As proponents of a statewide voter-initiative gather signatures to put rent control reform on the November ballot, the Santa Monica Rent Control Board is considering a ballot measure of its own. If both measures are successful, the RCB would regain control over the monthly rate of thousands of apartments in Santa Monica.
The Affordable Housing Act would put Costa-Hawkins up for repeal, potentially upending the law that allows landlords to lease rent-controlled apartments at market rate after a tenant moves out. If passed, the ballot measure would allow cities to decide whether to control rental rates. So far, signature gatherers for the Affordable Housing Act have gathered about 25 percent of the 365,880 signatures they need to have by June in order to put the initiative on the ballot.
To not miss a beat, the Rent Control Board Thursday will debate a tandem local measure which, if approved, would immediately give the RCB power to dictate rents in thousands of units across the city. The RCB can direct city staff to draft a proposed amendment to the city charter to send to the City Council. The local measure would only go into effect if the statewide act becomes law.
The two measures would turn back the clock on forty years of rent control. In 1979, Santa Monica residents voted to create one of the most radical rent control laws in the country, allowing the RCB to set the rental rate for apartments across the city. About 70 percent of apartments in Santa Monica fall under rent control jurisdiction. Over the next four decades, legislators in Sacramento hammered away at Santa Monica’s law by passing the Ellis Act and Costa-Hawkins.
“Since the California Legislature enacted the Costa-Hawkins Rental Housing Act in 1995, the Board has argued for its repeal,” says a report by the RCB’s general counsel, J. Stephen Lewis. “Staff brings this item to the Board based upon its understanding that the Board’s position on that subject has not changed.”
Rent Control by the Numbers:
The state mandate that allows landlords to reset rents to market rates is known as ‘vacancy decontrol.’ Because of turnover, seventy percent of Santa Monica rent-controlled apartments are listed at or near market rate, according to the RCB’s 2017 annual report. Last year, 361 long-term tenants gave up their apartments for the first time since vacancy decontrol became law in 1995. New tenants drove up the overall median initial rental rate the seventh straight year, to $2,295 for a one-bedroom and $3,000 for a two-bedroom. Studio apartments were the exception, with move-in rates falling 1.4 percent to $1,725. In comparison, the median rent for a three bedroom apartment occupied by a long-term tenant is $1,460.
A family of four would need to make at least $85,600 a year to afford to move into a studio apartment in Santa Monica, according to standards set by the U.S. Department of Housing and Urban Development. The median household income for a family of four in Los Angeles is $64,800.
“By contrast, had vacancy decontrol not been implemented, any household earning the median household income would have been able to afford any sized unit last year,” according to the city report.
Study finds rent control flaws:
Critics point to a recent Stanford study that found while San Francisco rent control laws helped many tenants stay in their homes, it also decreased available housing. Many property owners redeveloped buildings to exempt them from the law, typically by converting apartments into condos. Meanwhile, new construction projects catered to high-income earners.
“Indeed, the combination of more gentrification and helping rent-controlled tenants remain in San Francisco has led to a higher level of income inequality in the city overall,” the authors wrote, arguing the loss of housing contributed to a city-wide rent increase of 5 percent.
Locally, Santa Monica has lost 1,948 units to the Ellis Act since 1985, leaving 27,375 apartments under rent control jurisdiction. A 2017 report by Keyser Marston Associates found Santa Monica’s sky-high real estate prices entice landlords to leave the business altogether and sell their properties. Most Ellis Act evictions occur within six months of a sale when new owners convert the property into luxury homes or condos.
The RCB meets Thursday, March 22 at 7:00 p.m. inside City Hall Council Chambers, 1685 Main Street.