Threat of the “big one” looms over Rent Control Board discussions

Kate Cagle
Daily Press Staff Writer

With the images of Mexico City’s devastating earthquake still fresh in everyone’s minds, the Rent Control Board stressed urgency during last week’s discussion of mandatory earthquake retrofit costs.

The Board is considering whether owners should be allowed to pass through the costs of retrofitting their building to rent controlled tenants.

“I think we are up against the clock when facing the big one and it’s scary because we are behind,” board member Nicole Phillis said. “There are 1,300 buildings that are vulnerable and I’m concerned with creating an incentive system that would get retrofits sooner.”

The overwhelming majority of seismically vulnerable buildings in the RCB’s jurisdiction are “soft story” apartment buildings, with one or more unit sitting over a carport.

About 550 buildings owners will have received notices to inspect their buildings by the end of October, however, some buildings will not receive notices until August 2018, according to the City’s notification schedule.

From then, building owners have two years to submit their inspection findings and then four years to complete any retrofits.

“We could have a couple of earthquakes before this thing is over,” Board member Todd Flora said.

Phillis told staff she would like to see a concrete plan to distribute retrofit costs between landlords and tenants by the end of the year.

Because of the complexity of the discussion which involves several different departments and potentially the City Council, the RCB may increase their meeting schedule through the holiday season.

Board member Caroline Torosis suggested holding a round table discussion with the RCB, the City Council and staff members from Building and Safety to formulate a plan.

Other city leaders, landlords, tenants and advocacy groups weighed in during an extensive public comment portion of the meeting. After the Northridge Earthquake, owners were allowed to pass some costs through to tenants to expedite the repair and retrofit process.

The influential group Santa Monicans for Renters Rights does not support any pass throughs to tenants this time around.
“Post Costa-Hawkins, as we can see from the charts that were presented by the staff, relatively few units are still at those low original rent control levels,” said SMRR member Sonya Fox Sultan, referencing the California law that allowed all apartments to rise to market-rate rents once a tenant moves out. “About 70 percent have been vacancy decontrolled.”

Board member Anastasia Foster also indicated that she does not at this point support a pass through because landlords can factor the costs of retrofits into new rent rates when tenants turn over.

Foster said she needs much more information before making a final decision and asked staff to learn more about how the city of Berkeley handled their seismic retrofit costs.

Three percent, or about 40, Santa Monica rent-controlled buildings have had no tenants move out since Costa-Hawkens went into effect, meaning their owners collect very low rents.

Phillis worried limiting pass through costs might prompt long-time owners to sell their buildings, cashing in on rising property values over the costs of construction.

“It’s going to have the unintended consequence when these buildings turn over, (of) either losing existing housing stock because they are going to be Ellised or having tenants who are going to have much, much higher pass throughs on the other bonds and taxes, potentially far more than the amount were talking about on a (retrofit) pass through,” Phillis said.

The board unanimously agreed that they need to hear much more from the community and stakeholders before they make a decision. In the end, however, multiple members stressed human lives are at stake.

“It’s going to take a level of intergovernmental coordination that should be (as if) the crisis has already happened,” Flora said.
kate@smdp.com

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