Santa Monica Softens Its Tough Rent Control Law : Housing: A major revision allows for one-time-only increases on units with historically low fees, but only if they are voluntarily vacated.
This year brings a major change in Santa Monica’s tough-as-nails rent control law by allowing one-time-only increases on units with historically low rents if the apartments are voluntarily vacated.
The Threshold Rent Program, which went into effect Jan. 1, comes after various efforts over the past few years to provide a mid-course correction for a 13-year-old rent control law that is under continual challenge from the state Legislature, courts and landlords.
Under the program, the city is divided into seven sectors, each with a different rent schedule set by the Rent Control Board in December. Rents may increase to these threshold levels when an apartment is vacated voluntarily.
The new rent levels are intended to help bring rents on units that are far below the rate allowed under rent control into line with the prevailing rate in each sector. The new rents remain substantially below those of nearby apartments not covered by rent control (units built since the law was enacted in 1979 are exempt).
For example, under program guidelines, the highest allowable rent on a vacated two-bedroom apartment in the Ocean Park area was set by the Rent Control Board at $573 a month, whereas a two-bedroom apartment north of Wilshire Boulevard could rent for $616.
A landlord spokesman said some two-bedroom units north of Wilshire, which are not subject to rent control because they were built after the law passed, now rent for about $1,500.
Santa Monica’s rent control law is regarded as one of the nation’s toughest, primarily because units remain subject to controls even when they are voluntarily vacated.
The Rent Control Board allows modest percentage increases in rents each year, but owners of apartments where rents were below average when the law took effect have had no means of bringing their rents into line with those of other rent controlled units. As a result, some apartments in the city have rents below $300.
The Threshold Rent Program is designed to encourage owners of such apartments to keep them in the rental market. Over the past several years, 907 rental units have been lost because landlords have invoked the state Ellis Act, passed in 1986, which allows them to evict tenants and go out of business, provided they give adequate notice and pay relocation fees.
The rush to invoke Ellis awakened some rent control supporters to the potential of a wholesale loss of the affordable housing stock in the city. In recent months, however, because of the limp economy, Ellis Act evictions have slowed to a trickle, according to city rent officials.
“The new program will bring back empty units held off the market by landlords hoping for miracles,” Rent Control Board Chairwoman Dolores Press predicted last month.
Already, 66 applications for the new rates have been filed, including one for a six-unit building in which all units are vacant, rent board attorney Tony Trendacosta said.
To participate in the program, landlords must apply to the rent board and prove that the vacancy was voluntary and not a result of harassment. If the board finds that the tenant was harassed, the landlord is barred from the rate increase program.
Rent officials emphasize that the program is not vacancy decontrol because the units will remain under rent control.
The Threshold Rent Program has been the subject of considerable disagreement among rent control advocates in the city. Supporters say it was needed to ward off increasing attacks on the rent control law in the Legislature and the courts. Opponents have characterized the change as the beginning of the end of rent control.
“It’s the first major collapse of what had been the toughest rent control law in the country,” said former rent board member Susan Packer Davis. “It’s not such a heinous crime to have a certain chunk of our apartments renting for $300 to $350.”
