Article II — RENT STABILIZATION

SEC. 27-20. CITATION.

This article shall be known as the “Rent Stabilization Ordinance."

(Ord. No. 3013)

SEC. 27-21. PROHIBITED INCREASES.

(A) Increases in rent on residential real property in the city in excess of 4%, and more than one rent increase in any 12 month period, are prohibited, unless expressly exempt under the Costa- Hawkins Rental Housing Act codified in Cal. Civil Code, Section 1954.50 et seq.

(B) Under the Costa-Hawkins Rental Housing Act, an owner is entitled to establish the initial rental rate for new tenancies, unless the previous tenancy was terminated by a notice pursuant to Civil Code Section 1946.1 or has been terminated upon a change in the terms of the tenancy noticed pursuant to Section 827, except a change permitted by law in the amount of rent or fees. Therefore, an owner who terminates a tenancy for a no-fault reason under this chapter by a notice pursuant to Civil Code Section 1946.1 or has been terminated upon a change in the terms of the tenancy noticed pursuant to Section 827, except a change permitted by law in the amount of rent or fees may charge the subsequent tenant no more than the amount of rent that the owner could lawfully charge for the previous, terminate, tenancy plus any intervening 4% annual adjustments.

(Ord. No. 3013, 3049)

SEC. 27-22. REASONABLE RATE OF RETURN.

This article allows for an annual adjustment of residential real property rent of up to 4%. Such an increase is found and determined to provide a just and reasonable return on an owner’s property, and has been adopted to encourage good management, reward efficiency, and discourage the flight of capital, as well as to be commensurate with returns on comparable investments, but not so high as to defeat the purpose of curtailing excessive rents and rental increases. Notwithstanding the foregoing, however, any owner of residential real property who contends that the limit on rental increases set forth in section 27-21 above will prevent the owner from receiving a fair and reasonable return on their property may petition for relief from the cap set forth in section 27-21 pursuant to the procedures set forth in section 27-23.

(Ord. No. 3013)

SEC. 27-23. FAIR RETURN PETITION FOR RENT INCREASE.

(A) An owner of residential real property may petition for a rent increase in excess of that provided in section 27-21 in order to obtain a fair and reasonable return on their property (“fair return petition”). Such fair return petition shall be on an application form prescribed by the city manager and shall be decided by the city manager, or their designee (“city manager”). The owner shall provide a copy of any fair return petition submitted to the city to the applicable tenant(s), and provide the city with proof of completing such service to the applicable tenant(s). The tenant(s) will then have 30 days from the date of receiving the fair return petition to reply or provide additional

materials to the city in response to the fair return petition. The owner shall bear the burden of establishing that a rate increase in excess of that provided in section 27-21 is necessary to provide the owner with a fair and reasonable return on their property, including by providing an independent financial report and verified financial data demonstrating that without such an increase, they will not realize a fair and reasonable return on their property.

(B) The owner shall be responsible for all costs associated with the city’s review of the fair return petition. Upon receipt of a fair return petition, the city manager shall determine the anticipated costs of review and if the employment of expert(s) will be necessary or appropriate for a proper analysis of the owner’s request. If the city manager so determines, the city manager shall also determine the anticipated costs of employing such expert(s). The resulting figure shall be communicated to the owner, and the fair return petition shall not be processed until the owner has paid to the city the estimated cost of the complete analysis. The city will provide owner with an invoice of all costs incurred after the review of the fair return petition. Any unused portion of the advance payment for analysis shall be refunded to the owner. If additional funds are required, payment will be required before owner receives the determination on the fair return petition from the city.

(C) The factors the city manager may consider in deciding a fair return petition may include, but not be limited to:

(1) Changes in the Consumer Price Index for All Urban Consumers in the Oxnard-Thousand Oaks-Ventura Metropolitan Area published by the Bureau of Labor

Statistics.

(2) The length of time since the last determination by the city manager on a rent increase application, or the last rent increase if no previous rent increase

application has been made.

(3) The completion of any capital improvements or rehabilitation work related to the residential real property or mobile home space or spaces specified in the fair

return petition, and the cost thereof, including materials, labor, construction interest, permit fees, and other items the city manager deems appropriate.

(4) Changes in property taxes or other taxes related to the subject residential real property or mobile home park.

(5) Changes in the rent paid by the owner for the lease of the residential real property or land on which the subject mobile home park is located.

(6) Changes in the utility charges for the subject residential real property or mobile home park paid by the owner, and the extent, if any, of reimbursement from the

tenants.

(7) Changes in reasonable operating and maintenance expenses.

(8) The need for repairs caused by circumstances other than ordinary wear and tear.

(9) The amount and quality of services provided by the owner to the affected tenant(s).

(D) A fair return petition shall be decided by the city manager within 60 calendar days of the date that the application has been deemed complete, including proof of service of the fair return petition on the applicable tenant(s). The decision shall be emailed and sent by mail, with proof of mailing to the subject property owner, the owner's designated representative(s) for the fair return petition, the applicable tenant(s), and the designated representative of the tenant(s), if any. The decision of the city manager shall be final and not appealable.

(Ord. No. 3013)

SEC. 27-24. EXEMPTIONS.

(A) Pursuant to the Costa-Hawkins Rental Housing Act, the provisions of this article regulating the amount of rent that a residential real property owner may charge shall not apply to the following: any residential real property that has a certificate of occupancy issued after February 1, 1995 (Cal. Civil Code, Section 1954.52(a)(1)); and, any other provisions of the Costa-Hawkins Rental Housing Act addressing exemptions, as applicable.

(B) Pursuant to the Tenant Protection Act of 2019, Cal. Civil Code, Section 1947.12(d), the provisions of this article regulating the amount of rent that a residential real property owner may charge shall not apply to the following:

(1) Housing restricted by deed, regulatory restriction contained in an agreement with a government agency, or other recorded document as affordable housing for

persons and families of very low, low, or moderate income, as defined in Cal. Health and Safety Code, Section 50093, or subject to an agreement that provides housing subsidies for affordable housing for persons and families of very low, low, or moderate income, as defined in Cal. Health and Safety Code, Section 50093 or comparable federal statutes.

(2) Dormitories owned and operated by an institution of higher education or a kindergarten and grades 1 to 12, inclusive, school.

(3) Residential real property that is alienable, separate from the title to any other dwelling unit, provided that both of the following apply:

(a) The owner is not any of the following:

1. A real estate investment trust, as defined in section 856 of the Internal Revenue Code.

2. A corporation.

3. A limited liability company in which at least one member is a corporation.

(b) At the time the tenancy is created:

1. The tenants have been provided written notice that the residential real property is exempt from this section using the following statement:

“This property is not subject to the rent limits imposed by Oxnard City Code Chapter 27, Article II and the owner is not any of the following: (1) a real estate

investment trust, as defined by section 856 of the Internal Revenue Code; (2) a corporation; or (3) a limited liability company in which at least one member is a corporation."

2. For a tenancy existing before the effective date of this article, the notice required under clause 1. may, but is not required to, be provided in the rental

agreement.

3. For a tenancy commenced or renewed on or after the effective date of this article, the notice required under clause 1. must be provided in the rental agreement.

   (4) A property containing two separate dwelling units within a single structure in which the owner occupied one of the units as the owner’s principal place of residence at the beginning of the tenancy so long as the owner continues in occupancy, and neither unit is an accessory dwelling unit or a junior accessory dwelling unit.

(C) The provisions of this article regulating the amount of rent that a residential real property owner may charge shall not apply to the following:

(1) A unit subject to Chapter 24, Article I, the city’s mobile home park rent stabilization system.

(2) A unit in a hotel, motel, inn, tourist home, or rooming and boarding house which is rented primarily to transient guests for a period of less than 30 days; and

other transient occupancies as defined in Cal. Civil Code, Section 1940(b).

(3) A unit in an institutional facility, including a hospital, medical care facility, residential care facility, asylum, group home for seniors or the disabled; a rental unit in

a transitional housing program that assists homeless persons as defined in Cal. Civil Code, Section 1954.12; a convent or monastery owned and operated by a religious organization; and a fraternity or sorority house affiliated with a college or university.

(4) A unit that the owner or the owner’s immediate family occupied as their principal place of residence at the beginning of the tenancy so long as the owner or the

owner’s immediate family continues in occupancy.

(Ord. No. 3013)

SEC. 27-25. RENT INCREASE INEFFECTIVE.

No rent increase shall be effective if the owner:

(A) Fails to substantially comply with all provisions of this article, including but not limited to the failure to provide notices as required; or

(B) Fails to maintain the residential real property in compliance with Cal. Civil Code, Sections 1941.1et seq. and Cal. Health and Safety Code, Sections 17920.3 and 17920.10; or

(C) Fails to make repairs ordered by the city or court of competent jurisdiction.

(Ord. No. 3013)

SEC. 27-26. NOTICE REQUIREMENTS.

(A) An owner of any residential real property subject to this article shall, on or before the date of commencement of a tenancy, give the tenant a written notice in a form prescribed by the city which must include the following information:

(1) The existence and scope of this Chapter 27, Article II of the City Code; and

(2) The tenant’s right to respond to any fair return petition filed with the city by the owner pursuant to section 27-23.

(B) As part of any notice to increase rent, an owner must include:

(1) Notice of the existence of this Chapter 27, Article II of the City Code; and

(2) The tenant’s right to respond to any fair return petition filed with the city by the owner pursuant to section 27-23, unless such rent increase is pursuant to an

approved fair return petition.

(3) No rent increase shall take effect until the requirements of this article have been met.

(C) When the owner and tenant have entered into a written lease, the owner must give notices to the tenant in the language used in the lease. When the owner and tenant have not entered into a written lease, the owner must give notices to the tenant in the language that the owner and tenant used to negotiate the terms of the tenancy.

(Ord. No. 3013)

SEC. 27-27. DEFINITION OF RENT.

For the purposes of this article, “RENT” means all periodic payments and all nonmonetary consideration, including, but not limited to, the fair market value of goods or services rendered to or for the benefit of the owner under an agreement concerning the use or occupancy of residential real property, including, but not limited to, all payment and consideration demanded or paid for parking, pets, furniture, and subletting.

(Ord. No. 3013)

SEC. 27-28. VIOLATIONS.

(A) It shall be unlawful for any person to violate or fail to comply with any provision of this article. The violation of any provision of this article shall first be punished through the use of a civil citation, prior to prosecution as a misdemeanor, infraction, or civil injunction as provided in section 1-10.

(B) Any owner who intentionally demands, accepts or retains any payment in violation of the provisions of this article shall be liable in a civil action to the tenant from whom such payment is demanded, accepted, or retained for damages in the sum of three times the amount by which the payment demanded, accepted, or retained exceeds the maximum amount which could be lawfully demanded, accepted, or retained together with reasonable attorneys' fees and costs as determined by the court.

(Ord. No. 3013)

SEC. 27-28.1 ADMINISTRATIVE REGULATIONS.

The city manager may adopt administrative procedures and regulations to implement the provisions of this article. Any regulation intended to clarify the meaning of any provision of this article, or to add substantive (as opposed to merely procedural) details necessary to its implementation, shall not become effective unless approved by resolution of the city council. If approved by the city council, the regulation shall be published in an appropriate location, along with any other regulations implementing this article, on the city's website. Any presentation to the city council pursuant to this section shall include:

(1) A succinct statement of why the regulation is necessary or desirable;

(2) A succinct statement of what the regulation would do;

(3) A succinct statement of how the proposed regulation is consistent with the intent of the ordinance provision to which it relations; and

(4) The complete text of the proposed regulation.

(Ord. 3049)

SEC. 27-29. FEE ESTABLISHED.

Owners subject to this article shall pay the rent stabilization fee as established by city council resolution. The rent stabilization program fee is to fund the city’s cost to implement and enforce the provisions of this article.

(Ord. No. 3013)

SEC. 27-30. SUNSET.

This article shall automatically sunset on December 31, 2030.

(Ord. No. 3013)