Santa Monica Board Poised to Recommend Charter Amendment Expanding Rent Control

By Jorge Casuso

April 6, 2018 -- The Santa Monica Rent Control Board on Thursday is poised to back a ballot measure that would, in some cases, roll back rent-controlled rates to the amount initially paid by the tenants under full vacancy decontrol.

The proposed charter amendment -- which the Board would ask the City Council to place on the November ballot -- would only go into effect if California voters approve "Affordable Housing Act," a proposed initiative to repeal the 1995 Costa-Hawkins Rental Housing Act, which allows most vacant units to fetch market rates.

The proposed measure also should give the Board "clear authority to authorize surcharges, under appropriate and limited circumstances," according to staff.

The move comes three weeks after the Board tabled a similar motion to recommend a ballot measure, saying it needed more time for consideration ("Santa Monica Rent Control Board Tables Vote on Measure to Expand to More Units," March 23, 2018).

Under the proposed charter amendment recommended by staff, "For tenancies that began before January 1, 1999, the base rent ceiling is the rent that was in effect on April 10, 1978," when Santa Monica voters approved one of the nation's most restrictive rent-control laws.

For tenancies that began between December 31, 1998 and March 31, 2018 and qualified for a vacancy rent increase, "the base rent ceiling is the initial rental rate in effect on the date when the tenancy began," the proposed amendment would read.

For tenancies beginning on or after April 1, 2018, the base rent ceiling is the greater of either "the rent ceiling that was in effect on April 1, 2018" or "the median rent established over the three-year period preceding December 31, 2017 for a unit of comparable size."

The base rate ceiling for the later units would be "determined by the
number of bedrooms, in the city area in which that unit is located, as
reported in the Board’s 2017 Annual Report."

The proposed ballot measure also would include a provision addressing the Board's authority to authorize surcharges on property bills that can be passed on to the renters.

"If approved by the voters, this would give the Board express authority to permit landlords to add surcharges to controlled rents," Staff wrote.

"It would also include safeguards to ensure that surcharges’ addition to controlled rents do not inadvertently undermine rent control’s fundamental goals."

Staff is recommending a Council-approved ballot measure because "the Board likely could not finance a special election without increasing registration fees."

The proposed charter amendments "would prevent any confusion over the possibility of rent rollbacks, and would allow the Board to take advantage of any Costa-Hawkins repeal without resort to a costly special election."