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Rent Board Sets Annual Adjustment, Considers Cap

Bob Kronovetrealty
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Santa Monica

Santa Monica Apartments

Santa Monica College
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Santa Monica, CA 90405
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By Jorge Casuso

May 24, 2021 -- Tenants renting one of Santa Monica's 27,429 rent control units will see their rents rise by 1.7 percent starting in September under an annual general adjustment approved by the Rent Board this month.

The Rent Board must now determine at a June 10 meeting whether to cap the monthly increase at $39 for rents of $2,265 or above.

The annual adjustment -- dictated by a formula set by the City's Rent Control Charter -- is based on 75 percent of the percentage change in the Consumer Price Index (CPI) for the Greater Los Angeles area for the year ending in March.

The change in the CPI for that period was 2.2 percent. When rounded out, the percentage change results in this year's adjustment of 1.7 percent.

Raising the cap could affect the rents paid by a large percentage of Santa Monica rent control tenants, based on data in the Rent Board's Annual Report released in March ("Santa Monica's Rent Control Market Remains Strong Despite COVID Shutdown, Report Finds," April 8, 2021).

The report found that the median rents for one-bedroom units was $2,475 per month, which means half the rents are above that amount.

The median rents for two-bedroom units was $3,200 per month, according to data from rental registration forms filed by property owners.

The median rents reflect the increases allowed by the Costa-Hawkins Rental Housing Act, which allowed landlords to raise the rent on nearly all vacated units to market rates starting in 1999.

Nearly 21,000 units -- or about three-quarters of the total rent control units in Santa Monica -- have seen at least one market-rate increase.

By contrast, the rent cap won't have an impact on the 6,553 units occupied by tenants since 1999 who have seen their rents increase only by the amount allowed under the annual adjustment.

Under the Rent Control Charter approved by Santa Monica voters in 1979, the Rent Board must hold at least one public hearing to "consider the views of interested parties before deciding whether to impose a dollar-amount ceiling on a general adjustment."

If the Board elects to impose a limit, the amount is calculated according to the methodology prescribed in Charter, which for the year starting September 1 would be $39.

Apartment buildings constructed after Santa Monica's Rent Control law was passed in April 1979 are not subject to rent control.

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