CITY HALL — A weak real estate market in 2009 meant few apartment owners in Santa Monica sought to evict tenants and redevelop their properties into condos, leading to a rare net increase in housing units controlled by the Rent Control Board, a report from the board released this week said.
The report was an update on the impact of the California law known as the Ellis Act, which requires apartment owners who wish to leave the rental market to obtain permits and obey rules intended to protect tenants’ rights. Under a provision of the act designed to prevent owners from evicting tenants in order to increase the rent, an owner who takes a building off the rental market has to wait five years before again seeking tenants for the building.
In 2009, Santa Monica apartment owners sought to remove just 14 apartment units from the rental market, down from 79 units in 2008 and 201 in 2007, the report said.
Seventy-one units, though, were withdrawn from the rental market in 2009 because of Ellis Act withdrawals begun in previous years. Fifty-nine previously withdrawn units were returned to the rental market last year, for a net loss of 12 units.
Still, the total number of rental units increased because 168 newly built rental units came under the Rent Control Board’s authority as a result of an appellate court’s decision in a lawsuit filed by the Apartment Association of Los Angeles County.
Following a decision in the case in 2008, Santa Monica’s rent control board was able to assert its authority over the units that several owners had offered for rent in fewer than five years after withdrawing them from the market in order to redevelop, the report said.
Rent Control Administrator Tracy Conden said the decline in the number of owners seeking to withdraw their properties from the rental market was “at least in part [because of] the economic climate and the tightening of available credit,” which she said gave owners less of an incentive to get out of the rental business.
At least temporarily, she said the slowdown in requests for Ellis permits will benefit Santa Monica’s rental housing stock.
But she added: “There’s still a huge demand for the development of affordable housing in Santa Monica.”
Since 1986 there’s been a net loss of 1,936 rent controlled units, according to the report, and “history suggests that more will continue to be lost as the economy improves.”
Wes Wellman, president of the Action Apartment Association, blasted the report, calling it a “14-page polemic” that “ignores the most obvious cause of [rental unit] removals — the extremist nature of Santa Monica’s rent control law and its administration.”