Santa Monica Mayor Urges Easing Rent Control Laws to Save Housing

Santa Monica Mayor Dennis Zane is leading an effort to slow down the loss of rental housing in the city. He has proposed changes in city regulations that would prevent landlords from coercing tenants into agreeing to convert their apartments into condominiums, and would require property owners who convert apartment buildings to commercial uses to provide replacement housing or pay a fee.

But Zane’s boldest proposal is a ballot measure that would allow rents on units that are vacated voluntarily to rise to specific higher levels. It would also allow increases of between 10% and 20% on rent-controlled units already at those higher levels when vacated voluntarily.

The City Council is scheduled to discuss his rent control proposals Tuesday at 7:30 p.m. in the council chambers.

“The motivation for this liberalization of the rent control law is to avoid the twin terrors of vacancy decontrol and the Ellis Act,” Zane said. “Even if the vacancy decontrol initiative loses, we still have the problem of Ellis.”

Landlords are circulating an initiative petition for the November municipal ballot that would allow rents to increase to market levels whenever a unit is voluntarily vacated. Landlords say this so-called vacancy decontrol is the only way landlords will get the economic relief to avoid going out of business under the Ellis Act.

Much of the lost rental housing stock has been lost through the 1986 state Ellis Act, which allows landlords to legally evict tenants and go out of the rental housing business. Since the law was enacted, owners of more than 1,000 units in Santa Monica have notified the city Rent Control Board that they intend to go out of business.

Zane’s proposal, which would be placed on the November ballot, is based on similar proposals approved last month by Santa Monicans for Renters’ Rights, a political tenants group co-founded by Zane that controls the majority on both the City Council and the rent board. At that time, landlords responded to the idea by saying that it was too little, too late.

Zane said he plans for rents to rise to levels that remain affordable to most Santa Monica renters, yet exceed the rents on 90% of the units that have been removed under the Ellis Act.

A rent board study released in February said the average rent of units removed under the Ellis Act was $355 a month, and that more than 70% of the units removed had rents below the citywide average of $500.

Zane is proposing that the rent for a one-bedroom apartment, for example, be allowed to increase to between $475 and $525 when voluntarily vacated, regardless of its current monthly rent. A two-bedroom apartment could increase to between $600 and $675 a month.

Once they reach the new rent level, such units would be subject to the annual general rent increase determined by the rent board.

Rent-controlled apartments that are vacated voluntarily and are already at or above the new rent levels would be allowed increases of between 10% and 20%, with the provision that for a specified number of years--for example, two to four--no additional rent increases would be allowed when the apartments are voluntarily vacated again, except for the annual general adjustment.

In return for the increases, Zane said, landlords would have to agree not to go out of business under the Ellis Act for 10 years, and would have to meet minimum maintenance standards.

“Additional rent incentives must be given to property owners in order to encourage them to stay in the rental housing business rather than Ellising or otherwise seeking to exempt their units from the rent control law,” Zane said.

In addition to the proposed ballot measure, Zane is hoping to maintain the city’s low-cost housing stock by proposing an ordinance that would require that 50% of new multifamily housing be affordable to families with the median income or less.

The council voted 4 to 3 last week to direct city staff to draft such an ordinance. Council members Christine Reed, William H. Jennings and Herb Katz voted against the proposal. The draft ordinance is expected back before the council within 30 days.

The City Council last month voted 4 to 3 to require that 30% of individual multifamily projects be set aside for low- or moderate-income people, or that developers pay the city a fee of $15 per square foot so that the city can build affordable housing elsewhere. Zane’s proposal would not change that fee.

Last week the council also amended the city law that requires landlords who demolish rental units to replace them or pay replacement fees of between $27,000 to $63,000 per unit. The city is conducting an environmental and economic study of that ordinance, and has yet to enforce it.

This amendment to the so-called Program 10, proposed by Zane and approved by a 4-3 vote, makes the law applicable to owners who convert their rental units to commercial uses or condominiums other than through the city’s Tenant Ownership Rights Charter Amendment (TORCA), which allows tenants to buy their units.

The City Council last week was able to agree unanimously to direct the city attorney to draft changes in TORCA that would be placed on the November ballot.

Among the changes would be a provision that would prohibit threats and buyout offers to tenants by owners eager to convert their apartments.

Currently, TORCA allows apartments to be converted to condominiums if two-thirds of the tenants agree to the conversion and half agree to buy their units. Concerns that tenant votes were being bought, or that tenants were being threatened with evictions under the Ellis Act, prompted the proposed amendment, according to a staff report.

“The passage of the Ellis Act has created substantial opportunities for abuse of existing city programs,” the report said.

The conversion proposal also would increase the minimum time allowed between an Ellis application and a condominium conversion application from two years to five.

The City Council also asked city staff to consider a provision that would allow owners who occupy units to vote for conversion. Currently, an owner who lives in his building is not allowed to vote. The matter is expected back before the council within 30 days.

But not all council members support Zane’s proposals. Reed said there is too much legislation overwhelming the laws the council already has in place.

“We never actually let anything happen,” she said. “We change the rules.”