City officials are proposing new rules governing rental units that would discourage or outright prevent landlords from offering leases of less than a year in length.
Under the new rules, rent controlled leases would have mandatory minimums of one year while market rate landlords would be required to offer one-year leases unless the tenant requested a shorter length of stay.
“The proposed amendments will require landlords to offer a minimum one-year written lease to prospective tenants, thus affirming that the City’s rental housing stock is intended for the provision of long-term permanent housing,” said the staff report. “The provision of a one-year lease offer helps to minimize potential high turnover of residential units, provides stability for tenants, and ensures the preservation of a permanent residential housing stock.”
Staff said Council could enhance the measure with rules that require annual leases be reoffered every year or a prohibition on modifying rates during the term of a lease.
In addition to length minimums, the proposed rules would require all units be rented to “natural persons” as opposed to corporations and all tenants would need to use the units as their permanent residence.
“These provisions will specify that all leases must be made to tenants who are natural persons who will use and occupy the rental unit as their primary residence, or if to a tenant who is not a natural person only if the rental housing unit that is the subject of the lease will be used and occupied by a natural person as their primary residence,” said the staff report. “These provisions are intended to circumvent the practice of leasing out residential rental units for medium term corporate housing.”
Units subject to local, state or federal price controls (such as Section 8 or inclusionary housing) would be exempt from the rules. Owner-occupied units that are leased for less than a year would also be exempt as would subleases if the original tenant remains in the unit.
The proposals come after several years of debate on how to govern local housing. Santa Monica already has rules governing short term rentals, usually of less than 30 days, but housing advocates have argued that “medium term” rentals of more than 30 days but less than a year also endanger the long-term goals of the city’s housing policy. Council asked staff to draft rules that would incentivize long-term residents and prohibit corporations from taking housing off the market for employee use.
The proposals are described as the first phase in a series of actions.
“Consistent with Council direction, Staff is addressing medium term housing in phases with a focus on protecting existing housing stock in the immediate term and returning with options for defining use regulations for new housing models over a longer term,” said the report.
Council will meet on Tuesday, August 25 for a virtual meeting available online at smgov.net. Closed session begins at 5:30 p.m.
