To: Board of Supervisors of Sonoma County and the Board of Commissioners of the Community Development Commission
Department or Agency Name(s): Community Development Commission, County Counsel
Staff Name and Phone Number: Michelle Whitman, (707) 565-7504; Elizabeth Coleman, (707) 565-2421
Vote Requirement: Informational Only
Supervisorial District(s): Countywide
Title:
Title
Analysis of Impacts of Ending Sonoma County's Just Cause Ordinance
End
Recommended Action:
Recommended action
A) Review information and an analysis of impacts from ending Sonoma County’s Just Cause Ordinance
B) Provide direction to staff on policy choices to explore
end
Executive Summary:
As the COVID-19 pandemic took hold in March 2020, federal, state and local governments began implementing tenant protections aimed at preventing displacement during the health crisis. Sonoma County first passed Urgency Ordinance 6301 <https://library.municode.com/ca/sonoma_county/ordinances/code_of_ordinances?nodeId=1034609> on March 24, 2020, to ensure that no tenant residing in the County would be evicted for non-payment of rent due to a documented loss of income associated with COVID-19. On February 9, 2021, Sonoma County passed Urgency Ordinance 6337 <https://library.municode.com/ca/sonoma_county/ordinances/code_of_ordinances?nodeId=1067805>, commonly referred to as the “Just Cause” ordinance. This ordinance amended Ordinance 6301, limiting evictions to those supported by Just Cause, as defined by the Ordinance and state law, subject to certain limitations imposed by state-wide COVID-19 relief statutes. County eviction protections expired on September 30, 2022.
Just Cause places limitations on the allowable bases for eviction to those deemed sufficiently important to justify the termination of a tenancy, and those required by state law. The only allowable causes for eviction under the County’s Just Cause ordinance were: 1) tenant poses an imminent threat to health or safety (e.g., violence); 2) landlord was removing the property from the rental market (via a state law called the Ellis Act); or 3) nonpayment of rent under limited circumstances. The Just Cause ordinance created a legal defense for tenants who received an eviction notice that did not comport with the temporary limitations, or where evidence may not have established valid grounds for eviction.
During COVID-19, ordinances 6301 and 6337 likely prevented many evictions where nonpayment of rent was associated with a pandemic health or job impact. Tenants were also eligible for emergency rental assistance through the County’s Emergency Rental Assistance Program (ERAP), which to date has availed $39,602,623 in direct assistance to our community, administered by the CDC and Community Based Organizations (CBOs). ERAP enabled many landlords to recover unpaid rent as well.
An analysis of Superior Court of California, Sonoma County data collected since countywide Just Cause protections ended on September 30, 2022, demonstrates a rebound in court evictions, approaching or exceeding pre-pandemic levels of 1,133 in 2017, 932 in 2018, and 934 in 2019. Finally, the County’s 2022 Point In Time Count <https://sonomacounty.ca.gov/Main%20County%20Site/Development%20Services/CDC/Homeless%20Services/Homeless%20Data/County%20of%20Sonoma%202022%20Point-in-Time%20Count%20Results.pdf> lists the following among primary causes of homelessness: lost job (23%); eviction (10%); landlord raised rent (7%).
Discussion:
Renter Demographics
Renters are more vulnerable to housing instability than homeowners, therefore it is important to understand the demographics of the populations most impacted. The US Census shows Sonoma County has a renter percent of 38.6%, which is the second highest among neighboring counties. Black and Latino households are more likely to occupy rented units, with over half of all those population’s households renting. According to both the US Census Bureau and the 2021 update to the Portrait of Sonoma <https://upstreaminvestments.org/Microsites/Upstream%20Investments/Documents/Archive/Portrait-of-Sonoma-County-2021-Report.ADA.pdf>, 52% of renters in Sonoma County are rent burdened, meaning they spend more than 30% of their incomes on rent. The level of burden is disproportionate, varying by race and ethnicity, with 52% of Asian and 53% of white renters in the county facing a high housing burden, compared to 59% of Latino renters and 68% of Black renters.
Difficulty paying rent or mortgage is reported at a higher frequency by Black and Latino households, which on average have more of their income going towards housing while also earning less than their white counterparts - white households earned 30% more than Latinos, 40% more than Blacks, and 20% more than Asians (source, Generation Housing Report, Making the Rent <https://generationhousing.org/wp-content/uploads/2023/03/2023_0322-Making-the-Rent-The-Human-Price-of-Housing-Cost-Burden.pdf>, March 2023). In June 2023, the National Low Income Housing Coalition released Out of Reach <https://nlihc.org/oor>, a report stating that the housing wage required for a modest two-bedroom apartment in Sonoma County ranges between $36.35-$55.38 hourly, depending on ZIP code. Many of the most common industries in Sonoma County, such as hospitality and home health care, pay workers less than $20 per hour. Servers, for example, earn an average of $17.56 per hour, and nursing assistants earn an average of $18.91 per hour according to the Bureau of Labor Statistics. The MIT Living Wage Calculator <https://livingwage.mit.edu/counties/06097?> places the minimum hourly living wage for an adult with no children at $21.14; $44.18 with one child; $57.50 with two children; and $78.68 with three children.
Toward a New Understanding <https://homelessness.ucsf.edu/sites/default/files/2023-06/CASPEH_Report_62023.pdf>, a June 2023 statewide study conducted by the Benioff Homelessness and Housing Initiative at University of California at San Francisco, found that high housing costs and low income left participants susceptible to homelessness. Twenty-one percent of former leaseholders cited a loss of income as the main reason that they lost their last housing. The County’s 2022 Point In Time Count <https://sonomacounty.ca.gov/Main%20County%20Site/Development%20Services/CDC/Homeless%20Services/Homeless%20Data/County%20of%20Sonoma%202022%20Point-in-Time%20Count%20Results.pdf> lists the following among primary causes of homelessness: lost job (23%); eviction (10%); landlord raised rent (7%).
Tenant Protections Tied to Covid-19
As COVID-19 reached California in March 2020, the federal government, the State of California, and the County of Sonoma took separate steps to preserve housing status for Sonoma County’s renters. The primary tools were the Emergency Rental Assistance Programs (ERAP) offered by both the Federal and State governments, and eviction moratoriums for non-payment of rent and other non-essential reasons for eviction, including Sonoma County’s Just Cause ordinance.
1) Sonoma County’s Emergency Rental Assistance Program (ERAP)
Sonoma County’s Emergency Rental Assistance Program (ERAP) launched in April 2021 and stopped accepting applications in August 2022. The program was designed to help with back rent/utility debt from April 1, 2020 - March 31, 2021. The Sonoma County Community Development Commission (CDC) received and administered the funds locally in partnership with local Community-Based Organizations (CBOs), expecting that CBOs would have the closest proximity to local communities adversely affected by COVID-19. The CDC was awarded $45.8 million in both State and Federal funds under normal allocations and another $312,229 in reallocated Federal funds. The program has so far distributed $39,602,623 in direct assistance to 2,827 households, with total of $45,085,228 expended to date, including administrative costs. The remaining balance continues to provide direct assistance to households accepted into the program prior to March 31, 2022, and funds associated administration. Note that by the end of November 2023, the ERAP Program aims to have reviewed and completely processed any remaining applications submitted within program parameters.
2) State and Local Eviction Protections
Concurrent with ERAP, the State of California enacted eviction protections for those economically and physically affected by COVID-19. The California COVID-19 Rental Housing Recovery Act restricted certain unlawful detainer (UD) actions on some residential property for non-payment of rent. An unlawful detainer - or court eviction - is a legal process where a landlord uses the courts to remove a tenant. Subsequent State law prohibited judges from allowing evictions to proceed through June 30, 2022, if tenants had: 1) COVID-19 related health or economic impacts; 2) sought rental relief for unpaid rent owed between March 2020 and October 2021; and 3) applied for emergency rental assistance on or before March 31, 2022.
Sonoma County’s tenant protections, initially adopted prior to State protections and expanded by the Just Cause ordinance, provided additional safeguards. The County’s Just Cause ordinance applied to more bases for eviction than State law Just Cause protections generally do, and stayed in effect until sunsetting concurrently with the end of the repayment period for back-rent by certain tenants pursuant to Ordinance 6301 <https://mcclibraryfunctions.azurewebsites.us/api/ordinanceDownload/16331/1034609/pdf> and State law, on September 30, 2022.
On August 1, 2022, the clock started on a 60-day repayment requirement for local tenants to pay at least 25% of unpaid rent accrued during March 2020 - October 2021. By the close of September 30, 2022, a tenant must have paid 25% of the unpaid rent accrued between March 2020 and October 2021 to ensure those debts would never be the basis of an eviction. Finally, state-level preemption of the County’s ability to act to prevent evictions related to COVID-based nonpayment ended on July 1, 2022. Federal, state, and local policy measures mitigated challenges for millions of households nationwide that resulted from COVID-19. Additional relief came from economic impact payments, increases to unemployment insurance and Supplemental Nutrition Assistance Program (SNAP) benefits, and childcare tax credits, which helped low- and middle-income households meet basic needs. As many of these emergency resources phase out, low-income renters are likely facing a higher cost of living, escalating rents, and increased housing instability. Eviction filing rates across the nation that are approaching or surpassing pre-pandemic levels.
Effects of Just Cause Ordinance on Sonoma County Renters, before, during, and after COVID-19 Protections
CDC staff, working with Legal Aid of Sonoma County (LASC), gathered information on Unlawful Detainer (UD) complaints via records requests from the Superior Court of California, Sonoma County. Tenants who are unable to move out of their residence, or who believe they have a valid defense to the eviction, are entitled to a jury trial to determine whether or not the eviction is legitimate. During the pandemic, LASC provided eviction defense to low-income Sonoma County tenants and reportedly was able to use the Just Cause Ordinance to win better outcomes for those facing eviction.
Data provided by the Superior Court presents the number of residential UDs filed by date and property zip code. CDC and LASC analyzed data sets including: calendar years 2017-2019 (pre-pandemic); calendar year 2020 (partial pandemic); calendar year 2021 (partial pandemic); calendar year 2022 (partial post-pandemic); and the fourth quarters of 2019 (pre-pandemic), 2020 (partial pandemic), 2021 (pandemic), and 2022 (partial post-pandemic, immediately after Just Cause expired on September 30); and finally, the most recent data reflecting the first quarter of 2023 (post-pandemic). 2021 was the only year when tenant protections were in effect during all 12 months.
The data presented in Table 1 shows for Sonoma County: 1) pre-pandemic UD rates averaged 1,000 per year (years 2017-2019); 2) in 2020, when State and federal moratoriums on eviction and the County nonpayment moratorium, Ordinance 6301 <https://mcclibraryfunctions.azurewebsites.us/api/ordinanceDownload/16331/1034609/pdf>, passed, UD filings dropped to 356 total; 3) in 2021, as the County adopted Ordinance 6337 <https://library.municode.com/ca/sonoma_county/ordinances/code_of_ordinances?nodeId=1067805> (effective date February 9, 2021), further limiting reasons for eviction, UD filings dropped even more to 332 total (34% of pre-pandemic levels); and 4) in 2022, when ERAP protections ceased and the County Just Cause Ordinance expired on September 30, UDs rebounded sharply to 818, despite tenants having protections throughout the first 3/4 of the year. Table 1 presents the total annual UD filings with the Sonoma County Superior Court, and when sorted by ZIP code, points to a geographic concentration in cities and towns, noting however, city/town ZIP codes will inevitably capture some properties in the unincorporated area of the County.
Table 1
|
Description |
Calendar 2017 |
Calendar 2018 |
Calendar 2019 |
Calendar 2020 |
Calendar 2021 |
Calendar 2022 |
January-May 2023 |
|
UDs in City ZIP Codes (including portions of unincorporated areas) |
1,041 |
872 |
852 |
317 |
292 |
751 |
356 |
|
Total UDs |
1,133 |
932 |
934 |
356 |
332 |
818 |
370 |
|
|
|
|
|
|
|
|
|
|
Percent in city/town ZIP codes (some unincorporated areas included) |
91.87% |
93.56% |
91.22% |
89.04% |
87.95% |
91.80% |
96.21% |
Bay Area Housing Finance Authority Eviction Study
The Bay Area Housing Finance Authority <https://mtc.ca.gov/about-mtc/authorities/bay-area-housing-finance-authority-bahfa> (BAHFA) has identified that limited data is available on the rates and causes of Bay Area evictions, the demographics and geographies that are most affected, and the landscape of available legal and financial services to assist affected households. This lack of data makes it difficult to design effective interventions needed to assist tenants to stay stably housed. With the expiration of pandemic-era tenant protections and the accompanying rise in eviction rates throughout the Bay Area, gaining a better understanding of eviction causes, consequences, and effective interventions can advance equitable policies that benefit tenants, landlords, and communities. In June 2023, BAHFA was authorized to contract a consultancy, Centro Legal de La Raza, to conduct a regional Eviction and Housing Legal Services Study including these components:
1. A quantitative analysis of evictions over the past five years throughout the region, including the rates, causes, outcomes, and characteristics of evictions in each county, and estimates of the demographics of people most affected by evictions. This analysis will draw upon public court eviction records, legal service provider data, and, as available, local data sources.
2. A survey and/or series of interviews with legal services providers to determine trends and needs in evictions and the provision of legal services, including variations of available services across geographies, opportunities, and challenges around expansion of services, and the efficacy of legal services in aiding tenants in eviction proceedings. The study will be focused on the entire region, but there may be opportunities for deeper research and policy solutions that are focused on specific geographies depending on data availability (e.g., rent registry data, right to counsel program data, or other local data sources).
The results of the research will be compiled, and BAHFA will be responsible for finalizing content into a public-facing report due in October 2024. BAHFA is spending $250,000 of its Anti-Displacement Pilot budget for this purpose, and the CDC has offered to assist with access to Sonoma County-specific data.
Early Results, Tenant Protections in Petaluma
Petaluma passed a temporary residential tenant protection ordinance on September 12, 2022, effective on October 12, 2022, soon after the County protections expired. Petaluma followed with a permanent Just Cause ordinance on May 15, 2023. Petaluma’s ordinance closes gaps in coverage inherent under the State of California Tenant Protection Act by starting eviction protections at day one of a tenancy rather than one year from move in, and including single family homes, new construction, and subsidized housing, which are all exempted from State protections. As of the date of this staff report, there are five months of data from the Superior Court reflecting the rate of court evictions in Petaluma is currently trending below pre-pandemic levels, though additional analysis is needed over a longer duration to draw reliable conclusions.
Thought-Provoking Landscape of Legal and Financial Policy Options
As noted, BAHFA is in the research and planning process to develop regional anti-displacement and homeless prevention pilots. Today’s presentation of limited data points to a need for enhanced tenant protection programs, as pre- COVID displacement pressures are exacerbated by the economic fallout from the pandemic with renters at risk of immediate displacement upon the expiration of eviction moratoria. The lack of comprehensive data, however, makes it challenging to know which mitigations and policy tools will stabilize communities, especially lower-income communities and communities of color, and ensure that residents can remain in their homes. Currently, there are no regionwide initiatives that focus on tenant protections at scale or that can provide standardized data across jurisdictions. While many jurisdictions and organizations have rental and mortgage assistance funds, there is no regional network that can facilitate development of best practices nor are there regional standards for eligibility criteria, data tracking, or outcome evaluation. This makes it difficult to assess the underlying factors that threaten housing stability (i.e., loss of job, unexpected medical bill, rent increase) and the overall regional impacts or effectiveness of existing programs (i.e., how many households avoided homelessness due to receipt of financial assistance?). Moreover, most local rental assistance programs operate in a separate silo from homelessness services, despite overlap in core activities such as dispensing direct financial assistance.
The BAHFA Eviction and Housing Legal Services Study is due for release in October 2024, and will inform the strategic, data driven development of policies, tools, and regional resources to address tenant vulnerability, effectively and collectively. Waiting until the study is complete before making significant policy decisions would be beneficial to its development in Sonoma County as the results of the study should provide a fuller understanding of the causes and issues with potential paths to address and resources to assist. While it is too early to predict the outcome of the study, policy choices for exploration may include such things as:
1. Development of targeted Just Cause ordinances
2. Establishment of a rental registry to generate comprehensive data
3. Funding pre-eviction and eviction legal services, counseling, training, and renter education
4. Funding emergency rental assistance
5. Updating/strengthening Mobile Home Rent Stabilization ordinances
6. Providing relocation assistance
7. Collecting and tracking displacement data
Strategic Plan:
Assistance for renters experiencing hardship - either by subsidies/assistance, contributions to legal defense for tenants, or eviction protections - can be “best practices” in preventing homelessness and ultimately cost less than the costs associated with homelessness. This item directly supports the County’s Five-Year Strategic Plan and is aligned with the following pillar, goal, and objective:
Pillar: Healthy and Safe Communities
Goal: Goal 4: Reduce the County’s overall homeless population by 10% each year by enhancing services through improved coordination and collaboration.
Objective: Objective 3: Increase investment in programs that treat the underlying causes of homelessness, including substance abuse, mental illness, poverty, and a lack of affordable housing.
Racial Equity:
Was this item identified as an opportunity to apply the Racial Equity Toolkit?
Yes
This item was identified for a Racial Equity Toolkit; however, since the item is not recommending a specific action on an identified policy, program, or practice, the tool was not applied. The data collected and shared in the item can be applied to the toolkit for future housing related decisions. Further, should the Board direct staff to explore specific policy options the effort will include, as much as possible and within the project’s available timeframe, the application of the Racial Equity Analysis tool.
Prior Board Actions:
Urgency Ordinance 6301: Adopted March 24, 2020, prevented eviction for non-payment of rent cause by Covid-19 related loss of income.
Urgency Ordinance 6337: Adopted February 9, 2021, further limited reasons for eviction to identified “just causes.”
Fiscal Summary
Narrative Explanation of Fiscal Impacts:
N/A
Narrative Explanation of Staffing Impacts (If Required):
N/A
Attachments:
Attachment A: Sonoma County Superior Court Unlawful Detainer Data Sets and Charts
Attachment B: Presentation
Attachment C: Presentation-Spanish
Related Items “On File” with the Clerk of the Board:
None