October 9, 2023
To: Mayor Gleam Davis, Members of the Santa Monica City Council
Re: Item 16-C, 10/10/23 Council Agenda
Request for City Council Endorsement of the Justice for Renters Act
Dear Councilmembers,
Santa Monicans for Renters’ Rights urges the Santa Monica City Council to adopt a resolution of support for the Justice for Renters Act scheduled for the November 2024 statewide ballot as proposed to you by Mayor Davis, and Councilmembers Torosis and Zwick. We urge that you convey that support to Governor Gavin Newsom, Senator Benjamin Allen and Assemblymember Rick Zbur, as well as to the campaign that qualified and will champion the Justice for Renters Act.
The objective of the Justice for Renters’ Act is to enable cities and counties that choose to adopt rent control laws to be able to do so free of state interference so that such laws might genuinely reflect local concerns and conditions in their local rental housing market, rather than the politics of Sacramento.
The intent of the Justice for Renters Act is made clear by its brevity: “The state may not limit the right of any city, county, or city and county to maintain, enact or expand residential rent control.”
The measure, if approved, will repeal the Costa-Hawkins Act of 1995, legislation enacted by the State of California that places onerous and self-defeating constraints on local cities and counties that elect to adopt rent control laws in California. These constraints severely limit the effectiveness of local rent control laws either as a tool for protecting renters or as a tool to ensure an affordable housing supply in a community over the long term.
Costa Hawkins prohibits rent control on rented single-family homes and condominiums and permanently exempts all new apartments built after 1995 from rent control. These provisions or variations were already reflected in most locally approved rent control laws in California but enshrining them in state law creates inflexibility and prevents consideration of special local circumstances.
Moreover, these provisions of Costa Hawkins are also overreaching. By permanently exempting all newly built rental units from any local rent control law, even after they have been operating for 15 or 20 years or more and are an older part of the housing stock, Costa Hawkins goes far beyond what was needed to ensure that rent control laws do not discourage new apartment development.
However, the provision of Costa Hawkins that is most pernicious and has the gravest consequences for our communities is the provision that requires every local rent control law to allow unlimited rent increases for any unit upon vacancy, so called “vacancy decontrol.” Vacancy decontrol has dramatically reduced the effectiveness of all locally adopted rent control laws, including Santa Monica’s, and over time leads to a hemorrhage of our supply of affordable housing.
A requirement for vacancy decontrol in all rent control laws in California has exacerbated our affordable housing crisis and contributed to an increase in homelessness throughout California.
Further, in times like today where market rents have soared in a short period of time to never before seen heights, whether because of a shortage of rental stock or a spike in demand fueled by other factors, a large disparity develops between rent controlled rents and uncontrolled
market rents.
Under this circumstance there may be property owners, eager for the much higher potential rents, who employ pressure tactics and harassment to induce tenants to vacate their rent controlled units. Such perverse incentives, we believe, are a contributing factor to the scale of the homeless problem in our communities.
The following chart illustrates the challenge as it has been manifested here in Santa Monica.
Column 1 shows the median rents for the 6083 rent controlled units that have never been vacancy decontrolled because they are occupied by long term Santa Monica renters. This is 22% of all rent controlled units.
Column 2 shows the median rents for rent controlled units that have been vacancy decontrolled at least once since 1999, illustrating how Costa Hawkins has wiped out the affordability of most of our rental housing stock.
Column 3 shows the median initial rent for rent controlled units that have been vacancy decontrolled this year. These initial rents are nearly three times the rents paid by long term renters, most of whom are senior citizens. It demonstrates the scale of perverse incentive that vacancy decontrol creates for property owners to find a way to vacate a long term rent controlled unit.
We believe that such practices induced by the Costa-Hawkins provision for vacancy decontrol must be counted as potentially one cause of homelessness in California communities today.
We urge the Santa Monica City Council to vote to end these perverse incentives in our housing market by endorsing the Justice for Renters Act on the state ballot in California in November 2024.
Sincerely,
Denny Zane and Mike Soloff
SMRR Co-Chairs