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|Santa Monica Rent Control Board Approves Small Increase|
By Jason Islas
June 19, 2012 -- The Santa Monica Rent Control Board voted Thursday to allow landlords to raise rents of controlled units by 1.54 per cent -- approximately half of 2011's General Adjustment (GA).
Following staff's recommendation, the Rent Board voted 4 to 0 to allow landlords to raise controlled rents by as much to $26 a month in order to cover the rising costs of maintaining buildings, paying City fees, and enjoying a “reasonable” return on their investments.
The 2011 GA was 3.2 per cent -- the largest increase since 2006 -- after staff recommended introducing the cost of property tax assessments into the formula the board uses to calculate the GA, which resulted in a one-time bump.
This year's increase is 77 percent of the Consumer Price Index (CPI) and reflects the “improved cash-flow owners are experiencing as a result of vacancy decontrol,” according to Tracy Condon, the Rent Board administrator.
Last year, nine out of ten landlords had rented at least some of their formerly rent-controlled units at market rate, Condon said.
Under the 1994 Costa-Hawkins Rental Act, which went into full effect in 1999, owners of rent-controlled units are allowed to raise the rent to market rate when a unit is voluntarily vacated or the tenant is evicted for non-payment of rent.
Only Board member Robert Kronovet -- a property owner -- was absent from the vote.
Kronovet recused himself from the discussion, citing a ruling by California's Fair Political Practices Commission (FPPC).
He said that according to the FPPC, “a housing provider who has six units or more has a great deal of personal interest in the outcome of rent adjustments and pass throughs,” Kronovet said.
He stepped out of the room “under penalty of fine,” he said.
The rent increases will go into effect in September, Condon said.
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