r10699City Council Meeting 7 -24 -2012
ATTACHMENT A
Santa Monica, California
RESOLUTION NUMBER 10699 , CS)
(City Council Series)
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF SANTA MONICA SUBMITTING TO THE VOTERS
A MEASURE PROPOSING TO AMEND THE RENT CONTROL CHARTER
PROVISIONS RELATED TO THE COMPUTATION OF THE ANNUAL ADJUSTMENT
TO RENT CEILINGS AT THE GENERAL MUNICIPAL ELECTION TO BE HELD ON
TUESDAY, NOVEMBER 6, 2012, AND AUTHORIZING CITY COUNCIL MEMBERS TO
FILE WRITTEN ARGUMENTS FOR OR AGAINST THE PROPOSITION AND
DIRECTING THE CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS OF
THE MEASURE
WHEREAS, City Charter Section 1805, which governs the annual
adjustment to the ceilings on allowable rents for rent controlled units, was last
amended by the voters in 1985; and
WHEREAS, among other things, Section 1805 allows the Rent Control
Board, after holding a public hearing, to adjust the rent ceiling up or down for all
controlled rental units or for particular categories of units and to postpone the
effective date of the change; and
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WHEREAS, for nearly thirty years, the Rent Control Board has implemented
Section 1805 by using a complex methodology known as the "component ratio to gross
rent" formula; and
WHEREAS, over the years both the Rent Control Board and its staff have
observed that actual changes in expenses may be determined for only a small portion of
landlords' expenses considered under the current methodology; and
WHEREAS, the survey process is both costly and time consuming; and
WHEREAS, the Rent Control Board and its staff believe that the present formula
is so complex that it can make results unpredictable and that it is very difficult for the
public to understand; and
WHEREAS, an amendment to the way that annual adjustments are made will
correct the shortcomings existing in the current law.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA
MONICA DOES RESOLVE AND PROCLAIM AS FOLLOWS:
SECTION 1. A General Municipal Election has been called for November 6,
2012, for the purpose, among other things, of electing certain City Council members.
SECTION 2. At the General Municipal the City Council of the City of Santa
Monica also wishes to submit a measure proposing an amendment to the City of Santa
Monica City Charter to the voters.
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SECTION 3. At the General Municipal Election called for November 6, 2012, the
following measure shall be submitted to the qualified electors of the City of Santa
Monica:
PROPOSITION " ": Shall the City Charter be amended to
allow the annual rent control general adjustment to be Yes
based on 75% of the annual percentage change in the
Consumer Price Index, but limited to an adjustment
between 0% and 6 %; and to give the Rent Control Board
discretion, after a public hearing, to impose a dollar limit,
within the 0 -6% range, calculated using the same formula No
employed when imposing a limit under the existing general
adjustment formula?
SECTION 4. The City Clerk shall transmit to the City Attorney, in accordance
with applicable law, a copy of the proposed measure. The City Attorney shall prepare
an impartial analysis of it, which shall not exceed 500 words in length. The impartial
analysis shall be filed by the date set by the City Clerk for the filing of primary
arguments. In accordance with applicable law, not less than 10 calendar days before
the City Clerk submits the official election materials for printing, the City Clerk shall
make a copy of all applicable elections materials available for public examination in the
City Clerk's office.
SECTION 5. The City Council authorizes its members, as follows, to file written
arguments for or against the measure described above and which is contained in
Exhibit 1 to this Resolution, which Exhibit is incorporated by reference herein:
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FOR: Councilmember Pam O'Connor
AGAINST:
All written arguments filed by any person in favor of or against any measure,
including any rebuttal arguments, shall be accompanied by the names and signatures of
the persons submitting the argument as required by applicable law, and any names,
signatures and arguments may be filed until the time and date fixed by the City Clerk in
accordance with applicable law, after which no change may be submitted to the City
Clerk unless permitted by law.
SECTION 6. The City Clerk shall cause the text of the measure, which is
contained in Exhibit 1, together with the City Attorney impartial analysis, and any
arguments for or against the measure, as well as any rebuttal, to be mailed to all
qualified voters with the sample ballot. In addition to other notices and publications
required by law, the City Clerk, not less than forty (40) days and not more than sixty (60)
days before the General Municipal Election, shall cause the text of the measure to be
published once in the official newspaper and in each edition thereof during the day of
publication. The City Clerk is authorized to give such notices and to fix such times and
dates as are required by law or which are appropriate to conduct properly the election.
SECTION 7. The provisions of Resolution Numbers 10680 (CCS), 10681 (CCS),
and 10682(CCS) are referred to and incorporated into this resolution for more
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particulars concerning the conduct of General Municipal Election to be held on
November 6, 2012, and in all respects the election shall be held and conducted as
provided for by applicable law. The City Clerk is authorized and directed to procure and
furnish any official ballots, notices, printed materials and all supplies or equipment that
may be necessary in order to properly and lawfully conduct the election.
SECTION 8. The City Clerk shall certify to the adoption of this Resolution, and
thenceforth and thereafter the same shall be in full force and effect.
APPROVED AS TO FORM:
t
IVIARSFIA JONES �MqUTRI �
City Attorney
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EXHIBIT 1
PROPOSAL OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA TO AMEND
THE CITY CHARTER
Section 1803. Permanent Rent Control Board.
(g) RULES AND REGULATIONS: The Board shall issue and follow such rules and
regulations, including those which are contained in this Article, as will further the
purposes of the Article. The Board shall publicize its rules and regulations prior to
promulgation in at least one newspaper of general circulation in the City of Santa
Monica. The Board shall hold at least one (4) public hearing to consider the views of
interested parties prior te the adGption of general adjustments of the de- aisienbefore
deciding whether to impose a dollar- amount ceiling on a general adjustment
under Section 1805(b) or deciding to decontrol or reimpose control for any class of
rental units under Section 1803(r). All rules and regulations, internal staff
memoranda, and written correspondence explaining the decisions, orders, and
policies of the Board shall be kept in the Board's office and shall be available to the
public for inspection and copying. The Board shall publicize this Article so that all
residents of Santa Monica will have the opportunity to become informed about their
legal rights and duties under Rent Control in Santa Monica. The Board shall prepare
a brochure which fully describes the legal rights and duties of landlords and tenants
under Rent Control in Santa Monica. The brochure will be available to the public, and
each tenant of a controlled rental unit shall receive a copy of the brochure from his or
her landlord.
Section 1804. Maximum Allowable Rents
(b) ESTABLISHMENT OF BASE RENT CEILING: Beginning one - hundred - twenty (120)
days after the adoption of this Article, no landlord shall charge rent for any controlled
rental units in an amount greater than the rent in effect on the date one year prior to
the adoption of this Article. The rent in effect on that date is the base rent ceiling and
is a paiRt from which fair rents shall be adjusted upward or downward
accordanGe with Section 1805. If there was no rent in effect on the date one year
prior to the adoption of this Article, the base rent ceiling shall be the rent that was
charged on the first date that rent was charged following the date one year prior to
the adoption of this Article. For tenancies commencing on or after January 1, 1999,
which qualify for a vacancy rent increase pursuant to state law, the base rent ceiling
is the initial rental rate in effect on the date the tenancy commences. As used in this
subsection, the term "initial rental rate" means only the amount of rent actually paid
by the tenant for the initial term of the tenancy. The base rent ceiling is the
reference point from which the rent ceiling shall be adjusted upward or
downward in accordance with Section 1805.
-. -
.D - public
hearings prescribed by 88Gtion '0 the Fent
GeiliR9 for all controlled Fental units iR general and/or fer partiGular categories 0
controlled rental units deemed appropriate by the eard. Such an a-justment,
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periods No later than June 30 each year, the Board shall announce the
percentage by which rent ceilings for eligible units will be generally adjusted
effective September 1 of that year.
(1) The adjustment shall be equal to seventy five percent of the percentage
increase in the Consumer Price Index (All Urban Consumers, Los
Angeles, Riverside, Orange County region, or any successor
designation of that index that may later be adopted by the U.S. Bureau
of Labor Statistics) as reported and published by the U.S. Department of
Labor, Bureau of Labor Statistics, for the 12 -month period ending as of
March of the current year.
(2) In determining the allowable percentage increase, numbers of .04 and
below shall be rounded down to the nearest tenth decimal place and
numbers of .05 and above shall be rounded up to the nearest tenth
decimal place.
(3) Subparagraph 1 of this subsection notwithstanding, in no event shall
the general adiustment be less than zero percent or greater than six
percent.
(b) DOLLAR - AMOUNT CEILING:
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decreases in the City of Santa nn,.. iGa for taxes. The Board may, in its discretion,
impose a dollar- amount limit to any annual general adjustment. The dollar-
amount limit shall be calculated using the following methodology:
(1) The Board shall determine the eighty fifth percentile of the maximum
allowable rent of all controlled units;
(2) The Board shall then determine the eighty fifth percentile of maximum
allowable rent of all controlled units with a base rent established before
January 1, 1999;
(3) The dollar- amount limit shall be the average of the two rents arrived at
under paragraphs (1) and (2) multiplied by the annual general adjustment
determined under paragraph (a) of this Section.
(e) In making individual and general adjustments of the rent ceiling, the Board shall
consider the purposes of this Article and the requirements of law. In making an
individual downward adjustment, the Board may consider decreases in living
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space, furniture, furnishings, equipment, or services; substantial deterioration
of the controlled rental unit other than as a result of ordinary wear and tear; or
failure on the part of the landlord to provide adequate housing services or to
complV substantially with applicable housing, health and safety codes. In
making an individual upward adjustment, the Board may adept employ as its fair
return standard any lawful formula, including but not limited to one based on
investment or net operating income. The Board shall consider all factors relevant to
the formula it employs; sSuch factors may include: increases or decreases in
operating and maintenance expenses, the extent of utilities paid by the landlord,-
necessary and reasonable capital improvement of the controlled rental unit as
distinguished from normal repair, replacement and maintenance,- increases or
decreases in living spaces,— furniture, furnishings, equipment, or services, substantial
deter'erat;GR ef the GGRtrolled rental unit other than as a result Gf erdinary wear and
tear, failure on the part of the landlord to provide adequate heusing SeFV'Ges or to
comply substantially with applicable housing, health and safety , federal and
state income tax benefits;- the speculative nature of the investments; whether or not
the property was acquired or is held as a long term or short term investments, —the
landlord's rate of return on investments; the landlord's current and base date Net
Operating Incomes; and any other factor deemed relevant by the Board in providing
the landlord a fair return.
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Adopted and approved this 24th day of July, 2012.
R hard Bloom, Mayor
I, Maria M. Stewart, City Clerk of the City of Santa Monica, do hereby certify that
the foregoing Resolution No. 10699 (CCS) was duly adopted at a meeting of the Santa
Monica City Council held on the 24th day of July, 2012, by the following vote:
AYES: Councilmembers Holbrook, McKeown, O'Connor, O'Day,
Mayor Pro Tem Davis, Mayor Bloom
NOES: None
ABSENT: Councilmember Shriver
ATTEST:
Maria M. Stewart; City Jerk