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Item 25-A Staff Report Adopt Ordinance of the Town of Los Gatos Amending the Town Code Division 7, Sections 29.10.305 Through 29.10.320, Section 29.10.320, and Section 29.20.185(8)A Regarding Second Dwelling UnitMEETING DATE: 8/4/03 ITEM NO. 25-A COUNCIL AGENDA REPORT ADDENDUM DATE: August 1, 2003 TO: MAYOR AND TOWN COUNCIL FROM: ORRY P. KORB, TOWN ATTORNEY0" SUBJECT: ADOPT ORDINANCE OF THE TOWN OF LOS GATOS AMENDING THE TOWN CODE DIVISION 7, SECTIONS 29.10.305 THROUGH 29.10.320, SECTION 29.10.320, AND SECTION 29.20.185(8)A REGARDING SECOND DWELLING UNIT After the Town Council Report was prepared, the attached letters opposing the affordable housing requirement were received. Attachment: Multiple letters dated July 30, 2003 and July 31, 2003 PREPARED BY: ORRY P. KORB, TOWN ATTORNEY OPK:LMB/wp IN:\ATY\2ND-Dwell.Amend. TCR.wpd] Reviewed by: Town Manager per_) Assistant Town Manager Clerk Finance Community Development Rev: 8/1163 1:37 pm Reformatted: 7/19/99 File# 301-05 July 30, 2003 Mayor Sandy Decker and the Los Gatos Town Council 110 East Main Street Los Gatos, CA 95031 RECEIVED AUG 0 1 2003 4A YOk & IOW,N (MUNCH, VIA FACSIMILE: 408-354-8431 RE: Second Reading on Second Unit Rent Control Ordinance Dear Mayor Decker and Councilmembers: As a homeowner in Los Gatos, I am writing to ask that the Town Council remove Section 29.10.320, which establishes deed restrictions and rent control on new secondary units, be stricken from the proposed secondary unit ordinance. I believe this provision is counterproductive to the goal of providing more secondary units. The rent control provision unfairly burdens individual homeowners. If the rent control provision is adopted, 100 percent of new secondary units would be required to rent at BMP rates. Interestingly then, while other developments can offset the cost of providing BMP housing by charging a higher market rate, the entire burden of providing BMP secondary units would be assumed by an individual homeowner with no mechanism to offset the cost. Putting restrictions and burdensome reporting requirements on owners of such units is a disincentive to build or seek amnesty for second units. Requiring owners to rent to tenants at only a below market rate is a disincentive to build and rent second units. This goes against the stated purpose of the proposed ordinance, namely the production of secondary units. Further, the Costa -Hawkins Rental Housing Act preempts the Town from adopting the rent control provision of the ordinance. The Town may be subjecting itself to a long, costly legal battle to defend a questionable ordinance. With tight budgets and tough economic times, the Town Council should not waste the Town's time and money on an ordinance that may not be legal to begin with. For these reasons, I respectfully request that the rent control provisions of the proposed secondary unit ordinance be removed. Sincerely oe E C G-- TO'u C'Ptva•) f-c0 Pt 2 (address) T •d SZ9Z-bS6-B0t, uo4Tep aor eQj.:S0 60 8T udd AUG. 1.2003 1:38PM WINDERMERE LOS GATOS NO.102 P.1/1 -- July 30, 2003 Mayor Sandy Decker and the Los Gatos Town Council 110 East Main Street Los Gatos, CA 95031 REC 'I__A 9 YI/ ED AUG 01 2003 ,tA1'(ik& roWN COUNCIL RE: Second Reading on Second Unit Rent Control Ordinance VIA FACSIMILE: 408-354-8431 Dear Mayor Decker and Councilmembers. As a REALTOR® in Los Gatos, I am writing to ask that the Town Council remove Section 29.10.320, which establishes deed restrictions and rent control on new secondary units, be stricken from the proposed secondary unit ordinance. I believe this provision is counterproductive to the goal of providing more secondary units. The rent control provision unfairly burdens individual homeowners, If the rent control provision is adopted, 100 percent of new secondary units would be required to rent at BMP rates. Interestingly then, while other developments can offset the cost of'providing BMP housing by charging a higher market rate, the entire burden of providing BMP secondary units would be assumed by an individual homeowner with no mechanism to offset the cost. Putting restrictions and burdensome reporting requirements on owners of such units is a disincentive to build or seek amnesty for second units. Requiring owners to rent to tenants at only a below market rate is a disincentive to build and rent second units. This goes against the stated purpose of the proposed ordinance, namely the production of secondary units, Further, the Costa -Hawkins Rental Housing Act preempts the Town from adopting the rent control provision of the ordinance. The Town may be subjecting itself to a long, costly legal battle to defend a questionable ordinance, With tight budgets and tough Town Council should not waste the Town's time and money on an ordinance that may not be legal to begin with, For these reasons, I respectfully request that the rent control provisions of the proposed secondary unit ordinance be removed. Sincerely Ala �71Ee s-vp 155 N. Santa Cruz Ave. Ste.A Los Gatos, Ca. 95030 July 30, 2003 Mayor Sandy Decker and the Los Gatos Town Council 110 East Main Street Los Gatos, CA 95031 VIA FACSIMILE: 408-354-8431 RE: Second Reading on Second Unit Rent Control Ordinance Dear Mayor Decker and Councilmembers: RECEIVED AUG 0 1 2003 MAYOR & TOWN COUNCIL As a homeowner in Los Gatos, I am writing to ask that the Town Council remove Section 29.10.320, which establishes deed restrictions and rent control on new secondary units, be stricken from the proposed secondary unit ordinance. I believe this provision is counterproductive to the goal of providing more secondary units. The rent control provision unfairly burdens individual homeowners. If the rent control provision is adopted, 100 percent of new secondary units would be required to rent at BMP rates. Interestingly then, while other developments can offset the cost of providing BMP housing by charging a higher market rate, the entire burden of providing BMP secondary units would be assumed by an individual homeowner with no mechanism to offset the cost. Putting restrictions and burdensome reporting requirements on owners of such units is a disincentive to build or seek amnesty for second units. Requiring owners to rent to tenants at only a below market rate is a disincentive to build and rent second units. This goes against the stated purpose of the proposed ordinance, namely the production of secondary units. Further, the Costa -Hawkins Rental Housing Act preempts the Town from adopting the rent control provision of the ordinance. The Town may be subjecting itself to a long, costly legal battle to defend a questionabie ordinance. With tight budgets and tough economic times, the Town Council should not waste the Town's time and money on an ordinance that may not be legal to begin with. For these reasons, I respectfully request that the rent control provisions of the proposed secondary unit ordinance be removed. Sincerely q�l- CLreD/2- (address) July 30, 2003 Mayor Sandy Decker and the Los Gatos Town Council 110 East Main Street Los Gatos, CA 95031 RE: Second Reading on Second Unit Rent Control Ordinance VIA FACSIMILE: 408-354-8431 Dear Mayor Decker and Councilmembers: RECEIVED AUG 0 1 2003 MAYOR & TOWN COUNCIL As a REALTOR® in Los Gatos, I am writing to ask that the Town Council remove Section 29.10.320, which establishes deed restrictions and rent control on new secondary units, be stricken from the proposed secondary unit ordinance. I believe this provision is counterproductive to the goal of providing more secondary units. The rent control provision unfairly burdens individual homeowners. If the rent control provision is adopted, 100 percent of new secondary units would be required to rent at BMP rates. Interestingly then, while other developments can offset the cost of providing BMP housing by charging a higher market rate, the entire burden of providing BMP secondary units would be assumed by an individual homeowner with no mechanism to offset the cost. Putting restrictions and burdensome reporting requirements on owners of such units is a disincentive to build or seek amnesty for second units. Requiring owners to rent to tenants at only a below market rate is a disincentive to build and rent second units. This goes against the stated purpose of the proposed ordinance, namely the production of secondary units. Further, the Costa -Hawkins Rental Housing Act preempts the Town from adopting the rent control provision of the ordinance. The Town may be subjecting itself to a long, costly legal battle to defend a questionable ordinance. With tight budgets and tough economic times, the Town Council should not waste the Town's time and money on an ordinance that may not be legal to begin with. For these reasons, I respectfully request that the rent control provisions of the proposed secondary unit ordinance be removed. Sincerely % RJR ,✓.0 EZ (address) .. .. Lw. 1.,WW..41LiWJM YwLLLI ',42R +b7uaattfib T-913 P 002/00Z F-b35 July 30. 2003 Mayor Sandy Decker and the Los Gatos Town Council 110 East Main Street Los Gatos. CA 95031 TOWN OF LOS'GATOS OFFICE OF TOWN CLLFiK VIA FACSIMILE: 408-354-8431 RE: Second heading on Second Unit Rent Control Ordinance Dear Mayor Decker and Councilmembers: As a homeowner in Los Gatos, I am writing to ask that the Town Council remove Section 29.10.320, which establishes deed restrictions and rent control on new secondary units, be stricken from the proposed secondary unit ordinance. T believe this provision is counterproductive to the goal of providing more secondary units. The rent control provision unfairly burdens individual homeowners. If the tent control provision is adopted, 100 percent of new secondary units would be required to rent at SMP rates. Interestingly then, while other developments can offset the cost of providing BMP housing by charging a higher market rate, the entire burden of providing BMP secondary units would be assumed by an individual homeowner with no mechanism to offset the cost. Puffing restrictions and burdensome reporting requirements on owners of such units is a disincentive to build or seek amnesty for second units. Requiring owners to rent to tenants at only a below market rate is a disincentive to build and rent second units. This goes against the stated purpose of the proposed ordinance, namely the production of secondary units. Further. the Costa -Hawkins Rental Housing Act preempts the Town from adopting the rent control provision of the ordinance- The Town may be subjecting itself to a long, costly legal battle to defend a questionable ordinance. With tight budgets and tough economic times, the Town Council should not waste the Town's time and money on an ordinance that may not be legal to begin with. For these reasons, I respectfully request that the rent control provisions of the proposed secondary unit ordinance be removed. 1j!w c e__ T_'�4G-P� (address) 088-d 10/l0 d 869-1 -MOdd 9V:80 EO-l0-9fiV ur—.11—ua us:asYM UROM-ALAIN PINEL +4083581199 T-258 P.01/01 F-608 July 30, 2003 Mayor Sandy Decker and the Los Gatos Town Council 110 East Main Street Los Gatos, CA 95031 VIA FACSIMILE: 408-354-8431 RE: Second Reading on Second Unit Rent Control Ordinance Dear Mayor Decker and Councilmembers: As a homeowner in Los Gatos, I am writing to ask that the Town Council remove Section 29.10.320, which establishes deed restrictions and rent control on new secondary units, be stricken from the proposed secondary unit ordinance. 1 believe this provision is counterproductive to the goal of providing more secondary units. The rent control provision unfairly burdens individual homeowners. lithe rent control provision is adopted, 100 percent of new secondary units would be required to rent at BMP rates. Interestingly then, while other developments can offset the cost of providing BMP housing by charging a higher market rate, the entire burden of providing BMP secondary units would be assumed by an individual homeowner with no mechanism to offset the cost Putting restrictions and burdensome reporting requirements on owners of such units is a disincentive to build or seek amnesty for second units. Requiring owners to rent to tenants at only a below market rate is a disincentive to build and rent second units. This goes against the stated purpose of the proposed ordinance, namely the production of secondary units. Further, the Costa -Hawkins Rental Housing Act preempts the Town from adopting the rent control provision of the ordinance. The Town may be subjecting itself to a long, costly legal battle to defend a questionable ordinance. With tight budgets and tough economic times, the Town Council should not waste the Town's time and money on an ordinance that may not be legal to begin with. For these reasons, I respectfully request that the rent control provisions of the proposed secondary unit ordinance be removed. ,t) 1/;(6&, Oryee SANTA CLARA COUNTY 00111111.1.1111114111411 Association of REA TORS ESTABIJSHED 189E Meeting the business, professional and legislative needs of the real estate industry and protecting private property rights. July 30, 2003 Mayor Sandy Decker And Los Gatos Town Council Town of Los Gatos 110 Fast Main Street Los Gatos, CA 95031 RECEIVED AUG — 'a 2003 LOS GATOS TOWN ATTORNEY RE: Second Reading on Second Unit Rent Control Ordinance RECEIVEU , 1. 2003 TOWN OF LOS GATOS PLANNING DEPARTMENT Dear Mayor Decker and Councilmembers: On behalf of the Santa Clara County Association of REALTORS®, I would like to commend the Town of Los Gatos for their efforts to liberalize the requirements for existing and planned secondary units in order to comply with State Law AB 1866 and increase the affordable housing stock within the community. However, Section 29.10.320, which establishes deed restrictions and rent control, is in clear violation of the state -mandated Costa -Hawkins Rent Control Act. As we are sure your Town Counsel is aware, a case involving a similar ordinance in the City of Santa Cruz is on appeal with the State Supreme Court and very likely to be overturned. [Travis et al. v. City of Santa Cruz et al. 100 Cal. App. 4`" 609 (2002). ] The merits of this case have led the California Association of REALTORS® and the California Apartment Association to contribute amicus briefs to the appeal. It would seem unwise to reject this argument until a final decision has been rendered. Given that the proposed ordinance is in violation of an existing state law, it may be the more prudent course to suspend action and remand the matter back to Town Counsel for redrafting to ensure Los Gatos does not find itself in what any cautious person would recognize is clearly an actionable situation. If the proposed amendments are enacted, 100 percent of secondary units would be required to rented at BMP rates. Interestingly then, while other developments can offset the cost of providing the BMP housing by charging a higher market rate, the entire burden of providing BMP secondary units would be assumed by an individual homeowner with no mechanism to offset the cost. Surely this was not your intent. In addition, the fact that this ordinance will impact ALL owners of secondary units - not just new ones - is inequitable as existing owners of secondary units who rent their units will be forced to lower their rent sot be able to complete with the new "rent controlled" units. And some of you may intone that's exactly what you are trying to do... but what of those owners who are dependent on the income from a secondary unit to make their mortgage or pav their bills. This ill-conceived proposal would be devastating. Perhaps of greater concern to the Council should be the cost of pouring additional funds into an existing program during tough budget times to administer these new requirements as it is unclear how long the Town would deed restrict the secondary units and how you would enforce the rent control requirements. Secondary Unit Rent Contra. Ordinance — Page 2 In addition, SCCAOR feels that putting restrictions and burdensome reporting requirements on homeowners is a disincentive to create secondary units. As you know, the underlying principal of recently enacted state law is to create additional housing through the use of secondary units and not impose programs or requirements that would otherwise render secondary units impractical. This proposal is also a disincentive for owners of secondary units to seek amnesty for such structures that may be been built or improved without benefit of a permit. Lastly, the Planning Commission's recommendation to limit the rent levels but allow the owner to rent to whomever they choose is contradictory and should be stricken completely. Los Gatos has always been proactive in its effort to promote affordable housing, and now in addressing secondary units, but to do so in violation of state law is counterproductive and could lead to litigation... as we are sure your Town Counsel has advised you. SCCAOR looks forward to joining with the Silicon Valley Association of REALTORS® and the Tri-County Apartment Association in working with the Town Council and staff to create a positive, legally binding ordinance to achieve this laudable goal. Respectfully, Paul Stewart Executive Director/Government Affairs Director cc: Los Gatos Town Council Bud Lortz, Director of Community Development ►.-'" Silicon Valley Association of REALTORS® Tri-County Apartment Association AUG-1-2003 11:33A FROM: 4083959479 TO:3548431 P:1/1 July 30, 2003 Mayor Sandy Decker and the Los Gatos Town Council 110 East Main Street Los Gatos, CA 95031 VIA FACSIMILE: 408-354-8431 RECEF_ . L AUG 01 2003 MAYOR & TOIA/N COUNCU_. RE: Second Reading on Second Unit Rent Control Ordinance Dear Mayor Decker and Councilmembers: As a homeowner in Los Gatos, I am writing to ask that the Town Council remove Section 29.10.320, which establishes deed restrictions and rent control on new secondary units, be stricken from the proposed secondary unit ordinance. I believe this provision is counterproductive to the goal of providing more secondary units. The rent control provision unfairly burdens individual homeowners. lithe rent control provision is adopted, 100 percent of new secondary units would be required to rent at BMP rates. Interestingly then, while other developments can offset the cost of providing BMP housing by charging a higher market rate, the entire burden of providing BMP secondary units would be assumed by an individual homeowner with no mechanism to offset the cost. Putting restrictions and burdensome reporting requirements on owners of such units is a disincentive to build or seek amnesty for second units. Requiring owners to rent to tenants at only a below market rate is a disincentive to build and rent second units. This goes against the stated purpose of the proposed ordinance, namely the production of secondary units. Further, the Costa -Hawkins Rental Housing Act preempts the Town from adopting the rent control provision of the ordinance. The Town may be subjecting itself to a long, costly legal battle to defend a questionable ordinance. With tight budgets and tough economic times, the Town Council should not waste the Town's time and money on an ordinance that may not be legal to begin with. For these reasons, I respectfully request that the rent control provisions of the proposed secondary unit ordinance be removed. Sincerely Ray Darrow Homeowner 87 Roberts RD. Los Gatos, CA 95030 AUG-1-2003 11:31A FROM: 4083959479 TO:3548431 P:1'1 July 30, 2003 Mayor Sandy Decker and the Los Gatos Town Council AUG 01 2003 110 East Main Street Los Gatos, CA 95031 MAYOR & TOWN COUNCIL RE: Second Reading on Second Unit Rent Control Ordinance VIA FACSIMILE: 408-354-8431 Dear Mayor Decker and Councilmembers: As a REALTORt in Los Gatos, I am writing to ask that the Town Council remove Section 29.10.320, which establishes deed restrictions and rent control on new secondary units, be stricken from the proposed secondary unit ordinance. 1 believe this provision is counterproductive to the goal of providing more secondary units. The rent control provision unfairly burdens individual homeowners. If the rent control provision is adopted, 100 percent of new secondary units wound be required to rent at 13MP rates. Interestingly then, while other developments can offset the cost of providing BMP housing by charging a higher market rate, the entire burden of providing BMP secondary units would be assumed by an individual homeowner with no mechanism to offset the cost. Putting restrictions and burdensome reporting requirements on owners of such units is a disincentive to build or seek amnesty for second units_ Requiring owners to rent to tenants at only a below market rate is a disincentive to build and rent second units. This goes against the stated purpose of the proposed ordinance, namely the production of secondary units. Further, the Costa -Hawkins Rental Housing Act preempts the Town from adopting the rent control provision of the ordinance. The Town may be subjecting itself to a long, costly legal battle to defend a questionable ordinance. With tight budgets and tough economic times, the Town Council should not waste the Town's time and money on an ordinance that may not be legal to begin with. For these reasons, I respectfully request that the rent control provisions of the proposed secondary unit ordinance be removed. Sincerely, Ray Darrow Realtor° Windermere SVP 150 North Santa Cruz Av Suite A * Los Gatos, CA 95030 08/01/2003 13:52 COLDWELL-LOS GATOS 4 3548431 NO.553 0001 July 30, 2003 Mayor Sandy Decker and the Los Gatos Town Council 110 East Main Street Los Gatos, CA 95031 RE: Second Reading on Second Unit Rent Control Ordinance VIA FACSIMILE: 408-354-8431 Dear Mayor Decker and Councilmembers: RECEIVED AUG 0 1 2003 MAYOR & TOWN COUNCIL As a REALTOR® in Los Gatos, I am writing to ask that the Town Council remove Section 29.10.320, which establishes deed restrictions and rent control on new secondary units, be stricken from the proposed secondary unit ordinance. I believe this provision is counterproductive to the goal of providing more secondary units. The rent control provision unfairly burdens individual homeowners. If the rent control provision is adopted, 100 percent of new secondary units would be required to rent at BMP rates. Interestingly then, while other developments can offset the cost of providing BMP housing by charging a higher market rate, the entire burden of providing BMP secondary units would be assumed by an individual homeowner with no mechanism to offset the cost. Putting restrictions and burdensome reporting requirements on owners of such units is a disincentive to build or seek amnesty for second units. Requiring owners to rent to tenants at only a below market rate is a disincentive to build and rent second units. This goes against the stated purpose of the proposed ordinance, namely the production of secondary units. Further, the Costa -Hawkins Rental Housing Act preempts the Town from adopting the rent control provision of the ordinance. The Town may be subjecting itself to a long, costly legal battle to defend a questionable ordinance. With tight budgets and tough economic times, the Town Council should not waste the Town's time and money on an ordinance that may not be legal to begin with. For these reasons. I respectfully request that the rent control provisions of the proposed secondary unit ordinance be removed. Sincerely SsO12y,,q 92a?D Rug 01 03 02:04p Roseann 1 650 962 0976 p.1 RECEIVED AUG 0 1 2003 MAYOR & TOWN COUNCIL July 30, 2003 Mayor Sandy Decker and the Los Gatos Town Council 110 East Main Street Los Gatos, CA 95031 VIA FACSIMILE: 408-354-8431 RE: Second Reading on Second Unit Rent Control Ordinance Dear Mayor Decker and Councilmembers: As a homeowner in Los Gatos, I am writing to ask that the Town Council remove Section 29.10.320, which establishes dccd restrictions and rent control on new secondary units, be stricken from the proposed secondary unit ordinance. I believe this provision is counterproductive to the goal of providing more secondary units. The rent control provision unfairly burdens individual homeowners. If the rent control provision is adopted, 100 percent of new secondary units would be required to rent at BMP rates. Interestingly then, while other developments can offset the cost of providing BMP housing by charging a higher market rate, the entire burden of providing BMP secondary units would be assumed by an individual homeowner with no mechanism to offset the cost. Putting restrictions and burdensome reporting requirements on owners of such units is a disincentive to build or seek amnesty for second units. Requiring owners to rent to tenants at only a below market rate is a disincentive to build and rent second units. This goes against the stated purpose of the proposed ordinance, namely the production of secondary units. Further, the Costa -Hawkins Rental Housing Act preempts the Town from adopting the rent control provision of the ordinance. The Town may be subjecting itself to a long, costly legal battle to defend a questionable ordinance. With tight budgets and tough economic times, the Town Council should not waste the Town's time and money on an ordinance that may not be legal to begin with. For these reasons, I respectfully request that the rent control provisions of the proposed secondary unit ordinance be removed. Sincerely, Roseann Darrow — Homeowner 87 Roberts RD — Los Gatos, CA 95030 AUG. 1.2002 1:22PM 6506250129 NO.794`P.1 July 30, 2003 Mayor Sandy Decker and the Los Gatos Town Council 110 East Main Street Los Gatos, CA 95031 RECF'\T '- AUG 0 1 2003 MAYOR &TOVviN COUNCIL VIA FACSIMILE: 408-354-8431 RE: Second Reading on Second Unit Rent Control Ordinance Dear Mayor Decker and Councilmembers: As a homeowner in Los Gatos, I am writing to ask that the Town Council remove Section 29.10.320, which establishes deed restrictions and rent control on new secondary units, be stricken from the proposed secondary unit ordinance. I believe this provision is counterproductive to the goal of providing more secondary units. The rent control provision unfairly burdens individual homeowners. If the rent control provision is adopted, 100 percent of new secondary units would be required to rent at BMP rates. Interestingly then, while other developments can offset the cost of providing BMP housing by charging a higher market rate, the entire burden of providing BMP secondary units would be assumed by an individual homeowner with no mechanism to offset the cost. Putting restrictions and burdensome reporting requirements on owners of such units is a disincentive to build or seek amnesty for second units. Requiring owners to rent to tenants at only a below market rate is a disincentive to build and rent second units. This goes against the stated purpose of the proposed ordinance, namely the production of secondary units, Further, the Costa -Hawkins Rental Housing Act preempts the Town from adopting the rent control provision of the ordinance. The Town may be subjecting itself to a long, costly legal battle to defend a questionable ordinance. 'With tight budgets and tough economic times, the Town Council should not waste the Town's time and money on an ordinance that may not be legal to begin with. For these reasons, I respectfully request that the rent control provisions of the proposed secondary unit ordinance be removed. Sincerely d04* eilfiaL) (addre s) , *6- SiliconValley Association of REALTORS ® July 31, 2003 Hon. Sandy Decker Mayor, Town of Los Gatos 110 East Main Street Los Gatos, CA 95031 Re: Second Reading of Second Unit Rent Control Ordinance Dear Mayor Decker: RECEIVED AUG 0 1 2003 MAYOR & TOWN COUNCIL. On behalf of the Silicon Valley Association of REALTORS® (SILVAR), I would like to again commend the Town of Los Gatos for their efforts to liberalize the requirements for existing and planned secondary units in order to comply with State Law AB 1866 and increase the affordable housing stock within the community. However, we believe Section 29.10.320, which establishes deed restrictions and rent control, to be counterproductive to the goal of providing more secondary units and ask that it be stricken from the proposed ordinance. In fact, these restrictions may serve as a disincentive to the creation of more secondary units. We are concerned that the establishment of rent control on secondary units may be illegal under the State Costa -Hawkins Rental Housing Act, which bans rent control on single- family residential units (R1) and new construction. As you may recall, a case involving a similar ordinance in the City of Santa Cruz is on appeal with the State Supreme Court (Travis et al. v. City of Santa Cruz et al. 100 Cal. App. 4th 609 (2002). The merits of this case have led the California Association of REALTORS® and the California Apartment Association to contribute amicus briefs to the appeal. It would seem unwise to reject this argument until a final decision has been rendered. If the proposed rent control within the secondary unit ordinance is adopted, 100 percent of secondary units would be required to rent at BMP rates. Further, while other developments can offset the cost of providing BMP housing by charging a higher market rate, the entire burden of providing BMP secondary units would be assumed by an individual homeowner with no mechanism to offset the cost. This is an unfair burden to 345 S. San Antonio Road Los Altos, CA 94022 Telephone: 650.949.9115 Facsimile: 650.948.6716 www.siliconvalley-realtors.org place on homeowners in Los Gatos. Further, this impacts all owners of secondary units, not just those with new secondary units. Homeowners who depend on the rental income from their secondary units will be forced to lower their rental rates to compete with the new units subject to rent control. This could have a significant negative impact on those homeowners who depend on this extra income to make ends meet. Finally, it is unclear how long the Town would deed restrict the secondary units and how the Town would enforce the rent control requirements. Administration costs to the Town and the burdensome reporting requirements for homeowners are unwise at this time of tight budgets and economic uncertainty. Again, SILVAR respectfully requests that Section 29.10.320 of the secondary unit ordinance be removed. We applaud the Town for its effort to promote affordable secondary units and look forward to working with the Town Council, staff, and other key community stakeholders to find alternatives to rent control to achieve this laudable goal. I look forward to a continued positive dialogue on this issue. Sincerely, dot Natalie Cardenas Government Affairs Director cc: Los Gatos Town Council Bud Lortz, Director of Community Development Tri-County Apartment Association Santa Clara County Association of REALTORS®