After months of discussion, debate, dissension, demonization and at least one debacle, Council has finally settled on a ballot measure to reduce rents for rent controlled units.
Annual increases in rent controlled units are currently defined as a percentage of inflation limited to a maximum of 6% or $140. Voters will be asked to cut that in half setting a new annual cap at 3% or $70.
As a 6% increase has already been approved and notified this year, the ballot measure calls for reducing that rate to 0.8% on February 1, 2023, resulting in an overall increase of 3% for the year. For units in which owners implement no more than a 3% increase in September, no reduction on February 1, 2023, will be required.
In addition, the measure allows officials to freeze rent during a declared emergency, requires owners to occupy a unit for at least two years when evicting tenants to take control for themselves and allows officials to cancel Rent Control Board elections if they are uncontested.
The decision Wednesday night followed a week of consternation among renters after Councilwoman Lana Negrete proposed an alternative formula for determining increases last week. Negrete withdrew her idea after receiving heavy criticism and said as a tenant of a rent-controlled unit herself, she only wanted to improve the system.
“It is all to strengthen rent control,” she said. “It is not to end rent control, it is just to look at it and make it better. I really want to make that clear, because there’s been a lot of misinformation and hopefully we can all be receptive of everyone at the table. It’s really hard to have a discussion about something that has been the same for 43 years and people get really scared and uncomfortable with change, but I can speak, I think for all of us on this dais, I think I’ll speak for myself, but I think I can speak for all of us that we all hold rent control near and dear to our heart as a way to preserve our diversity as it has been in Santa Monica and we just want to make sure that we continue to do that …”
She said Council should begin plans for a large-scale evaluation of rent control in the city that would involve grassroots discussions, community meetings and official action designed to protect the city’s most vulnerable tenants.
During the debate, Councilman Oscar de la Torre proposed reimplementing Negrete’s proposal, which would eliminate increases on renters who pay the least in the city but his motion failed to gain support from any other councilmembers.
De la Torre also suggested looking for ways to ease fees assessed to landlords that were then passed through to tenants. Councilman Phil Brock supported that notion.
“Is there some other way to give them credit on a couple of the pass-throughs and not wait till 2025? Because the crisis will be over but can we try and do something during September for this next year where we’re able to defer or eliminate one or two expenses that would normally go to landlords to show that we have good faith toward both tenants and our landlords in the city,” he said. “And what’s important to me is that we’re not waiting three years to try and help landlords. We know we’re going to do our best to help our tenants tonight. But I don’t want to keep hurting our landlords either. So we need to find a way to have a balance and recognize that some landlords, not all landlords, are the same as some tenants, not all tenants, are hurt by the rent control, the fees, etc. and try and find a way to balance that for all of our residents.”
Brock, along with Negrete, de la Torre and Christine Parra had supported a sunset clause for the new rent cap.
Arguments for and against the idea focused on the unpredictable and often slow nature of government action. Sunset proponents said a definitive ending to the proposal imposed a deadline that would force the city to adopt a permanent revision to rent control rules.
“We were elected during this unprecedented time of upheaval, and I think that we’ve had to make a lot of really hard decisions,” said Parra. “And so I also have been looking at this time and place right now as a time of opportunity and so right now I really feel that we have an opportunity to reevaluate and look at how we can reimagine how we can do things differently and make them even better and that’s what I see before us today.”
However, opponents said unforeseen circumstances could delay if not outright derail the best of intentions for permanent revisions and if the cap were to revert back to the 6%/$140 limit, tenants would find themselves in the same crisis they are currently experiencing.
“So the minute you say we’re going to put a sunset on even if you say ‘I have every intention of putting a new ballot measure on that, I think it’d be good for renters’ if it doesn’t pass and it reverses back to the current system which has the 6% cap, then renters are going to be destabilized,” said Councilwoman Gleam Davis. “And I think that’s what we’re looking for is how do we show renters that we have their best interests at heart? How do we assure renters that we’re not going to end up in this situation again, two or four years down the road? And I think unfortunately, a sunset provision removes that certainty and destabilizes renters and their ability to feel comfortable that they’re going to be housed over the long term.”
While Negrete, Brock, Parra and de la Torre all voiced their support for a sunset clause during the meeting, Brock ultimately withdrew support for the notion.
In addition to the ballot measure and pursuing a community-wide discussion on the subject, City Hall said it will explore additional policy and programmatic options to support renters most impacted by rent increases, including short-term rental assistance programs, eviction moratoria, and rent deferrals.