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Property owners who rent units subject to Santa Monica’s rent control laws at market rates or convert permanent housing into vacation rentals will face a $1,000 fine.

On Tuesday, the City Council unanimously voted to raise fines for unlawfully evicting rent-controlled tenants and operating vacation rentals. Councilmember Kevin McKeown said the higher fines will deter property owners from misusing rent-controlled housing, but also asked city staff to look into enforcing criminal penalties or daily fines to further discourage the practice.

“(These fines) still may not be enough to deter behavior that threatens our rent-controlled housing,” McKeown said.

Under the home-sharing ordinance the council passed in 2015, it is illegal for residents to turn permanent housing into vacation rentals by renting out the entire unit. They may, however, rent out rooms in their homes if they are present during guests’ stays.

The city has used the ordinance to return hundreds of vacation rentals to the residential market, but city staff said it has proved difficult to deter serial offenders because the $75 fine amounts to a fraction of their profits.

The fine increase the council approved Tuesday will require property owners to pay $1,000 if they are caught operating a vacation rental.

The council also increased the fine for renting formerly rent-controlled units at market rates from $75 to $1,000. The Ellis Act, a 1985 state law, allows landlords to evict tenants if they want to leave the rental business, but many owners of rent-controlled properties have used it to temporarily take units off the market and re-rent them at market rates.

In addition, the council approved a $1,000 fine for landlords who evict tenants in buildings with a combination of condominium and rent-controlled units.

That prohibition was instated after voters passed the Tenant Ownership Rights Charter Amendment (TORCA) in 1984. TORCA, which expired in 1996, allowed apartment buildings to be converted into condominiums as long as a sufficient number of tenants approved the conversion and agreed to purchase their units.

An ordinance accompanying TORCA gave tenants in buildings that were being converted eviction protections under the rent control law.

City staff said raising the fine for violating the ordinance from $75 to $1,000 will deter landlords from evicting those tenants to raise rents.

Earlier this year, staff recommended raising the fine applied to landlords who prevent tenants from accessing their units to try to recover possession of a rent-controlled unit. The council approved increasing the $75 fine to $500.

Staff will return to the council with additional recommendations to discourage property owners from misusing rent-controlled housing.

madeleine@smdp.com

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1 Comment

  1. A $1000 fine is not going to deter landlords anymore than a $1 fine will deter someone from evading a $2 bus fare. Evicting a single rent controlled tenant could net hundreds or thousands of dollars every month, and the $1000 fine would be recouped in no time. The fact that buyout offers for rent controlled tenants are often in the $10,000 – $20,000 range, and sometimes much higher, shows how much an eviction is worth to a landlord.

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