Local residents will have to pay more to rent in Santa Monica
CITY HALL Tenants and their landlords will have the chance tonight to voice either their support or opposition to a proposed 2.3-percent increase in rents.
The Rent Control Board is holding a public hearing in the City Council Chambers to discuss the annual rent adjustment, which sets a ceiling for landlords, allowing them to raise rents based on a formula that takes into account rising costs for property owners, such as heftier insurance and utility bills.
Staff has recommended an increase of 2.3 percent, down from 4 percent one year ago. That would mean a renter paying roughly $750 a month can expect an increase of about $16. Those who have lived in their apartments for less than year will not be affected by the increase.
If approved, landlords can raise rents beginning Sept. 1.
Absent this year is an increase to the annual registration fee for landlords and a cap on rents, something which staff did not recommend because the rent increase is relatively small, said Tracy Condon, public information officer for the Rent Control Board.
The ceiling was set at $54 last year. The year before that, the annual adjustment was set at 3 percent, with a $48 cap.
Board members are also expected to establish a public hearing to discuss changes to the formula used to calculate the annual increases in rent and utilities. Landlords have complained that the fees are often set too low and do not accurately reflect the rise in costs associated with providing housing, such as rapidly increasing insurance rates and maintenance and labor costs.
Currently, staff relies on established increases or actual changes in rates, as well as the Consumer Price Index, which measures inflation. Each expense for the landlord is given a certain weight, with profits for property owners taking out the biggest bite at 35 percent of the rent dollar for 2007.
Other cities calculate their annual rent increases based on percentage increases in the CPI.
The rent adjustment is low primarily because of low inflation, Condon said.
While at first, it seems the significant drop in the cost of gas contributed to the low rent adjustment, but Condon said gas only represents about 3 percent of the total rent dollar. The real savings can be found in most other areas, which saw modest increases, around 2.5 percent.
The largest increase, 7 percent, came in refuse collection because of the City Council’s decision to raise rates.
Originally published in the Santa Monica Daily Press print edition on June 7, 2007. Read the original PDF.