Santa Monica OKs Rent Increases Tied to Equal Units for Low-Income Tenants

Despite strong opposition from both landlords and tenants, the Santa Monica Rent Control Board voted 3 to 2 Thursday night to adopt a program that will allow landlords to nearly double the rent on some apartments, if they set aside an equal number of units for low-income tenants at lower rates.

The revision to what is considered one of the toughest rent-control ordinances in the nation will allow the monthly rent on some apartments to reach market levels similar to those in neighboring areas of Los Angeles. The average rent for regulated apartments in Santa Monica is about $500 a month, about half the prevailing rate in Los Angeles.

Supporters of the so-called Incentive Housing Program say the rent increases are needed to give landlords an incentive to continue to provide affordable housing for low-income tenants and to stop evicting tenants and going out of business under the state Ellis Act.

“What we are trying to do is plug up problems with rent control,” said rent board Commissioner Wayne Bauer, who in the spring negotiated the program with a group of landlords.

“We are the guardians of the affordable housing,” said board Chairwoman Susan Packer Davis. “This is the only real alternative to the Ellis Act.”

Commissioner Julie Lopez Dad joined Bauer and Davis in supporting the program, which is expected to be in place by Nov. 6. Commissioners Dolores Press and Eileen Lipson voted against it, saying the incentives were too high and that the program would not stop landlords from using the Ellis Act to go out of business.

Under the program, landlords may raise the monthly rent on some apartments by as much as $900, if an equal number of units are set aside for as low as $266 a month. The first apartment that becomes vacant will go to a low-income person, although the landlord may get credit for an existing low-income tenant. The monthly rent on the next voluntarily vacated apartment would be allowed to be increased. Any remaining vacated apartments would alternate between a unit for a poor tenant and a so-called incentive unit with rent increases.

Rent board members spent the summer unsuccessfully trying to persuade tenant advocates that the program was the only way to protect low-income tenants from being evicted under the Ellis Act. About 600 rental units have been removed from the housing market in the city under the act, the city’s Rent Control Office said.

Still, tenants opposed the program, saying it gave landlords too much. And many landlords were opposed, saying it did not give them enough, and questioning whether it would work because vacancies occur so infrequently.

Some landlords, however, said they will participate. “While this is a far cry from what landlords want, it’s a step in the right direction,” landlord Ed Simonian said.