, seek employment close to their new home 7. Require a time frame for tenants to respond to the landlord once the written notice is provided 8. Remove the word “Fair” from the Ordinance as it is not clear how this is defined 9. Tenant and Landlord should come up with a lease acceptable to all parties and tenant should not sign at will 10. Require the written notice at any point when an increase above 5% is considered, at the end o r during the rental period Staff supports the following language changes to the Ordinance for Board consideration: 1. Remove the word “Fair” 2. Add language to the written notice providing the website and phone number for Community and Human Services 3. Remove Section III options to: (1) accept the proposed amendment; (2) reach an acceptable compromise, or (3) reject the proposed amendment to their tenancy. If the required sixty (60) days written 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. 4. Require the tenant to provide the landlord 30 days notice if they are going to accept the rent increase FISCAL IMPACT: The future fiscal impact if additional Code Enforcement staff are necessary to administer is unknown at this time. GROWTH MANAGEMENT IMPACT: There is no Growth Management impact. LEGAL CONSIDERATIONS: In light of the Board’s discussion on April 26th I amended the proposed ordinance to apply to only those leases of one year or longer (eliminating the month-to-month issue) and included a specific violations and penalties clause. The proposed ordinance reads in the relevant part as follows: SECTION THREE: Fair Notice to Tenants on Rent Increase More Than Five Percent A residential landlord that proposes to increase the rental rate by more than five percent (5%) at the end of a lease for a term of one year or longer must provide sixty (60) days written 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 sixty (60) days written 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: Violations and Penalties All violations of this ordinance may be processed according to the Collier County Consolidated Code Enforcement Ordinance (Ord. No, 2010-04, as amended) and per the provisions of F.S. chapter 162, parts I or II, as may be applicable. A violation of this ordinance shall be pu nishable by a fine not exceeding $500. A separate penalty may be imposed for each violation of this ordinance. In keeping with the Board’s discussion, staff also added an additional Whereas clause to include the following policy reason for the proposed ordinance: 9.A Packet Pg. 91 05/24/2022 WHEREAS there are programs that are available to assist tenants in paying their rents, which application process takes a minimum of thirty (30) days; During the April 26th discussion Staff advised the Board that there are currently millions of dollars in government programs in place for the express purpose of rental assistance to Collier County residents, which take a minimum of thirty (30) days to process, which programs would be rendered moot without sufficient time for the tenants to apply and receive the funding. Requiring sixty (60) days’ notice of a rent increase over five percent (5%) allows those tenants the opportunity to apply for and obtain the assistance. With that noted, this item is approved as to form and legality. -JAK RECOMMENDATION: To enact an Ordinance to establish a Notice to Tenant Ordinance relating to landlords providing written notice of rent increases over five percent to tenants with leases of one year or longer. Prepared By: Jacob LaRow, Housing and Grant Development Manager, Community and Human Services Division ATTACHMENT(S) 1. Ordinance - Fair Notice to Tenant - JAK signed (PDF) 9.A Packet Pg. 92 05/24/2022 COLLIER COUNTY Board of County Commissioners Item Number: 9.A Doc ID: 22290 Item Summary: Recommendation to consider an Ordinance to establish a Notice to Tenant Ordinance relating to landlords providing written notice of rent increases over five percent (5%) to tenants with leases of one year or longer. (This item is a companion item to items 11C and 11D) (Kristi Sonntag, Community and Human Services Director) Meeting Date: 05/24/2022 Prepared by: Title: Manager - Federal/State Grants Operation – Community & Human Services Name: Kristi Sonntag 05/17/2022 7:24 PM Submitted by: Title: Manager - Federal/State Grants Operation – Community & Human Services Name: Kristi Sonntag 05/17/2022 7:24 PM Approved By: Review: Operations & Veteran Services Kristi Sonntag Additional Reviewer Skipped 05/17/2022 7:24 PM Public Services Department Kristi Sonntag PSD Level 1 Reviewer Skipped 05/17/2022 7:24 PM Community & Human Services Kristi Sonntag CHS Review Completed 05/17/2022 7:46 PM Public Services Department Tanya Williams PSD Department Head Review Completed 05/18/2022 8:28 AM County Attorney's Office Derek D. Perry Level 2 Attorney Review Completed 05/18/2022 3:04 PM Office of Management and Budget Debra Windsor Level 3 OMB Gatekeeper Review Completed 05/18/2022 3:06 PM County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 05/18/2022 3:11 PM Growth Management Operations Support Christopher Johnson Additional Reviewer Completed 05/18/2022 3:15 PM County Manager's Office Dan Rodriguez Level 4 County Manager Review Completed 05/18/2022 4:28 PM Board of County Commissioners Geoffrey Willig Meeting Pending 05/24/2022 9:00 AM 9.A Packet Pg. 93 9.A.1 Packet Pg. 94 Attachment: Ordinance - Fair Notice to Tenant - JAK signed (22290 : Rental Ordinance) 9.A.1 Packet Pg. 95 Attachment: Ordinance - Fair Notice to Tenant - JAK signed (22290 : Rental Ordinance) 9.A.1 Packet Pg. 96 Attachment: Ordinance - Fair Notice to Tenant - JAK signed (22290 : Rental Ordinance)