sr-030811-13c13-C
March 8, 2011
Council Meeting: March 8, 2011 Santa Monica, California
CITY CLERK'S OFFICE -MEMORANDUM
To: City Council
From: Councilmember McKeown
Date: March 8, 2011
13-C: Request of Councilmember McKeown that the Councii direct staff to
explore issues raised in the Rent Control Board memo to Council of
February 22nd, including the amount and structure of relocation assistance
in certain no-fault evictions and the eligibility of tenants for such
assistance, such as extension to non-controlled units where tenants
gained no-fault eviction protections with the passage of Measure RR; and
return with recommendations and suggested potential changes to City
ordinances for Council consideration.
13-C
March 8, 2011
CITY ~~ sANTA I>noNtcw
RENT CONi'ROL BOARD MEMOFi
DATE: 1=ebruary 22, 2011
TO: Santa Monica City Council Members
FROM: Tracy Condon, Rent Control Board Administrator '(
RE: Expansion of Relocation Assistance and Tenant Harassment Protections and
The Ellis Act's Impact-2010 Report
At their February 10`h meeting, the Rent Control Board moved to recommend that the
City Council amend Chapter 4.36 of the Santa Monica Municipal Code to increase and
expand relocation assistance to tenants displaced in evictions for owner occupancy and
removal of units from the rental market.
The proposed amendment, as set forth in the attached staff report, updates the
relocation assistance amounts to reflect the significant increase in market rents since
the removal of vacancy control in 1999 in accordance with state law. The proposed
amendment also expands eligibility for relocation assistance to include tenants who
established. their tenancy prior to an owner occupied exemption from rent control. The
Council may also wish to consider the basis and applicability of relocation assistance to
tenants in other non-controlled units.
Current relocation assistance is primarily based on the costs of relocation in t990 when
market rents for new tenancies were still subject to the vacancy control measures of the
Santa Monica Rent Control Law. Santa Monica's current relocation assistance is also
significantly lower than the amounts required in West Hollywood and. Los Angeles, the
other principal- rent control jurisdictions of Southern Calffornia. The proposed'increases
reflect the higher costs of market rents in Santa Monica while still being within the
reasonable band of the relocation amounts of neighboring jurisdictions.
In addition to the proposed increases in relocation assistance, the Board also moved to
recommend. amendment of Chapter 4.56 of the Municipal Code to protect tenants
eligible for just cause evictien protections as a result of the passage of Measure RR.
Board General Counsel Miehaelyn Jones, Staff Attorney Hakhamanesh Mortezaie and I
are available to meet with city staff to discuss these recommendations and to assist in
the drafting of proposed language for the amendments to the Municipal Code.
At their February meeting, the Board also reviewed the attached report on the impact of
the Ellis Act during 2010. In addition to reviewing Ellis withdrawal and re-rental activity
since 1986, the report details redevelopment and reuse of withdrawn properties and
Recommended Expansion of Relocation Assistance and Tenant Harassment Protections
briefly discusses the work of the EIIis Task Force.. This year, the report includes brief
anecdotal information about how the displaced tenants have been impacted. The Rent
Control Board thought you would find this report interesting as you consider their
recommendations on the expansion of relocation assistance.
Thank you for your consideration.
Attachments
cc: Santa Monica .Rent Control Board Commissioners
Rod Gould, City Manager
Marsha Moutrie, City Attorney
SANTA MONICA RENT CONTROL BOARD
STAFF REPORT
TO: Commissioners
FROM: Hakhamanesh Mortezaie, Staff Attorney
RE: Expansion of Relocatiori Assistance and Tenant Harassment Protections
FOR: Board Meeting of February 10, 2011
Introduction
On July 22, 2010, the Santa Monica City Council placed on the ballot Measure RR.
The Measure incorporated the Board's May 24, 2010 recommendations to the City
Council for an amendment to the Charter to expand just cause eviction protections to
all tenants in multi-family properties in the City of Santa Monica, to require written
warnings to tenants to cure conduct before it results in grounds for eviction and to
expand owner occupancy eviction protections to senior, disabled and terminally ill
tenants. The Santa Monica electorate approved Measure RR in the November 2,
2010 election. The Measure became effective on December 17, 2010.:
The Board's May 24, 2010 recommendations to the City Council also included a
recommendation to increase and expand relocation assistance beyond that which is
currently provided under the Santa Monica Municipal Code. Since amendment of the
City's relocation provisions did not require an amendment of the Charter, the Council.
did not incorporate these recommendations into.Measure RR. With the enactment of
Measure RR, staff respectfully submits this report to suggest recommendations for
the increase and expansion of the City's relocation assistance provisions and tenant
harassment protections.'
The recommendations contained herein would increase the relocation fees in
evictions for owner occupancy or removal from the market. They apply to tenants of
rent-controlled units, and tenants who established their tenancy prior to an owner
occupied exemption from rent control. The proposed increases reflect the changes
to the City's rent levels that have occurred since the adoption of the 1990 relocation
amounts, which are the basis of the current relocation fees. Since the passage of .
Measure RR, the Board has also received inquiries from tenants in non-controlled
units about their eligibility for relocation if they are evicted for owner occupancy. The
City Council may also wish to consider the basis and applicability of any relocation
fee to tenants in non-controlled units. Board staff are available to meet with City staff
to discuss any recommendations approved and submitted by the Board to the City
Council for consideration.
qG
Staff Report -February 10, 2011
Expansion of Relocation Assistance and Tenant Harassment Protections
Discussion
1. Increase and Expansion of the City's Relocation Assistance Requirements
Santa Monica Municipal Code chapter 4.36 provides relocation assistance to tenants
in rent-controlled units in specified no-fault evictions permitted under the Santa
Monica Rent Control Law (Santa Monica City Charter Article XVIII, "RCL"). The
current relocation amounts reflect a 1990 fee annually adjusted for inflation. The
1990 amount was based on the difference between the average Maximum Allowable
Rent (MAR) in a.rent-controlled unit and the average market rent. The 1990 amount
reflected. a Santa Monica with a more affordable rental stock predicated on the
controls on increases in rent effectuated by the 1979 RCL.
In 1995, the California Legislature adopted the Costa Hawkins Law, which eliminated
the RCL's vacancy control provisions. Costa Hawkins allows landlords to raise rent-
controlled rents to market upon the vacancy of units. As a result, every year has
witnessed a deterioration of the affordability of the City's rental housing for new
tenants. The Board's 2009 Market Rent Report found that none of the median rents
for units that have received market rate increases are affordable to a family even
making 100% of median income.
Before Costa Hawkins, there were nearly 13,000 units affordable to new tenants with
less than 100% of median income. Today, there are only approximately 2,000 units
affordable to these tenants: The elimination of vacancy control has resulted in 58%
of rent-controlled units being rented at market rates. The significant increase in
market rents has impacted neighborhood stability. Most market rent units have
turned over at least twice in fhe 11 years since Costa Hawkins eliminated vacancy
control. Tenants evicted from their rent-controlled Santa Monica apartments have a
dramatically diminished chance of affording the rent at a new tenancy in their own
city.
Despite the fact that Santa Monica market rents are among the highest, if not the
highest, in the region, the City's relocation assistance amounts are the lowest among
the region's three principal rent control jurisdictions.
Jurisdiction Minimum
Relocation
Amount Maximum
Relocation
Amount
Los An eles $7,300 $18;300
West Holl ood $5,100 $17,000
Santa Monica $5,650 $11,550
Staff Report -February 10, 2011
Expansion of Relocation Assistance and Tenant Harassment- Protections
Staff recommends amendment of the City's relocation assistance amounts to reflect
this city's high cost of market rents for new tenancies. The recommended amounts
below allow Santa Monica tenants evicted from their units through no fault of their
own to have an extended period of housing stability in their own city. The amounts
below are based on 30-36 months of rental disparity between the average MAR and
the average market rent plus security deposit, with the higher amount for qualified
tenants.
Disparity
between Proposed Proposed
Pre Average Regular Qualifieds
Costa MAR and Tenant Tenant % of
ApE Hawkins Market Average Market 30 mos. 36 mos. Security Relocation Relocation Total
Size MARSH Rents MARz Rent Disparity Disparity Deposit3 Assistance4 Assistance^ Unitsr
0 $ 703 $1,141 $ 957 $184 $ 5,520 $ 6,624 $2,282 $ 7,800 $ 8,900 15%
1 799 1,514 1,214 300 9,000 10,800 3,028 12,050 13,850 52%
2+ 1,024 2,000 1,590 410 12,300 14,760 .4,000 16,300 18,750 33%
Currently, the City's relocation assistance is based on MARS for vacancy controlled
units and therefore provides higher relocation assistance to tenants who are senior,
disabled or who have a minor child residing with them if their tenancy was
established prior to the elimination of vacancy control in 1999. The proposed
relocation assistance above, however, is based on an average MAR calculated from
the weighted average of vacancy controlled MARS and market rent MARs in the
rental housing stock..Accordingly,-staff recommends higher relocation assistance to
qualified tenants who are defined as households with seniors, persons with
disabilities and minors, regardless of the date on which they commenced their
tenancy.
In its May 24, 2010 meeting, the Board also recommended that relocation assistance
be provided to tenants evicted in a 3-unit-or-less proper{y that has an owner occupied
exemption from the RCL. The enactment of Measure RR provided just cause
eviction.protections to these tenants. Staff, therefore, recommends that the proposed
relocation assistance also be provided to tenants who established their tenancy prior
to an owner occupied exemption from the RGL and who are subject to an eviction for
Board 2009 Market Rent Report,
z Weighted average of Pre Costa Hawkins MARS and Market Rent based on their percentage of
controlled units in the Board 2009 Market Rent Report.
' Consistent with the current relocation ordinance, security deposit is based on iwo times the market
rent to provide the. displaced tenant with first and last month rent at a new tenancy.
° Rounded to the nearest $50 multiple.
e Qualified tenant to be defined as any household which includes a senior citizen, a person with
disability or a minor child.
Staff Report - Febmary 10, 2011
Expansion of Relocation Assistance and Tenant Harassment Protections
Page 4
withdrawal of units from the rental market pursuant to Santa Monica City Charter
Article XXIII Section 2304(a)(g).
2. Tenant Harassment
Santa Monica Municipal Code chapter 4.56 prohibits landlords from malicious
conduct which constitutes tenant harassment. The Code's definition of tenant
harassment includes failure to perform repairs, interruption or termination of housing
services, intimidation, and threat of physical harm and discrimination when done with
malice. The chapter, however, only applies to rental units subject to the RCL.
Measure RR extended the RCL's just cause eviction protections to tenants in non-
rent-controlled multi-family properties. Accordingly, staff recommends amendment of
the definition of rental housing unit in section 4.56.010(f) to include both units subject
to the RCL and units subject to Santa Monica City Charter Article XXIII.
Recommeridation
Staff recommends that the Board direct staff to forward this report to the City Council
and request that they draft ordinances to accomplish the stated objectives.
D1C
Intr~ucti®n
Through 1985, Santa Monica could
ensure the continued availability of
existing rental housing stock by forbidding
apartment buildings' removal from the
rental market unless the Rent Control
Board granted a removal permit. This
changed in 1986 when the Legislature
enacted the Ellis Act, under which cities
must now allow landlords to withdraw their
property from the rental market, so long
as certain provisions are made for
displaced tenants' relocation.
This report surveys the Ellis Act's
cumulative effect in Santa Monica over
the 24 years since its enactment, with
special emphasis on Ellis activity during
the calendar year January through
December 2010.
By itself, the statistical data tells a
compelling story. Since the Ellis Act was
enacted, 2,566 units have been withdrawn
from the rental market, of which several
hundred were later returned, for a net loss
to date of 1,944 units. This report will
show, year by year, how many units were
removed from the rental market, how
many were returned, and what many of
the withdrawn properties were used for-
some developed as affordable housing,
but many more as luxury condominiums
out of most displaced tenants' economic
reach.
But lost in the pure statistical data is
the human story. What happens to the
tenants who are displaced? Where do
they go, and how does the displacement
affect them? We recently surveyed some
displaced tenants, and their responses
were sobering.
Many tenants have been displaced
from the Santa Monica community
altogether.
One such tenant, a senior citizen who
had lived in the same unit for 37 years,
was unable to find affordable housing
locally and now pays twice as much rent
in a different city. This tenant, who
described the displacement as "stressful,"
elaborated that "it has basically destroyed
my life-stress, depression, unsatisfactory
relocation-loss of a great deal." Another
tenant, who had lived in the same unit for
25 years, moved to Koreatown, where he
or she pays a higher rent for a smaller
apartment. That tenant, too, expressed
extreme distress at the loss not only of
affordable housing, but also of
community:
When reviewing the current year's
statistics, it is useful to keep these human
stories in mind.
A historically low number of units (ten)
were withdrawn from the rental market in
2010, and 29 previously-withdrawn units
were returned to the controlled rental
market, for a net increase of 19 units. It is
easy to view this as good news, and to
forget that, though only ten units were
withdrawn, those units had been occupied
by real individuals and families whose
lives have been upended.
Nor does the number of units
withdrawn in 2010 tell the full statistical
tale; although only ten units were
withdrawn, many more are in process.
Ellis activity actually rose sharply last
year, with 13 notices being filed to
withdraw some 58 units. Most of those
units will be finally withdrawn in 2011, and
with tentative signs that the economy is
improving, the upward trend in Ellis
withdrawals is likely to continue in 2011.
Page I i
Ellis Activity, January
thr~la eceber 21
Completed Withdrawals Were
Historically Low
Properties are actually withdrawn
from the rental market when all the units
reach the date of withdrawal as defined
by the Ellis Act.t Only ten units (four
properties) completed the withdrawal
process in 2010, including one property
for which the process had begun in
2009. This was low by historical
standards. But 56 units (ten properties)
were still pending withdrawal at the end
of 2010, and those withdrawals are
expected to be completed this year.
Notices of Intent to Withdraw
Increased from Last Year
After three years of steady decline,
Ellis activity rose in 2010. Withdrawal
notices, which had dropped from 32
notices affecting 201 units in 2007 to
only five notices affecting 14 units in
2009, are now up, with 13 notices filed
affecting 58 units. The change is
illustrated in the chart at the top of the
next column.
California Government Code § 7060 et seq. A
property is usually deemed withdrawn from the rental
market four months after the owner delivers a
withdrawal notice to the Board, but the withdrawal
period can be extended to a year for units occupied
by tenants who are senior or disabled. It is also
possible for a property owner to rescind an Ellis
withdrawal notice and allow current tenants to remain
in place, which further diminishes the value of focusing
primarily on the notice itself. This report focuses on
completed withdrawals to support the report's goal of
informing the public about the actual loss of rent-
conirolled units in Santa Monica.
Properties Returned To the
Rental Market
In 2010, 29 previously-withdrawn
units (six properties) returned to
residential rental use. With only ten
units newly withdrawn, this resulted in a
net increase of 19 rental units.
ithdraWat and Rerentl
Activity Since 196
Historic Overview
From its inception in July 1986
through December 31, 2010, the Ellis
Act was used to withdraw 2,566 units
(527 apartment buildings and houses)
from the rental market. Of these, 622
units (124 properties) have returned to
the market under rent control. Thus, as
of December 31, 2010, 1,939 units (403
properties2) remain withdrawn.
z Five properties returned to the rental market with a
differern number of controlled units than were
withdrawn. This accourns for the five-unit
Page 17
The graph on page 3 illustrates the
number of units withdrawn, along with
the number returned to the rental
market, each year from 1986 through
calendar year 2010. As the graph
demonstrates, the number of units
withdrawn in 2010 remains historically
low, continuing a decline that began in
2008. The number of units returned to
the rental market, meanwhile, is at or
near the historic average. Thus there
was actually a net gain last year in the
number of controlled rental units.
The 2009 report warned that units
previously withdrawn and returned to
the market might again be withdrawn
when the economy improves. Although
the recession's effect continues to
linger, it appears tYlat there has been a
slight easing of the credit markets and
an uptick in property development.
Thus, although there is no evidence of
significant re-withdrawal of previously
withdrawn units this year, last year's
cautionary note continues to appear
justified despite last year's net gain in
units.
2010's Completed Ellis
Withdrawals were Historically
Low
As the graph on page 3 shows; Ellis
activity has fluctuated over the years,
influenced, in part, by changes in state law
and shifting economic conditions:
• 1986-1990: 881 units were withdrawn
and just 39 rerented for a net loss of 842
units over five years-an average of 168
units per year-in the years immediately
following the Ellis Act's enactment.
discrepancy in the number of units withdrawn and
returned to residential rental use.
1991-1998: There was a sharp
decrease in withdrawals during the
economic recession of the early 90s and
a relative flattening of the rate of
withdrawal as property values struggled
to recover through the decade.3 During
this period, 428 units were withdrawn
and 151 rerented for a net loss of 277
units over eight years--an average of
35 units per year.
1999-2002: Southern California real
estate prices began a dramatic rise
during this period, creating an economic
incentive for the development of new,
market-rate housing,° and Ellis activity
increased. Five hundred sixty four units
were withdrawn and 223 rerented for a
net loss of 341 units over four years-an
average of 85 units per year.
2003-2004: Ellis activity slowed
following a change instate law
restricting rent levels on units rerented
following withdrawal, with 118 units
withdrawn and 30 units rerented for a
net loss of 88 units-an average of 44
units per year. But the slowdown was
temporary.
2005-2007: As the real estate bubble
rapidly inflated, driven by low interest
rates and lax lending standards,
development and related Ellis activity
increased. As the number of
withdrawals went up, the number of
units returned to the rental market went
down. The number of rerentals, which
had climbed steadily between 1999 and
2002 plummeted. From 2005 to 2007,
379 units were withdrawn and 79
rerented for a net loss of 300 units-an
average loss of 100 units per year.
s Stephen Day Cawley, California Housing Policy. p.
92 (2005, UCLA Graduate School of
Management), online at
http://www.spa.ucla.edu/ca I policy/fi Ies05/cauleyt
extwchrt.pdf
^ See Cawley, generally
Page 12
2008-2009: In 2008 and continuing into 2010: In 2010, although the real estate
2009, corresponding with the decline in market began to show signs of recovery
the real estate market and the extreme and credit eased somewhat, Ellis
tightening of credit, Ellis withdrawal withdrawal activity continued to reflect
activity slowed considerably, returning in the slow market of previous years. In
2009 to pre-1999 levels. In 2008, 114. .2010, 10 units were withdrawn and 29
units were withdrawn and 16 units units returned to residential rental use
returned to residential rental use fora for a net gain of 19 units: This is only
net loss of 98 units. In 2009, 71 units the second net gain since the Ellis Act
were withdrawn (most as the result of became law in 1986, and the first since
withdrawal notices filed in 2008) and 59 1992.
units were returned to residential rental The chart on the next page provides an
use for a net loss ofjust 12 units-at annual breakdown of units withdrawn and
that time, the lowest number of units lost rerented. (The periods described above are
since 1995. separated by bold horizontal lines.)
Page ~ 3
t ~
i,Xeor. ~' :Propekfres ~,~
,Ntrt[rdrd~v2; . -;~ ~,`
Untts'4ihthdreii~ . ~ ,
Uiiitr.RereMed
Chan'e ,
11986 14 86 0 -86
i 1987 13 80 0 -80
1988 21 165 0 -165
'1989 57 188 25 -163
1990 76 362 14 -348
;1991 21 88 1 -87
;1992 12 43 68 +25
j 1993 9 23 5 -18
! 1994 7 76 17 -59
1995 3 9 7 -2 j
11996 10 67 14 -53
'1997 8 51 25 -26
i 1998 17 71 14 -57
'1999 31 125 31 -94
2000 36 212 48 -164
2001 25 110 86 -24
;2002 28 178 58 -60
i 2003 15 54 8 -46
2004 15 64 22 -42
12005 24 119 38 -81
{ 2006 28 122 2 -120
12007 29 138 35 -103
12008 16 114 16 -98
2009 8 71 59 -12 ~
;2010 4 10 29 +19
Tofals
i
527
2,56b
622
-1,944
®st-~lis Activity
A property's withdrawal from the
rental market is rarely an end in itself;
more typically, properties are Ellised in
order to make room for development.
Some properties are used for new multi-
family residential redevelopment, while
others are converted to some non-
residential use, such as business and
commercial development, schools,
childcare centers, and churches. A
smaller number are turned into parking
lots or vacant lots, or used for non-rental
residential occupancy (i.e. family
occupancy). Some properties are left
vacant but otherwise unchanged.
The table on the following page
summarizes post-Ellis use for all 403
currently withdrawn properties from
1986 through the present, and divides
the totals into two periods: from 1986
through 1997 and after 1998. As the
table makes clear, the largest reuse
category overall continues to be
condominium development, followed by
family occupancy/no activity and single
family dwellings.
Page 14
aVeraii surrsmary o~+Post-
EllisUse of Vlfithdrawre
Properties gotais 19s6 - 19..97
Wethdrawals
Post-Ellis Pdew
Use 19ss - 2®®~
iWithdrawais
Post-Eiiis New
Use
A artments 18 4% S 3°fo ° 12 ` 8°/o
A artments/Mixed Use 20 ? ' 5% ' 13 8% 7 4%
Condominiums 115 28% 49 30% `66 42%
Condominiums/Mixed Use 1 1% 1 1% ' 0 0%
Sin ie Farnil Dwellin 's 70 ' ; 17°/a : 22 14% 48 29%
Commercial 57 I 14% 40 2!5% 17 10%
Parkin Lat 12 3°!0 9' 6°!° 3 ` 2%
School/ChiEdcare/Church 19 5°fa '` 12 7% 7 4%
Vaeaht Lot IZ 3% SO 5% 2 ' 1°/a
Totals 324 - 162 100% 162 100%
Famij Occu anc /No Activit 79 20% ,
Grand Totals 403 ! 100%'
end of 2010. On these 109 sites, 689
The Largest Percentage of
Ellised Properties Are Replaced
with Multi-.Family Residential
Developments. This Has Yielded
a Net Increase in Residential
Units, But a Decline in
Affordability
units withdrawn under EIIis were
demolished and 1,209 units have been
built (634 condominiums and 575
apartments). On the remaining 19 sites
in development, 156 withdrawn units are
to be demolished and 177 units are to
be built (138 condominiums and 39
apartments).
According to City records,51536
withdrawn properties (38°/a of the 403
properties that remain withdrawn) have
been--or are in the process of being--
developed as new multi-family housing
including both condominiums and
apartments. In 22 instances, two or
more withdrawn parcels were combined
into a new development. Therefore, the
total number of new residential
developments is 128.
109 of these 128 developments
(roughly 85%) were completed by the
s Information on redevelopment, reoccupancy and
conversion is drawn from the City's Permih Plus
System.
a One withdrawn property, built as condominiums, has
continued condominium use after its withdrawal
As the graph on page 6 shows, 845
withdrawn units have been, or are slated
to be, demolished and replaced with
1,386 condominiums and apartments on
the same properties, resulting in
increased density on those sites and a
net increase in units overall.
A high percentage of the increase in
units is attributable to just 12 mixed-use
projects (ground floor commercial space
and upper floor apartments) in the
downtown and Main Street areas, where
70% of the new apartments built are
part of mixed-use projects. On these
properties, 162 withdrawn units are
being replaced by 432 apartments. One
mixed-use condominium project was
completed in 2008. On this property,
Page 15
two withdrawn units were replaced by
32 condominiums.
Although, as the below chart shows,
the number of units added to the
housing stock is greater than the
number removed, a few points are worth
noting.
rerented within five years of Ellis
withdrawal (see last year's report) are
market-rate units, resulting in the
practical loss of a high percentage of
affordable housing.
Second, while the rate of Ellising and
redevelopment has increased from last
year, it is still relatively low by historical
39 ~~
Units To Be
Units
Demolished
Units Built
First, the units lost are all rent-
controlled units that had been used for
residential rental, while the majority of
those built or slated to be built in their
place have been for-sale units. Of
these, many are market rate, and
sometimes luxury units, that are beyond
the economic reach of those tenants
who have been displaced. Many of the
apartment developments come online
as market-rate units. Even 168
apartments that were brought under rent
control last year because they were
standards, and the increase comes only
after an extended period of economic
contraction. Thus, an increase in
housing supply that could, in theory,
suppress housing costs over the long
term may not apply.
Third, it is unclear what the long-term
effect of this gradual but persistent
reduction of rental units coupled with an
increase in those that are owner
occupied will be. Santa Monica has long
been amajority-renter community, and it
Page I b
still is, but that may be changing.
According to the U.S. Census Bureau,
78% of Santa Monica housing units
were rentals in 1980. By 2009, that
figure had declined to 72°/a.
The relative merits of renting and
owning have been debated extensively
elsewhere and will not be considered
here.' But it seems likely that the high
percentage of renters in Santa Monica
has played an important role in the city's
cultural development.
The City has long been home to a
vibrant arts community and has
increasingly
attracted i
several high- zso
tech ~ zoo
employers. ~
Many of the ,~
young people ~
drawn to such ~ too
careers move ~
from place to 50
place as they
.advance ! °
Many Withdrawn Properties Are
Developed as Single-Family
Homes
Forty-five of the 403 currently
withdrawn properties (97 units) were
demolished and replaced by single-
family dwellings or are pending single-
family dwelling construction. Twenty-
five withdrawn properties (99 units) were
remodeled into single-family-dwellings,
or are in the process of conversion.g
Overall, 17°/a of the redeveloped
withdrawn properties have been
converted into
Residentiai Units Replaced By Single-Fatuity Dwellings single-family
r!0 Properties)
professionally
and they rely
upon a supply
of good-quality but affordable rental
housing. $
A Santa Monica in which people are
less mobile because they are tied to
owned real estate may, over time, lose
the appeal that it has long had to many
of the people who have made the city
what it is today.
~ "Rethinking Home Ownership' Time, September 8,
2010
a "Employee turnover: Labour lost" The Economist, July
13, 2000
dwellings or
demolished
and rebuilt as
single-family
homes,
suggesting
that some
owners have
found it more
economical to
buy a multi-
unit property
and convert it
to asingle-family home than to buy an
existing single-family home.
Withdrawn Properties and
Affordable Housing
Despite the loss of rent-controlled
units detailed in this report, affordable
housing has been, and continues to be,
developed in Santa Monica as the result
of a City law that affordable units be
produced in conjunction with market-
e On one property four units were converted into two
and then the property was subdivided to create
two single-family dwellings.
Page 17
1g6 Units . became -r 70 Single-Family Dwelings
rate development. That law, an
amendment to the City Charter enacted
by the voters in a 1990 measure known
as Proposition R, requires that at least
30% of all newly-constructed multi-
family residential housing in the City
should be permanently affordable to and
occupied by low and moderate-income
households: It further requires that at
least one-half of the affordable units be
made available to low-income
households (not exceeding 60% of area
median income) and the remainder be
affordable to moderate-income
households (not exceeding 100% of
area median income).
According to the City's Housing
Division, of the 537 apartments built in
FY 2008-09, 248 have been deed-
restricted as affordable: 167 to
moderate-income households, 18 to
low-income households, and 63 to very-
low-income households. Many of these
were produced on properties that had
been Ellised.
More information about the City's
affordable-housing program is provided
in past Ellis Activity reports, which are
available online or at the Rent Control
Agency in Room 202 of City Hall, and in
an Information Item that Housing
Division staff provided to City Council in
.March 2010. A complete copy of that
Item is available at:
http://www01.smgov. neUhousing/reports
/Prop_R_Report_FY08-09. pdf
Redevelopment of Ellised
Properties has been Clustered in
Areas Defined by Zoning and
Income
The map on page 9 displays the
geographic distribution of the
apartments, condominiums and single
family homes that have been developed
(or remodeled), or are being developed.
As the map shows, most multi-family
apartment developments have been in
the central part of the city, while single-
familydevelopment has largely been
concentrated in more affluent, low-
densityareas. Condominiums have
been developed largely in parts of the
city zoned for higher density, but close
to the most affluent, low-density
neighborhoods.
Apartments: The red and rust
colored dots on the map show the 26
post-Ellis apartment projects. By the
end of 2010, 24 apartment
developments with 575 units had been
constructed (replacing 36 withdrawn
properties with 224 units). Two more
apartment projects with 39 units are in
development (replacing two withdrawn
properties with 12 units).
Twelve of the 26 apartment
developments are mixed-use projects
with commercial space on the ground
floor (rust dots). The map shows that
with just one exception, these mixed-
use projects have been built in the
downtown and Main Street areas and
they account for 70% of the new
apartment units built or in development
(432 of 614).
Condominiums: The prevalence of
blue dots on the map shows the majority
of residential redevelopment on
withdrawn parcels has been
condominiums. By the end of 2010, 85
condominium projects with 634 units
had been completed (replacing 95
withdrawn properties with 465 units).
Seventeen more projects with 138 units
Page i 8
are in development (replacing 20
withdrawn properties with 144 units).
As the blue dots show,
condominium developments have. been
built throughout the areas of the city that
are zoned for multi-family development,
with the highest concentration in the
corridor between Wilshire Boulevard
and Montana Avenue east of 14th Street.
Single-Family Homes: The green
dots show that the redevelopment of
multi-unit properties into single-family
homes has occurred primarily in the
Ocean Park neighborhood, on Pacific
Coast Highway and north of Montana in
Page 19
the area zoned for single-family homes.
About 25% of Ellised Properties
have been Developed for Other
Uses
Commercial: Fifty seven withdrawn
properties (comprising 315 units) have
been changed from residential to
commercial uses. On 32 of these
properties, the residential structures
were demolished to make way for
commercial development. On the
remaining 25 properties, formerly
residential structures have been
repurposed for commercial use.
Parking Lots and Vacant Lots:
Twenty four withdrawn properties
(comprising 133 units) have been left
effectively empty. Of these, 12 are now
being used as parking lots, and the
other 12 are just vacant lots that are
currently unused for any
purpose.
Schools/Childcare
Facilities/Community Care
Facilities/Churches: Nineteen
withdrawn properties (comprising
88 units) have been turned to a
community use. On eight of
these properties, the withdrawn
residential buildings were
demolished and replaced: five as
schools or childcare centers, one
as a community care facility, and
one as a church. On the
remaining 11 properties, the
formerly residential buildings
were converted to one of these
community uses.
current status of all 403 properties that
remain withdrawn since inception of the
Ellis Act. The colors in the left side of
the pie slices correspond with the dots
on the map on page 9.
The Ellis Task Force
Family Occupancy/No Building
Permit Activity: Approximately 20% of
withdrawn properties (79) remain
standing with no building permit activity.
City ordinances require owners who
want to occupy their withdrawn
properties to apply for a reoccupancy
permit. Thirty of these properties are
being used for family and/or non-rental
occupancy as indicated on the owner's
reoccupancy permit application. The
remaining 49 properties either have
been, or will be, looked at by the Ellis
Task Force.
Re-flee of ithravvn
Properties Sur~rnary
The diagram above right shows the
To prevent owners from fraudulently
evicting tenants under the pretext of
withdrawing their properties from the
rental market, the Ellis Act imposes
certain restrictions on the ability to
return units to the rental market after
they are withdrawn. For example, if a
unit is returned to the rental market less
than five years after it was withdrawn,
the rent for that unit remains controlled
at its pre-withdrawal level. If a unit is
returned to the rental market less than
two years after it was withdrawn, the
owner may also be subject to civil
liability. These restrictions are imposed
by state law.
In Santa Monica, local law requires
that withdrawn units be issued a
Page 110
reoccupancy permit before they may
again be used for any purpose.
The Ellis Task Force, a coalition of
staff from the Rent Control Board,
Planning, Code Compliance, and the
Consumer Protection Division of the City
Attorney's Office, was formed in 2007 to
ensure compliance with these state and
local laws.
Rent Control staff can, and does,
take steps on its own to ensure
compliance with the Ellis Act. If, for
example, staff learns that a withdrawn
unit has been rerented sufficiently soon
after withdrawal that a rent limitation
applies, the rent limitation will be
enforced.
Recently, for example, staff learned
that a landlord was illegally rerenting her
units at market rates after evicting the
previous tenants under the Ellis Act.
Staff brought the violation to the
attention of the City Attorney, who filed a
civil enforcement action, which was
ultimately settled. Under the terms of the
settlement the landlord was required to
pay $100,000 to the tenant and $20,000
to the city.
But the reoccupancy permit
requirement is outside the Board's
purview, and Rent Control staff lack the
authority to enforce it. That authority lies
with Building & Safety, who can initiate
enforcement, and with the City Attorney,
who can follow through with prosecution
in the event of noncompliance.
Nonetheless, Rent Control staff
does monitor Ellised properties-even
those that are expected to be
redeveloped as non-rental property-in
order to ensure compliance with the
Rent Control Law.
As a result of that ongoing
monitoring, the Task Force has
discovered several properties that
appear to be reoccupied, but for which
reoccupancy permits have not been
obtained. The noncompliance has been
brought to the appropriate authorities'
attention, and efforts are being made to
correct it.
~Oi1CtU5'1®1'1
Ellis activity, which had nearly
stopped in 2009, has begun to increase
and appears to be gathering momentum
as the economy shows signs of
recovery. Even so, 2010 saw a net gain
in the number of controlled units, a
lagging effect of the near total absence
of Ellis activity the year before. But it is
anticipated that Ellis activity will continue
the increase that started last year, with
the result that Santa Monica will see a
gradual but perhaps escalating erosion
of the existing affordable, controlled
housing stock.
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