CITY HALL – City Council will consider green-lighting a ballot measure that would allow the Rent Control Board to increase costs for landlords and decrease fees for renters.
If approved by council and then by voters in November, registration fees for rent-controlled apartments could shoot up to $288 per unit annually, from $175 last year. Despite the fee increase, renters would actually have to pay less.
The $288 rate would be a cap; the board could decide on the exact number every year so long as it is below $288.
Last year, the Rent Control Board raised rates and, for the first time, required landlords to pay a portion of the fee – $19. In the past, they were allowed to pass all of the cost onto residents.
On top the rate cap increase, the proposed measure would require landlords to pick up at least half of the fee leaving renters with the other half.
For landlords it could mean a more than 700 percent increase but for renters, who paid $156 last year, it would be a guaranteed reprieve of at least $12 (last year’s $156 fee minus half of the $288 cap).
The Rent Control Board and its staff interpret, enforce, and implement rent control law. This work is funded through the fee.
Last year’s increase of the fee was the board’s first in six years and, according to city officials, highly controversial.
Landlords threatened to sue if they weren’t allowed to pass on the entire fee to tenants, claiming the fee couldn’t be raised without voter approval. City officials say that fees may need to be raised again, possibly as soon as next fiscal year, hence they proposed the charter amendment to the Rent Control Board.
A full pass-through of the fee may have made sense in 1979, when rent control laws were adopted, but it doesn’t now, Rent Control Board members said.
“Vacancy decontrol and market forces have resulted in a steep increase in median rents,” city officials said. “With the current registration fee and pass through, landlords are out of pocket only a tenth of one percent of the rent (1.5 percent if they forego the pass through). Thus, landlords can likely bear an increase in registration fees and are almost certainly better situated to bear that increase than their increasingly rent-burdened tenants.”
Council will have its say on Tuesday. If they agree, voters will have theirs in November.