SR-8C (22)PCD SF f pfar~ladmmlccreportlsupplem
Councii Mtg May 2~, 1998
TO Mayar and City Council
FROM City Staff
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Santa Mon~ca, California
MAY 7 6 '~8
SUB,)ECT Supplemental Staff Report For Item 8C
INTRODUCTION
At i#s meeting of May 19ti~, the Council hearrJ public testimoriy and began deliberatior~s
an the proposed extension af the ~nterim ardcr~ance governmg second units Several
questions arose This supplemental report prov~des infarmation on two of the ~ssues
raised at the pubiic hearing
One questior~ was whether second units would likely be affardable Staff has abtained
mformation about rents currently being charged for cer~ain TORCA units which are
be~ng rented at market rates pursuant ~o Rent Baard Regufa~ion 33a2 TF~at informafion
~s attached !n summary, ~t shows that market rates are sul~stant~aNy h~g~er than
controlled rents The median post-~ncrease Maxkmum AI{owable Rent was $1075 for
one bedrooms, $1400 for two bedrooms, and $1425 for three bedraoms These rent
ie~el~ are unaffardable at 100% of inedian
Another question was whether factual information supports the find~ng ~n the proposed
ord~nar~ce that parkmg rs ~r~ s~ort sup~ly w~thrn the City One Councrim~mber mqu~red
about prefer~nt~al park~ng zonss There are presently aver 4Q preferent~al parMA~ ~ 6~
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zones in the City and four more m process Appraximately ten of the existing zones are
lacated in the single family district Each of these zones represents a situation in wh~ch
City residents have identified a shortage of parkkng w~th~n thejr neighborhood In
approv~ng the zones, Council has made the f~nciings that nan-resident vehECles do or
may suhstantially and regularly ir~terfere with the use of the ma~or~ty of available public
sfreet or alley parkmg by ad~acent residents and that a shortage of reasonabiy avaiiab{e
and convenient resident~al park~ng spaces exists cn ihe area of the zane
Addit~onally, there are a n~mber of older buildings w~thin the C~ty Over 75% af the
Caty's housmg stock was built priar to 1970 A number of the older buildings do nat
pra~ide adequate par~C~ng by current standards The occupants of these buildtngs need
to depend u~on street parking and, in many ~nstances, the need will continue well into
the f~t~re Th+s ~s d~e to fact #hat many bu+fdmgs were damaged ~r~ the Northr~dge
Earthquake and rebuilt pursuant ta the Earthquake Recavery Ord~nance which af~owed
rebuilding without additional parkmg So, while there may be specific streets m the city
upon wh~ch parking is avaiEabie, residen#ial parking is clearly in short supply
RECQMMENDATl4N
It is recommencied the Council approve an extension to thE inter~m orciinance
Prepare~ by Suzanne Frick, PCann~ng and Community Development Dept Director
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SAl~TA MO I~ f CA R E~[7
CC~NTRaL BaARD
ANI~IJAL REPORT
F I SCAL YEAR 199b/97
A DO PTE D
MARCH 8, 199$
TABLE OF COi~IT~NTS
l NTRO DUCTI ON
2
SIGNIFICANT DEVE~.OPMENTS EN 19gb~97
AFTERMATH 4F THE 1994 NORTHRIDGE EARTHQUAKE 4
Summary af Earthquake•Damaged Housing Stock
The "Q-Pe#ition"
VACANCY 1NCR~ASES 6
THE CQMBINED IMPACTOF VACANCYAND EARTHQUAKE
INCREAS~S 7
Background on Vacancy Increases 8
Impact of Vacancy Increases on Med~an MAR's 9
Impac# of Vacancy ]ncTeases on Affordability 1 Q
Affordability far Very Law Income Households {50% of Mediar~) 11
Impact of Q-Petition Increases on Affordability 13
Impact of Vacancy Increases on Fee Wai~ers 14
Impl~cat~ons for the Future 1~
CHANGES f N THE H4USiNG STOCK
Tracking Resrdential De~elopment 17
Completed GonstructEOn 17
The EI[is Act 18
Tenant Ownersh~p R~ghts Charter Amendment 19
Remo~a! Permits 19
Exempt~ans 20
Unit Summary 20
~ PROGRAM, pOLIClES AND ADMIN]STRATION
~ Publ~c OUtreach 21
Sign~f~car~t Legal Decis~ons 2~
Regulat~ons 22
incer~t~ve Housing Pragram 22
~ Annual General Adjustment 22
Ind~v~dual Rent Ad~ustments 23
Fee Wai~ers 25
THE WORK O~ THE RENT CONTROL BOARD BY DEPARTMENT 26
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SANTA M4N iCA RE~(T CONTR~L BQARD
~ A~[NUAL REP~RT
~ 1ULY 'l996 THR~UGH JUNE ~997
~ ~N-rRa~ucTEON
~ The Rent Control Charter Amendment pro~ides that the Rer~# Control Board shall
report annualty to the City Councii on the status of controlled rentat housing. The
ma~or factors affecting the housing stock in the past year were vacancy rent i~creases
~ and the finai stages of the earthquake repair increase program. _
During Fiscai Year 1996/97 the Agency refoc~sed its programs and pciorities in the
~ wake of a new state law w~ric~t rnandates ~acancy decontro~recontrot on Jan~ary ~,
1999 following a three-year phase-in period during which owners may take an
increase o# up to 15% upon voluntary ~acancy.
~ • The new state law took effect on January 1, 1996. In most cases it allaws
rer~t ~ncreases of ~p to ~ 5% upon vol~ntary vacancy of a unit. U~its may be eligible
fior two ~ncreases prior ta Ja~uary 1, 1999. Thraugh June 30, 1997, 6,865 unit
~ vacancy registrat~ons (R's) had been filed, 3,837 m the past year. Vacancy
increases are expected ta i~ave s~bstantiaf fong-range deleterio~s effecfs on tl~e
affordabElity of rental housing in the commg years.
~ • In response to the ~ 994 earthquake, the Board establ~shed the Q-Pe#ition,
a rent increase process for owners to recaver the cost o~ earthquake-related
~ re~airs. Th~ major ~urpose of the pragram was t~ encourage aw~ers ta quickty
repair their properties and minim~ze the loss of rental hausing u~its and
d~splacement of tenants. Thraugh June 30, 1997, 1,017 decisions have beer~
~ ~ssued for bo#h completed and pro~osed repairs. The totai cost of appro~ed repairs
for wh~ch mcreases were grant~d was $30,576,14G These increases affected
9,738 ur~its
~ • Because tE~e cumu~ati~e impaet of ~acancy mcreases and earthquake
~ncreases ha~e afifected the affordabilEty of the hausing stock, this report studies
~ both the separate and combined im~acts of those increases:
' The data dramat~ca[ly shows that once a vacancy increase is taken, the
~ probability ~s ~ery low that the unit will be re-rented to low income sernors or disabied
tenants ThEs is the case wY~ether ar not the unit ~reviousfy was rented to a very 1ow
income sernor or disabled person. Santa Monica has maintai~ed a high percenta~e of
~ senior renters over the past 30 years. dther studies ha~e sE~own that a great percentage
of them are low sncorne. The data in tl~is report ~ndicates that the number of senior
renters wif~ decl~ne rapidly En San#a Monica as units are vacated and t~e rents increase.
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Ann~at Report -- FY 1956~37 -- Mar 5,1998 2
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" ThougY~ #he data is not as clear-cut as it is for low income fee wa~vers, the
e~~dence suggests that once a ~acancy increase is taken, ~# is unlikely that the unit will
be rented to a tenant witF~ a Section 8 cantract or certificate, whether or no# the u~it was
pre~iously occupied by a Section 8 tenant. The HUD r~les that make it easier for
owners to opt out of a HUD contract and the diminished economic benefit of Section 8
tenants indicate that fewer owners will elect ta pro~ide housing ur~der Section 8.
' The data indicates t~a# housing costs will continue to rise, becom~ng less
affordable at every income level. This ~ortends an influx of more affluent renters
accompaniad by an exodus of low and maderate income households, res~l~ing over
time in a population much less economically diverse than it has beer~ ir~ recent years.
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Annual Report - FY 1996/97 -- Mar 5.1998
~
r SIGNlF1CANT DEVELOPM~NTS IN 1996/97
~
~ AFT~RMATH OF THE JANUARY ~(7~ T944
NaRTH Ri DGE EARTHQUAKE
~ SUMMARY Q~ fARTNOUAKE-DAMA~ED HQUSlNG STOCK
~ The earlEest data indicated that, as of February 10, 1994, approximately 218 multi-#amily
rESidential ~uiid~ngs cor~taining 2,252 units had some uniis which were [~nin[~abitable,
eitl~er red or yeAow-tagged~. Many ather properties sustained varying degrees of
~ damage, particu~arly t~ose in fhe northwestern part of the city. ~
Of the tagged properties, #hrough June 3fl, 1997, 16~ pro~ert~es avEth 1,607 units ha~e
been repaired and are now habitable.
~ Thirty-two properties contair~ing 354 units have besn demolished as a dErec#
cor~sequence o# ea~thquake damage. lncluded are 178 units at the Sea Castle whict~
~ was damaged in the earthquake_ T~,e demolition, however, was also t~e res~l~ vf a
subsequent fire which caused additional damage to the ~acant building.
Th~rty-two properties {309 u~its) remain tagged as unir~f~abitable. This includes 122~
~ OceaR Avenue, wi#h f20 unrts, whic~r rs now beiRg re~aired.
TH~ Q-P~r~rrON
~ Q-pet~tions allowed the pass through to tenants of the owner's costs af repa~ring
ear#F~quake-related ~amage. Owners applied for rent i~creases far c;ompleted repairs or
~ for author~zation for propase~ repairs. Qnce the repa~rs were completed, owners cauld
f~le a request for addendum ir~ order to implement tE~e proposed ir~creases.
To ass~st owners to ~ap~dly repair un~ts damaged by the`ear#hquake, streamlined
~ proceduTes were de~eloped to expedite processing of the petitions. Q-peti#ior~s were
processed administra#~vely in most cases, rather than i~a~~ng a formal e~~dentiary hear~ng.
Tenants had an opportunity to respond to the claims A case analyst reviewed the
~ ~andlord's dqcuments and tenant respoRSes to determine ~f the cla~ms were earthquake-
refated and the costs reasana~le. On some occas~ons, tF~e analys~ inspected tF~e property.
The costs of repairs, including f~nancir~g, w~re amort~zed over 5, 10 0~ 20 years,
~ depe~d~ng on the type of rePair, and passed thraugh as rent increases. Tt~e decision
cou(d be appeafed to tne Board by ei#fzer landlord or te~ant.
The ong~r~al Q-petition reguiation expired on Jar~uary 17, 1995, b~t was ex~ended by the
~ Board #o June 30, 1995. The deadl~ne insp~red a last-minUte flurry of petit~ons. By the
deadline ~,04~ petitions were filed, 220 on the last day alane.
~ ~ Burldmgs that were red ar yellaw-tagged ~mrnedrate~y tol~ow~ng the earlhquake but had a~ready been upgraded
to gree~ status by February 10, 1994 are not mcluded m these n~mbers
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Annual Repori -- FY 19961'97 -- Mar. 5, 1998 4
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Shortly after the earthquake, the Santa Monica City Council mandated that fauildings of
certa~n construction types which are cons~dered s~sceptik~le to earthquake damage be
retrof~tted, even if there was no earthqUake damage. The mast common residential
construction impacted by this ardinance ttas resideRtial ur~its built o~er tuck-under
parking; this is commonly refeRed tp as "soft story." The costs of soft story retrofittir~g were
allowable expenses under the C~ petEtion process.
aDMfNlSTRATIVF DfCISl41~f5. One thousarzd seventeen adminis~rative
decisions wera issued by June 30, 1997, i 82 in the 96197 year. Upan compietion of
approved proposed repairs, 265 addenda, most of them final addenda, were a[so issued;
of those, 81 were issued in the past year.
Of tha decisions issued, 9fi4 {95%) were granted -- 491 for oampleted repairs, 76 for
proposed repairs, and 397 for bot~ completed and proposed repairs. Twenty-~ve
petitions were withdrawn or dismissed. Twenty-eight were denied.
Prior to 1996/97, f~ve petitions were referred to the Hearings Department for an
evidentiary heanr~g. No petitions were referred ~n ~ 996/97. -
TF~e number of units affected by approved petitions was 9,738. Below is a cost st~mmary
of expenses {not inciudEng financing) of earthquake-related repairs appraved. Costs
which were authonzed as proposed in the administrati~e decision, b~t ha~e subseque~tly
been allowed as campleted through th~ addendum pracess are listed as campleted costs.
Completed Cornmon Area $25,306,060
Compfeted (ndiWidual Units 2.641.914
Completed Total $27,947,974
Proposed Common Area $2,412,7~6
Propased Indi~iduaf Un~ts 215.416
Propased Total $2,628,172
Total Appro~ed Repaits $3a,576,146
Monthly increases per tenant ranged from $1 to more #han $300, though typical increases
were be#ween $~ 0 and $30.
APPEALS OF ADN~INISTRATlVE DECISIOIVS. Two hundredfifty-faurofthe
decisions were appealed to the Rent Co~tro~ Board by either the owner, tenant~s), or both
partEes, an appeal rate of 25% Forty-six of the appeais were ~led in 96197. By June 30,
1997, the Board had heard a tvta! of 210 of the appeals, a~d 27 were wi#hdrawn by the
part~es. The Boar+d heard 52 appeals in 96/97. The Board affirmed the decisions in 89
cases, modified t~e decision in 79 cases, den~ed f~ve pet~tions, dismissed five, and
remanded f~ve cases to Hearings.
S PETITIOIVS. The Board also establ~shed a procedure ~the "S-petition") tha~ went
into effect on A~gust 1, 1995 by which ow~ers could apply for pass through af the casts of
soft story retrofitting. As of June 30, ~997, 40 S-pstitions had been ~Eed, 23 of them within
the last year. Thirty-fi~e decisions were issued, al1 granting increases -- 33 for completed
retro#itttng, 1 for proposed costs and 1 camb~ned com~leted ar~ci proposed. Thro~g~ June
30, 1997, one decis~on was appealed; the Baard affirmed the admi~istrative dec~sion.
The appeal occurred in a prior year; no appeals were filed in 9fi/97.
Annual Report -- FY 1998/'97 -- Mar. 5,1998 5
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VACANCY iIVCREA5E5
Duri~g the period of this report, the faw allawed an owner to increase the rent on a
~aluntarily vacate~ unit by up to 15°/a or up to 70°/a of a market le~el determined by HUD
(Department af Housing and Urban Develapment}, whiche~er was greater. Owners are
eligible for two increases upon ~oluntary vacanci~s prior to 1999.
3,83~ Unit vacancy registrations ~R'sj were fited in the past year. Ninety-one were
rejected as dupl~cate filings, and in 96 cases tY~e units were ineligible. Two hundred
ninety-fi~e R's were in progress at the end of #he fiscal year.
ThrougF~ J~ne 34, 1997, a total of fi,865 unit vacar~cy reg~stratio~s (R's) had been filed of
wh~ch 5,492 were forthe frst vaca~cy. Within th~s category, the 15% increase was
applied to ~,040 units {92°!0} and 409 uRits were ra€sed #a 70% of fair markat. Eighf
hundred ninety-one increases were fvr the second vacancy, which app~ied up fo a~ 5%
i~crease in ali cases. O# the 891 se~ond ir~creases, 703 were ~6ted in the ~ast year.
Yacancy Rent Increases for TORCA Un1ts -- !n December, 1995, ihe Baard created a pmgram
allowrng owners at eligibre ors+rrer-oc~up~ed T~RCA urrrts fe rent the unrts at market rare upon authorrzatiorr by
the Board Regulat~on 3302 rmplemerrtrng the program becarne effectrve an January 1, i99S
The pmgram, Vacancy Rent lncreases for TORCA Urrrts, was modeled after the exempt,on which is grantebf ta
smgle famrly dwellings that are owner-accupred for two cavnsecut,ve years (Charter Seciian i8i5)_ An owrrer-
accuparrt wlro has lrved rrr a TQRCA unif far (wo years may apply ta the Rent Caritrol Boarrl f~r aur,horizatrorr t~
establish a new maxrmum allowa6le rerrt (MAR) for the unrt. The authorrzatron grves the orvner pre-apprnval to
set a new MAR when he ar she Ieaves the unrf and rents ~t to a tenant
~ !f the Board autharrzes the vacarrcy rent increase and the unif rs renfed, the o~vner fs reqr~ired ta re-regrster the
unit w,th !ts new MAR ar~d amenrties_
~ Between July 1, 1996 and June 30, 1997, 64 applicatfons far Vacancy Ir~crease for
TORCA units had been filed. Of those, 59 were granted and four were withdrawn. The
~ remam~ng ap~l~cation was pending. Of the 59 uni#s with vacancy increase autharizations,
30 owners rented their units and re-registered tt~e new MARs during the ~iscal year.
~ The tr~creases in MAR's ranged from 27% to 222°/a. Se~enteen increases were under
1 DO%, ~ 3 w~re more than 10~%.
~ Among the 14 one-bedroom units, the pre-increase MAR's rar~ged from $319 to $896 and
the post-~ncrease MAR's ranged from $850 to $i ,900. The median pre-increase MAR was
$672 (affordabl~ at 80% of inedian); #he median post-increase MAR was $1,054
~ (unaffordable a# 100°/a of inediar~).
Among the 15 two-bedraom ~nits, the pre-increase MAR's ranged from $452 to $1,062
and the pas#-mcrease MAR's ranged frorn $1,~00 ta $2,DOQ. The media~ pre-increase
~ MAR was $767 ~affordable at SO% of inedian); the med~an ~ost-increase MAR was $1,400
(unaffarda~le at 100% of ined~an)
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Annua! ReporE -- FY 1996/97 - Mar_ 5,1998 B
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The 3-bedroom unit was increased #ram $824 (affordable at 60% of inedian~ to $~.50p
{unaffardabie at 100% of inedian}.
Tl~e pre-~ncfease affordability af u~9ts was similar ta #he csty aver all. After tne increase no
unit was affordab~e to housEholds w~th incomes under 100% af inedian. Ele~en are
affordable at 100% af inedian while ~ 9 are no longer affordabte even to households at
100% of inedian income.
Because TOA~A owr~ers wit~ ~acancy increases may set the MAR at any le~el, the re-
registered MAR's may pravide some indreation of what "marke# rer~ts° may be. Howe~er~ it
is posssbEe ta infer too much fram t~e new MAf~'s because #h~ T4RCA un+ts in questian
were not representative of controlled units as a w~ole and the sam~le a# 30 is very small.~
7H E COM B I N E D! M PACT 0 F VACAN CY
AND EARTHQUAKE INCREASES
The date of the earthquake, January ~ 7, i 894, was a sign~ficant date for the housing stock
o~ Sa~ta Mornca. On the day before the sarthquake, 11,22~ out of 28,657 controNed
rental ~nits (39%) were affordable to "very Eow ir~come" households (50% ~f inedian). By
June 30, i 997, th~s number had deciined to 8,82D {30.8%) The 2,4D0 units na longer
afforda~~e at 50% of inedian represents a decreas~ of more than 21 %.
The decline of affardable units was aEso fef~ at #he "low incame" (60% and 80% of inedia~
mcome~ levels, and even the "mad~rate" (100% af inedian income~ levef, thaugh the
impact was not as pronounced at the higher fe~els.3
19,133 units (65.8% ofi all units) were affordable at 60% of inediar~ income in ~994, and
~6,792 ~r~ 1997, a declir~e of 2,341 units which translates into a 12.2°/0 ~eductio~ in the
numbef of un~ts affordab~e at this ~ncome level.
2~,848 urnts (90.2% of aIl units~ were affordable at 80% ot med~an income ~r~ 1994, and
24,946 ~n i 997, a dechne of 902 un~1s which trar~slates into a 3 5% reductiar~ in the
number o# u~its affordab~e at #his income level.
27,479 t~nits (95.9% of all un~ts) were affordable a# 1 p0% of inedian income in ~ 994, and
27,i ~1 tin ~ 997, a de~iine vf 328 units whfch transfates into a~.2% reduction m the
number of ur~its a#fordable at t~is inaome ~evel.
2 Penodical~y the Agency cieterrrunes rr~edian MA~'s from unEts in its database The ~nits inc~ude only those on
propert~es w~th faur unifs or more and an~y those un,ts ior which the numher of bedrooms hsted is considered
acc~rate The nurnber of un~ts used in the determ~nation ~s typically be~+nreen 26,000 and 28,a00.
3 For example, for a fam~ly of four, the maximum income at 50°Io of inedian was $24,150 m 1994 and $25,6~a in
~ 997 !n ~ 997 maximvin meorr+e for a famdy of faur ai 64°fo was $30,784, at 84°/a it was $4~ ,040, and at ~ fl4°to d
was $51,300
Annuai Fieport -- FY 7996197 -- Mar 5, 1998 7
Th~s report st~dies the impacts of several ~mportartt factors on the rent [evels in the City
- between January ~ 6, 1994 {the day before the earthquake) ar~d June 30, 1997. It
examEnes changes in median MAR's, fhe affordab~fity o# units, and !ow ~ncome fee
~
wai ~e rs
To the extent possible, it isolates the impact of ~acancy ~ncreases ~both Threshofd Rerrt
` and Costa-Haw~Cins~ and earthqt~ake iRCreases, and also examines the cumulative effects
._ of these increases. To evaluate the relative ~mpact of each type of increase, staff
analyzed severai database reports. Or~e report provided data detaEfmg changes from
- January 16, 1994 to June 30, 1997 and focused on units w}~ich had received earthquake
~ increases. Another report deta~led effects vf ir~creases from September 30, ~l995 #o June
30, 1997 focusir~g on units which had rece~ved Costa-Hawkins increases.
~ BACKGROU~lD ON VACA~tCY II~CREASES
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In 1992 the Rent Con#rol Board ir€augurated the Tnreshold Rent Pro~ram which allowed
~ increases on ~oluntarily vacated low-rent ~nits. A"threshold" ar minimum rent levef was
_~ set for eac~ el~gibte unit based upon the ~eigl~barhood 4n which the property was lacat~d
and the r~umber of bedrooms in the un~t Un~ts were ~nt~tled to only one vacancy increase
~ whic~ ~ncreased the rer~t to the threshofd level.
-~ ~n flctnber ~ 995, impl~mentattion af #he Costa-Haw~cros Act ehmmated't~e need for the
~- Threshold Rer~t Program a~d ~t was repealed by the Board. From the Ja~uary 17, 1994
earthq~ake to the end of the program, 1,465 thresho~d rent increases were granted.
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~ The impact of tt~e Threshald rent ir~creases was rnagr~ified because many of #t~e
vacancies #hat enablEd owners to a~ply for Threshold mcreases were triggered by the
~ earthquake, a factor t~at did not exist ir~ the f~rst two years af t~e Threshold program. More
_ thar~ 500 Threshald rent ir~creases were granted after tha earthquake on units which also
reeeived some earthq~ake increase as well. ln some cases, ~roperties were red- or
~ yellow-tagged and tenants had to move out ur~tii ti~e buildrng was safe. By the time the
_ w building was repa~red, many te~ants had become established at differe~t residences and
did not w~sh to return. In other cases, tenants were fnghtened by t~e earthquake and
, moved to what they cons~dered safer structures, or they feft Santa Monica.
~ Some vacanc~es wh~ch occurred durmg the period ofi the Threshold Rent Program were
~ not repar~ed by the owner ~n#rl Threshol~ Rent had been replaced by sfate-mandated
vacancy increases. In other cases, when a unit had beer~ fef~ vacan# after the earthquake
~' continua~sly thraugh the begmning af Costa-Hawkir~s, the unit may ha~e recei~ed bath
~ ty~es of mcrease Since the earthquake appraximately 240 units were ~ranted both types
of vaca~cy increase.
G,ven the entanglement of t~m~ng and programs, much a# the ciiscussion of vacancy
~ ~ncreases includes un~ts receiving eitner a Threshvld Rent mctease, a Costa-Hawkins
+ncrease, ar both
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Annuaf Report -- FY 1996/97 -- Mar 5, 1998 8
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1MPACT OF VACANCY fNCR~ASES ON M~D1AN MARS~
Gity-wide median MAR's os~ October 14, 1993, three m~ntl~s prior ta the earthq~ake, were:
0-bedroom $408
~ -bedroom 489
2-bedroom fi45
3-bedroom 796
The ar~nuaf general adj~stment was the greater of $11 or 2% ir~ 7994 and $8 or i.5% in
1995. The center column below lists what median MAR's wauld have been or~
September 3~, 1995 (just prior to implementation of C~sta-Hawkins) ca~culated using th~
ann~al general ad~ustments afone. The cofumn on the right lists actua( c~ty-wide median
MAR's on Septemher 34, 1995.
[~umber of 9I30f~5 Med~an MAR's 9I3QI95 Median MAR's
Bedrooms ~ased on Generaf Adiustments Actu~
0 $42T $~45
1 508 527
2 668 fi76
3 824 850
The actuaf increase ~~ median MAR's over what would f~a~e been expected fram general
ad~ustments afor~e was 3-4% over a period of two years ~October i 993 through September
~995). Tnis increase can, for the most part, be attrib~ted to Threshnld Rent increases.
t~ ~ 996 the annua! generai adjustment was $9 or 1 6%. The center column below I~sts
what the MAR's woutd ha~re been on .1~ne 30, 1997 applying the genera~ a~justmerrt afone;
the r~g~t-F~and column Irsts actual city-w~de med'rar~ MAR's an June 3Q, ~ 997.
Number of 6/30197 Med~an MAR's 613D197 Mediar~ MAR's
Bedrooms Based on General Adi~stments Act~al
0 $454 $474
~ 536 557
2 687 708
3 $64 886
The actuaf increase in me~ian N1AR's o~er what wou1~ t~av~ been expected from the
general ad~ustrner~t afone was 3-4% o~er a period of 21 months. This increase can, for the
most part, be attr~buted ta Costa-Hawkins increases.
~ Penod~cally the Agency determ~Res m~an MAR's firom units ~n ~is database The rriec~an is used ~eCause it is
most represerrta#~ve of the "average " It is derrved from listing all MAR's ~n order ~rorr~ ~west to highest; the
median ~s the m~d-pornt_ In analyz~ng rents, th~s r~ethod ~s preferable to addmg up the MAR's and dividirxl by !he
number of units because MAF~'s at the hfgh end haue #oo rr~uch weight and slcew #he resuli
TY~e un~s m~lude vniy thos~ an proper#~es w~th iour unrt~ or more and onty those units for wh~ch the number of
badraoms listeci is considered accuraie The number of uRits used ~n the determ~naUoR is typica[ly be~rnreen
25,OOD and 28,000.
Ann ual Report -- FY 1996/97 -- Mar. 5,1998
~ A~tho~gh other #act~rs could ir~fluence the data, they are stat~stically insigr~ificar~t. These
include increases and decreases granted by the Board, exemptians, remo~als, corrections
of number of bedrooms in a unit, and propert~es bemg reass~gned parcel n~ambers du~ to
~ T4RCA conversions. However, the only #actor tt~at ~ocurred in sufficient nurnbers to
potential[y ha~e a signifcant impact was Q-petitio~ increases. Thougt~ approx€mateiy 34%
of the units in each bedroom-size category had earthquake incre~ses and 20% had
~ vacar~cy ir~creases, tE~~ typical amount of earthquake increase {$10-30y had little impact on
the median MAR, particularly compared with the typical $100 vacancy increase.
Earthquake increases dEd ha~e an impact on city areas hardest hit by the earthq~ake.
~ The data ~ndicates #hat #he ~acancy increases, whefher Threshoid Rent or Costa-Hawkins,
ha~e served to increase #he median rent by 1.5%to 2% peryear. Two elements of the
~ Casta-Haw~cins Act indicate that this increase will be accelerated in #he coming years. F~rs#,
mare units wilf become eligible for the secand vacancy increase, resulting in cumulati~e
increases per un~t of 33°l0, rather ti~an t~e 15% a[[awed on the first increase. Secor~d,
~ beginn~ng January i999, increases upon vacancy will no longer be restricted to 15%. ~ach
time the unit is volun#anly vacated, a rent amount may be set anew.~ Pres~mably, this will
result in increases larger than 15°/0.
~ IMIPACT OF VACANCY INCREA5~5 QN AFF~RDABILITY ,
~ The ~mpact of t~e increases is more mear~~ngful when viewed from the perspective of
affordab~l~ty, or~e of the most important factars affected by re~t increases, In the first 16
years of rent cor~tral, t~e stab~~~ty pro~ided by ~acancy cor~tro! resulted irr a large percentage
o~ un~ts that were affordable to households with a w~de range of incomes, from very iow to
~ moderate, thereby enabl~ng Santa Monica to maintai~ an econamically diverse community.
The following d~scussion uses definitions estab[ished by the federa[ Housing and Urban
~ Developmen# (HUD) program:
Very Law Income -- househo[ds whose mcome is 50% or less than the med~ar~ household
~ mcome for a family ofi four in Los Ar~geles County.
AfiFordable FFent -- r~nt no higher thar~ 30% o# gross ~ncome.
~ Because the focus of the Threshold program was ta increase rents on units with the lowest
rents, the great ma~oraty of ur~its receiving ~ncreases underthis program ~1,202, or 82%} had
been a#fordable ta very law mcome F~ouseholds. Based on the Threshofd Rent increase
~ afone, 775 (64°/a of the ~,202} are no longer afforda~le to ~o~,seholds witY~ an rrrcome at
5Q% af rned~ar~.
~ S~nce #he Thresholci ~nc~ease was l~mitsd to one ~ncrease per unit (a~erag~ng about $~00},
and s~nce the threshold rent levels were roughly based an med~an rerots, of the ~,465
ancreases, alf 0- and 1-bedroom ~nits remained affordable at the 6Q% le~ef (considered to
~ be "low ~ncome"), and only a small number af 2- and 3-be~iroom units became ur~affordabie
at the fi0°/a level.
Annual Repart -- ~lf 1998/97 -- Mar 5, 1998 10
On Sepiember 3Q, 1995, tt~e day be~are Gasta-Haw~cins was implemerrted, a~d i~ spit~ of
the prior impact of the Tt~res~old Rer~t Progcam, 54°/a of 0-bedroom units, 49% Of 1-
bedrooms, 35°/a of 2-bedrooms, and 25% o~ units w~th 3 or more bedrooms were affordable
to "~ery !ow income" hauseholds.
• Also on September 34, 7995, 8~°l0 of 0-bedroom ~nits, 80% of ~-bedrooms, fi4°/o of
2-bedraoms, and 52% of units witl~ 3 or mare ~edroorns were affordabfe to "iow income"
havseholds at 64°/0 of ~nedia~ income.
• Also on September 3D, 1995, 94% of 0-bedroorn units, 97% af 1-bedrooms, 93% of
2-bedrooms, and 86°fo of units wi#h 3 or more bedrooms were affardab~e to "!ow income"
ho~aseholds at 80% of inediar~ ~ncome.
By .lur~e 30, ~ 997, less thaR two years later, a sign~f~car~t number of units that had once
been affordable to the very low i~came group were no lor~ger affordable to t~em.
A s[ight loss of affordability is attributed to the interver~ing annual g~neral adjustment that
occ~arred in September i996. Because the HUD affordability ~evels did not change that
year, ancf #he g~r~eral adjustment increased rents by 1.6% or $9, whichever is higher, some
attrition accurred The great majority of the loss of units affordable at the 50% ievel is
attributable to Costa•Hawkins increases.
AFFORDABILITY FOR VERY L~W INCOME HQUSEHOLDS (509o OF ~
MEDIAN)
In 1994 according #o HUD, ta be considered very faw income (~0% of inedian ineome}, the
maximum mcome for a family of four was $24,150; m~ 997 it was $25,6505.
The table belaw identifes the n~mber ofi urnts at each bedroom size and percer~tage of total
(28,657) un~ts whicf~ were affordable to ~ery ~ow income ho~aseholds on January 16, 1994
(befase the earthq~,ake} and as of Jur~e 30, 1997.6
No. of Un~ts En Affardable % of Affordable °/a af Amt. of
Be~rooms $~~ U~~ts in 1994~ Total ~l~its ir~ 1997 ~'otal ~han,g,~
Q Z ,326 885 -33.3%
f 5,882 4,6Q6 -2~ .7
2 3,394 2,79 i -17.8
3 or more ~1$ ~38 -14.6
Total 28,657 1 f,220 39 2% 8,820 30.8% -21.4%
~The analys~s below meas~res t~e effects of increases on very low incorr~ househvlds as if all househofds in
the group had the maxirnum aual~fyir~g income in faci, most ho~seholds had even bwer incomes and because
afforda~xl~ty ~s b~seci 4n a pe~centage income, households w~th l4~ver i~comes wi41 find even ~e+rier uriits
affordable.
6 The units ~rpclude anry those or~ propert~es wdh fo~rr ur~iis ar more and on~y thase units 3or which the number of
bedrooms hsted ~s considered accurate ln the case of th~s report, the total number of ctnds was 28,~7.
Annual Report -- FY 1996197 -- Mar 5, i 998 1~
~
,
fn a#her words, 2,400 units ~~ 1,200 less 8,820} w~ich had ~een affordab~e to very low
income househoids, no ionger are. The loss of those 2,400 un~ts diminis~ed the number of
UnEts affordable to very low income famities by mo~e than 21 %. Uni#s wi#h 0-bedrooms
were impacted most; one-third of #hose units were lost.
The database cannot direc#1y track the factors that caused the units to lose a~fordabifity. But
it was possible to indirectly determine and examine the ma~or influences -- ~acancy
i~creases and ear~hquake increases
During the intervening period, the Board granted i~creases on earthquake petitions
affecting 2,654 un~ts w~ich were affordable at 50°/o prior ta the earthquake.
I~ the majority of cases (1,581, or 59.8°/0), the earthquake increase was sma11 enough t~at
~ t~e un~t was stifl affordable at 5~% on June 3D, 1997. 112 of the 2,654 units had both an
eart~quake and vacancy increase {either Thresho[d Rent [30~ or Costa-Hawkins [82]~ and
s~~ll remained affordable at 5Q%.
~ The 1,a73 remaini~g units wEth earthq~ake increases were r~o longer affardable to very low
~ncome hausef~otds. These ur~its represent nearly hal# of the 2,~00 that last affordability.
299 units lost affordability due solely to the earthquake increase, while others i~ad as many
~ as four ir~creases (eartY~quake, thresho[d and two Costa-Hawkins) which contributed to t~e
loss of affordab~lity. Near~y ~alf (500} had one vacancy increase in addi#ion to the
~ earthquake increase. Another 264 urnts l~ac! two orthree vacancy increases in addition to
fhe earthquake ir~crease.
~ Some ~an~ts whicM lost affordability at 50% of inedEan income were affordable to households
at the next income [e~e! up (fio%); other ~nits became unaffordable even at i 40% of
rnedian More than one-third af units became affordabfe at the 8a% of ined~an le~et or
~ higher After the increase(s):
717 were affordable at 60% of inedian
326 were affordable at 80% of ined~ar~
~ 22 were affordable af 100% of inedian
S were unaffordable at 100°fo of inedian.
~ In the Costa-Hawk~ns study, of th~ units on whECh Gosta-Hawki~s :ncreases had been ~led,
1,692 units were affordab[e at 50% on September 30, 1995, and by June 30, 1997 onEy 461
(27.3%} were a~forda~ie.
~ Of the 1,231 un~ts that were no longer affordabEe to ~ery fow income families, and wI~~ch
had at {east one vacancy mcrease, 351 also ~ad earthquake increases. 880 were no
~ longer affordable ta ~~ry Eow income fam~lies based upon Costa-Hawkins vacancy
fncreases alane.
fn summary, the ioss af affordab~l~ty of 2,40q units to ~ary fow income farnilies is attributable
~ to:
Earthquake increase alone 299
~ Costa-Hawk~ns incrsase alone 880
Combmat~on of earthquake and ~acancy increases 77~
Threshvld rent increases aEone or other factors 547
~~
Annua~ Report -- FY 1996/97 -- Mar 5, 1998 12
~
fMPACT OF Q-PETITlON INCREASES ON AFFORDABIE.ITY
To assess ~ow much the earthquake pe#itian increases aiane were responsible for tF~e
decline ir~ affordable units for very iow income househo(ds, the impact was compated for
se~eral groupings of units: aEE un~ts in the ci#y, units wf~ich recei~ed earthquake
increases, units whic~ did not recei~e earthquake increases, ~nits in area A(Ocean
Park -- where earthquake damage was not extensive), Areas F and G~north of HV~Is~ire
-- where some pro~erties experienced substantiaf damage~ and properties that were
tagged red or yellpw, meaning uninhabitable, at leasf temporarily.
The chart below compares the loss qf affordability at the 50% of inedian income level for
each of the categories. The n~mber of units in the selection is in parentheses:
Cateaorv of Units
AIE units {28,6~7)
With no Q-petit~an increase (~ 9,794)
Area A {4,9$1)
Areas F and G(~ 1,093)
W~th Q-petition tncrease (8,863}
Red- and yellow-tagged (1,672)
A#fordab~e a# 50°fo Affordabte at 50%
tn 1994 in 1997
39.2%
~3.3
3~.6
2s.s
30.0
32.5
30.8%
36.5
24.2
19.0
18.1
17.7
°/4 Chanc€~~
-2 i .4°/Q
-15.8
-23.6
-28.5
-39.6
-45.7
The impact of eartF~quake increases can be seen in the decl~ne 4f affordabtlity. Those
gro~ps of un~ts most affected by the earthquake Eost affordable units at a higher rate
(s~awn by a greater percentage of change in tE~e right-hand calumn}. On the other hand,
areas of the city suct~ as Qcean Park, wh~ch ~ad relatively I~ttle damage~ lost affordable
units at about the same rate as the city as a whole, 23.6% compared with 21.4%.
Notable also is the fact that the units hardest hit by the earthq~ake were less affor+dable
before the earthquake t~an the city as a whole or the units which received r~o
earthq~ake increase The earthquake caused the most damage in areas where tf~e
rents tended ta foe h~gher
Neafly ~ 6°Ja af units ('~ 5 8%} lost affo~ciabrltity s~ren ti~ the abser~ce o# earthquake
~~creases, this represents the norm. In ather wards, of #t~e 2i.4% decline ~n affordable
un~ts c~ty-wide, 15.8% cannot be attnbuted to earthquake Encreases Viewed another way,
o~ly 5.6% of the decli~e can be attnbuted to earthquake increases. Most af #he decline is
the result of ~acancy increases ~discussed ~r~ tl~e Costa-HawkiRS section abo~e.)
~ Represents change ir~ nurr~er of a~fordable urnts in 1994 to number of a~fordable units ~n i 997. For example,
~n 1994, ~ 1,220 (39 2%) of all 28,657 units were afforciable, in 1997 8,820 (30 8%) were aifordable. The
percentage change tis (i 1,220 - 8,820 = 2,404) tiiv~ded ~y 11,220, whtiCh is a decline Of 2ti 4%_
A~nual Report -- FY 1996/97 -- Mar. 5, '[99$ 13
1MPACT 4F VACANCY INCREASES ~N FEE WAIVERS
_ The loss of very low incom~ hauseholds dunng this period can also be seEn by the
char~ges in ~aw incame f~e waivers. The number of fee waivers typically ~ses and falls
- during the year. Generally, however, they decrease ~n June and increase again by
December. EveR when rents were rising as a result af Threshold Rent increases, the
- number of low income fee wai~ers remained #airly constant. Law income seniflr fee waivers
~ were consistently ir~ the 900's through December 1993, one month before #he earthquake.
One year later, December 1994, t~e number was s#ill 895. Howe~er, from t~a# poirrt on, #he
- number continued to decline untii by June 3~, 1997, it was down ta 756.
The impact resulting from vacancy increases is clear. In September ~995, there were ~19
~ senior fee wai~ers and 26 disabfed fee wai~ers En the ~,358 units which subseq~ently
_ received ~acancy increases. On June 30, 1997, these same ~nits had only 9 senior f~e
wa~~ers and 5 disabled fee waivers.
The impact on Section 8 fee waivers has been somewhat different. -"fhough the total
~ nurnber of Section 8 fee wai~ers has sligf~t~y increased over time, the number of waivers on
~ units with ~acancy increases has dechned dramat~cally. In September 1995 there were
748 Sect~on 8 fee wa~vers -- 104 af those were on un~ts which subsequently received
~ ~acancy increases. In June 1997 though there were 751 5ection 8 fee waivers -- only 64
_ were units that had had vacancy incrsases
- Pre~~ously owners entered ir~to cor~tracts for Section 8 tenants because it rnade aconQmic
_ sense -- they received ~igher rents than permitted under the MAR. Now in many cases, tY~e
first ar second ~acancy increase raises t~e MAR h~ghertha~ the "fair market rents" paid by
- HUD After ~fanuary ~, 1999 when rents far new vacanc~es can be s~t at any amount the
owner can collect, there wilE be even less economic mcenti~e to rent to Sect~on 8 tenartts.
~ Also during this penod, the HUQ r~les char~ged and allowed owners to opt out of Section 8
contracts mote easily thar~ ~efore Same owners canceled Section 8 cor~tracts on existing
~ tenants While this action reduced the lawful re~t back to the MAR, the tenants were now
_ ~esponsibie for the entire amount when prev~ously they paid 30% of their household
income and HUD pa~d the d~fference This increased burden on the tenants caused several
y to move, act~ons the owners claimed were "~ofuntary " They, #herefore, belie~ed that they
_ were entitled to a Costa-HawEcins increase
~ ln summary, once a unit rece~~ed one vacancy increase, the likeE~hood of ~ts being rer~ted to
_ a Section 8 or ~ery low mcome sen~or or d~sabled tenant d~minish~d substar~tially. The
ta~le below tall~es the gaiNretent~on of fee wa~~ers and the loss of fee wa~~ers fallowing
, one Costa-Hawkins vacar~cy increase
~
_
~
- .~
Annual Report -~Y T996f97 - Mar. 5, 1996 14
•w,
Fee W~iver Fee Waiver
Status ~ained! et i~ed ~
Vacating low income fee waiver holder replaced t~y
new (ow income fee waiver halder 5
Vacating non-fee waiver holder replaced by Iow income
fee waiver hofder 10
Vacating low income fee waiver ho~der (~ 18 senior,
24 disadled) replaced by non-fee waiver holder 742
Vacating Sec#ion 8 tenant replaced by new Sectfon 8 tenant ~ 8
Vacat~ng nan-fee wai~er Y~older rep[aced by Section 8 tenant 44
Vacati~g Sec#ion 8 ter~ant replaced by non-fee waiver #~o(der ~. $~
77 227
Simiiar losses occurred after owners taok a secand Costa-Haw4cins inerease. Qf $~'! units
wtth two Costa-Hawktifis inc~eases, 19 t~flits ~ad se~ior €ee was~~rs-or~ Septeml~e~' 30,
~ 995; three f~ad t~em o~ ~une 30, 1997. Two un'sts had d~5a~led fee wai~ers in 1995 ar~d
one ~n 1997.
!n September ~ 995 there were 25 Sectian 8 fee wa~vers on ~nits which subsequently
recsirred two Costa Hawkins increases, in June 1997 anly 9 were units that had had two
Costa Hawkins Encreases.
Three u~rts that had a Sect~an 8 fee waiver pr~or fo the inc~eases, brought in anotF~er teRant
wl~o also hacf a Section 8 fee waiver after the second increase. One Section 8 fee wa~ver
holder was replaced by the hoEder of a~ow ~ncome tee waiver. ln 6 cases, the unit was
rentad to a Sect~on 8 tenar~t after a vacancy by a tenant who did not have a fee wai~er. ln
21 ur~~ts, the Section 8 tenant was not replaced with a tenant witi~ a f~e waiver.
ln summary, ~or t~e units with fwo vacancy increases, after 21 months of Costa-Hawkins
Encreases, tee waivers were gained or retained oR 12 units and lost on 32 units.
1MPLICATIpNS FaR THE FUTURE
The t~ata abvve d~s~ribe a t~ousing stock wh~ch is rap~dly chang~n~. Th~se char~ges
ind~cate the trends for the future af affor~abie t~ous~ng and an eeor~om~cally ~tiverse
pQpulation ~n #he C~ty. 4n botri cour~ts, the data s~ggest a cont~r~~rous decline taking place
awer a snort periad of time.
• More then 1,OOQ units los# affordab~lity far very law income households (50% of
media~} over a period of 21 manths (Octo~er 1, ~ 995 through Jurre 30, 1997}, an average
of sl~ghtly under ~D un~ts per manth Ifi the trend cantm~,es, 600 units currently affordable to
very low ~ncome famrf~es w~ll no ionger be affordable ta them by June 30, ~ 998 and 900 will
ha~e been lost by January ~, 1999 The num~er o~ units affordabie at 50°la decre~sed from
11,220 before #he earthquake in Jan~ary 1994 to 8,820 in June 30, 1997, a decrease of
~1.4°Io in 3 i/2 years. The projected loss of 9~0 units wouid be an add~tior~al decrease vf
i 0°l~ in 1 112 years -- a rapid acceleration in the toss of affordabte un~ts.
Ann ~a! Report -- FY 1996P97 -- Mar. 5, i 998 1$
• Low income house~olds may rent ~nits that are not affordabie to them. Mar~y
households already pay rent that is a larger p~rti~n of their income than HUD co~siders
affordaE~le (30% of gross income is consid~red affordable). As a result of vacancy
increases, more houset~olds may pay an e~en larger portion of #f~eir income for rent. ~n the
other har~d, overcrowding may increase when households attempt to add more ir~come
praducers to pay the rer~t. Mast likely, howe~er, the number of low income households in
Santa Mon~ca wi11 decrease along with the decline of housing affordable to them. They wiil
be torced to go elsewhere for affordabls hqusing.
• The data dramaticalfy sF~aws #hat once a vacancy increase is taken, ff~e
prabab~lity is very low that it will be re-rented to low income seniors or disabled tenan~s.
This is the case whether or not the u~it pre~~a~sly was rented to a very low tncome seniar or
disabled person. Santa Monica has maintained a l~igh percerrtage of seniors o~er the pas~
30 years Qther stud~es ~a~e shawn that a gr~at percantage of them are !ow income. TI~e
data ir~ this st~dy ind~cates that the nurnbers of senior renters wiil decl~ne rapidly fn Santa
Monica as un~ts are vacated and ~he rents increase
• Though the data is r~ot as clear-cut, the evider~ce svggests t~at once a~acancy
~ncreas~ is taken, it is ~nGkely that it wiH be rer~#ed to a t~nant with a Sect~on 8 oor~#rac~ ar
certificaie, whether or not the un~t previously was occupied by a Section 8 tenant. The HUD
rules that make it easier for owners ta opt out of a HUD contrac# and the dim~nishe~
econom~c benefit of Section 8 tenants mdicate #hat #ewer owners wilf elect to provide
hausing ~nder Section 8.
• The data ind~cates that ho~smg costs will continue ta rise, becoming more
~naffordable at e~ery income le~el Th~s partends an Enflux of affluent rente~s accompanied
hy an exodus of Iow and moderate income hauseholds, resuiting ir~ a~op~lation much less
~conom~cally diverse than it has been ~n recent years.
Annual Repart -- FY 1996/97 -- Mar 5, 1998 7 6
CHAIVGES I N 7H F H~USI I~G ST4CK
In order to foliow changes in the housing stock in different areas in the City, severa! years
ago the Rent Board divided the City ~nto sever~ areas~ which parafle~ neighborhoods and
census tracts. Remavals, E~lis withdrawals, demal~t~ons, develapment, TORCA statis#~cs
and other data are rdentifred a~d anaSyzed ~y area.
The City areas ar~d approximate percentage of re~#al units it~ each are shown below:
Area A 17%
-
Area 8 ~12% o
$ D
G o ~.a SI11
Area G
5°!0 ti
; °
~ ~ N-PoA
Area D
1 D% ~
~ E ~' B
~Khst ~
~
A~ea E ~ S%
~~ uncao~n 9hrr1
Area F ~ 7% ~~,n s~ ~ C~ 1 A ~
Area G 2 i °Io
TRACKlNG RfSIDENT/AL D~VELOPM~NT
The Rer~t Control Board tracks res~dent~al de~elopment iR the City using Planning and
Build~ng Departmen# records ar~d perm~ts as well as Rent Gon#roi recordsa.
Tf~e completed deveiQ~me~t d~r~ng the Qast fiscal year reflec#s the slow deveiopmen# rate
prer~~lent i~ the ea~ly 1990's. The re~ent t~psurge ~n development is r~ot yet ~eflected in
c:omp~eted pro~ects
N~vertheless, the devefopment that has be~n comp~eted indicates that there has been an
i~tensification of use, that is, more un~ts have been burK than ha~e been removed.
Co~u~t~r~a ~a~vsrr~ucrro~r
Eigh# projects which contairr 129 units were compieted These projec~s replaced 4Q
residential u~its. One of tf~ese properties ~i2 un~ts} was re~uRlt pursuant to a Rent Gontrol
B~ard settlement agreement.
8 Ali ~nformat~on related to new constn~ct~on comes #rom the C~ty'S PERMlT system
Annual Report -- FY i 9J6197 -- Mar 5, 7996 ~7
~--
~
1
~
I
~
~
~
~
Details of the remaining 1~7 comple#ed res~dent~a! ur~~ts are:
Condomin~ums • T~ree properties (14 ~nits), wi#hdrawn u~der E31is, recei~ed a
certificate of accupancy for 33 candominiums. In {~eu fees were paid
to meet Proposition R requiremer~ts. One 20-unit property includes
th~ee moderate income le~el units and 3 ~ow income ur~its.
Rentals • Two properties with 3 u~its each that rece~~ed Ca#egory D removal
permi#s were repfaced by 56 (28 at each property) units, faur o~ which
are deed restrictec! to tenants of low income (at the 80°l0 of inedian
~ncome level). However, the City's Multi~amify Earthquake Residential
Loan P~ogram ~MERLP}, which ~ro~ided most o~ the funding, requires
that al! un~ts be deed res#rrcted to tenants of low income at tfi~e 6~% of
med~an income level for the per~ad of the loan (30 years}.
• One 4-unit property recei~ed a aQ removaE permit and was rebuilt
with four market rate un~ts, ane moderate income level uni# and one
low income unit -
Residential deveiapment was completed ~n f~ve of the se~en areas m the City. The table
below indicates the ~nrts remaved and ur~its built in each City area.
f Rental Units
~ Ur~~#s comp~eted pre~iousEy removec~
~ ~i~v Area in FY 95/~6 from these sites
B 20 ~2
~ G 56 6
E i$ i3
~ F ~2 1
G 23 $
Tota! 1 29 4 0
~ THf ELIIS ACT
~ When the EIIrs Acr beeame la~ rn July 1986, rt allowed landlords ta go out of the rental bus,ness, evicf renants,
and an+~thdraw unrt5 from fhe hpusing market
Dur-ng the ~ 996197 fisca! year, nme properties containing 48 residentiaE rental ur~its were
~ withdrawn fram tfi~e residential renial housin~ market under the Ellis Act. The ownec of
one property with one rental unit began the wEthdrawal process but elected not to
compiete it.
ln ihe same per~od, awners of three propert~es w~Ech had previously beer~ wi#hdrawn
rescinded the withdrawaE and re-rented the un~#s. The 13 u~~ts on these properties are
again ~nder Rent Contraf.
T~e net loss of units dur~ng the #~scal year was 35. Howe~er, as a result of mocli~icat~ons
to the database re~at~ng to withdrawals from pr~or years, the totals reflect a ct~ange of 55
units. As af J~ne 30, 1997, 215 praper~~es conta~n~ng ~,054 units F~ad been withdrawn.
Two ~roperties with a#otal of f~fteen urnts had begun tf~e process of withdrawal.
Anrsua! RepoR -- ~1(1996I97 -- Mar 5, 1998 i 8
TENANT OWNERSHlP RIGHTS CHAi~TER AMFNDMENT CfORCA)
!n i984 Santa A+lonrca vo[ers approved the 7enant 4wnershrp Rrghts Charter Amerrdment (TORCA) through
wh-ch an apartmenr burldrng could be converted to condomrnrums ~f a suffrcient nurrrber of tenarrts approved
fhe conversion and agreed ta pc-rchase their units_ Protect-ons were burlt m for tenarrts wno drd nat rv~sh to
purchase therr unrrs. Not a!I converted units are losi from the rent control hous,ng stock ~rrrme~ately. Current
tenants may conhrrue fa occupy them.
The provisions of the TORCA law ended on Jur~e 30, i 996. App~ications filed prior ta the
deadline are stEll processed, but no further applications are accepted ~y t~e City.
As of June 30, 1997, TORCA conversions had been appro~ed for 3~ 9 properties
contair~ing 3,233 ~nits. Of those, 1,525 units had been sold on 202 properties; 599 units
on t~e same properties had not been sold. On 117 of the projects, r~one of the 1,109 units
had been so~d.
An add~tional three ~roperties canta~ning 155 units were penr~ing canversion at the er~d of
the fiscal year. This includes one mob~le home park (Mountain View - 1930 Stewart
Street) with ~ 4i units _
REM VAt PERMITS
To pratect the controlled renta! l~ous,ng stack fhe Aent Gontrol Board applres tJ•~e provrsians of ihe Char~er ta
decrde whefher or na# ta grant removal permrts There are several fypes af removals whrch ihe Baard may
grarrf.
• Cafegary B- ~f the Baard frnds thaf the Maximum Allowa6le Rent daes not provFde a fa-r ~efum and that the
landlord cannot rent the un~f at the rent necessary to prov~de the landlord with a falr return.
• Category C-- rf fhe BoarC fnds thaf fhe un~t rs unrnha.brta6lB and cann0i be made hah~table in an
econamrcally feasi6le manner.
• Category D-- ,f the permrf ~s 6erng soUght sa fhat the prope~ty can be developed wr'th mul~famfly renta!
units, the demolrshed rent coRiro!!ed urrlts wr!! be repl~ced wrth fhe same number of renf cantrolled unrt5,
and at Ieast 15/ af the controlled Lnrts to 6e burlt will be at rents affordable ta law rncome people Because
unrls removed under Garegory D are replaced wrth other cortfrolled rental unr~s, they are nor treated as unrts
Ivst to the housmg stock
Tl~e 8oard also aafQpted special regulat~ons tar the re~rovaf af earthquake-damaged propertres {ca!!ed CQ and
DQ removalsJ_
[n the period Ju~y 1, 1996 through J~ne 34, 1997, the Board granted a Category C permit
for one property wrth 6 units and a Caiegory D perm,t far the remo~al of a one-~nit
property
Uti~szing the regulat~ons for prflpert~es damageci by the earthqua4ce, t~e Soa~d granted
Gategory CQ remo~als for f~ve properties with ele~en total units.
Twenty-eight units on each af two propert~es remo~ed under Category D were returned to
the ho~smg stock. One property which had recei~ed a Category DQ removal p~rmit
returned six controlled units. Another ~roperty with 16 units were re~umed under the
cond~t~ons of a Gategory D settleme~t agreement
~ .:_ ~~
Annual Repori -- FY 7 996/97 -- Mar 5, 1998 19
~
~-
~
~ ~XEMP710N5
The Rent Control Law applres to al! resrderrtral renta! unrts in Santa Manr'ca, except thase rhe Charter exempts
~ Under a number af drfferent cnieria There are two krnds af exempirans: 1) use exemptrons whrch the owner
retarns as long as fhe cntena far whrch the exemptlan rs granted remarn rn effect; and 2) permanent
exemptrons
~ Permanenf Exemptlans -- Permaneni exemptrons are grarrted for srrrgle farrrily dwellrngs not used as
reniafs {§i8l5} and far new constructlan (§~80i}
In th~s fiscal year, there were 18 declarations submitted for srngie family dwel~ings stating
~ that the str~rctures were ~o# rented on July 1, 1984. Se~en other single family dwellings
were aiso exempted under §181 ~.
~ Use Exempttons -- Use exemphaRS are granted for unrts used as fo~laws.
• Renlal unris ~n 6urldrngs havrng two or fhree unris, one of wh,ch 1s occupled try the owner,
• Resrdentral unris whrch have never 6een rented or far whrch renr has never beerr collected srnce frhe
~ Begrnning ot reni conrrol {non-re»tals),
• Resrdent~a! unrfs used for hausrng as a necessary par# pf a saaal serv,ce program on a non-~orofri basrs.
T~e foilowing use exemptions were granted:
~ Tvne of e~~motion Number of ur~its af~ected Number of orooerties affected
owner-occupied 52 20
~ non-rental 2 9
~ hote]Imotel 17 1~
Totai 71 2 2
These exem~#~ons do not all represenf a foss of cantrolfed rental unEts from the haus~ng
stocK jr~ ~ 996/97. OnE 3-un~# property rece~ved an owner-occ~p~ed exemption for the first
time The balar~ce of the owner-occupEed prapert~es had previous exemptions.
UIVIT SUMMAI2Y
Reduct~on ~n
Activitv ~~r~trolled urn~,~
Ellis act~vrty -36
Category G Removafs -6
Category D Removals -1
Ca#egory CQ Removals -11
Category DQ Removals
New use exempt~ons ;~
Total -57
Ir~crease tn
controfled un~ts
a-14
+72
~fi
f92
Net change in
cor~troiled un~ts
-22
-s
+71
-11
+6
~
+35
Annuai Report -- FY 1996/97 -- Mar 5, 1998 20
PR4GRAM, P~LIClES A1~[D ~4DN11N157RATIQN
PUBtIC DUTREACN
Recently the Fient Controi Agency has been expanding public outreach efforts. This fisca!
year, the Board resumed pub(ication of its newstetter "Rer~# Control News" and produc~d
two issues. The first issue was mailed to tenants, landlords and other ~r~terested parties in
January, ~997. 1t included articles on maintenance af rental property, lead paint hazards,
and evictio~s, as we11 as information about Rent Control Board p~blic meetings. T~e spnng
issue, mailed in April, 1997, ar~nounced important changes in Board regulations and
procedures regard~ng rent increases follawing vacancies. it atsv featured information on
sec~arity deposits, rent reductions, and med~ation services a~fered by a local non-profit
organization.
This year severa~ easy-to-read information sheets were added to mate~a~s available to the
public. The annual surnmer mailing ir~cluded an informat~or~ sheet with answers to same of
the most commonly asked questions. ln daveloping these matenals, emphasis was p[aced
on pro~iding accurate, useful i~farmation ~n an attractive and easy to understand format.
In addit~on to producing tt~ese written materials, information coord~natars ha~e staffed
informai~on booths at numerous commUn~ty even~s, ~ncluding ihe Santa Monica (Clover
Park~ Festivai, the Police Gentennial Celebratian and the various neighbofioad
assoc~ation meetings. Addr~ionally, an informat~on coord~nator visited the Zocal ser~ior
center, providing r~nt control informa#ion most rele~ant to senior residents.
The Public Infarmat~on Department continues to investigate addit~anai methods to Emprove
comrnur~ity c~utreach, ~ncludrng coord~natmg efforts w~th those of ott~er city departments and
lacal nan-profi# organ~za~~ons anci develop~ng a Workd Wide Web presence.
SIGNIFI~ANT L~GA~ DFCISIONS
1996/97 was marked pnmar~ly by a period of status quo w~th respect to litigation. The major
legal issue facir~g the Board, the direct cons#~tutional attack on rent contro! as a"taking" of
pr~vate property without just compensation, rema~~ed unresolved at the end of ihe period.
The pnmary case on this issue, Kavanau v. SNfRCB, was pending before the Califomia
Su~reme Court throughout the year and was decided in the Board's #a~or after Jur~e 1997.
Additionally, in lit~ga#ion similar to that brought against otfi~er rent control }urisdjctrons, t~e
Rent Control Baard ~as been faced w~th lawsuits seek~ng ta have the Rent Control Law
ruled unconstitut~anal k~ecause #he landlord ckaimed i# failed to meet its in#ended purpose.
One case, Santa Monica Beach Ltd. v. SMRCB, is still before #he Galifornia Supreme Court.
The Board did preva~I at trial ~n a similar ~ase, Craig v. SMRGB, when the trjal judge
granted the Board's mot~on for non-su~t.
As a result of the Court's recent decision in Kavanau, ii ~s expected tha# Sanfa Monica
Beach will be decided some t~me ir~ ~ 998.
Annual RepoR -- FY 1996197 -- Mar S, 1998 2~
~ m~~
R FG ULATIDNS
!n 1996/9i the Board adopted, amer~ded or repealed twelve regu~ations, inc~uding the
~ 997/98 annual genera! ad~ustrnent {Reg. 3019) and ~egistra#ion fee (Reg. 110~ 8).
The most sig~~ficant activ~ty invol~ed ad~ustments to the procedures for implementir~g an~
processing rent adlustments pursuant to the Costa-Hawkins Rental Ho~sing Act. The
Board amended Regulation 334'~ regardmg the registratior~ upor~ re-rental ta reflect cer#ain
amendme~ts to the Act through state leg~slation. The Board alsa adopted Regulation 3303
reqwring that landlords notify their incoming tenant, in wnt~ng, of the maximum allowable
rent. Regulation 3302, the TORCA ~acancy increase progTam, was also ame~ded to clariiy
#he procedures for obtaming the increases.
lNCENTIVE HDUSING PltOGRAM
~ 1n ~984, as part of a Charter Amer+dmeni, Santa ~anrca vafers passed a pravrs-omf§18~5(i)J which aufhonzed
the Board ta "enacf reg~lafrons to pravrde for lncreases of rents on r~nrts voluntar-!y vacated where the landlord
has dedreated a percentage of uruts fa be renfed at affordable rates fo low-rncome tenants "!n i989 fhe Baard
r passed Chap[er 1 T, Hegulations for Inclusionary Housing Pifof Program "
DurEng the seven years t~e program has been ~n effect, 43 cor~#racts F~a~e been approved
by the Rent Contro! Board. Fi~e of the contracts were subsequently w~#hdrawn. Thirty-eigt~#
prope~ties with 223 units remain acti~e. As of June 3Q, 1997 there are 11 Q inclusionary
sets m place.
There are 113 dedicated units. Eigf~ty of these are rented to ho~seholds qualifying as "very
low ~ncome" (90% have HUD subs~d~es); the remain~ng 33 units are rented to house~olds
qual~fy~ng as "low ~ncome."
ANNUAL ~ ENERAL ADjUSTMENT
7he annua! Generaf Ad~ustment rs a defermrrratron rrrade yearly by the Board whrch alfows a!! Iandlords to ra,se
renfs by a spedfied amount to keep pace wrth fhe r~crease rn aperat-ng expenses. Over the years the Board
has used varrous meihoafs fa amve at the Genera! AdlustmenL
For the 1996/97 Annuaf General Ad~ustment, t~e Board used the "pie method" to analyze
the increases m opera#~ng oosts by the var~ous components of the rent dollar The Board
also took ~nto co~sideration the findings of a cons~~tant hired by the Board #o assess the
impact af increases in the costs af ir~surance.
The Board adopted a general ad~ustment En max~mum rent levels of i.fi percent or $9,
whichever was greater. The $9 was set to prov~de a minim~am mcrease to apartments with
the lowest rents SEnce these un~ts have many of tF~e same expenses, such as trash
collect~an ~ncreases, as the h~gher reni units, tE~e ~9 assured owners of the mmimum
necessary to cov~r the~r actual costs
Annual Repart -- FY 1996/97 -- Mar 5, 1998 22
~I~IDIYfDUAL REN7AOJUSTMfNTS
Incr+ease Petltlons -- Property nwrrers rrray peMron the Rent Control8aard for rerrt increases ab~vve the
year~y general ad~strr~ent ~e to mr'r~afeted or p~tarrned caprtai ~rr~xovements, fadc ~ a fair re~rm ar mc~ased
o,verabng experr~es nat covered by fhe genera! ad/ustrn~ertts
ln FY 1996I97, 16 ir~crease petitions were received by the Hearings Departmer~t.
Heari~g examir~ers isst~ed deasions in 10 c~ses (including four filed the prior year) Eight
increases (80%) were grar~ed and two cases were denied. One pet~tion was withdrawr~.
Two pefitions were dismissed ~one of which had been fried the pnor year.) At end of he
fis~al year, ~ight p~titions were pen~ing.
Professional Expenses Addenda -- Profess~ona! expenses addenda are ,ssued 6y hearing
examrrrers rn r~spornse ro~quests from owners arad renarrts rn relatron ta the ownefs piursurt ofi C~nsbfu~orral
rx,~hts with rega-d t~ the Rerrf Cor~iu! Law. 71~e pmfessional experzses category ~ras added rn f99~55 rn
resp~onse to the State -aw whrda reqcured 1t. _
In 1996197, eight prafessianal expenses addenda were issued, af~ approvir~g fees. All
eight addenda, whicn had been reguested by land4ords, were approved.
Hardshlp Addenda -- Low maome tenarlts may apply for hardshrp addenda when irrcreases grarried
exceed 12°~6 of the MAR or $5Q whrchever rs greaier. The adden~a schecfules out the ir~crease over a pericd of
rime, not exceed7ag 60 rn~nths
In the tast year two hardship addenda were issued, qualiiy~ng two tenar~s. Fve
add~tional tenarrts were placed on a hardsf~ip schedule because additional mcreases w~re
grarrted m subseque~rt addenda upo~ oompletion of proposed caprtal improvements.
Decrease Pefitlans -- Tenarrts whose rer-tal urnis need repalrs or marnfenarlce, ~r whose housing
serv,ces trave 6een re~r~, may pe~tron to have the~r rr~nthJy renl ~~creasad The tenanYs frrst step rs fO
request that the owner rep~r the pmblem or re,5tore the servrce. !f fhe o~vner daes not meet thrs req~uest, the
tenar~ may peh~an for a rer~ decrease When the owner makes rec~ulred reparrs or restores servrces far whicah a
dacxease was granted, the decreas~cf amour7i ~s re-nsfated to fhe rent. Wf~en a decrsase pe~bon rs fiiecl, a
settlerrrent cnrrference is scl~eduled to resohre the rssues wrthaLt a heanng, rf p~ossrble.
Received for Medi~#ion 103
S~ccessfu! FuJly Resolved 31
Resoiutians: Parfia!!y Resolved 28
No resolution-referred t~ heanng 35
W~thdrawn or D~smissed 6
f n process 3
Annual Repori -- FY ~ 996l97 -- Mar 5,1998 23
~iecesved ~or Hearfna from Mediatian 57
Decreas~s granted 28 (49~
flecreases den~~d 3
D~smissed 3
Witt~drawr~ 5
In process 18
14einsfa~ement of Decreases -- Reinstatemenf of decreases accurs upan recerpt of a Request for
Proposed Addendum and verrficatron that the corrdrtrons were corrected.
ln FY 96/97 the decreases in efever~ of the 49 approved petit~ons were fully reinstated and
were partially reinstated in ar~other 17. Additianally, decreases awarc~ed 'm decisions made
in prior fiscal years were ful~y reinstated in ~ 7 cases and parfially re~nstated in eight.
Administraf~ve Petitiorrs -- Adm,nrstrafrve petitrons may be filed when an rndrv~dual decrease petrfidn
afes a common area problem sucl~ as a leaky raof, dangerous starrs, loss of Iaurrdry room, etc. Adminrstrative
petrbans are filed an 6ehalf of al! tenanfs no! covered by the ~rrd-vrdua! decrease petitian I~a decrease is
warrar~fezi for fhe cammon area probfem, afl atf2cted ~rr~rts tnay then be auttrorrzer~ fu take such a cfeCrease
1n FY 96/97 f~ve adminis~rati~e comman area decrease decisions were issued in conjur~ctior~
w~th mdEV~duaE decrease ~et~t~ons, three ~et~t~ons were granted and two were denied.
Decreases awarded affec#ed 37 unEts. No commor~ area decreases were reinstated.
Base Rent P~tifians - Any awner, former awner, fenant or farmer tenant of a praperty, or any Board
Commrssraner or the Board s Adm~nistrator may petrtron for a f~ear,ng to establrsh a carrect renr or apartmentl
bu,ldrng amerr~#res .
In ~996/97 ~S base rent pet~tions (3~ consol~dated pet~t~ons) werE rece~ved by tf~e Hearings
De~artment.
19 base rer~~ decrs~ons were issuecE by the Hearings Departrnent, two were dismissed and
four were w~thdrawn. The 19 decisions cancerned 49 petitions, some of wh~ch were
consolidated. Qf those issued, 14 cancerned base amenity ~ssues whi~e fi~e cor~cemed
base rents. Three of the f~~e petitions dea~mg with base ~ent issues were approved and two
were den~ed Thirteen of the base amenity petitions were appraved; one was denied. Eight
cases were pending at the ~nd of the year
g Twenty-one add~tiona] dec~sions grarned decreases for pet~tions rece~ved ~n pnor fiscaf years
~~
Annual Report -- FY 1996197 - Mar 5, 1998 24
~
Excess Rent Camp/alnts -- Board regulat,ons prav-de for a settlement phase prior ta a hearing in
excess renf aomplamts. 7he purpose of fhe settlementphase rs ta prevrde an exped~tiaus mecharrism far
ferranfs ar~d owners to meet ar~d resa~ve therr cl~fferences mtormafly, rvrth the assistance of a s~ai!!ed irrtermec~ary.
Unresolved cases are decrded by a hearing.
D~~ir~g the fisca4 year, 52 compla~nts alleging excess fe~t we~e su~mitted and 1 complain#
was s~rbmitted for rron-registration. Complaints are submitted but not filed for a va~iety of
reasons including: fhe tenant has r~ot shown a valid cfaim o# excess rent; the property is nat
under the ~unsdiction o~ the Rent Gantrof Law, i.e., it has an owner-occupied exemption; or
the tenant withdraws fhe complamt prior to f~ling in favor of going to court. Of the 53
cornplaints submitted, 7 were withdrawr~, 8 were rejected and there are two for whict~ the
status is pending.
O~ the 3~ complaints accepted for f~ling, ~ were resalved ~ar~or #o formal mediation when
owners paid tenants the amou~t of o~srcharge claimed by the tenant; ~ 8 were reso[ved
throug~ the settlementlmediatior~ process; and 6 were withdrawn prior to hearing. A tata~ of
78% of the complaints were resol~ed without the necessity of a hearing. A# the cbse of the
fiscal year, 4 cases were in the settlement/mediation process.
Six cases were sent to tY~e Hearings Department to t~e resolved through hearing. Or~e of
the cases was withdrawn Of the remaini~g 5 cases, four were dec~ded and one is pending.
F~~e dec~sions (4 of wh~ch were fiiied in f~scal year 96197) were handled by the Hearings
Department this year, 1 compla4nt o# ~an-reg~st~at~on was den~ed because the claim was
~ot s~bsta~tiated. Four cases dealing witF~ claims of excess rent were decided. Excess
rent violat~ons were substantiated and rent withholding was author~zed in three decisions
issued; one claim was not substantia#ed
FF~ WA~vF~s
The Rent Contrat Board pro~ides wa~vers af Rent Control registratEOR fees to un~ts occupied
by their owners, subsid~zed by HUD (Sect~on 8), or accup~ed by low-jncome tenants who
are a~er 62 or disabled. There are also fee waEVers in mob~le ~ome parks far units where
tenan#s ha~e signed tong-term lesses.
Tx of ~e W_ ive~
low-income senior
low-3ncome dEsabled
owner-occvpred
As of
Sune 3fl, y 997
766
HUD subsidized (Section 8}
administrative
mobile home
Tota! fee wai~ers
148
2,fi90
751
272
45
4,fi72
Annual ~ie~oR -- FY 1996197 -- Mar. 5, 1998 2~
~ 7'H E- W~RK ~F TH E RENT C4NTRQL B~ARD BY
DEPARTMENT
~
ADMINISTRATION AND
PUBLIC INFQItMATION DEPARTMEHTS
• Rent Board meetmgs con~ened and staffed 38
regular meetings 31
specral meetrngs 7
• Newsietters produced and distr~b~tec~ ~ 2
• Clearance forms ta subm~t development appl~cations 134
• Demo~ition Permits processed 69
• Building Permits processed 145
~ Util~ty ad~ustment ap~al~cat~ons processed 3
• Number of people hefped seek~ng
information 2fi,993
Num6er a~ coun#er (22°!) 5,854
Number by phone (78%) 27,139
• Excess ren# camplaints processed 54
• Excess rent med+atEOns eonducted 26
• MAR reports generated 1 ~ 9
• Pet~tions processed on m-take 322
• Property Registrat~ons processed 378
• Reg~stration fees processed 4,384
• Fee wai~ers pracessed 3fi1
• Smal[ Cla~ms l~tigation
fees coll~cted $39,113
~ caliect~on actEOns taken 52
settlements er~tered 25
y, reg~stration fee suits fEled 36
Annua! Report -- FY 1996197 -- Mar 5, 1998 26
~
HEARINGS D~PARTMEhtT
• Heari~gs held
on rent increases
on decreases
on base rents and amenities
on earthquake petifians
orr complaints
• Media#ion conferences held
• Writt~n decisian~ issued
• Addenda issued
• On-s€te investigat~ons conducted
upon scheduling decrease petrt~ons
rn response io compfiance requests
regarding unit identificatron conflicfs
Ellis investigafions
research and measurrng
other, r.e., occupancy, unif use, etc.
• MARs vpdated d~e ta decisions/addenda
• S~te file pages copied to f~che by contractor
• lnterpreter services pravided
Spanish
Persian
Cantonese; Egyptian; Korean
LEGAL DEPARTMENT
• Staff re~orts on appeaf prepared
6ase renf cases
decrease cases
-ncrease cases
earthquake increase cases
excess rent complaints
• Eihs property withdrawals processed
• Misceflaneous staff reports
• New or amended regulations prepared
• Litigatian
• Off~cer of the Day requests respar~ded ta
• Vacancy rer~t increase matters
re-regrstration ~nquiries
TORCA mcrease pefrtron reviews
• Exempt~on cases wr~tten or rev~ew~d
owner-occup~ed
sing~e famrly dwe!l~ngs
non-renfal
• Administrati~e Records prepared
26
7
2
3~
57
25
i0
7
sa
s2
94
s
6
7
3
3
3
2
9
i3
45
3
S4
60
13~
4B
100
i~1
~62
8,917
72,Op4
9
72
9
7
13
11
625
35
6
Anr~uaf Report -- FY 1996/97 -- Mar 5, ~ 998 27
s +
SANTA MONICA RENT CONTROL BOARD INTERDEPARTMENTAL MEMO
DATE: May 20, ~ 998
TQ Barry Rosenbaum, Deputy CEty Attorney
FROM Mary Ann Yurkor~is, Admir~istratar
RE: Update on TORCA Rental Data
---------------------------------------------------------------------------------------------------------
~ulv 1 1997 throuah Mav ~ 5. 1998
14 owners rented their units ancE re-regis#ered the new MARs dur~ng the f~scal year
through May 15, ~ 998
The mcreases in MAR's ranged from 70% ta 22Q°/a except for one questionabfe fisting t~at
re#lects an ~ncrease of 629% (from $542 to $3,950) S~x increases were under 100%, 8
were more than 100%
Among the 6 one-bedroom units, the p~ear~crease MAR's ranged from $501 to ~742 and
the post-increase MAR's ranged fram $990 to $1,5a0 The median pre-increase MAR was
$572 ~affordable at 60°/Q of ined~an}, the med~ar~ past-~r~crease MAR was $1,300
{unaffordable at 100°l0 of inedian)
Among the 6 two-bedroam units, the pre-~ncrease MAR's ranged from $391 to $864 and
the post-~ncrease MAR's ranged from $1,100 to $i,575 The med~an pre-~ncrease MAR
was $654 (af#ordable at 60% of inedian}, the median post-increase MAR was $1,375
{unafifordable at 100% of ined~an)
Of the two 3-bedroom unEts, one was ~ncreased from $792 ~affordablE at 60% of ined~an)
to $1,350 (affordable at 100% af inedian) T~e other un~t is the previous ment~oned
quest~onable ~542 (affardable at 50°/a of ined~an) that was repor~edly ~ncreased to $3,950
After the ~ncrease no unit was affordable to households with ~ncomes u~der 100°/v af
med~an Four are affordable at 100% of inedian wh~le 10 are no longer affordab~e e~en to
households at ~ 00% of ined~an ~ncome
Cumulative Result$
Between July 1, 1996 and May 15, 1998, 44 owr~ers rented their units and re-registered
the new MARs during the fiscal year
The ~r~creases in MAR's ranged from 27°/a to 222% except for the one prev~ously
ment~oned un~t Twenty-t~ree ~ncreases were under 100%, 21 were more than 10a%
.'
Among the 20 one-bedroom units, the pre-~ncrease MAR's ranged from $3~9 to $896 and
the post-increase MAR's ranged from $850 to $1,900 The median pre-~ncrease MAR was
$622 (affordable at 80% af ined~an); the med~an post-increase MAR was $1,075
{unaffordable at 104% of ined~an)
Amang the 21 #wo-bedroom units, the pre-~ncrease MAR's ranged from $391 to $~ ,062
ar~d tne post-~nerease MAR's ranged trom $~,1a0 to $2,000 The med~an pre-~r~crease
MAR was $702 (affordable at 60% of inedian), the medjan post-i~crease MAR was $1,400
{unaffordable at 1 ~0°/0 of ined~an)
For two af the three 3-bedroom units, the pre-increase MAR's ranged fram $792 to $824
and the post-increase MAR's ranged #rom $1,350 to $1,500. The med~an pre-increase
MAR was $80$ (affordable at 60% of ined~an}, the median post-increase MAR was $~ ,425
{unaffordable at ~ QO% of ined~an)
After the increase no unit was affordable to households with Encomes under 100% of
median Fifteen are affordable at 100% of inedian whGle 29 are no konger affordable e~en
to households a# 100% of ined~an Encome