By Jonathan Friedman
Associate Editor

June 13, 2016 -- Monthly residential rent charges in Santa Monica could increase as much as 1.3 percent or $25, whichever is smaller, beginning in September.

A divided Rent Control Board made this determination following a public hearing on the annual rate adjustment.

The maximum percentage increase was calculated by a voter-approved formula based on the Consumer Price Index, so the board had no authority to change that.

But the board was able to decide whether to pass a dollar-figure maximum (also calculated by a formula) or not have one at all.

Rent board staff had recommended against the dollar-figure increase because it would mean a smaller percentage increase for “better-off” tenants living in higher-priced homes.

With a $25 maximum increase, the uptick would be lower than 1.3 percent for those paying $1,885 per month or more.

Commissioner Todd Flora, who had approved dollar-figure maximums in the past, said he agreed with staff’s logic after speaking with many people.

“While not regressive, a (dollar-figure) cap is certainly far from progressive,” Flora said.

When casting one of the two votes against setting the maximum increase at $25 (the other coming from Commissioner Steve Duron), Flora said he was doing it based on the facts this year.

“I’m not wholly changing some philosophy,” he said. “I’m doing it this year.”

Voicing the opposing argument was board Chair Nicole Phillis, who said she was concerned rent charges "will continue to increase if we don’t have some sort of ceiling.”

“It seems somewhat insignificant, but if rents go up between 40 and 75 dollars every year, that does start to add up,” she said. “I believe a $25 ceiling on market-rate apartments does help to slow that down.”

The $25 maximum increase is the highest since it was $26 in 2012. Other recent maximum increases have been $7 last year, $14 in 2014 and $17 in 2013.

Commissioner Anastasia Foster, who voted with the majority along with Commissioner Christopher Walton, said rent control was not just important for low- and fixed-income people.

“Young professionals who cannot afford a home enjoy the benefits of rent control as well,” she said. “So, the slightly higher rents that are being protected as well here with a cap, those protections serve someone as well.”

The board heard from three landlords, all of whom spoke against setting a dollar-figure cap on rent increases.

David Miller, who said his family owns buildings in Mar Vista and Santa Monica, told the board that he has been able to improve the kitchens in Mar Vista, which only has a percentage annual increase in line with City of Los Angeles.

“What you’re really saying is 'don’t improve your property,'” Miller told the board. “The direct result of putting the cap on is to cause the continued deterioration of the housing stock in the city.”

Commissioner Duran proposed that there be a two-tiered system in which landlords who promised to use the extra income on improvements would be exempt from a dollar-figure increase cap.

J. Stephen Lewis, the rent board’s general counsel, said staff could look into that, but the board could not vote on the proposal at that meeting since it was not on the agenda.