SANTA MONICA—On Thursday, March 23, the Santa Monica Rent Control Board will decide whether to support California Assembly Bill 1506, a bill introduced by local Assemblymember, Richard Bloom (D-Santa Monica), and two colleagues, David Chiu (D-San Francisco) and Rob Bonta (D-Oakland).
AB 1506, which was introduced on February 17, 2017, would cap rising rent costs and dramatically expand rent control. Local jurisdictions would be allowed to set rent control rates for vacant apartments, increasing the number of units under rent control.
The bill would repeal the Costa-Hawkins Rental Housing Act of 1995, which exempts housing built after 1995 from local rent controls. Under this law, owners of rent-controlled properties are allowed to establish market rates on units after a tenant change, a practice known as “vacancy decontrol.” Single-family homes are exempt from rent control rules. When it was first introduced, the Costa-Hawkins Act eased the strict rent control regulations in cities including Santa Monica and West Hollywood.
Since 1999, about 70 percent of rent-controlled Santa Monica apartments have had rents reset to market rates. According to the Rent Control Board’s annual report, a tenant who has not moved since 1996 would pay $883 a month for a one-bedroom unit, while a new tenant in the same building would pay about $2,195.
Each year, about 400 to 550 rent-controlled units in Santa Monica turn over to market rate. Santa Monica has become a popular place to live, with significant job growth, but little housing available. A report from the McKinsey Global Institute showed that nearly 60 percent of Los Angeles County residents cannot afford local rents.
“I hear all the time from Millennials, from working class folks and people who work in the tech sector how difficult it is to find something that is affordable,” Bloom told the Santa Monica Daily Press in an interview.
Bloom says new housing developments are necessary to bring rising rents down. Repealing the Costa-Hawkins Act would provide relief to renters.
Last Friday, March 17, an informational hearing was held in downtown Los Angeles at the Ronald Reagan State Building, chaired by Assemblymembers Chiu (D-San Francisco), Miguel Santiago (D-Los Angeles), and Mike Gipson (D-Carson). Landlords, tenants, tenant activists, and advocacy organizations came together to discuss concerns about AB 1506. Supporters of the bill spoke of the repeal’s economic benefits for renters.
“Right now, market-rate rents can be increased to any amount that the landlord sees fit,” said an activist to Capital & Main. “Costa-Hawkins is preventing rent control from expanding, so repealing it is the only way to get rents under control.”
Critics of AB 1506 have indicated rent controls may limit the development of new housing and worsen affordability issues.
“Allowing rent control on new apartments would bring the development of rental housing to a standstill,” said California Apartment Association Communications Director Mike Nemeth. “Moreover, if vacancy controls return, rental property owners are sure to exit the market, further reducing the housing stock in Santa Monica.”
AB 1506 will be heard by the Housing Committee in the coming weeks.