Good News Unless You're a Landlord: Forced Rent Freeze Could Be Coming

Never a stranger to trying to do things they have no legal authority to do, the Santa Monica Rent Control Board is thinking about instituting a rent freeze in Santa Monica. Board Chair Nicolle Phillis raised the issue at the May 14 meeting, even though Board Executive Director Tracy Condon noted there is nothing in the City Charter that allows this. Phillis said it might be time to call for emergency powers.

"At a minimum, we owe it to the public to be talking about it because other jurisdictions are [talking about rent freezes], Phillis said. "We should at least be addressing it in a pandemic, and I want the constituents to understand why we are acting the way we are acting. Because this certainly is not business as usual."

Board member Caroline Torosis said she would like to hear a legal opinion on what the Board might be able to do.

"I'm hoping we can at least liaise with City Council in order to protect all our tenants in this city," Torosis said. "It's a difficult time [for tenants]. And I understand it's also a difficult time for landlords."

The Rent Board has posted a survey on its website to get a feel for what the situation is in Santa Monica for tenants and landlords. There are 10 questions in the tenants' survey asking whether you are able to pay rent, if you have had a pandemic-caused, closure-related job loss, and other related questions.

Board members and the Board staff say the answers to the survey will guide them in their decisions. As of Wednesday when the Observer went to print, only about 200 people (or less than 1 percent of all local renters), had responded to the survey. Officials hope that more people respond to it so that its usefulness will increase.

The Observer recommends that if the Rent board wants to get serious answers, it will need to dish out money for a scientific survey. Basing serious decisions on an unscientific web survey that can easily be manipulated is no way to be operating in any time, but especially in these challenging times.

Rent freeze was not a subject on the agenda, but it likely will be next month. The hot item that was on the agenda was the annual allowable increase to lease prices for rent-controlled units, which will go into effect in September. This year's maximum allowable increase is 1.4 percent.

Here in Santa Monica where rent laws highly favor the tenants (a good or bad fact depending on your perspective), the Rent Board annually announces how much the lease amount can go up on rent-controlled units. It is based on a formula established in the rent control amendment to the City Charter that was approved by voters more than 40 years ago.

"In this unusual time of a public health emergency related to the coronavirus, some community members have suggested there should be no rent increase at all this year," Condon wrote in a report to the Board. "Others have proposed that because the city and state-imposed eviction moratoriums temporarily protect tenants who are unable to timely pay their full rent, the general adjustment should be higher to help compensate owners for this emergency public policy.  While proponents find merit in these positions, the Rent Control Law specifies how each year's general adjustment is calculated and provides no means by which the Board itself may permit deviation from that formula."  

The City Charter also allows the Board to approve a strict ceiling for the total dollar amount the rent can go up. The dollar amount increase maximum is also based on a formula and would be $32 if approved. A public hearing and vote will take place June 11.