'FOR RENT' signs color the corner of Idaho and 11th Street.

Following a historically high annual rent adjustment of 6% for rent controlled units, city councilmembers have indicated a desire to cap all future increases at 3%.

This was proposed during a July 12 meeting when Santa Monica City Councilmembers tore apart a ballot measure proposed by the Rent Control Board and redrafted it from the dais.

The annual rent adjustment is calculated by a set formula in the Rent Control Charter, which Rent Control Commissioners are legally bound to approve. This formula is determined by the regional consumer price index and spat out an unusually high number this year due to spiraling rates of inflation.

Many rent controlled tenants, particularly those living on fixed incomes, are worried about how they will afford the 6% hike. 

The Rent Control Board’s initial ballot measure sought to give Rent Control Commissioners the ability to issue a freeze on rent increases for controlled units during declared public emergencies. 

Councilmembers objected to this and other aspects of the ballot measure, subsequently directing staff to prepare two new ballot measures based on their suggestions.

According to the City Attorney’s Office, one of these measures is the 3% cap on annual rent increases. The other is a measure to authorize the City Council to impose additional rent limitations during a declared emergency. 

During a subsequent Rent Control Board meeting held on July 14, board members spoke strongly in support of the 3% cap and asked their staff to prepare a presentation in time for the next City Council meeting on July 26, when council members will have the opportunity to review the two ballot measures Council asked staff to draw up.

“The city attorney’s office is going to prepare the staff report but we will work with them,” General Counsel Alison Regan said during the July 14 Rent Control Board meeting. “I think, certainly, we can include aspects of the annual report and make sure the facts are available to them and include that in our presentation. We’re somewhat limited in that we’re obviously not a part of their deliberations. So if the City Council chooses to ignore what we have presented to them in order to emphasize whatever stories they want to tell, whether based in reality or not, there’s not much we can do about that.”

If these measures are approved by Council, they will be placed on the Nov. 8 ballot. If they are subsequently approved by voters, they will go into effect on Jan. 1, 2023.

Regardless of what happens with the ballot measure, this year’s 6% adjustment will go into effect on September 1 as Council does not have the legal authority to overturn it. However, the City is researching relief strategies for rent burdened tenants.

“City staff are developing legal and policy options at Council direction to provide relief for those subject to the 6% rent increase, including potential emergency deferral or eviction moratorium measures and direction of funds to provide relief for those most impacted by the increase,” a City spokesperson said.

Councilmembers axed or altered other aspects of the Rent Control Board’s original ballot measure. They removed a section extending term limits to three terms and a section asking the City to prepare an annual registry of non-controlled units. 

The Rent Control Board was also seeking to require that an owner intend to occupy a unit for at least three years instead of one year before evicting a tenant. Council changed this to two years. 

“I think we need to simplify and not make it too complicated and just focus on what’s most important here, which is supporting our renters and, hopefully, also supporting the small mom and pop housing providers who we want to keep in business in Santa Monica,” Councilmember Oscar de la Torre said on the subject of the additional revisions.

In a conversation with the Daily Press, Rent Control Board Commissioner Caroline Torosis said she was frustrated by the number of revisions given to the original measure and the tight timeline City staff now has to research and prepare the new measure language.

“This all has to be worked out between now and two weeks from now, which I think is a very aggressive order,” Torosis said. “Instead of taking a body of elected experts and staff of hired experts on rent stabilization and landlord tenant law and renter protection [and] taking the recommendations of the Board … they want to go back and do some sort of other analysis.”

Torosis was also perturbed by what she felt was a lack of urgency on behalf of Council to provide immediate relief and certainty to renters.

“To me, the most important takeaway from the meeting was that we declined to take swift action to protect our renters from skyrocketing inflation,” said Torosis.

De la Torre took umbrage with the criticism Council has been receiving for their response to this year’s adjustment.

“We got to stop all that BS people are putting out there saying that the City Council is not that interested or not showing urgency to support people, residents, who are struggling,” said de la Torre. “We have done a whole lot and we will continue to do more to support those renters.”

Speaking during the July 14 Rent Control Board meeting, Chair Steve Duron said it was “tragic” to see a missed opportunity to grant relief to renters, but it was best for the Board to look toward the future.

“We can’t undo what was done, but what we can do, going forward, is see what we can do about changing that cap to 3% so that it can help people who need it,” Duron said.

City Council will take up the issue during the upcoming meeting on Tuesday, July 26. The meeting can be viewed at www.youtube.com/user/Citytv16santamonica and the staff report, when it is prepared, will be posted to www.smgov.net/departments/clerk/agendas.aspx.