On Thursday, the Santa Monica Rent Control Board will decide whether to throw its support behind a controversial California Assembly Bill that would vastly change the way rent control operates in the City.
The bill introduced by local Assemblymember Richard Bloom (D-Santa Monica) and two other legislators from the Bay Area, Rob Bonta (D-Oakland) and David Chiu (D-San Francisco), would allow local jurisdictions to set rent control rates for vacant apartments and expand the number of units that fall under Rent Control.
AB 1506 accomplishes this by repealing the 1996 Costa-Hawkins Act which outlawed vacancy control in California, ending a decades-long practice in Santa Monica where the Rent Control Board set rents for certain apartments in perpetuity. After Costa-Hawkins became law, landlords were able to reset rents to market rate after a tenant moves out. About 27,600 apartments in Santa Monica fall under rent control jurisdiction because they were built before 1979.
More than 20 years later, rent control neighbors now pay vastly different rents. The median rent for a tenant who has not moved since 1996 is $883 a month for a one-bedroom, according to the Rent Control Board’s annual report. In contrast, a tenant moving into the same rent control apartment today would pay about $2,195. About 70 percent of rent control apartments in Santa Monica have had rents reset to market rate since 1999.
“I hear all the time from Millennials, from working class folks and people who work in the tech sector how difficult it is to find something that is affordable,” Bloom said in a phone interview from his office in Sacramento.
Just this legislative session, Bloom has sponsored 11 of the 130 housing-focused bills making their way through the assembly and senate. He says repealing the Costa-Hawkins Act would allow cities to give renters immediate relief.
His critics say the cure is worse than the disease.
“Allowing rent control on new apartments would bring the development of rental housing to a standstill,” California Apartment Association communications director Mike Nemeth said. “Moreover, if vacancy controls return, rental property owners are sure to exit the market, further reducing the housing stock in Santa Monica. This is the wrong direction.”
Instead, the CAA supports three bills aimed at creating more housing by allowing micro units, increasing the voter threshold for anti-growth measures and adding teeth to housing mandates. Former Rent Control Board commissioner Robert Kronovet hopes current members recognize the urgent need for more housing.
“These laws were created because rent control was so ugly, lawmakers needed to give relief to housing providers being strangled,” Kronovet said, comparing rent control to communism. “These laws did not come out of thin air.”
The housing crisis may be reaching a tipping point as legislators flood Sacramento with new bills to bring rental prices down. A recent report from the McKinsey Global Institute estimated nearly 60 percent of people in Los Angeles County cannot afford local rents. The same report said California needs to build 3.5 million homes by 2025 in order to solve the affordability crisis. Bloom calls it a “significant undertaking” and says he also supports new development to bring prices down, adding the need is urgent.
“I think what has been lost in the debate for the last couple of years is the plight of those who are trying to find affordable housing around the state. That’s not something that is fixed in the short term simply by building new units,” Bloom said.
The Rent Control Board will also debate a second bill introduced by Bloom, AB 982, that would make changes to the Ellis Act, requiring a one-year notice to tenants being evicted under the act. In 2016, 90 units received Ellis withdrawal notices, down from the previous year’s number of 183.
Both bills AB 1506 and AB 982 are early in the legislative process and will be heard by the Housing Committee in the coming weeks. The Board’s general counsel J. Stephen Lewis is encouraging the commissioners to support both bills.
kate@www.smdp.com
