Councilmembers Seek Changes to Strengthen Santa Monica's Tenant Protections

By Jorge Casuso

August 9, 2018 -- Worried that long-time rent control tenants will be increasingly displaced in Santa Monica's heated real estate market, two Councilmembers are recommending that staff revisit local renter protections.

The item placed on Tuesday's agenda by Councilmembers Sue Himmelrich and Kevin McKeown asks staff to look for "outdated definitions and compensations, in light of rapidly intensifying market pressures on local rents."

If directed by Council, staff would explore a range of issues, including compensation for tenants evicted "through no fault of their own" and the use of rent-controlled units as corporate rentals.

"These are the issues that tenant advocates on the ground tell us are major problems across the City," Himmelrich said. "They are things that have come to us from various sources."

“Our requests may sound generic," McKeown said, "but behind each reform we’re asking for there’s a true story of renters losing their homes, or living with that threat."

One of the issues the item addresses is the relocation compensation for renters evicted for circumstances beyond their control, including evictions under the 1986 state Ellis Act, which allows landlords to go out of the rental business.

Recent studies have shown that real estate speculation is driving evictions under the law, which was written to help landlords struggling under rent control ("Speculation Likely Driving Ellis Evictions in Santa Monica, Study Finds," July 26, 2018).

The relocation compensation, Himmelrich said, should be "adjusted to make up for rising rents and the cost of relocation."

The issue of relocation compensation, McKeown said, "is a simple case of actual costs to move into a new rental having risen faster than the general cost-of-living increases to which our compensation amounts have traditionally been pegged.

"We need to have staff generate new factual findings to justify an increase in the relocation amounts," he said. "We cannot just decree such increases."

McKeown and Himmelrich, who are both running for reelection, also would like staff to revisit "the definition of what constitutes 'corporate housing' or 'short-term rentals.'"

These prohibited uses, which often take place when corporations rent units for workers who are relocating to Santa Monica, "erode our stock of true residential rentals," the Council members said.

"Corporate apartments are cheaper for them than a hotel," Himmelrich said. "Hotel rooms should be hotel rooms and apartments should be apartments."

The City has a "vague idea" of how widespread the problem is, she said.

According to McKeown, "a major local developer is suspected of taking advantage of (the City's) original, insufficiently precise, language" to turn newly-built units into corporate rentals.

"Let’s just say it’s strongly suspected some of the new projects from particular developers, and even some of the purchase/rehabs from those same developers, are being used in ways that barely skirt our existing laws against corporate housing and short-term rentals," McKeown said.

Adopting new language, he said, "will make it easier to distinguish, and enforce against, these abuses."

McKeown and Himmelrich also would like staff to explore "code requirements for room sizes and other parameters of legally habitable permanent housing," according to the agenda item.

The issue arose when a developer who used the Ellis Act to evict tenants from two apartment buildings offered them units half the orginal size in the newly renovated buildings.

"It appears the developer has subdivided existing rent-controlled apartments to shoehorn two renters into the space formerly afforded to one, with each renter paying for half about what used to be paid for the whole space," McKeown said.

The item would ask staff to determine whether the practice is legal and how the City's most recent zoning code adopted in 2015 applies.

The item asks staff to return to the Council "as soon as possible" and to combine it with the recent direction "to prepare for the possible repeal of the Costa-Hawkins Act" ("Santa Monica Council Votes to Explore Scaled-Down Rental Ballot Measure," June 27, 2018).

Once the laws are tweaked to incorporate "bulletproof language," they will be easier to enforce McKeown said.

“Even when our enforcement staff identifies issues, they are limited in taking action if our ordinances lack the specificity of language to make an enforcement action stick if challenged," McKeown said.