Santa Monica Tentatively OKs Higher Tenant Relocation Fees

The Santa Monica City Council voted Tuesday night to increase relocation fees that landlords are required to pay tenants who are evicted from apartments covered under the city’s rent control laws.

The new fees increase the minimum from $2,000 to $3,000, and the maximum from $3,000 to $5,500.

Landlords had been required to pay relocation fees to tenants evicted because the landlord wanted the unit for himself or a family member, or if the landlord was planning to go out of business and demolish the building.

Under the new ordinance, relocation fees also would be given to tenants who vacate their units after the lengthy eviction process has been started, but before they receive a formal eviction notice.

The fee increases come as a response to the growing number of evictions by landlords using the state Ellis Act, passed in 1986. It allows landlords to legally evict all tenants, get out of the rental business, and put the land to other uses allowed under existing zoning. Nearly 1,000 units have been or are scheduled to be removed from the city’s housing stock.

The ordinance is scheduled for a second reading in two weeks and, if approved then, would become effective 30 days later. The new ordinance also has a provision that would impose the higher fees for any tenants who may have received an eviction notice prior to the effective date, but not yet vacated the unit.

That provision is expected to apply to the tenants of the 178-unit Sea Castle Apart ments, whose owner notified the rent board on Jan. 25 that he intends to evict the 212 tenants under the Ellis Act.

John Rodriguez, president of a landlords group called Action, described the fees in an interview as a form of “extortion” not imposed on any other business.

“I can’t imagine anyone feeling comfortable knowing that if he were a doctor that he would have to pay his patients if he wants to retire,” Rodriguez said. “Why are we being singled out to pay to go out of business?”

But supporters defended the relocation fee and the increase.

“The adjustment is absolutely necessary . . . as part of the effort to maintain affordable housing,” said Brad Jones, co-chair of Santa Monicans for Renters’ Rights, the tenants group whose members make up the majority on both the City Council and the Rent Control Board. “Affordable housing must be protected by government.”

Only Councilman Herb Katz voted against the increases, saying he felt that there had not been sufficient notification to get adequate public comment. Councilwoman Christine Reed was absent.

The relocation fees for a bachelor or single apartment will increase from $2,000 to $3,000; a one-bedroom from $2,500 to $3,750; a two-bedroom from $3,000 to $4,250; a three-bedroom from $3,000 to $5,250, and four or more bedrooms from $3,000 to $5,500.

The existing requirement for an additional $1,000 in fees remains for displaced tenants who are 62 or older, disabled or any tenant living with minor children.

A staff report prepared by the city attorney’s office said the increase in fees reflects the growing difference between the average maximum rent allowed in rent-controlled units in Santa Monica and the average for unregulated apartments in Santa Monica and West Los Angeles.

According to the report, the average monthly rent for a one-bedroom apartment under rent control is $416. The same size apartment in the open market in Santa Monica and West Los Angeles would rent for $1,186. A two-bedroom under rent control averages $558, and in the open market it rents for $1,357.

The new $3,750 relocation fee for a one-bedroom apartment, for example, includes $770 representing the additional cost of rent for one month; $2,372, the equivalent of two months’ rent as a security deposit; $360 for moving costs, and $178 to hook up utilities. The total of $3,680 is rounded up to $3,750.

But apartment owner James Baker questioned whether the market rates used in the formula were appropriate.

Baker contended that the figures cited by the city attorney’s office were not a fair average for unregulated nearby apartments but rather an average for newly constructed luxury apartments. He estimated that more realistic averages would be $900 for a one-bedroom apartment and $1,150 for a two-bedroom apartment.