Facing escalating rents and strong opposition from landlords, the Rent Control Board voted unanimously Thursday to support a State Assembly bill that would repeal the Costa-Hawkins Act.
Without the 1996 Act, local rent control boards would once again have the power to control the rents of certain apartments, even after tenants move out. Currently, landlords can resent rents of apartments when they go back onto the market. There are approximately 27,600 rent controlled units in Santa Monica.
The going rate for a rent controlled apartment shot up in 2016, according to the Board’s annual report. The median monthly rent for a studio apartment is $1,800, up 16 percent over the previous year. Rent for a one-bedroom apartment is around $2,195, up 7 percent over the previous year. Back in 1999, you could find a one bedroom in Santa Monica for under $1,000 a month.
“This annual report scares the shit out of me,” Commissioner Todd Flora said, “because the affordability crisis gets worse and worse and worse.”
During the late night meeting, Flora put forward a motion to limit commentary from the multiple landlords who showed up to voice their opposition to AB 1506, which was introduced by Assemblyman Richard Bloom (D-Santa Monica) and two other assembly members from the Bay Area in February. Instead of three minutes, the landlords condensed their frustrations into two.
Landlord Michael Millman owns 11 buildings, one of which is in Santa Monica. He has long-term rent control tenants paying as low as $525 a month in his building. Millman argued the market-rate tenants are subsidizing the tenants who have not seen a significant rent increase in decades.
“I’m happy to keep them in the building because the market rate tenants keep the building in the black so I can keep their life perfect without putting any pressure on them,” Millman said.
Other landlords cast a bleak picture of rent control before Costa-Hawkins. With rents so low, landlords kept units off the market. Without the income from rising rents, landlords might choose to take the building out of the rental market entirely, choosing instead to turn apartments into condos.
Even with high prices, Landlord Elaine Golden-Gealer says it takes three to five years to recoup the investment she’s spent fixing up units.
“In order to get those rents to be higher I personally, and a lot of other owners, had to spend a lot of money,” Golden-Gealer said. “I spent 20 or 30 thousand dollars to upgrade the unit to make it very desirable.”
When it came to the actual vote to support the bill, which faces an uphill battle through the Assembly, there was little discussion among the Commissioners and broad consensus.
“This has long been a priority of the rent control board,” Commissioner Caroline Torosis said, adding that just 4 percent of rent control apartments meet the rent requirement to be considered affordable housing.
kate@www.smdp.com
