Santa Monica Council to Consider Rent Control Law Change

 

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By Lookout Staff

July 17, 2012 — As part of an unusually light agenda, the City Council on Tuesday will consider changing Santa Monica’s Rent Control law for only the third time in more than 30 years.

The proposed charter amendment would replace the General Adjustment (GA) formula the Rent Control Board uses to calculate how much landlords can raise rents on rent-controlled units annually.

The new formula would allow landlords to raise rents based on 75 percent of the regional Consumer Price Index (CPI), instead of basing it on a complex formula that can change from year to year depending on landlord expenses.

Landlords argue that 75 percent is not a fair return, but prefer the simpler formula.

If the council accepts the change recommended by the Rent Board, the charter amendment would be placed on the November ballot, making it the third such change since voters approved Rent Control in 1979.

West Hollywood, another major rent control area, also uses 75 percent of CPI for their GA, according to Rent Board officials.

Using the current formula, Santa Monica landlords were allowed to raise rents by 77 percent of CPI, an increase Rent Board officials said reflected the “improved cash-flow owners are experiencing as a result of vacancy decontrol.”

Last year, nine out of ten landlords had rented at least some of their formerly rent-controlled units at market rate, officials said.

Under the 1994 Costa-Hawkins Rental Act, which went into full effect in 1999, owners of rent-controlled units are allowed to raise the rent to market rate when a unit is voluntarily vacated or the tenant is evicted for non-payment of rent.

The general adjustment, however, caps the percentage a rent can be increased.

 

Source: The LookOut News

Voters Could Change Rent Control Law

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Santa Monica Rent Control Board asks City Council for a charter amendment on the Nov. 2 ballot that would simplify formula used to calculate yearly rent increases.

By Jenna Chandler | June 29, 2012

Santa Monica voters could be asked to simplify the method used to calculate yearly increases to rent paid by tenants of rent-controlled units in the city.http://blog.rsanyc.net/property-rights/wp-content/uploads/2012/07/santamonica1.jpg

In a 4-0 vote Thursday night, the Rent Control Board recommended to the City Council that it place a charter amendment on the Nov. 2 ballot.

Each year the board approves rent increases designed to cover the costs a landlord pays to maintain their properties, such as property taxes, utilities and business license fees.

If ultimately approved by voters, the formula used to determine how much rent should increase would be equal to 75 percent of the percentage increase in the Consumer Price Index, the federal government’s tool for measuring inflation rates.

“Going to a 75 percent of CPI is somewhat tried and true, it’s really just following the lead of several of our sister cities,” said Rent Control Board member William Winslow.

For the past 30 years, the board has calculated the increases using a formula that involves surveying landlords to find out how much and in what areas their expenses have increases and weighting those components based on local median rents.

“Santa Monica is the only city with rent control in the state using this methodology for determining what the general adjustment should be,” Winslow said. Continue reading