By Jorge Casuso

August 22, 2022 -- The City Council on Tuesday will take up an emergency ordinance that protects tenants from eviction if they can't afford to pay a monthly rent increase of more than 3 percent over the next six months.

Based on rent data, the ordinance is likely to protect a limited number of rent control tenants experiencing "financial distress" from temporary increases to their rents.

The emergency moratorium would cover tenants unable to afford annual rent increases of between 3 and 6 percent -- with a $140 monthly cap -- between September 1 and January 31, when a November ballot measure capping the increase at 3 percent would go into effect.

The rent increase would then be reduced to 0.8 percent to bring the average increase to 3 percent for the year. Tenants would have until September 1, 2023 to pay the balance owed or face eviction, according to the proposed ordinance.

In its report to the Council staff contends the ordinance is "necessary to preserve housing stability and help prevent rent-burdened tenants from becoming displaced and unhoused."

Staff cites a recent article in the Los Angeles Times that notes "Santa Monica is now ranked the fifth most expensive city for renters in the United States," with an average rent of $4,357 a month, according to a report by the listing portal Rent.

The staff report does not mention that the rent portal's data is based on listings that are likely in market-rate buildings constructed after 1979, which are not covered by rent control.

Staff also relies on data that likely overstates the extent of the rent crisis.

The report states that "14,460 renter households in the City are cost burdened (meaning they pay over 30% of their income for rent), representing 31.6% of renter households."

Marc Verville, who is vice chair of the Santa Monica Audit Subcommittee, has questioned the use of the data, which is based on demographic information for the County and not for Santa Monica, where household incomes are nearly 25 percent higher.

Verville points to the Rent Control Board's 2021 Annual Report, which found "that 434 means-tested fee waivers were granted in Santa Monica in 2021, less than 2 percent of total controlled units" ("OPINION -- Dueling Tax Measures Offer Voters Easy Choice," July 23, 2022).

The proposed Santa Monica ordinance differs from LA County's rent moratorium, which expires on December 31, is based on household income and only covers non-payment due to financial impacts related to COVID-19.

The City's ordinance would apply only to Santa Monica tenants in rent-controlled units who have their rents increased more than 3 percent and the "financial distress does not need to be related to COVD-19."

"A tenant’s self-certification of inability to pay due to financial distress is sufficient to meet the notice and documentation requirement," according to staff.

Mathew Millen, a lawyer and a leader of Progressive Landlords of Santa Monica, contends that the ordinance is unconstitutional.

"Allowing a tenant to not pay rent for 1 year, because they allegedly cannot pay the 6% increase is an unconstitutional taking in violation of the 5th Amendment to the United States Constitution," Millen wrote in a letter to the Council Monday.

Under the proposed emergency ordinance, "If the tenant pays the deferred rent accrued during the protected period by September 1, 2023, the tenant is permanently protected from eviction for nonpayment for rent accrued during the protected period.

"If the tenant is not able to pay the unpaid (deferred) rent accrued during the protected period by September 1, 2023, the landlord may then proceed with eviction.

"Significantly, the protection does not excuse or take away a landlord’s ability to evict, it merely extends the period in which the tenant can pay the increased unpaid rent that accrued during the protected period," according to staff.