By Danny Little
Noland, Hamerly, Etienne & Hoss
As published in the Salinas Valley Business Journal, June 2023
On April 4, 2023 the Salinas City Council unanimously adopted Ordinance 2663, which establishes a mandatory registry for most residential rental units in the City.
Who must register?
All owners, sublessors, and property managers must register any residential property they rent in the City of Salinas.
What properties must be registered?
All single family homes, apartments and ADUs (some ADUs are exempt; see below).
What properties are exempt?
Hotels, certain deed-restricted affordable housing, mobile homes, unpermitted converted spaces, and ADUs where the owner lives in the primary dwelling and the primary dwelling has never been held out as a rental.
When is registration required?
All landlords initially register any covered units with the City on or before Sunday, June 18, and then annually each year thereafter between July 1 and July 31. The City is required to provide a specific form for registration, but as of May 25, that form has not yet been made available to the public. The Ordinance specifically requires the City to create a website for submission of the information.
How much does registration cost?
The City established the following fee schedule for landlords (levied on a per property basis), the costs of which cannot be passed through to residents:
What information must be reported?
At a minimum, the following information will be required: (i) contact information for the landlord, (ii) the address or APN of the property, (iii) the number of bedrooms and bathrooms in the unit, (iv) the unit’s square footage, (v) the landlord’s business license number, and (vi) the name and contact information of the property manager. Landlord will be asked, but not required, to provide the following information: (w) monthly rent, (x) whether utilities are included, (y) whether the unit is occupied, and (z) whether rent is subsidized. If any of the registration information changes, the landlord has 45 days to update the registry.
What is the purpose of the Ordinance and how will information be used?
The Ordinance’s ostensible purpose is to “allow the City to collect, monitor and analyze the characteristics of the residential rental units and actual rents in Salinas” to support the City’s housing goals and protect public health, safety, and welfare for city residents. The Ordinance requires the City keep the rental information in a secured database that can be used to generate reports about the City-wide rental market. Individual landlord and unit information is to be kept confidential (and not subject to Public Records Act requests), but the Ordinance specifically permits the Community Development Director, in consultation with the City Attorney, to authorize the release of otherwise confidential information if legally required or if “public interest in disclosure would clearly outweigh the public interest in nondisclosure.” Of note, the Ordinance specifically states it is not intended to authorize the establishment of a residential unit inspection program without further approval from the City Council.
Why does the registry require a business license number?
It was previously unclear whether residential landlords with less than four units were required to get a business license for their rental properties in the City. While still less than definite, one of the notable provisions of the Ordinance is the requirement that all landlords must obtain a business license for any unit subject to registration under the Ordinance. By including this language, it appears the City was trying to clarify that all covered residential properties require a separate business license. Consequently, we anticipate that the City will prioritize comparing the rental registry to its business license records to ensure landlords are meeting the registration and fee obligations of both programs.
What’s next?
Much remains unknown about the registry. The Community Development Department is tasked with implementing the program at a time that it is experiencing turnover at its top level. The deadline for initial registration for landlords is roughly a month away yet there is very little information available to the public at this point. City officials have stated they view the registry as a starting point for the City’s further involvement in landlord-tenant relations. Consequently, some observers have speculated that the residential rental registry program is laying the foundation for City-wide rent stabilization or control program, similar to those in San Jose and San Francisco. Finally, Salinas’ initiative is already having ripple effects across the County. The City of Monterey is considering a similar proposal to establish a residential rental registration program, and it seems highly likely to follow suit with a comparable ordinance.
This article is intended to address topics of general interest and should not be construed as legal advice.
© 2023 Noland, Hamerly, Etienne & Hoss