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Rent Board Approves Biggest Increase in Four Decades
 

Bob Kronovetrealty
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By Lookout Staff

June 16, 2022 -- Santa Monica's rent control tenants will see the biggest annual rent adjustment in more than 40 years after the Rent Board on Thursday approved a maximum 6 percent hike.

The increase -- which goes into effect September 1 -- is based on the percentage increase in the Consumer Price Index for the LA region, which was 6.4 percent but capped at 6 percent by a 1990 Charter amendment.

While the Board had no choice but to impose the rent hike -- which has a ceiling of $140 that applies to rents of $2,340 or more -- it chose to also increase the annual registration fee for landlords, who can pass on half of that amount to tenants.

Under the registration fee increase approved by the Board, the amount paid by landlords would rise from $198 to $228 per unit, or a $30 annual increase.

The increase is expected to bridge a $221,000 deficit in the current fiscal year budget that ends June 30, according to Rent Board officials. The deficit is expected to grow to more than $500,000 in the upcoming year.

The proposed increase would "allow the Board to replenish its reserve account," which has been dwindling, and "meet increased insurance and pension costs (for Rent Board staff) over the coming fiscal years."

This year's annual adjustment is the largest since the Board increased rents by 7 percent in 1979 and 6.5 percent the following year, during the start of what is widely considered the most severe economic depression since World War II.

This year's hike -- the largest in 42 years -- is more than triple the 1.7 percent increase approved by the Board last year, with a 39 percent cap.

The last time the Board approved a significant increase in the registration fee was in 2013, when it jacked up the rate from $156 per unit to $174.96 to bridge a shortfall similar to the $500,000 deficit it currently faces.


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