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Santa Monica Planning Panel Wants Voluntary Rent Control at New Apartment

Phil Brock For Council 2014

Santa Monica Real Estate Company, Roque and Mark

Frank Gruber for Santa Monica City CouncilHarding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore
Kutcher & Kozal, LLP

Pacific Park, Santa Monica Pier

Santa Monica Convention and Visitors Bureau

By Jonathan Friedman
Associate Editor

September 3, 2014 -- A developer proposing a 32-unit apartment building on Pico Boulevard off 11th Street has promised four of the units would be “affordable” as part of a development agreement, but the Planning Commission wants more perks.

Four of the five commissioners in attendance recommended a “voluntary rent control program” affecting 11 of the units to bring the total number of rent-restricted units to 15. Commissioner and council candidate Sue Himmelrich said this would make up for 15 rent-controlled units being razed several years ago on the property where the apartment would be built.

Speaking on behalf of developer Pico Eleven, which is headed by Peter Bohlinger, attorney Kevin Kozal said his client would likely not be interested in voluntary rent control.

“[Pico Eleven] would be concerned when they go to get financing that these restrictions on rent and limitations would be problematic,” Kozal said.

The commission does not have final say on what happens with this project because it is subject to a development agreement. Its members can only make recommendations to the City Council. City staff and the developer negotiate terms of the agreement, which could be altered at the council dais (with the developer’s approval) prior to a final vote.

A development agreement is required in this situation because the proposed 32,000-square-foot building would be 45 feet high, which is 15 feet higher than allowed by City law for a project of this type. In exchange for the variance, the applicant must offer so-called community benefits.

Some of the proposed benefits on the table include the four affordable units, local hiring program for construction, bus passes for certain tenants, sidewalk enhancements and payment to the City of nearly $300,000 for “transportation infrastructure improvements” and off-site parks/open space.

Himmelrich said it was important to add voluntary rent control to the benefits list because “one of things going on in this city is people are being forced to move out because their rent goes up so much every year … I think it’s worse for families.”

Fellow Commissioner and council candidate Jennifer Kennedy was another strong supporter for rent control with this project, saying she had heard of other new apartments that featured an introductory rate that went up by $800 three years later. Tenants were forced to leave, she said.

Himmelrich and Kennedy said the controlled units should be restricted to an annual increase of no more than 75 percent of the Consumer Price Index. This is the maximum increase allowed for Santa Monica units already subject to rent control.

Commissioners Richard McKinnon (also a council candidate) and Amy Anderson agreed to include voluntary rent control in the recommendation to council. Commissioner Gerda Newbold was the lone dissenter.

All 32 units proposed for the apartment would feature two bedrooms. The plan calls for a two-level subterranean parking garage with 66 parking spaces. Unit renters would have the option of not taking a parking space in exchange for cheaper rent.

The proposal will head to the City Council and later the Architectural Review Board.

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