A couple of weeks ago, a group of local apartment owners sued the City of Santa Monica's Rent Control Board alleging that prohibiting them from charging tenants for water use is a violation of the state's vacancy decontrol laws. The news item was on the front page of the May 28, 2016 Daily Press Weekend edition.
The latest flap stems from whether landlords and property owners can charge future, not current, residential tenants for using too much water - or exceeding the mandated guidelines for excessive consumption as defined by state and local regulations designed to curb water shortages during times of drought.
Tenants in occupied rent-controlled apartments - especially in older apartment buildings -- often pay gas, electricity, telephone and cable TV directly to utility suppliers. Water service (along with trash pickup) is provided mostly by the City of Santa Monica. In most Santa Monica apartment buildings, whether or not under rent control, the “master water bill” is paid by the building owner. However, in newer rental complexes, where water is metered at each dwelling unit, occupants pay directly to the provider.
Costs for water service, sewage and solid waste (trash) pick-ups are paid for by the property owner and that expense is calculated - divided by the total cost and number of units including the landlord's portion - and is part of the building's monthly overhead.
City Council debated long and hard as to whether fees and penalties for excessive use could be passed on by the ratepayers (landlords/property owners) to their tenants.
The Daily Press reported that landlords claim they have requested the ability to negotiate an agreement with new tenants to pay a proportional share of the total water bill, but the Rent Control Board has refused to allow the arrangement.
This policy places owners of mostly older, master-metered buildings at a competitive disadvantage with owners of newer buildings and forces them to pay for the water actually used by the tenants without compensation. According to the suit, agreeing to pay a proportional amount of the total bill at the time of a new tenancy is one of the landlord's rights under the state's Costa-Hawkins legislation regulating rent control measures.
While the amount the tenants would pay will vary per month based on use, the Daily Press states that landlords claim the varying amount does not violate the Rent Control Board's authority to set rates. In other words, “Landlords contend that it is and the Rent Control Board contends that it is not.” Landlords contend that their court action is necessary due to increasing water rates and the ongoing drought.
Santa Monica's water rates are scheduled to increase 9 percent over the next two years. Tenants face a 41 percent increase in water rates between 2014 and 2020. The “market rate” increases allowed when a unit is vacated won't cover the “full cost” of water rate increases implemented after a landlord/tenant lease was signed.
The major complaint with the Rent Control Board's action - and City Council's support of it - is that tenants are not held responsible for water excessive use and basically get a “skate home free” card while landlords end up picking up the tab for water they're most likely not over-consuming.
This must have been a tough decision for some on the Santa Monica for Renters' Rights dominated council dais to make. On one hand, they want to assure renter-voters (about three quarters of Santa Monica voters are renters) that they “have their back” and are “saving rent control.” Yet, on the other hand, it must really be a pain for an environmental advocate, former “Green Party” member and sustainability booster like Councilman Kevin McKeown for not providing the financial motivation to reduce tenant water use and further protect the environment.
You've got to hand it to some of these landlords who've become so adept at filing challenges to the city's rent control policies that it seems like their on SMRR's payroll.
Many of us contend that SMRR has given up supporting renters. The 40 year old political organization is more interested in “staying in power” than protecting renters.
Even the old time, die-hard SMRR leaders know that Rent Control is here to stay and under no real threat of being terminated. But, telling nervous renters that “they could be evicted” or “if you don't vote for our candidates your rents will go up” at election times is easy to do. Most renters aren't wondering how a vote for a SMRR-endorsed school board candidate is going to protect them from evictions.
So, they take their SMRR mailer and check off a list of SMRR-endorsed candidates - even though many of the candidates on the official “mailers” were placed there during back room wheeling and dealing fostered by long time SMRR leaders and without full member ratification who are out to further their own social agenda and promote their own pet projects.
The landlords unwittingly play into SMRR's hands and end up keeping their sworn enemies in power. Renters are given lip service and their leadership's real loyalties are to the developers, hotel unions and special interests who are bought and paid for by entities that could care less about the well-being of the community or its renters.
Bill can be reached at mr.bilbau@gmail.com.
