Good evening, everyone. Welcome to the Province City Chambers for Tuesday, March 17. Today, for our regular meeting, a special committee on health, opportunity, prosperity, and education, known as also of hope. Would the clerk please call the roll?
Chairman Picciato? Present. Vice chairwoman Peterson? Present. Councilor Inderwal?
Present. Councilor Royas? Present. Councilor Sanchez? Present.
Five present, no absent. You have a quorum.
Thank you very much. Would everybody rise, please? Do the pledge of allegiance. I pledge allegiance to the flag of The United States Of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Thank you.
Thank you. Madam clerk, would you please read item number one?
Item one, an ordinance amending chapter 13 housing of the code of ordinance of the city of Providence to add the next appropriate article, the Providence Rent Stabilization Act.
Thank you. Before us, we have the sponsor of the legislation, council president Rachel Miller.
Thank you, chairman Pichardo. I am right now flanked very officially on either side by our chief of staff June Rose and Erin Easter Gardner, our deputy chief of staff and policy director. But I'm just gonna go through the initial amendments in front of you. Two things. One, I wanna thank this committee in particular, of course, every committee of the council, but this committee in particular and the other councilors who have joined for every one of these meetings.
We have heard hours of public testimony. We'll continue to hear probably hours of public testimony. This is a a really important process and you are incredible stewards of it. So I just wanted to thank you. Two, I wanted to wish you a very happy Saint Patrick's Day.
So, the amendments in front of us are based on feedback from public hearings, from public comment, from some meetings we've had with a variety of developers and low income housing developer organizations and many many of these changes are just tightening up the language. So I'm not gonna go over those just making sure that we refer to the board in the same way on every page, making sure we refer we refer to an apartment in the same way on every section of the ordinance. I won't go over those, I'll just go over what's substantial. So number one, on page three which is in the definition section and this is something that came up repeatedly from both proponents and opponents of this legislation, just a more comprehensive definition of substantial rehabilitation. That includes, you know, we're talking about two major building systems getting redone.
We're talking about costs that exceed or equal to 15% of the fair market value of the property. And so, we're just being crystal clear about what we mean by substantial rehabilitation. We do not mean ongoing maintenance which is already required by law. On page four, section thirteen seventy one, again, heard this from a number of sources that there's times that weren't articulated in the ordinance already when an apartment might be empty for a period of time and not on the market. So, in that case, it is very likely that the property owner will want a process to go to the board and make adjustments in the base rent.
So, we just included a few more cases during which an apartment would be vacant for a period of time. Those include involuntarily from foreclosure, receivership, tax sale into the already existing definition. Under the section c of the same section 30 thirteen seventy one under the utility section, we heard concerns raised about specific circumstances where utilities are not metered by the unit and so just giving the board specific instructions to a process for which landlords might seek relief in those cases. On that same section thirteen seventy one d and appreciated feedback from many renters that January is not the right time. If we're gonna set an annual time of year, it ought to be July 1.
In January, there are many other expenses that happen and so being able to plan around an annual increase in July makes sense. Okay. Thirteen seventy two, page six, thirteen seventy two c which is major renovations and reconfigurations. Four, we just put substantial rehabilitation, that same definition into the body of the bill. And now we are at thirteen seventy four section j.
We heard a lot of feedback from again people speaking in for, people speaking against, people who are yes and ing in public testimony that we just wanted to be more specific about what the board is doing. And so you'll see a few amendments that address that. In this one in particular, we are saying that the board sets the date by which the rule regulation and ruling on a certain property takes place. So, that is not left up to chance. Section thirteen seventy seven.
That is the next one, right? Yes. Thirteen seventy seven a two. So, this is a hat tip to the Rhode Island ACLU for calling out that that particular definition misinformation spreading false or misleading information is protected speech under the constitution, under the free speech, and so we removed it. Page 12, section thirteen seventy seven e, this we move to a later section in the ordinance, will cover when we get there.
Section thirteen seventy eight. Okay. So, now we're into the section that covers exemptions, which is probably where we're talking about some of the most substantial changes that are before you. Sections I and J. So, we rewrote those to more clearly define and cover the various different programs that are subsidized affordable, subsidized low income.
They match state programs and federal programs. We did that in alignment with the community of nonprofit and low income housing developers in that operate in the city of Providence. Section k, also under exemptions, moved the and we did this in another section as well, but to be in alignment with housing programs statewide, moved it to four units. So in this case, from five to four units. In the next case, from three to up to four, so equalizing them all to four.
In this case, we're talking about this is the one plus one. So, rental unit located in a housing accommodation containing no more than four instead of five where the owner owner occupied. It's a further definition of that. In 1378. Okay.
So this was probably universally the least supported by everyone piece of the ordinance. This is where we were talking about exemptions for new construction. And so, there's two well, really three primary adjustments to exemptions for new construction. The very first changes the period from of exemption from fifteen years to ten years. We heard from sponsors of the ordinance in particular.
So from many of you and other colleagues on the council, we heard from housing developers, smaller sized housing developers, and low income developers. We heard from advocates overwhelmingly that fifteen years was a little too long, so down to ten years of exemption. However, if there is a twenty year exemption available if housing if labor standards are adhered to, those are the same labor standards that we outlined in the tax stabilization agreement. So on the on the first, we're talking about apprentice utilization at 10% of labor hours, talking about prevailing wage. And finally, in this section, we established that from passage, we will go back in time five years to exempt new construction over the last five years.
Section n of the same section moves this is where we go from this article shall not apply to rental units in a building containing one to four units as opposed to one to three. Again, just to adhere to state and federal policies around that talk about buildings of units of one to four. Okay. And now in section thirteen seventy nine enforcement. We created a home for enforcement of the ban that we passed last year on algorithmic algorithmic pricing.
This is critical. This is just to remind all of us, this is a ban on the use of tech that has been proven to artificially increase rent. So that in many many places that it was used, property owners were charging a rent much higher than they would have if they used their own market information, if they used the other data in front of them. Section thirteen eighty four. So these amendments speak to advice from other people who have served on boards of across the city of Providence.
It was something we knew we wanted to address as my co sponsors. I know we've all talked about addressing how to speak about compensation for members of the rent board. And so the ordinance the amendment sets compensation for the board chair at $12,000 per year and for each of the four other members at $10,000 per year. That is a $52,000 additional cost and is something that can be of course amended by ordinance and by subject to the salary review commission. And thirteen eighty five in the administration section, by request of mayor Smiley's administration, we removed a sentence that they felt could be construed to be overly permissive.
So thirteen eighty five e, we've struck funds shall be sufficient to ensure full implementation of the board's duties. And then finally, this was really at the advice of good government proponents everywhere. So we heard it from a lot of different places that we wanted to we had already kind of nodded to public rule making procedures as designated by the city and the state, but we spelled those out. So there is a publicly vetted that includes notice, that includes what has to be included in that notice. Right?
So every rule that the rent board might make spelled out, made made clear before the public, open to a public hearing prior to finalization by the board. And then finally, in 1392, again, just being explicit on the types of rules expected to be set by the board and the executive director of the rent board. And that covers the amendments in front of you. Again, anything that I didn't cover is just to create some consistency in how we're naming things. So, I just wanna again thank you for the way and the process by which you are vetting this.
I believe in these amendments, I believe in this ordinance quite quite clearly. And then I think there's two two pieces that I just wanna share. We have heard from so many people. Some of them sharing like hope for their families, hope for their neighborhoods, hope for themselves. Some of them sharing strong concerns that we are addressing and trying to address.
Some of them sharing just just misinformation. And I think that is challenging and we will do our best as we always do to make sure that people have the information in front of us. And and I just like, we There's two things. One, I think as humans, we not just elected officials, but as human people, we have an opportunity to work with whatever power is in front of us. And this is the power in front of us right now.
To change the rules for people who live in poverty, for people who live in fear, for people who live in instability. This is our one of our moments to do that. We have done that in the past. We have a moment, the second part of that, right, is we have a moment to do that without undoing the good work that this council has already done this term to build more housing, to develop more housing, to create more access to housing. And so again, thank you.
These are the amendments and I'm happy to discuss them further.
Thank you, president Miller. Also, with you and for our benefit, we have obviously our chief of staff, June Rose, and also Aaron as deputy chief of staff and senior policy. And also we have Miguel on the left hand side. So if you have any points of clarification from this committee, please ask now. If not, we'll move on.
In addition to having the staff at hand, we also like to recognize, councilwoman, Mary Kay Harris. Thank you for being here. And also councilwoman Jill Davidson. And also councilman John Gunkhouse. We also have city solicitor, Sofia Weaver, for joining us.
And also our staff and our team from the clerk's office, Laura Gutierrez and and Tyler Crowder. So seeing no further question, I would like to question. Councilwoman Peterson.
Thank you. Sorry, I just I felt that it was important to highlight and I was hoping you could elaborate a little bit more. You have a definition here of substantial rehabilitation And I'd like to ask if you could just go into a little bit more depth about specifically what substantial rehabilitation means because I know that there are people here that are eager to understand.
Thank you. Yeah. Happily, and I know this came up again from everyone in some of the public hearings. So, it defines in a few ways, comprehensive renovation that extends the life of the apartment of the dwelling unit that offers replacement or substantial upgrade of two kind of two or more major systems like plumbing, electrical, HVAC, absolutely refers to structural elements, roofing, support, foundation, beams, covers, direct labor, material cost, and soft fees like architectural and service fees. And we're talking about renovations that equal or exceed 15% of the fair market value of the property following the completion of the rehab.
Yeah. So that that definition is new, but also the ways in which we now will treat those properties under the ordinance is new. So as the council president explained, we're talking about rehabilitation that functionally brings bring this brings this up to being essentially a new apartment. And so it will be it will have the opportunity. I'll say it first kind of in a a wonkier term, and then I'll explain what it means.
So, the way that substantial rehabilitation will be treated once they've petitioned the rent board is as receiving a one time vacancy decontrol. And so, what that means in, you know, the the ways we actually speak is that rather than only being able to increase the rent by 4%, If the rent board determines this was substantial was or will be substantial rehabilitation, they have the one time opportunity to set a new base rent. So, it's not governed by the 4%, it's a new base rent with new tenants. And so, that's how that process will be handled.
Sorry. So, just because I need it to be broken down for me in layman's terms, Can I give you an example and you tell me if this is off the mark or right on the money? Prior tenant moves out. There's a substantial amount of structural rehabilitation that needs to be done just like what we've discussed here but that includes like upgrades to cabinets, piping, anything of the air conditioning, painting, window, whatever. I'm not a landlord, so I don't know.
But all of that would allow you not based necessarily on an amount, but would allow you to reestablish a different market rate rent on a one time basis?
That's correct. Yes. Not cabinets. Not cabinets.
But the other ones you listed.
Yes. But all the other stuff like Yes. I guess They
were structure load bearing cabinets as opposed to yes.
I guess I'm trying to understand because I mean, we all do renovations in our own homes. Right? So I know how much I've spent for the things in my house and those are substantial Yes. At least in my eyes and my paycheck. So I'm I'm trying to understand what exactly feeds that because it's, you know, obviously, they're different, but it's it's important to know, like, what that would be.
Yes. So it's spelled out in the in this amendment Two two of the ones you listed. So you said piping, so plumbing, and you said air conditioning, HVAC. Those are two that are included. So it's two major building systems.
And then in the amendments, it says, may include, and then lists plumbing, electrical, HVAC, structural elements, roofing, or load bearing components. And it can this can also be defined by future board regulations. So in those cases, it's exactly how you described it, councilwoman, where it's they would get to set a new base rent. New tenants and a new rent.
