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SANTA MONICA RENT CONTROL BOARD MEMORANDUM TO: Santa Monica Rent Control Board FROM: J. Stephen Lewis, General Counsel FOR MEETING OF: January 25, 2018 RE: Amendments to Regulations 3105, 3106, 3108, and
3109, and addition of new Regulation 3120, respecting limitations on rent surcharges for local taxes and local voted indebtedness.
Subject Matter
The Santa Monica Rent Control Board will hold a public hearing to consider
whether to:
adopt proposed new Regulation 3120 to specify that surcharges for local
taxes and voted indebtedness may not be added to the rent for any
controlled unit whose initial rental rate was established on or after
September 1, 2017, or that is reassessed as the result of sale or
improvement; and
amend Board Regulations 3105, 3106, 3108, and 3109 to be consistent
with proposed new Regulation 3120.
How this Item was Initiated
At its January 11 regular meeting, the Board held a public discussion about
how to begin to phase out surcharges resulting from local taxes and voted
indebtedness in view of the 2012 amendment to Charter Section 1805—which
eliminated the authority under which such surcharges were authorized—without
creating undue hardship for owners.
After hearing from the public and deliberating, the Board directed staff to
return at the next regular meeting, January 25, with amendments to existing
surcharge regulations to immediately eliminate surcharges for new tenancies,
Item 11A
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and tenancies in buildings that are reassessed due to a qualifying transfer of
ownership or significant improvements.
Background
Until December 2012, Article XVIII (the portion of the Charter that includes the
city’s rent control law) included the following sentence, in Section 1805,
subdivision (b):
Each year the Board shall generally adjust rents … upward by
granting landlords a utility and tax increase adjustment for actual
increases in the City of Santa Monica for taxes and utilities.
Over the years, the Board accomplished this in two different ways. It adjusted
rents to account for some tax increases, and nearly all utility-cost increases, by
incorporating them into the formula that it used when deciding the percentage by
which annual rents could increase. It adjusted rents to account for other taxes
(and bonds) in a less subtle fashion: by enacting regulations allowing owners to
add them to tenant’s rents directly, as a surcharge on a unit’s maximum
allowable rent. All of the surcharges at issue here are the result of that approach.
The regulations allowing those surcharges are as follows:
Regulation 3105, allowing a surcharge by which owners can recoup
their payment of School District Special Bond Tax Surcharge Measure
ES, approved by the voters in 1990, and Community College District
Special Bond Measure T, approved by the voters in 1992;
Regulation 3106, allowing a surcharge by which owners can recoup
their payment of the Stormwater Management User Fee, enacted by
the City Council in 1995;
Regulation 3108, allowing a surcharge by which owners can recoup
their payment of the Clean Beaches and Ocean Parcel Tax, enacted by
the City Council in 2006.
Regulation 3109, allowing a surcharge by which owners can recoup
their payment of a School District Special Tax approved by the voters in
2008.
At some point, the Board neglected to account for certain new taxes and
voted indebtedness, either as a component of the annual general adjustment
formula, or as a surcharge added to controlled rents. The Board was sued, and
settled that lawsuit by agreeing to allow owners of controlled units to recover their
overhead resulting from local taxes or voted indebtedness, “unless Section
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1805(b) is changed by voter amendment to the Rent Control Law.” As noted
above, that change occurred in 2012.
Under Charter Section 1805’s current iteration, the annual general adjustment
is now a simple percentage of the Consumer Price Index. Gone is any
requirement—and any allowance—for additions to rents in the form of pass-
throughs.1 Nothing in the current iteration of the City Charter, and nothing in the
2011 lawsuit settlement, requires the Board to continue to permit them. Indeed,
the City Attorney’s impartial analysis of Measure GA—the ballot measure by
which the voters amended Charter Section 1805—specifically notes that the
amendment was intended to do away with the inclusion of specific landlord
expenses, including those related to taxes, in the computation of controlled rents.
A copy of that analysis is included with this staff report as Exhibit A.
The Board has also heard from numerous tenants who have complained of
the hardships caused by increases in their rents due to surcharges. New tenants,
whose landlords have already established their rents at market level, have
complained that they have been surprised when, a year after their tenancies
began, their landlords not only imposed annual inflationary adjustments, but
added surcharges—sometimes in the amount of several hundred dollars
annually—to rents that presumably already include a full accounting for the
owner’s overhead. Longer-term tenants, including some on fixed incomes, have
informed the Board of annual rent increases amounting to several hundred
dollars above the annual general adjustment, resulting from tax-based
surcharges imposed after their buildings were sold and reassessed.
In view of these legal and factual realities, the Board has announced its
intention to “sunset,” or phase out, existing surcharges. As a first step to doing
so, it directed staff to draft proposed regulations to disallow surcharges for any
unit as to which any of the following three things are true:
1. The unit’s rent was established as the result of a new tenancy after the
unit had been vacated;
2. The unit is in a building that was reassessed as the result of an
ownership transfer; or
1 Members of the public have approached the Board to allow for pass throughs of various
expenses, such as earthquake-retrofitting costs, new voted indebtedness, and utility costs. In view of the voters’ elimination of the sole Charter provision under which such pass-throughs could have been authorized, the Board has clarified that they are not authorized.
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3. The unit is on a property that was reassessed as the result of significant
improvements.
Proposed regulation 3120, attached to this report as Exhibit B, includes these
provisions, as well as amendments to existing surcharge regulations as
necessary to be consistent with the proposed new regulation.
With respect to each of the above three categories, the Board stated at its last
meeting that it wished to have the inability to collect rent surcharges go into effect
“immediately.” As drafted, each of them does so, by specifying that it goes into
effect on February 1. In order to provide information to all affected landlords and
tenants before the changes go into effect, staff has also proposed an alternative
recommendation, under which the changes would go into effect on March 1.
Proposed Regulation 3120(c) specifies that the “new tenancies” to which it
would apply are those that began since the last time the Board allowed the
imposition of an annual general adjustment—September 1, 2017. This is to
prevent new tenants, whose landlords have recently established their rents at
market rates, from having surcharges added to their rents in addition to next
year’s general adjustment. This change would be prospective only, however.
While any landlord who has been collecting a surcharge since a new tenancy’s
inception would be required to reduce the affected unit’s rent by the amount of
the surcharge going forward, no collection of a surcharge occurring before
February 1 of this year would constitute an overcharge.
With respect to reassessments resulting from ownership changes, proposed
Regulation 3120(d)(1) references California Constitution Article XIIIA § 1
(Proposition 13). This is to clarify that only actual ownership changes—not, for
example, the transfer of a property into a revocable living trust for estate planning
purposes—that result in a reassessment, would thus result in the loss of ability to
collect rent surcharges.
With respect to reassessments resulting from significant improvements,
proposed Regulation 3120(d)(2) references California Constitution Article XVIIIA
§ 2 and California Revenue & Taxation Code § 70. These references clarify that
surcharges will no longer be permitted for properties reassessed as the result of
“new construction,” but that “new construction” includes all significant
improvements warranting a property’s reassessment, as specified by state tax
law.
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Finally, the Board directed staff to present with the attached proposed
regulatory amendments a sample of what the general adjustment calculation
sheet would look like, if the proposed amendments were adopted. That sample is
attached to this report as Exhibit C.
Recommendation
Staff recommends that the Board hear from the public, and then publicly
deliberate, about whether to adopt the proposed regulatory amendments as
presented in Exhibit B.
Alternative Recommendation
Alternatively, if, after hearing from the public and deliberating, the Board opts
to adopt the proposed substantive regulatory changes, but wishes to provide time
for staff to inform the affected public of those changes, staff recommends that the
Board adopt the amended and new regulations as proposed, with the exception
that they would be effective March 1, rather than February 1, 2018.
1/18/2018 Measure GA - Ballot Measures - SMVote
City of
Santa Monica® MENU
Impartial Analysis
Text
Argument in Favor
Espai1ol
Measure GA Shall the City Charter be amended to allow the annual rent control general adjustment to be
based on 75% of the annual percentage change in the Consumer Price Index, but limited to an
adjustment between 0% and 6%; and to give the Rent Control Board discretion, after a public
hearing, to impose a dollar limit, within the 0-6% range, calculated using the same formula
employed when imposing a limit under the existing general adjustment formula?
CITY ATI'ORNEY'S IMPARTIAL ANALYSIS OF MEASUREGA
BALLOT MEASURE AMENDING CITY CHARTER PROVISIONS GOVERNING THE COMPUTATION, APPLICATION AND
http://www.smvote.org/ballotmeasures/detail.aspx?id=35051#1mpartia1Analysis 1/8
1/18/2018 Measure GA - Ballot Measures - SMVote
ANNOUNCEMENT OF THE ANNUAL GENERAL ADJUSTMENT OF RENT CEILINGS FOR CONTROLLED RENTAL UNITS
This proposed measure would amend City Charter Sections 1803, 1804 and 1805 in order to
change the way that the Rent Control Board establishes the annual general adjustment to rent
ceilings for rent controlled units in Santa Monica.
At present, the City Charter does not specify a particular formula for use in computing the
annual general adjustment. Instead, Charter Section 1805 requires the Board to adjust rents
upward due to actual increases in landlords' utility, tax and maintenance expenses or downward
due to actual decreases in landlords' tax costs. Additionally, Section 1805 allows the Rent
Control Board to adjust ceilings up or down either for all controlled units or for particular
categories of units and also allows the Board to postpone the effective date of the change.
The formula that the Rent Control Board currently utilizes to compute the general adjustment is
known as the "component ratio to gross rent" formula. It is intended, in part, to yield a general
adjustment reflecting changes in landlords' actual costs; and the formula has the advantage of
capturing some of those changes. However, the formula is complex; and the results it yields are
consequently difficult to predict. Moreover, the results may not accurately reflect changes in
landlords' actual costs since reliable data about some cost categories is unavailable.
Additionally, the Rent Board's authority to make adjustments by category and to postpone the
effective date both increase the difficulty of making accurate predictions about the general
adjustment.
The proposed measure would establish a new adjustment formula and incorporate it into the
City Charter. That formula would tie the general adjustment to the inflation rate by basing the
adjustment on 75% of the annual percentage change in the Consumer Price Index for the Los
Angeles area, subject to two limitations. First, the proposal would limit the annual adjustment to
a range of zero to no more than six percent. Second, it would grant the Rent Control Board the
authority, after holding a public hearing, to impose a dollar limit on any year's general
adjustment according to a specified formula. Additionally, the proposed measure would make
the general adjustment uniformly applicable to all controlled units and would require that the
amount of the adjustment be announced, annually, by June 30th to be effective September 1st.
If the proposed City Charter amendment is adopted, future general adjustments would become
more predictable and computations would be more readily verifiable. Thus, the process would
be more transparent; and uncertainty would be reduced for both tenants and owners.
http://www.smvote.org/ballotmeasures/detail.aspx?id=35051#1mpartia1Analysis 2/8
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3105. School District Special Bond Tax Surcharge Santa Monica
Community College District Special Bond Surcharge
(a) The surcharges provided by this regulation are meant to reimburse owners of
controlled residential rental properties for the cost of the School District
Special Bond Tax Surcharge (Proposition ES) as approved by the voters on
November 6, 1990, and for the cost of the Santa Monica Community College
District Special Bond (Proposition T) approved by the voters in November,
1992.
(b) Duration of Surcharge
In addition to the monthly rentExcept as limited by Regulation 3120,
subdivisions (c) and (d), a landlord may collect a monthly surcharge in
accordance with this section on any controlled rental unit for each month
from January 1, 1992 until December 31, 2020. The actual surcharge for
each fiscal year beginning July 1 may be collected in monthly installments
commencing the following January 1, or any month within the same calendar
year, and continuing for the next twelve months thereafter.
(c) Determination of Surcharge
(1) The monthly surcharge shall not exceed an amount equal to the amount
of the yearly school bond property tax assessment as determined by the
Santa Monica-Malibu Unified School District, plus the amount of the
yearly Santa Monica Community College District Special Bond
assessment, divided by the total number of units on the parcel divided
into twelve monthly payments.
(2) For purposes of this subsection, the term "units" includes, but is not
limited to, all units in a controlled rental property that are used for
residential rental purposes or for commercial purposes, are owner-
occupied or relative occupied, are occupied pursuant to a Section 8
housing agreement, and/or are participating in the Incentive Housing
program.
(3) The yearly tax surcharge per parcel will change each fiscal year based
on the actual assessed values, the timing of the sale of the bonds and
the interest rates on any bonds sold. The owner of each assessed
parcel will receive notice from the County Assessor's Office and/or the
School District and/or the Community College District of the amount of
the yearly School Bond Tax Surcharge and the yearly Santa Monica
Community College District Special Bond Surcharge.
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(4) Upon notice by the County Assessor's Office of any change in the
assessed valuation of the parcel which affects the surcharges, the
landlord shall recalculate the surcharges as provided in this regulation
and give notice to the tenants of the change in the rent as set forth in
subsection (d) of this regulation. Any reassessment in the property tax
that results in a reduction of the School Bond Tax Surcharge and/or the
Santa Monica Community College District Special Bond Surcharge must
be recalculated and renoticed within thirty days of the receipt of the
notice of reassessment by the County Assessor's office.
(d) Notice Requirements
(1) Before imposing any surcharge under this section, A landlord shall must
notify each the affected tenant of a rent increase pursuant to this
regulation. The notice must comply with all noticing requirements set
forth in Civil Code Section 827.
(2) The Board shall promulgate a form for the notice required by this
regulation.
(3) The notice shall contain the following information: the amount of the
School Bond Tax Surcharge and/or Santa Monica Community College
District Special Bond Surcharge for the property; the number of units on
the property; the amount of the monthly per-unit surcharge; and, the
amount of the maximum lawful rent, including all fees and surcharges. A
copy of the portions of the Joint Consolidated Tax Bill or other official
notification that reflects the School Bond Tax Assessment, and/or Santa
Monica Community College District Special Bond Assessment, and the
parcel number shall be attached to the notice.
(4) Failure to comply with the notice requirements set forth above shall
render any increase excess rent within the meaning of Chapter 8.
3106. Stormwater Management User Fee Surcharge
(a) The surcharge provided by this regulation is meant to reimburse owners of
controlled residential rental properties for the cost of the Stormwater
Management User Fee established pursuant to City Ordinance 1811 (CCS),
enacted by the Santa Monica City Council on July 25, 1995.
(b) Duration of Surcharge
In addition to the monthly rent, a landlord may collect a monthly surcharge in
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accordance with this section on any controlled rental unit for each month no
earlier than January 1, 1996, and which shall expire upon the repeal or
expiration of Santa Monica City Ordinance 1811 (CCS). Except as limited by
Regulation 3120, subdivisions (c) and (d), the actual surcharge for each
fiscal year beginning July 1, 1996 may be collected in monthly installments
commencing the following January 1, or any month within the same calendar
year, and continuing for the next twelve months thereafter.
(c) Determination of Surcharge
(1) The monthly surcharge shall not exceed an amount equal to the amount
of the Stormwater Management User Fee, as determined by Ordinance
1811, divided by the total number of units on the parcel, divided into
twelve monthly payments.
(2) For purposes of this subsection, the term "units" includes, but is not
limited to, all units in a controlled rental property that are used for
residential rental purposes or for commercial purposes, including owner-
occupied or relative occupied units, units occupied pursuant to a Section
8 housing agreement, and/or units participating in the Incentive Housing
program.
(3) Upon notice by the County Assessor's Office of the Stormwater
Management Fee, the landlord shall calculate the surcharge provided in
this regulation and give notice to the tenants of the amount of the per
unit surcharge as set forth in subsection (d) of this regulation.
(d) Notice Requirements
(1) Before imposing any surcharge under this section, Aa landlord shall
must notify each affected tenant of the amount of the Stormwater
Management User Fee surcharge pursuant to this regulation. The notice
must comply with all noticing requirements set forth in Civil Code
Section 827.
(2) The notice shall contain the following information: the amount of the
Stormwater Management User Fee for the property; the number of units
on the property; the amount of the monthly per-unit surcharge; and, the
amount of the maximum lawful rent, including all fees and surcharges. A
copy of the portions of the Joint Consolidated Tax Bill or other official
notification that reflects the School Bond Tax Assessment, and/or Santa
Monica Community College District Special Bond Assessment, and the
parcel number shall be attached to the notice.
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(3) Failure to comply with the notice requirements set forth above shall
render any surcharge excess rent within the meaning of §1809 of the
Charter and Chapter 8 of the Board's regulations.
3108. Clean Beaches and Ocean Parcel Tax Surcharge
(a) The surcharge provided by this regulation is meant to reimburse owners of
controlled residential rental properties for the cost of the Clean Beaches and
Ocean Parcel Tax established pursuant to City Ordinance 2214 (CCS),
enacted by the Santa Monica City Council on July 25, 2006.
(b) Duration of Surcharge
In addition to the monthly rent, a landlord may collect a monthly surcharge in
accordance with this section on any controlled rental unit for each month no
earlier than February 1, 2008, and which shall expire upon the repeal or
expiration of Santa Monica City Ordinance 2214 (CCS). Except as limited by
Regulation 3120, subdivisions (c) and (d), tThe actual surcharge for each
fiscal year beginning July 1, 2008 may be collected in monthly installments
commencing the following January 1, or any month within the same calendar
year, and continuing for the next twelve months thereafter.
(c) Determination of Surcharge
(1) The monthly surcharge shall not exceed an amount equal to the amount
of the Clean Beaches and Ocean Parcel Tax, as determined by
Ordinance 2214, divided by the total number of units on the parcel,
divided into twelve monthly payments.
(2) For purposes of this section, the term “units” includes, but is not limited
to, all units in a controlled rental property that are used for residential
rental purposes or for commercial purposes, including owner-occupied
or relative-occupied units, units occupied pursuant to a Section 8
housing agreement, and/or units participating in the Incentive Housing
Program.
(3) Upon notice by the County Assessor’s Office of the Clean Beaches and
Ocean Parcel Tax, the landlord shall calculate the surcharge provided in
this regulation and give notice to the tenants of the amount of the per
unit surcharge as set forth in subsection (d) of this regulation.
(d) Notice Requirements
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(1) Before imposing any surcharge under this section, Aa landlord mustshall
notify each affected tenant of the amount of the Clean Beaches and
Ocean Parcel Tax surcharge pursuant to this regulation. The notice
must comply with all noticing requirements set forth in Civil Code section
827.
(2) The notice shall contain the following information: the amount of the
Clean Beaches and Ocean Parcel Tax for the property; the number of
units on the property; the amount of the monthly per-unit surcharge;
and, the amount of the maximum lawful rent, including all fees and
surcharges. A copy of the portions of the Joint Consolidated Tax Bill or
other official notification that reflects the Clean Beaches and Ocean
Parcel Tax, and the parcel number shall be attached to the notice.
(3) Failure to comply with the notice requirements set forth above shall
render any surcharge excess rent within the meaning of section 1809 of
the Charter and Chapter 8 of the Board’s regulations.
(e) Exemptions
(1) Section 7.64.060 of the Santa Monica Municipal Code authorizes the
City Council to establish by resolution special exemption procedures
and eligibility criteria based on income, age or disability for the Clean
Beaches and Ocean Tax. The City Council established special
exemption procedures for low-income residents in Resolution 10248
(CCS). All property owners and renters who meet the Clean Beaches
and Ocean Tax Exemption eligibility criteria are exempt from the Clean
Beaches and Ocean Tax.
(2) The maximum dollar amount of gross household income for single-
person households for purposes of Clean Beaches and Ocean Parcel
Tax Exemption eligibility shall be twenty five thousand and two dollars
($25,002).
(3) The maximum dollar amount of gross household income for households
of two or more persons for purposes of Clean Beaches and Ocean
Parcel Tax Exemption eligibility shall be twenty eight thousand six
hundred and fifty dollars ($28,650).
(4) On July 1, 2008 and in subsequent years on the same date thereafter,
the maximum dollar amounts of gross household income for single and
two-or-more person households for purposes of Clean Beaches and
Ocean Parcel Tax Exemption eligibility as set forth above shall be
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adjusted by the Los Angeles-Riverside-Orange County Consumer Price
Index for Wage Earners and Clerical Workers (CPI-W) for the previous
calendar year.
(5) Application for determination of eligibility for fee waiver under this section
must be on a form provided by the City.
3109. School District Qualified Special Tax Surcharge (Measure R)
(a) The surcharge provided by this regulation is to reimburse owners of
controlled residential rental properties for the cost of the School District
Qualified Special Tax of $346 per year, per parcel, adjusted annually for
inflation, as approved by the voters on February 5, 2008.
(b) Duration of Surcharge
In addition to the monthly rentExcept as limited by Regulation 3120,
subdivisions (c) and (d), a landlord may collect a monthly surcharge in
accordance with this section on any controlled rental unit starting no earlier
than January 1, 2009. The surcharge shall expire upon the repeal of School
District Qualified Special Tax (Measure R). The actual surcharge for each
fiscal year beginning July 1, 2008 may be collected in monthly installments
commencing the following January 1, or any month within the same calendar
year, and continuing for the next twelve months thereafter. The landlord shall
not collect this surcharge for any year for which the landlord has obtained a
senior exemption to the qualified special tax for the parcel from the Board of
Education of the District. The landlord shall not collect this surcharge during
any month in which the landlord has not paid this tax and the payment is
overdue.
(c) Determination of Surcharge
(1) The monthly surcharge shall not exceed an amount equal to the amount
of the School District Qualified Special Tax, divided by the total number
of units on the parcel, divided into twelve monthly payments.
(2) For purposes of this subsection, the term "units" includes, but is not
limited to, all units in a controlled rental property that are used for
residential rental purposes or for commercial purposes, including owner-
occupied or relative-occupied units, units occupied pursuant to a Section
8 housing agreement, and/or units participating in the Incentive Housing
program.
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(3) Upon notice by the County Assessor's Office of the School District
Qualified Special Tax, the landlord shall calculate the surcharge
provided in this regulation and give notice to the tenants of the amount
of the per-unit surcharge as set forth in subsection (d) of this regulation.
(d) Notice Requirements
(1) Before imposing any surcharge under this section, Aa landlord shall
must notify each affected tenant of the amount of the School District
Qualified Special Tax surcharge pursuant to this regulation. The notice
must comply with all noticing requirements set forth in Civil Code
Section 827.
(2) The notice shall contain the following information: the amount of the
School District Qualified Special Tax for the parcel; the number of units
on the parcel; the amount of the monthly per-unit surcharge; and, the
amount of the maximum lawful rent, including all fees and surcharges.
(3) Failure to comply with the notice requirements set forth above shall
render any surcharge excess rent within the meaning of section 1809 of
the Charter and Chapter 8 of the Board's regulations.
3120. Limitation on Surcharges
(a) The Board finds and declares that permitting landlords to add surcharges to
rents in order to recoup their payment of local taxes and voted indebtedness
is inconsistent with the Board’s twin mandates, stated in Charter Section
1800, to regulate rents so that they will not be increased unreasonably, and
to ensure that landlords will receive no more than a fair return.
(b) The Board further finds and declares that:
(1) Because the majority of past and existing regulations allowing
landlords to add surcharges to rents in order to recoup their payment
of local taxes and voted indebtedness were enacted before landlords
had the right to establish initial rents for new tenancies, the Board
reasonably concluded, at those times, that permitting the surcharges
was consistent with Charter Section 1800;
(2) Regardless of whether permitting surcharges for landlords’ local tax
liabilities was consistent with Charter Section 1800, until 2012, Charter
Section 1805 required the Board to account for those liabilities when
establishing annual across-the-board rent increases;
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(3) When the electors of the City of Santa Monica amended Charter
Section 1805 in 2012, they eliminated the provision authorizing the
Board to account for landlords’ local tax liabilities as part of its
calculation of annual general adjustments;
(4) Since 1999, initial rents for units in roughly 90% of controlled buildings
were established at market level, with the result that nearly every
owner of controlled units is currently earning more than the
constitutionally-required fair return;
(5) The Rent Control Law continues to provide any landlord who can
demonstrate that he or she is not earning a fair return to petition for
rent increases sufficient to provide one.
(c) Beginning February 1, 2018, no surcharge may be added to a unit’s rent—
other than a charge to recover fifty percent of registration fees, as permitted
under Charter Section 1803(n)—for any unit with an initial rent that was
established on or after September 1, 2017.
(d) No surcharge may be added to a unit’s rent—other than a charge to recover
fifty percent of registration fees, as permitted under Charter Section
1803(n)—for any unit on a parcel about which either of the following is true:
(1) The parcel was reassessed, as authorized by California Constitution
Article XIIIA, § 1 et seq. (Proposition 13), as the result of a change of
ownership occurring on or after February 1, 2018;
(2) An improvement on the parcel was reassessed, as authorized by
California Constitution Article XIIIA, § 2 and California Revenue and
Taxation Code § 70, on the basis of new construction that was
completed on or after February 1, 2018.
Blank form provided by the Santa Monica Rent Control Board
NOTICE OF CHANGE IN TERMS OF TENANCY 2018
To:
tenant(s) in possession
, Santa Monica, CA
address unit number zip code
According to Santa Monica Rent Control Regulation 3035 and Board Resolution 18-XXX, you are hereby notified that thirty days after serving you with this notice (but not before September 1, 2018), the monthly rent for the premises you occupy will be increased as indicated below. NOTE: If your tenancy started on or after September 1, 2017, your unit is not eligible for the 2018 General Adjustment.
Enter the 2017-2018 Maximum Allowable Rent (MAR) ............................................................. $ .00
The registration fee and other surcharges are not included in the MAR.
If Line 1 is $X,XXX or less, multiply amount on Line 1 by .0X (X.0%) ........................................... $
If Line 1 is $X,XXX or more, enter $XX.
Add lines 1 and 2 and round to a whole dollar amount (for $0.50 or more, round up).
This is your 2018–2019 MAR ....................................... $ .00
Enter $8.25 (tenant’s share of Registration Fee) or $0.00 (if fee waiver is in effect) …….......... . $
Calculate surcharges Amount on Tax Bill
Calculate Adjustment
Adjusted Tax
Enter Total # of Units
Divide by 12 Months
Surcharge per Unit
5a Community College Bond1 $ ÷ ÷ 12 $
5b Unified Schools Bond1 $ x 0.6262 $ ÷ ÷ 12 $
5c Stormwater Management User Fee1 $ ÷ ÷ 12 $
5d Clean Beaches & Ocean Parcel Tax1,2 $ ÷2
÷ 12 $
5e School District Parcel Tax3 $ ÷ ÷ 12 $
Total Surcharges per Unit… $
❻ Add lines , and This is your 2018–2019 Maximum Lawful Rent …..…. ❻ $
The undersigned hereby verifies that the 2018–2019 Santa Monica Rent Control registration fees, as well as all past fees and penalties, were paid in full by August 1, 2018, as required by Regulation 11200. The undersigned further certifies that this unit and the property’s common areas are not subject to any uncorrected citation or notice of violation of any state or local housing, health or safety law issued by a government official or agency.
Date: , 2018
By: /
print owner/agent name signature of owner/agent
address of owner/agent
1 Owners must provide a copy of the property tax bill to the tenant to pass through this tax. Regulations 3105, 3106 and 3108. 2 Divide only by the number of units without an exemption from this tax. 3 This is a flat fee of $XXX.XX (“SMMUSD-MEAS-R” on tax bill). Regulation 3109.
COMPLETE THE FOLLOWING TWO QUESTIONS BEFORE PROCEEDING TO SECTION 5 - SURCHARGES
1. Did this tenancy begin on or after Sept. 1, 2017? No Yes
2. Was this property purchased or was the property value reassessed pursuant to elective improvements on
or after Feb. 1, 2018? No Yes
If you answered No to both questions, you may complete Section 5.
If you answered Yes to either question, surcharges may not be added. Enter $0 on Line 5.
The following pages are written
communications that have been received from
the public on this item of the Jan. 25 agenda
and are part of the Board record.
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From: Ann Maggio [mailto:[email protected]] Sent: Monday, January 22, 2018 12:28 PM To: RentControl Mailbox <[email protected]> Subject: Jan 25th Meeting ‐ Hearing on pass‐throughs
Dear Rent Control Board, This is not a case of better late than never. We brought this issue to your attention prior to the 2016 election when we realized the displacement effects taking a toll on renters when properties were being flipped to proportionally increase taxes paid by renters. What excuse is there for not having acted immediately to stem the negative impacts real estate investors and Real Estate Investment Trusts (REIT's) have had on Santa Monica's huge rental community? It is with great disappointment that this agenda item has taken so long to surface. This discussion should have taken place well over a year ago. We hope you immediately begin tracking the negative impacts this delay has caused on our neighbors. Additionally, it is imperative that staff NOT change the RCB report format every year in order to obfuscate pertinent data from public oversight. If the Rent control board seeks additional information on an annual basis, increase the size and scope of the report. The public deserves a consistent format that can be compared with ease on an annual basis. Sincerely, Ann Maggio Thanawalla 90403 "Unthinking respect for authority is the greatest enemy of truth." - Albert Einstein
Item 11A - Public Comment
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From: The Millers [mailto:[email protected]] Sent: Tuesday, January 23, 2018 4:39 PM To: RentControl Mailbox <[email protected]> Subject: Public Comment on Item 11A, SMRCB Meeting on Jan. 25, 2018
Dear Commissioners, I am a Santa Monica resident, voter and housing provider. I am writing to comment on Item 11A (Voted Assessments Passed Through to Tenants) on the Rent Control Board’s Agenda for January 25, 2018. Parts of the proposal make good sense (for example, that a tenant’s pass through amounts should not be increased if the building is sold). However, the proposal would establish an inequitable, unfair and undemocratic policy with respect to future local taxes that are approved by voters. With this proposal, the Board is establishing a policy that tenants can vote for a new tax (say, for libraries or schools) and tenants can enjoy the benefits of the new tax (say, better schools, or cleaner beaches), but that tenants do not have to pay for the new tax. Isn’t this very bad policy? How is it fair or equitable for tenants to vote for a new tax and not have to pay their fair share? Do we abandon the principle that voters are responsible for their fair share of new taxes because one tenant moved out and another tenant moved in? It just seems fundamentally unfair that all citizens should not pay their fair share of future voted taxes. Sincerely, David Miller
Item 11A - Public Comment
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From: Diane Drake [mailto:[email protected]] Sent: Thursday, January 25, 2018 2:57 PM To: Lonnie Guinn <[email protected]> Subject: Fwd: Surcharge Pass Throughs
Dear Mr. Guinn, As a tenant of a rent-controlled apartment building on Ocean Ave. which was relatively recently sold (December, 2016, after having been held by the previous owner since the 1970s), I’m writing to express my concern about the astronomical increases in surcharge pass throughs that some tenants in the city are seeing. It’s my understanding that four of the five tax surcharges are, in fact, tied to assessed property value. Our current surcharges are in the neighborhood of about $13/month, and given that this rate is below the City average of about $28, a small increase seems fair. Even a doubling of the charge would seem a reasonable fee for the city to add to our already annual rent increases. Instead, I’m told that some tenants in neighboring buildings are seeing their rates go up by 10 times or more. This type of sudden exponential increase would represent a formidable economic burden to many, and one that seems at odds with the City’s stated goals to maintain a diverse population and to not drive even more working people out of Santa Monica. It’s my hope that the Board will carefully weigh its options and in its decision continue to look out for the welfare of those of us in rental housing who wish to remain a part of the City. Sincerely, Diane Drake
Screenwriter | Author | Consultant | Educator www.dianedrake.com Get Your Story Straight
Item 11A Public Comment
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From: Bill Dawson [mailto:[email protected]] Sent: Thursday, January 25, 2018 3:59 PM To: Lonnie Guinn <[email protected]> Cc: Tracy Condon <[email protected]>; 'Mary Stewart' <[email protected]>; Ryan Dawson <[email protected]>; 'Joe Fitzsimons' <[email protected]>; 'Bob Sullivan' <[email protected]> Subject: RE: Tentative Rent Control Board Agenda for 1/25/2018 Agenda Item No. 11 Dear Board Members, In response to the agenda item No. 11 for tonight’s meeting I wish to weigh in once again with my opinion that I feel it is unfair to remove the approved rent surcharges for the various local taxes and voted indebtedness. All four of these taxes were previously voted on by the public, many of which are tenants, and debated and approved for surcharges by previous boards. To remove them now is unfair and not an equitable sharing of cost. A suggestion is to allow the current rent surcharges to stay in place. Freeze the dollar amounts at 2017 levels and not increase for the future. Also, set up a financial hardship process to allow a tenant to petition the board to waive the surcharges for low income tenants. This approach in my opinion would be a fair and equitable approach. Thank you for your consideration. Bill Dawson, Past President 2009 Apartment Assoc. of Greater Los Angeles & V.P of Sullivan Dituri Real Estate Co. www.AAGLA.org
Item 11A Public Comment