Also of Interest

Passing Through Utility Costs May Lead to Illegal Excess Rent  

Every annual General Adjustment takes into account changes in utility costs, and any utility “surcharge” added to the MAR is not allowed. Rent-control tenants may lawfully be required to pay for their own utilities when their units are separately metered by the utility company.  But submetering or “RUBS” (Ratio Utility Billing System) billing under which tenants pay the owner or submetering company, is not permitted. Owners who pass though utility charges in this way may be liable to the tenant for excess rent.

 Vacancy Increase Report – April 2010  

Under the state Costa-Hawkins Rental Housing Act, landlords of rent-controlled units can set rents for most new tenancies at any amount. Although these market-rate units remain under rent control, this resetting of rents at new, higher levels has made them less affordable. The median rents for long-term controlled units of every size are affordable to households earning the Los Angeles-area median income for a family of four, but those same families cannot afford even the smallest (0-bedroom) units when the units are rented at market rate. Minimum-wage earners may be priced out of the market for a new Santa Monica tenancy altogether. This report details the effect that the Costa Hawkins Act has had on rent-controlled housing costs and affordability since 1999, analyzing past year-by-year effects, the current state of affordability, and trends over the past eleven years.

The state Ellis Act allows landlords to evict tenants in order to remove their units from the rental market. The Rent Control Board closely monitors this type of eviction and produces an annual report detailing the number of Ellis evictions, the properties’ subsequent use, and the overall effect on Santa Monica’s rent-controlled housing stock. Past reports have shown a steady increase in the total number of Ellised properties, most of which were redeveloped as market-rate condominiums. This year’s report shows a dramatic slowing of Ellis activity in 2009, likely a temporary phenomenon related to the troubled economy. Also, the total supply of rent-controlled units rose slightly from 2008 as previously-Ellised units were returned to the rental market and the Board asserted jurisdiction over 168 newly-built units that were offered for rent within five years of Ellis evictions.

The Rent Control Law requires the Board to report annually to the City Council about the status of controlled rental housing. Because 2009 was the 30^th anniversary of the enactment by popular vote of the Rent Control Law, this year’s report reviews the history leading up to that enactment and then highlights how the Law has operated in the three decades that followed. The report also notes last year’s significant developments, including the Board’s exercise of jurisdiction over 168 newly-constructed units in downtown Santa Monica; the loss of affordable housing caused by the state Costa-Hawkins Rental Housing Act; the temporary decline in Ellis activity due to the economic downturn; and Agency efforts to improve the efficient administration of the Law with respect to monitoring evictions and exemptions as well as processing Clean Beaches Tax waivers for low-income households. The Board discussed its 2009 annual report at the public meeting of May 13, the agenda and video for which is available here.

Effective January 1, 2010, State Law requires landlords to provide at least 60 days’ notice to terminate a residential tenancy. In Santa Monica, tenants may only be evicted from a controlled rental unit for good cause as stated in the Rent Control Law. The 60-day notice provision applies to evictions for owner-occupancy and to lease terminations that are exempt from rent control.