6.20.060 Fair Return Petition for Rent Increase.
A. An owner of residential property may petition for a rent increase in excess of that provided in Larkspur Municipal Code Section 6.20.040 in order to obtain a fair and reasonable return on their property. Such a 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. 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 owner shall be responsible for accurately translating the return petition into the primary language(s) spoken by the applicable tenant(s). The tenant(s) will then have thirty (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 Larkspur Municipal Code Section 6.20.040 is necessary to provide the owner with a fair and reasonable rate of return on their property, including by providing an independent financial report and verified financial data demonstrating that without such an increase the owner will not realize a fair and reasonable rate of 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 whether 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 shall not be further processed until the owner has paid to the City the estimated cost of the complete analysis. The City shall provide the owner with an invoice of all costs incurred after the review of the fair return petition. Any unused portion of this advance payment for analysis shall be refunded to the owner. If additional funds are required, payment of such funds shall be required before the 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 San Francisco-Oakland-Hayward 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 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.
5. Changes in the rent paid by the owner for the lease of the residential real property.
6. Changes in the utility charges for the subject residential property 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 sixty (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 shall be translated into the primary language(s) spoken by the applicable tenant(s).
E. The City Council shall appoint a five (5) member rent review board consisting of two (2) owners of residential property in Larkspur who actively rent property to residential tenants, two (2) tenants of residential real property who reside in Larkspur, and one (1) resident who is neither an owner of residential rental property nor a tenant of residential property. Members of the rent review board shall serve four (4) year terms and may be reappointed by the City Council.
1. Within thirty (30) calendar days of the City Manager’s decision on a fair return petition, the applicant or the affected tenants may file an appeal of the decision with the rent review board. A hearing on an appeal shall be held within thirty (30) days of filing. The board may continue a hearing to obtain additional information relevant to the appeal. The board shall issue a written decision on an appeal within thirty (30) days of closing the hearing. The decision of the City Manager shall be the final decision in the event of no appeal to the Rent Review Board.
2. By resolution, the City Council shall enact rules and regulations governing such appeal hearings.
3. In deciding an appeal, the rent review board shall consider the factors listed in subsection (C) of this section, in addition to any others stated in the City Council resolution enacting rules and regulations for appeal hearings.
4. On appeal, the rent review board may affirm, reverse, or modify the decision of the City Manager. (Ord. 1067 § 2, 2023)