R114521
City Council Meeting: August 3, 2022 Santa Monica, California
RESOLUTION NUMBER 11452 (CCS)
(City Council Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA
SUBMITTING TO THE VOTERS A MEASURE TO AMEND ARTICLE XVIII OF THE
CITY CHARTER TO REVISE REQUIREMENTS FOR OWNERS TO EVICT TENANTS
FOR OWNER-OCCUPANCY, REVISE ELECTION PROCEDURES, AND LOWER THE
CAP ON THE ANNUAL GENERAL ADJUSTMENT AT THE GENERAL MUNICIPAL
ELECTION TO BE HELD ON TUESDAY NOVEMBER 8, 2022, AND AUTHORIZING
CITY COUNCILMEMBERS TO FILE WRITTEN ARGUMENTS FOR OR AGAINST THE
MEASURE AND DIRECTING THE CITY ATTORNEY TO PREPARE AN IMPARTIAL
ANALYSIS OF THE MEASURE.
WHEREAS, the City’s Rental Control Law (Article XVIII of the City Charter, also
referenced as “RCCA”) prohibits evictions of tenants except as enumerated in the law;
and
WHEREAS, owners or qualified relatives who wish to move into their units and
reside there permanently may evict current tenants to do so, but only if they meet the
requirements set forth in the RCCA; and
WHEREAS, one of those requirements is the owner or relative “intend in good faith
to move into the unit within thirty (30) days after the tenant vacates and to occupy the unit
as a primary residence for at least one year”; and
WHEREAS, the Santa Monica Rent Control Board (the “Board”) has heard input
from the public on the feasibility of requiring owners or their qualified relatives to intend
to occupy the unit for a longer period, instead of one year, upon evicting an existing
tenant; and
WHEREAS, the purpose of placing both a requirement to occupy the unit within a
certain time frame and a good faith intent to live there for a certain period is to ensure the
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eviction is not used as a pretext for the owner to rent the unit to a new tenant paying
market rates; and
WHEREAS, in light of the foregoing recitals, the Board has recommended the City
Charter be amended to modify Article XVIII, Section 1806(a)(8)(iv) and (v), to require an
owner intend to occupy a unit for at least three years, and occupy the unit within sixty
days of vacancy; and
WHEREAS, after consideration of the Board’s recommendation, the City Council
desires the City Charter be amended to require an owner intend to occupy a unit for at
least two years, unless extenuating circumstances exist; and require the owner to occupy
the unit within sixty days of vacancy; and
WHEREAS, on or about November 6, 2012, Section 1805 of the City Charter was
amended to allow for an Annual General Adjustment to the maximum rent ceiling, based
upon the CPI, with a maximum increase of 6%; and
WHEREAS, the Costa-Hawkins Rental Housing Act (Civil Code sections 1954.50
to 1954.535), allows owners to charge fair market rents upon vacancy of certain rental
housing units in accordance with Civil Code section 1954.52 (also known as “vacancy
decontrol”); and
WHEREAS, due to vacancy decontrol allowed by the Costa-Hawkins Rental
Housing Act, several other jurisdictions in the state have lowered their annual general
adjustment caps to address the imbalance caused by allowing a higher cap on the annual
general adjustment in addition to vacancy decontrol; and
WHEREAS, the global pandemic due to COVID-19 has caused unprecedented
hardships, disruptions, and long-term impacts that continue to negatively affect Santa
Monica’s residents; and
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WHEREAS, reducing the rent cap from 6% to 3% would strike the correct balance
in times of higher inflation given that property owners continue to have the benefit of
setting the initial rents at any amount upon a vacancy and, thus, can account for any
maintenance cost increases; and
WHEREAS, while there has been some relief in the form of an eviction moratorium,
rental assistance, and other efforts to prevent displacement, those programs are winding
down while the pandemic’s impacts continue to be felt; and
WHEREAS, inflation rates continue to spike and rising costs are hampering
residents’ ability to recover from the loss of income and unexpected expenses that many
experienced during the pandemic’s first two years; and
WHEREAS, COVID-19 cases are increasing even as mitigation measures, such
as masking and social distancing, are no longer required; and
WHEREAS, 14,460 renter households in the City are cost burdened, representing
31.6% of renter households, as further discussed in the City’s most recent draft of the
Housing Element relating to fair housing; and
WHEREAS, there are 10,225 households in Santa Monica experiencing severe
housing cost burden, of which 2,930 of these households are families; and
WHEREAS, approximately 11.7% of Black and 8.6% of Hispanic/Latino family
households in the City were cost burdened even before the COVID-19 pandemic; and
WHEREAS, other rent stabilization jurisdictions have been able to adjust to these
conditions by freezing, lowering, or implementing caps on rent increases for controlled
units, including Oakland (3% cap) and City of West Hollywood (freeze), among others;
and
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WHEREAS, following the economic hardships of COVID and the unanticipated
highest inflation rates in recent history, to strike a balance between tenant relief and
landlords obtaining a fair rate of return, Section 1805(a) could be amended as follows:
(a) Annual General Adjustment. 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 (75) 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 twelve
(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 adjustment be less than zero percent or
greater than six (6) three (3) percent; and
(4) Commencing February 1, 2023, the general adjustment
during the period from February 1, 2023, through August 31, 2023,
shall be 0.8% of the maximum allowable rent (MAR) in effect as of
August 31, 2022, with a maximum dollar amount limit of nineteen
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dollars ($19) (“Adjusted GA”). Absent an individual adjustment
pursuant to subparagraphs (c) through (h) of this Section, the MAR
during this seven month transition period shall be the MAR in effect
as of August 31, 2022, plus the Adjusted GA. Notwithstanding the
Board’s June 2022 announcement of the 2022 general adjustment,
the MAR for any period after August 31, 2023, shall be calculated
pursuant to this Section 1805 as if the General Adjustment for the
entire period from September 1, 2022 through August 31, 2023, had
been three (3) percent, with a maximum dollar amount limit of
seventy dollars ($70). The Rent Control Board may by regulation
increase the Adjusted GA for landlords who did not increase their
rents by the full six (6) percent prior to February 1, 2023, so long as
the average rent increase for the period from September 1, 2022,
through August 31, 2023, does not exceed the lower of 3% or $70
per month.
(5) If any section, subsection, subdivision, paragraph, sentence,
clause or phrase of this Section is for any reason held to be invalid,
unlawful, or unconstitutional, such decision shall not affect the
validity of the remaining portions of this Section or any portion
thereof.
WHEREAS, an owner in Santa Monica would still be able to petition for a rent
increase if rents were adjusted to a 3% increase from rents in effect as of August 31,
2022, which would enable the owner to obtain a fair and reasonable return. Charter
Section 1805(c) provides a due process safety net for landlords who believe they are not
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making a fair return, despite other Sections of the Charter that limit rent increases:
1805(c). Petitions. Upon receipt of a petition by a landlord and/or a
tenant, the maximum rent of individual controlled rental units may be
adjusted upward or downward in accordance with the procedures set forth
elsewhere in this Section. The petition shall be on the form provided by the
Board and shall include a declaration by the landlord that the unit meets all
requirements of Section 1805(h). Notwithstanding any other provision of
this Section, the Board or hearing examiner may refuse to hold a hearing
and/or grant a rent adjustment if an individual hearing has been held and
decision made with regard to maximum rent within the previous six (6)
months.
and
WHEREAS, currently, the RCCA requires that an election be held even if there are
only as many candidates as open Board positions; and
WHEREAS, the Rent Control Board has proposed an amendment to the RCCA
that an election is not necessary when the number of qualified candidates does not
exceed the open positions. To accomplish this, Section 1803(d) could be amended as
follows:
Section 1803(d) ELECTION OF COMMISSIONERS: Commissioners
shall be elected at general municipal elections in the same manner as set
forth in Article XIV of the Santa Monica Charter, except that the first
Commissioners shall be elected at a special municipal election held within
ninety (90) days of the adoption of this Article. The elected Commissioners
shall take office on the first Tuesday following their election. If, upon the City
Clerk’s determination of the qualified candidates, the number of candidates
does not exceed the number of vacant positions, no election will be held
and the qualified candidates shall be seated upon swearing in by the City
Clerk.
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WHEREAS, the City Council has considered and approved the Board’s
recommendation because these amendments are in the public interest as they would
strengthen tenant protections from unnecessary displacements and would streamline
elections to improve governmental functions; and
WHEREAS, pursuant to California Elections Code Section 10403, the City Council
has previously requested the County of Los Angeles consent and agree to the
consolidation of all aspects of a General Municipal Election with the Statewide General
Election scheduled for Tuesday, November 8, 2022, for the purpose of electing members
of the Santa Monica City Council, the Santa Monica Rent Control Board, the Santa
Monica-Malibu Unified School District, and the Santa Monica College Community College
District.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES RESOLVE AND PROCLAIM AS FOLLOWS:
SECTION 1. At the General Municipal Election called for November 8, 2022, the
following measure shall be submitted to the qualified electors of the City of Santa Monica:
PROPOSITION " ": Shall the City Charter be
amended to require intended owner occupancy of
rent-controlled units for two years before tenant
eviction; require owner occupancy within 60 days of
vacancy; reduce the maximum Annual General
Adjustment from 6% to 0.8% from 2/1/23 through
8/31/23, or average not to exceed 3%, with a 3%
maximum Annual General Adjustment thereafter;
and require elections only if the number of qualified
candidates exceeds the number of open Board
positions?
Yes ________
No ________
SECTION 2. That the City Clerk shall file a certified copy of this resolution with the
Board of Supervisors and with the county election department of the County of Los
Angeles.
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SECTION 3. That the City of Santa Monica recognizes additional costs may be
incurred by the County by reason of the addition of this measure to the ballot and agrees
to reimburse the County for any additional costs.
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 the measure, which shall not exceed 500 words in length. The
impartial analysis for each measure 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:
FOR: Mayor Sue Himmelrich and Councilmember Oscar de la Torre
AGAINST: None
All written arguments filed by any person in favor of or against the 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
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against the measure, as well as any rebuttals, to be mailed to all qualified voters with the
sample ballots. 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 11425 and 11426 are referred
to and incorporated into this resolution for more particulars concerning the conduct of
General Municipal Election to be held on November 8, 2022, 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:
_________________________
Douglas Sloan, City Attorney
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Exhibit 1
Section 1806(a)(8)(iv) and (v) of Article XVIII of the City Charter shall be amended
to read as follows :
(iv) The landlord or enumerated relative must intend in good faith to move into
the unit within thirty (30) sixty (60) days after the tenant vacates and to occupy the
unit as a primary residence for at least one year two years, unless extenuating
circumstances exist.
(v) If the landlord or relative specified on the notice terminating tenancy fails to
occupy the unit within thirty (30) sixty (60) days after the tenant vacates or fails to
occupy the unit as a primary residence for at least two years, unless extenuating
circumstances exist, the landlord shall: A. Offer the unit to the tenant who vacated
it. B. Pay to said tenant all reasonable expenses incurred in moving to and/or from
the unit.
Section 1805(a) of Article XVIII of the City Charter shall be amended as follows:
(a) Annual General Adjustment. 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 (75) 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 twelve (12) month period ending
as of March of the current year.
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(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 adjustment be less than zero percent or greater than six (6)
three (3) percent; and
(4) Commencing February 1, 2023, the general adjustment during the
period from February 1, 2023, through August 31, 2023, shall be 0.8% of
the maximum allowable rent (MAR) in effect as of August 31, 2022, with a
maximum dollar amount limit of nineteen dollars ($19) (“Adjusted GA”).
Absent an individual adjustment pursuant to subparagraphs (c) through (h)
of this Section, the MAR during this seven month transition period shall be
the MAR in effect as of August 31, 2022, plus the Adjusted GA.
Notwithstanding the Board’s June 2022 announcement of the 2022 general
adjustment, the MAR for any period after August 31, 2023, shall be
calculated pursuant to this Section 1805 as if the General Adjustment for
the entire period from September 1, 2022, through August 31, 2023, had
been three (3) percent, with a maximum dollar amount limit of seventy
dollars ($70). The Rent Control Board may by regulation increase the
Adjusted GA for landlords who did not increase their rents by the full six (6)
percent prior to February 1, 2023, so long as the average rent increase for
the period from September 1, 2022, through August 31, 2023, does not
exceed the lower of 3% or $70 per month.
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(5) If any section, subsection, subdivision, paragraph, sentence, clause
or phrase of this Section is for any reason held to be invalid, unlawful, or
unconstitutional, such decision shall not affect the validity of the remaining
portions of this Section or any portion thereof.
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Section 1803(d) of Article XVIII of the City Charter shall be amended to read as
follows:
Section 1803(d) ELECTION OF COMMISSIONERS: Commissioners shall
be elected at general municipal elections in the same manner as set forth
in Article XIV of the Santa Monica Charter, except that the first
Commissioners shall be elected at a special municipal election held within
ninety (90) days of the adoption of this Article. The elected Commissioners
shall take office on the first Tuesday following their election. If, upon the City
Clerk’s determination of the qualified candidates, the number of candidates
does not exceed the number of vacant positions, no election will be held
and the qualified candidates shall be seated upon swearing in by the City
Clerk.
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Adopted and approved this 3rd day of August 2022.
__________________________
Sue Himmelrich, Mayor
I, Denise Anderson-Warren, City Clerk of the City of Santa Monica, do hereby
certify that Resolution No. 11452 (CCS) was duly adopted at a meeting of the Santa
Monica City Council held on the 3rd day of August 2022, by the following vote:
AYES: Councilmembers Brock, Davis, De la Torre, Negrete, Parra,
Mayor Pro Tem McCowan, Mayor Himmelrich
NOES: None
ABSENT: None
ATTEST:
_____________________________________
Denise Anderson-Warren, City Clerk
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