CITY HALL The body charged with setting rents in Santa Monica voted unanimously Thursday to raise them by 2.3 percent, a move that drew criticism from both landlords and their tenants.
The increase, which will take effect Sept. 1, is significantly lower than last year’s 4-percent hike, part of the reason why the Rent Control Board decided not to call for a cap.
Each year, the board is required to review rents and calculate an increase using various sources, including actual increases in costs as well as estimates tied to the Consumer Price Index (CPI), which measures inflation. Each expense is assigned a certain portion of the rent dollar, with profits for landlords taking the biggest bite out of the pie.
Often at odds, tenants and their landlords seemed to be on the same page during the public hearing on the increase, with each side blasting board members and city staff for using what was described as an outdated and confusing formula to calculate the annual adjustments.
Tenants said the increase was too high and would force those on a fixed-income to give up their homes. Landlords complained the increase was set too low and does not accurately reflect a rise in costs associated with providing housing, such as rapidly increasing insurance rates, and maintenance and labor costs.
Board members said they have sympathy for tenants, particularly those who are on a fixed income, however, they are required by law to review rents and fees annually to ensure that landlords are receiving a fair return on their investment in a rental property. By doing so, the board is ensuring that the landlord is also able to afford to maintain the property and provide quality housing for residents.
“It is a frustrating experience sitting here making this decision, one that you know will make one half of the room angry with us, actually, sometimes it’s the entire room,”said Joel Koury, a member of the board.
“I listened to many of the landlords talk about their cost and I think costs are going up. I recognize their concerns about maintaining economic viability. There’s nothing worse than seeing an apartment building torn down and seeing it converted to condominiums,” Koury added.
“On the other hand, any rent increases we impose are falling on some of the people who can least afford it in our city,”he continued. “It’s just troubling, and always very painful for me to make this decision.”
In addition to voting for the raise in rents, the board also stated its intentions to review the formula used to calculate the annual increase to determine if there is a better way. That could include re-adjusting the weight given to various expenses like maintenance and utilities, or relying greater on CPI.
Originally published in the Santa Monica Daily Press print edition on June 9, 2007. Read the original PDF.