Council’s Rent Hike Plan OKd : Santa Monica: City-sponsored ballot measure for significant increases competes with landlords’ market-level proposal.

The Santa Monica City Council gave its final approval early Wednesday to a ballot measure that would allow significant rent increases on apartments that are vacated voluntarily.

The ballot measure is designed to compete with an initiative sponsored by the city’s landlords that would allow rents on units vacated voluntarily to rise to whatever the market will bear.

Both measures, which will be decided by voters in the Nov. 6 city elections, are aimed at stopping the city’s loss of housing units. In the event that both measures are supported by a majority of voters, the one approved by the largest margin will take precedence.

Landlords have been complaining for years that Santa Monica’s restrictive rent control law makes it impossible for them to earn a fair return on their investments. Invoking provisions of a state law called the Ellis Act, which establishes conditions under which landlords can evict tenants and go out of business, owners of more than 1,000 units have notified city officials that they intend to take their apartments off the market.

Since rent control was imposed in 1979, rents have never been allowed to rise more than 5% a year, and in most years the allowable increase has been substantially less. A city Rent Control Board study earlier this year found that the average rent of apartments being 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.

Landlords have said the only way to stop the growing number of evictions is to allow “vacancy decontrol.” The landlord-sponsored ballot measure would essentially remove rent controls whenever units are vacated voluntarily, and then reimpose controls at the higher level once the unit is rented again. Based on recent newspaper listings, that would mean a one-bedroom apartment could increase to between $800 and $1,000 a month, and a two-bedroom to between $1,100 and $1,500.

But tenant activists, including Santa Monicans for Renters’ Rights, the tenants political group that came into power by championing rent control in the late 1970s and whose members now constitute a City Council majority, say vacancy decontrol would mean the end of affordable housing in Santa Monica.

Tenant activists have grudgingly agreed to the new higher minimum levels as a way to appease landlords without giving up too much. Some critics say the group is conceding ground to save its political future.

The council’s proposed ballot measure would allow some landlords significant increases while still keeping rents below the prevailing level found in nearby areas of Los Angeles. The new so-called threshold levels were designed to be affordable to households with incomes at or below 70% of the median income for Los Angeles County .

That means, for example, a one-bedroom apartment would be allowed to increase to $511 a month, and a two-bedroom unit to $613.

Apartments already at the new threshold levels would be allowed increases of at least 10% if specific minimum maintenance levels are achieved. They include new paint, cleaned or new carpets, new floor and window coverings and all appliances in working order.

To collect either increase, landlords would have to agree to give the new tenant a three-year lease. Originally, tenant activists had hoped to commit landlords not to remove their units under the Ellis Act for 10 years, but they dropped that condition after landlords vehemently objected.