Facing Deficit, Santa Monica Rent Board Raises Registration Fee

By Jonathan Friedman
Associate Editor

June 12, 2017 -- Not wanting to dig into the reserve fund to overcome a projected budget deficit in excess of $500,000 for the next fiscal year, the Santa Monica Rent Control Board decided Thursday that it would make up the money by raising landlords’ registration fees.

The board voted 4-1 to increase the annual fee from $174.96 per controlled unit to $198. This is the first increase since 2013.

Tracy Condon, the rent board’s executive director, told the board commissioners that there is enough money in the reserve to cover the projected deficit, but it would bring that account’s total to $600,000.

She said doing this would not be fiscally responsible.

The rent board’s budget for Fiscal Year 2018, which begins next month, is $5.1 million. Most of that money covers compensation and related costs for 26 employee positions.

There was some minor debate among the commissioners on whether to increase the fee to just over $195 or $198. Caroline Torosis supported the lower figure and voted against her colleagues’ final decision.

Condon estimated the fee hike would not only cover the deficit, but also give the board a surplus of more than $89,000. The excess money will be used for “capital improvements,” including the updating of what rent board staff called an “aging” database.

No public speakers addressed the board before it voted for the increase. This is unusual because the board almost always hears from at least a couple disgruntled landlords before making decisions that affect them.

The registration fee covers the vast majority of the rent board’s budget.

Traditionally, landlords recouped the entire cost by passing it down to tenants.

This practice ended in 2013 when the rent board limited how much tenants could be forced to pay (“Santa Monica Rent Board Raises Registration Fee, Says Landlords Have to Pay,” June 17, 2013).

The next year Santa Monica voters approved a ballot measure that capped the amount tenants could be forced to pay at 50 percent of the registration fee.

That measure also increased the maximum amount the registration fee could be from $174.96 to $288 (“Voters Could Decide on Proposed Hike to Landlord Registration Fee,” June 16, 2014).