Item 10 - Moratorium on Commercial EvictionsApril 7, 2020, Item #10M EM ORAN DLJ M City of Poway DATE: TO: FROM: SUBJECT: Summary: April 7, 2020 Members of the City Council Steve Vaus, Mayor Moratorium on Commercial Evictions I am seeking council concurrence on a measure that will offer some protections and assistance to local businesses to help them in transitioning back to more normal operations after the worst of the Coronavirus crisis has passed. While the State of California has suspended all residential evictions until May 31, 2020, they have not offered similar protections to commercial evictions. The State of California has, however, empowered local jurisdictions to undertake such action to prohibit commercial evictions. In the interest of protecting our local businesses and the jobs they provide I propose the City of Poway suspend commercial evictions until May 31, 2020. It is important to note the federal and state government have issued increased protections for landlords that do not make mortgage payments, suspending foreclosure and eviction proceedings by most financial institutions. Recommended Action: Mayor Vaus is requesting discussion on a Moratorium on Commercial Evictions and if there is Council concurrence, adopt the Urgency Ordinance. Attachments: A. Urgency Ordinance Reviewed/ Approved By: Assistant City Manager 1 of7 Reviewed By: Alan Fenstermacher City Attorney Approved By: Ch~ City Manager
April 7, 2020, Item #102 of 7ATTACHMENT AORDINANCE NO. __ _ AN URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA, ENACTED PURSUANT TO CALIFORNIA GOVERNMENT CODE SECTIONS 8634, 36934, AND 36937, TEMPORARILY PROHIBITING THE EVICTION OF ANY COMMERCIAL TENANT WHO SUFFERS A SUBSTANTIAL LOSS OF INCOME OR SUBSTANTIAL INCREASE IN EXPENSE RELATED TO COVID-19 WHEREAS, the Novel Coronavirus, Coronavirus Disease 19 ("COVID-19") has spread globally to over 117 countries, infecting more than 700,000 persons and killing more than 37,000 individuals worldwide, and shows every indication of spreading further before it is controlled; WHEREAS, the COVID-19 global pandemic in the City of Poway, commencing on or about January 24, 2020, creates a threat to public health and safety; WHEREAS, on February 14, 2020, the County of San Diego determined that there is an imminent and proximate threat to the public health from the introduction of COVID-19 in San Diego County and declared a Local Health Emergency; WHEREAS, on March 4, 2020, the Governor of the State of California declared a State of Emergency in response to the COVI D-19 pandemic; WHEREAS, on March 11, 2020, the World Health Organization ("WHO") publicly characterized COVID-19 as a pandemic; WHEREAS, on March 12, 2020, the Health Officer of San Diego County has issued restrictions relating to public and private gatherings, and this order was subsequently amended on March 16, 2020, to further restrict public and private gatherings in response to COVID-19; WHEREAS, on March 12, 2020, the Governor of the State of California issued Executive Order N-25-20 in a further effort to confront and contain COVID-19 that, among other things, recognized that individuals exposed to COVID-19 may be temporarily unable to work due to illness caused by COVID-19 or quarantines related to COVID-19 and, as a result, may be unable to pay for housing; WHEREAS, Executive Order N-25-20 also ordered residents to heed any orders and guidance by local public health officials, including but not limited to social distancing measures; WHEREAS, Executive Order N-25-20 also provided that local jurisdictions could determine that promoting stability among commercial tenancies is also conducive to public health, to help mitigate the economic impacts of COVID-19; WHEREAS, on March 13, 2020, the President of the United States declared a National Emergency due to the continuing spread and the effects of COVID-19; and on March 16, 2020, announced guidelines advising people to avoid gatherings of ten (10) or more persons for a period of fifteen (15) days; WHEREAS, on March 13, 2020, the City Manager, acting pursuant to Government Code section 8630 and PMC section 2.12.060, proclaimed the existence of a local emergency based
April 7, 2020, Item #103 of 7Ordinance No. *** Page 2 on conditions of extreme peril to the health and safety of persons caused by the COVI D-19 global pandemic, which the City Council ratified at its March 18, 2020 Special Meeting; WHEREAS, on March 15, 2020, the Governor of the State of California announced via press conference that he was: (1) calling for home isolation for adults over the age of sixty-five and individuals with chronic conditions; (2) directing the closure of bars, brewpubs, wineries, and nightclubs; and (3) calling for restaurants to limit occupancy to half their current allowance and practice social distancing; WHEREAS, on March 16, 2020, the Governor of the State of California issued Executive Order N-28-20, which indicated local jurisdictions take additional measures to promote housing stability and security in the face of the COVID-19 threat; WHEREAS, pursuant to the statewide and County stay at home orders, only "essential" businesses in the City of Poway are permitted to stay open, and except for delivery and take out services, all restaurants in the City of Poway have been ordered to close; WHEREAS, on March 18, 2020, the Federal Housing Administration implemented a foreclosure and eviction moratorium for single family homeowners with FHA-insured mortgages for 60 days; WHEREAS, all schools in the Poway Unified School District are currently closed to prevent the spread of COVID-19; WHEREAS, on March 25, 2020, the Governor of the State of California issued an announcement that financial institutions will offer a 90-day grace period for mortgage payments, including no negative impacts on credit reporting, and a moratorium on financial institutions initiating foreclosure sales or evictions; WHEREAS, on March 27, 2020, the Governor of the State of California issued Executive Order N-37-20, which had the effect of placing a statewide moratorium on residential evictions until May 31, 2020; WHEREAS, as of March 31, 2020, there were 603 confirmed positive CVOID-19 cases, including a number by community transmission, in San Diego County; WHEREAS, the COVID-19-related social distancing measures imposed by federal, State, and municipal agencies (such as school and childcare closures, home isolation, quarantines, and the closure of many workplaces) have resulted and will continue to result in a substantial loss of income for many residents and businesses; WHEREAS, pursuant to Government Code Section 8634, during a local emergency, the City Council may promulgate orders and regulations necessary to provide for the protection of life and property; WHEREAS, pursuant to Government Code Sections 36934 and 36937, a city may adopt an urgency ordinance for the immediate preservation of the public peace, health, or safety; and
April 7, 2020, Item #104 of 7Ordinance No. *** Page 3 WHEREAS, as set forth in more detail in the declaration of the facts constituting the urgency in Section 3 below, the threatened displacement of businesses during the COVID-19 pandemic poses numerous threats to the public peace, health, or safety, including increased joblessness and reduced sales tax revenue for the City; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1: The above recitations are true and correct. SECTION 2. The City Council finds and determines that the adoption of this Urgency Ordinance is exempt from the California Environmental Quality Act ("CEQA") under State CEQA Guidelines Section 15060(c)(2), in that the adoption of this Ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment, and is further and independently exempt from the California Environmental Quality Act under State CEQA Guidelines Section 15061 (b)(3), in that it can be seen with certainty there is no possibility the adoption of this Ordinance will have a significant effect on the environment. SECTION 3. The adoption of this Urgency Ordinance is necessary to provide for the protection of life and property (as those terms are used in Government Code Section 8634) and necessary for the immediate preservation of the public peace, health, or safety (as those terms are used in Government Code Section 36937(b)) in at least the following respects: A. For all of the reasons set forth in the recitals, COVID-19 has become a National, State, and local emergency that will result in a substantial loss of income for many commercial renters, particular for those "non-essential" businesses that have been forced to close. B. Promotion of stability in commercial tenancies is important in the City of Poway, given the number of small businesses in the community, and the need to preserve the existing commercial core of businesses, as a foundation not only for the City to recover quickly from losses of sales tax revenues expected to occur as a result of immediate shutdowns and curtailment of business activities in compliance with local, State, and federal health orders, but also for the ability to meet the need to attract new commercial tenants, and to minimize the job losses that might occur form displacement, relocation, or bankruptcies businesses that might follow commercial evictions caused by socially responsible activities of commercial tenants in response to the COVID-19 crisis; which in turn would exacerbate the impacts of residential evictions and its contributing impact to homelessness. C. Evicting renters who are temporarily unable to pay rent due to a COVID-19-related loss of income or expense poses an immediate threat to life, property, and the public peace, health, or safety, in that it would displace some of Poway's most vulnerable residents and businesses, and likely increase homelessness and/or the risk of COVID-19 transmission. Therefore, it is imperative that the City implement temporary strategies to keep people and businesses housed. SECTION 4. Temporary Prohibition on Commercial Evictions Caused By Financial Impacts of COVID-19.
April 7, 2020, Item #105 of 7Ordinance No. *** Page4 a) Prohibition. During the term of this moratorium, a commercial tenant shall not be evicted for nonpayment of rent when the tenant can demonstrate that they have suffered one or more financial impacts related to COVID-19. b) Definitions. As used herein, "financial impacts" means a substantial loss of business income. A financial impact is "related to COVID-19" if it was caused by the COVID-19 pandemic, the President of the United States' Declaration of National Emergency, the Governor of the State of California's Declaration of State Emergency, the County of San Diego and/or City of Poway's Proclamation of Local Emergency, or compliance with public health orders related to COVID-19 from local, State, or federal authorities, including compliance with employer dictates or policies regarding shutdowns, limitations on gatherings or operations of businesses or groups, social distancing, self-isolation or self-quarantine, or like measures. c) Notice to Landlord. Tenants who wish to avail themselves of the protections afforded by this moratorium must first notify their landlords that they cannot pay rent due to a COVID-19-related financial impact. Within one week of providing this notice, tenants must provide documentation to their landlord(s) corroborating that they have suffered a COVID-19-related financial impact. A statement signed under penalty of perjury outlining the specific details of the COVID-19-related financial impact the tenant has suffered shall constitute sufficient corroborating documentation. d) Repayment of Unpaid Rent. This Urgency Ordinance imposes a moratorium on evictions -but is not, and should not be interpreted as-a moratorium on the payment of rent, or any forgiveness of same Tenants who avail themselves of the protections afforded by this moratorium shall remain responsible for ultimate payment of rent. Unless a landlord agrees to a longer repayment term, tenants shall have up to three (3) months after the City of Poway proclaims the termination of the Local Emergency to repay any unpaid rent. SECTION 5. A landlord's failure to comply with this Urgency Ordinance shall render any notice of termination of tenancy issued during the term of this moratorium void. For notices of termination issued during the term of this moratorium, this Urgency Ordinance may be asserted as an affirmative defense in an unlawful detainer action. A landlord's failure to comply with this Urgency Ordinance does not constitute a criminal offense. All penalties that are set forth in State Law and the Poway Municipal Code shall apply to violations of the provisions of this Urgency Ordinance. SECTION 6. This Ordinance is declared to be an Urgency Ordinance by authority conferred on the City Council of the City of Poway by Government Code Sections 8634, 36934, and 36937, and shall be in full force and effect immediately upon its adoption by a four-fifths vote of the City Council. SECTION 7. The moratorium created by this Urgency Ordinance shall be in effect until May 31, 2020, unless extended by action of the City Council, which may occur at a meeting complying with the interim orders regarding the Brown Act in the Governor's Executive Order No. N-25-20, as amended by Executive Order N-29-20. If a term of the moratorium is not extended,
April 7, 2020, Item #106 of 7Ordinance No.*** Page 5 then it shall automatically expire at 11 :59 p.m. on its last day without further action of the City Council. If, during the effective period of this ordinance, a moratorium on commercial evictions is enacted by either the federal government, the State of California, or the County of San Diego, and such moratorium is effective as to the City of Poway, this ordinance shall automatically expire upon the date such statute, ordinance or law becomes effective as to the City of Poway. If the City Council proclaims the termination of the Local Emergency based on COVID-19, the moratorium shall automatically cease to be in effect without further action of the City Council. SECTION 8. If any section, subsection, subdivision, paragraph, sentence, clause or phrase, or portion of this Urgency Ordinance is, for any reason, held to be unconstitutional or invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this Urgency Ordinance or any part thereof. The City Council hereby declares that it would have adopted this Urgency Ordinance and each section, subsection, subdivision, paragraph, sentence, clause or phrase of this Urgency Ordinance irrespective of the fact that one or more sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases be declared unconstitutional or invalid or ineffective. To this end, the provisions of this Urgency Ordinance are declared to be severable. SECTION 9. The Mayor shall sign this Urgency Ordinance and the City Clerk shall attest and certify to its passage and adoption. The City Clerk shall cause this Urgency Ordinance to be published or posted as required by law. In accordance with Government Code Section 8634, this ordinance and any amendments, extensions, and rescissions thereof shall be given "widespread publicity and notice," including but not limited to providing notice of, and a copy of, the ordinance on the City's website, issuance of a press release to local media, and offering notice of same via local public access television. EFFECTIVE DATE: This Ordinance shall take effect and be in force immediately. CERTIFICATION/PUBLICATION: The City Clerk shall certify the adoption of this Ordinance and cause it or a summary of it, to be published with the names of the City Council members voting for and against the same in the Poway News Chieftain, a newspaper of general circulation in the City of Poway within fifteen ( 15) days after its adoption and shall post a certified copy of this Ordinance in the Office of the City Clerk in accordance with Government Code § 36933. PASSED AND ADOPTED at a Regular Meeting of said City Council held the 7th day of April, 2020 by the following vote, to wit: AYES: NOES: ABSENT: DISQUALIFIED:
April 7, 2020, Item #107 of 7ATTEST: Faviola Medina, CMC, City Clerk Steve Vaus, Mayor Ordinance No. *** Page 6