September 27, 2012 Hon. Elizabeth B.

Tisdahl and Members of the City Council City of Evanston 2100 Ridge Avenue Evanston, Illinois 60201 RE: Rental Unit Licensing Ordinance Dear Mayor Tisdahl and Members of the City Council: Evanston is a community we care about, as you do too. The North Shore Barrington Association of REALTORS (NSBAR) has long, deep ties to the community. While our office locations and names have changed over the years, our Association was, in 1919, born and headquartered right in Evanston. Nearly 600 REALTORS live and/or office in Evanston, including the Chairman of our Board (among the undersigned) who calls Evanston home. Like you, we know that a healthy, vibrant real estate environment, including rental property, is a fundamental contributor to Evanstons economic and social vitality. Rental property owners have a nearendless choice as to where to invest. As you know, decreased demand for property decreases property values, and an ill-conceived rental license ordinance, on-top of the other unique rental regulations specific to Evanston, will certainly dissuade some from investing in Evanston. It is for these reasons we weigh-in on the proposed rental unit licensing ordinance. While we maintain a number of concerns with the proposal, chief among them are: 1. The intent to levy fines against property owner who do not immediately eject a tenant from a premise upon a license being revoked; 2. The complete lack of due process for tenants; 3. The intent to circumvent constitutional safeguards against unreasonable government searches; and 4. The ability for city staff to deny licenses without any due process. Addressing point one; there appears to be a large disconnect between the proposal and existing law. Illinois Forcible Eviction and Detainer Act, the state law governing evictions, provides specific causes for evictions; loss of a municipal license is not one of them. The Citys own Residential Landlord Tenant Ordinance also addresses landlord-tenant relations again, immediate ejection is not authorized. While staffs contention that the draft ordinance itself does not technically require property owners to immediately eject tenants and their belongings onto the street, staff continuously fails to mention that it is their intention to fine landlords $14,500 the first week and $17,000 each week thereafter for not immediately ejecting tenants from their home. This is unacceptable. The inference is that the end justifies the means, and that any conflict in state or local law is the property owners problem. As REALTORS, more than most, we recognize the desire for safe, attractive

communities, but adopting laws that knowingly and profoundly conflict with other laws makes for poor public policy and will not serve the community well. We have provided staff with very robust, viable alternatives, including registration (rather than licensing) and rental license models from Mt. Prospect, Skokie, and Ft. Worth (TX) that do not impose any penalties upon property owners simply because the existing tenant or tenants remain in the unit (however, they cannot re-rent the unit until the license is restored). We would be happy to continue working with the City in crafting an ordinance that does not conflict with other real estate laws. Point two is also of grave concern. Staff has stated it is not their intent to provide due process to tenants. However, the fourteenth amendment protection of property extends to any significant property interest (See Fuentes v. Shevin, 407 U.S. 67 (1972)), and the tenants right of continued residence is a significant interest in property (See Greene v. Lindsey 456 U.S. 444 (1982)). Since tenants have a property interest, they are afforded due process rights. The central meaning of due process is clear: Parties whose rights are to be affected are entitled to be heard; and in order that they may enjoy that right they must first be notified (See Fuentes quoting Baldwin v. Hale, 68 U.S. 223 (1863)). The right to notice and hearing must be granted at a meaningful time and in a meaningful manner (citing Armstrong v. Manzo, 380 U.S. 545 (1965)); due process requires notice and a hearing prior to eviction of a tenant (See Flatford v. City of Monroe, 17 F.3d 162 (1994) citing Fuentes). Case law is clear; affected tenants, in the event a revocation of a rental license is being considered, must be notified and must be provided an opportunity to be heard. Again, we would relish the opportunity to work with the Village in ensuring adequate due process is afforded to all parties. Third, we are troubled by the Citys assertion that it will deprive rental licenses if one exercises their constitutional right to refuse a government inspection without a search warrant. The stated rationale is that is inconvenient for the City to seek an administrative search warrant and the outcome of a judicial ruling is unknown (in other words, a Judge may not side with the City). While REALTOR legal counsel will soon be contacting the City on this matter, from a philosophical view this approach is distasteful. The fourth amendment to the U.S. Constitution, while at times inconvenient to all governments, is intended to safeguard the citizenry from unreasonable search and seizure. To penalize property owners because an owner or tenant exercises their constitutional right of insisting on a search warrant robs your residents and taxpayers of essential constitutional protections. While we understand that the City does not want to be bothered with administrative search warrants, if the City desires to be among the vast minority of municipalities that conduct such inspections then the need to occasionally seek an administrative search warrant without penalty must be accepted. Lastly the ordinance allows the city (without indicating who would hold this authority) to bypass the revocation hearing process by refusing to issue or renew a license. In other words, city staff can confiscate the property rights of property owners and tenants with no notice or hearing. Under the U.S. Constitution and the Illinois Constitution, a person may not be denied a property right without due process. The Supreme Court has held that an owners right to maintain control over his home and to be free from governmental interference, is a private interest of historic and continuing importance. (See United State v. James Daniel Good Real Prop., (1993)). Among valuable rights of ownership in a property are the right to unrestricted use and enjoyment, and the right to receive rents (Id. at 54). The loss of rent due is not insignificant or unworthy of due process protection. The rent represents a significant portion of the exploitable economic value of property (Id. at 54-55). A landlords interest in his or her right to rent property pursuant to a rental license within the City is important and weighs in favor of providing significant process. The risk of an erroneous deprivation of this important property interest is high if a hearing is not held before a revocation. As written, this provision attempts to

deprive property owners of a substantial property right and their due process by refusing to issue a license without notice or a hearing. Licenses, if ultimately adopted, must be presumed inherent unless proved otherwise. Our letter focuses on four significant concerns, but a number of other concerns related to this proposal exist. We implore the City Council not to adopt this proposal in haste; please, for the betterment of Evanstons real estate environment, table this ordinance and enter into robust, thoughtful dialogue with interested parties in reforming this proposal. In the meantime, please do not hesitate to contact NSBARs Government Affairs Director, Howard Handler, at hhandler@iar.org or 847-4807177 to discuss these concerns in greater detail. We look forward to working with the City of Evanston in addressing these proposed policies. Respectfully, Martin Walsh, ABR, SFR Chairman of the Board Christopher B. Smith Chairman-elect of the Board Keith Hancock Chairman, Government and Political Issues Committee Terese (Terry) Penza, CAE, RCE President and Chief Executive Officer

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Wally Bobkiewicz, City Manager W. Grant Farrar, City Attorney Steve Griffin, Director of Community & Economic Development