By now, renters have recently received their notice of the Annual Rent Adjustment allowed under the city's rent control law. It’s one of the largest increases in rent control history and the biggest jump since 2006. Last year’s adjustment was 2 percent.
The 3.2 percent increase is actually a compromise of a 3.5 percent reduction recommended by staff based on costs factored into a formula used to determine the adjustment.
The 3.2 percent adjustment effective Sept. 1 applies only to base or Maximum Allowable Rents (MAR). The suggested adjustment was approved by the elected, five-person Rent Control Board and City Council.
School and college taxes, bond costs and "Clean Beach" fees are added and all these costs are passed through to tenants. Those are the add-ons you see in your Landlord’s "Notice of Changes to Term of Tenancy" — $30 per month, per unit in the seven unit building I live in.
In April, City Hall agreed to a settlement of a lawsuit filed by Action Apartment Association. AAA claimed the formula used to determine the annual adjustment didn't accurately reflect the true costs of operating apartment properties, thus denying landlords a fair return on their investment.
City Hall caved and the 2011-12 adjustment — and all future adjustments — will reflect a formula change to include additional taxes such as business licenses, city and county assessments and fees such as fire department inspections that hadn't previously been part of the formula.
This year’s increase raises questions as to whether the rent control administration is protecting tenants as they should.
The adjustment is also capped at $52. Tenants living in rent controlled units renting for more than $1,617 will pay less than the 3.2 percent. For example, persons paying $3,200 per month will have their rent increased by only 1.6 percent.
Why is City Hall protecting the highest paying or wealthiest tenants? It's like the Republicans in Congress who refuse to implement tax increases on the wealthy while letting the low and middle classes carry more and more of the burden.
My hat is off to Rent Control Board Commissioner Todd Flora who voted against the increase and Councilman Kevin McKeown, who urged commissioners to resist increases on vulnerable tenants. Where were the rest of the Santa Monicans for Renters’ Rights leadership? Who knows.
SMRR should push rent control staff to propose a formula based on Social Security increases — of which there have been none in the last two years. If the purpose of rent control is to protect fixed income senior and lower income tenants, this would be the easiest and most even-handed way to determine adjustments.
I know our landlord friends at AAA won't be happy, but it won't stop them from still going to the bank.
Sign the petition to repeal Internet sales tax
An attractive, young, blonde lady approached me in front of City Hall last Tuesday regarding a petition repealing AB-28, the new California law that requires out of state Internet retailers to collect and remit the same sales/use taxes as in-state retailers.
AB-28 was signed by Gov. Jerry Brown in June. States like California view taxing Internet sales as a potential source of revenue. Not collecting and remitting such taxes, they claim, costs the state 10s of millions of dollars, annually. The amount of sales tax varies throughout the state, but it's currently 9.25 percent in Santa Monica.
I quickly affixed my "X" to her petition because I don't like taxes. I especially don't like paying California sales taxes when purchasing from non-California retailers over the Internet.
Prior to AB-28, sales/use taxes could only be collected from firms who had a physical or "brick and mortar" presence in the state. AB-28 expanded the collection of sales/use taxes on Internet purchases from out of state vendors if they have affiliates or subsidiaries in California.
This ballot referendum is backed by Seattle-based amazon.com who claims it isn't required to collect California sales/use taxes because a 1992 Supreme Court decision excuses Amazon and other out-of state Internet sellers from having to collect taxes in states where they don't have company employees, storefronts, offices or warehouses.
When AB-28 was implemented, Amazon alone terminated an estimated 10,000 independent, in-state affiliates and suppliers to avoid paying the new tax. Small California businesses who supplied Amazon and other major Internet sellers are belly-up.
Backers of the referendum must get 504,760 registered voter signatures by Sept. 27 for it to appear on the ballot. If it qualifies, the measure will appear on the ballot in an upcoming statewide election — most likely Feb. 7, 2012
Many local retailers and national chains such as Best Buy support out of state Internet sales taxes because “tax-free” items purchased on the Internet are up to 10 to 11 percent less expensive than when purchased locally.
As for me, I'll buy wherever I can get the best value.
Want referendum information? Call (415) 389-6800.
Bill can be reached at mr.bilbau@gmail.com
