By Lookout Staff

June 23, 2023 -- The Rent Control Board on Thursday approved a mandated 2.8 percent rent increase that kicks in September 1 and opted to place a $67 cap.

The increase is based on a formula dictated by the Rent Control Charter that sets the amount at 75 percent of the Consumer Price index for the 12-month period ending as of March, which was 3.7 percent.

This year's increase is slightly lower than the 3 percent annual cap overwhelmingly approved by voters last November after the Board was required to approve the biggest rent hike in more than 40 years.

Given runaway inflation, the formula last year yielded a 6.4 percent hike capped by a 1990 Charter amendment at 6 percent, prompting the ballot measure.

This year's ceiling -- which is also dictated by a formula -- is $67 per month, down from the $140 cap last year. The ceiling applies to units with a maximum allowable rent of $2,375 or more.

This year's increase comes after move-in prices for Santa Monica's rent-controlled units climbed to record levels last year as fewer tenants moved out, according to the Rent Board's annual report released in April.

Starting rents set a record high for all unit sizes except 3-bedroom and larger units, which were higher only in 2020 ("Prices Climb, Turnover Persists for Rent-Controlled Units, Report Finds," April 20, 2023).

The median starting rent for a studio in Santa Monica increased $70 to $2,020 last year, $200 to $2,500 for a 1-bedroom unit and nearly $400 to $3,400 for a 2-bedroom unit.

Units with three or more bedrooms increased by $377 to $4,372, which was still below the record $4,600 set in 2020.