CITY HALL — The Rent Control Board embraced compromise Thursday night, agreeing to raise registration fees by almost half of what officials proposed four months ago and force landlords for the first time in Santa Monica’s history to pay the fee.
Registration fees for rent-controlled apartments, which are assessed every year, will rise by $1.58 per month to $174.96 per year, an almost $19 increase over the existing rate, but short of the $180 originally requested.
Tenants will continue to shoulder $156 of that amount, the original registration fee, and owners will pick up the increase. It’s the first time that landlords have been asked to pay registration.
Board member Todd Flora, who has been pushing for a lower fee and a phase-in period to make the change more palatable, praised the compromise, which won unanimous support from the board.
“We do want some reserve … and this will get us literally to a zero balance,” Flora said. “I think that’s the kind of fiscal responsibility we want to show.”
The increase is below what officials first proposed, a $180 annual fee split evenly between landlords and tenants.
The money would have dug the Rent Control Agency out of the red — the agency is expected to run a $360,000 deficit this year, which would grow to $502,000 in the 2013-14 fiscal year — and handed it a cushion for future years.
The sudden increase and shock to landlords of paying a new cost caused some board members pause. They asked for a range of options, some with phase-in periods that would slowly shift more of the burden onto landlords.
The fee increase passed Thursday will not even cover the board’s basic expenses, according to a staff report. The $34,461 remainder will be made up with revenue from interest income and administrative charges.
In the meantime, two board members have formed a subcommittee to look into ways to cut costs and raise revenues in an attempt to prevent future increases as costs for employee benefits rise.
Wes Wellman, president of the Action Apartment Association, took on the challenge himself. He presented a thick binder to board members Thursday that he called the “Blueprint for Black Ink.” It details how the board can raise revenues, cut costs and make the office more efficient, backed up with articles and examples of places where the measures have worked in the past.
Between the three categories, he projected a $6 million budget impact.
“Assuming 90 percent of what I say is bogus and 10 percent is valid, there’s enough wiggle room there to accomplish an historic compromise where tenants get no increase, owners get no increase, the staff gets paid and no one loses any jobs,” Wellman said.
Some landlords are still unhappy with the situation.
Rosario Perry, an attorney, sent a seven-page letter to the board threatening to sue over the increase, calling it unnecessary and that shifting some of the burden to landlords constitutes a “taking” of property.