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News, Election, Santa Monica

Santa Monica's Measure GA Ballot Item Seeks To Change Rent Adjustment Methodology

Posted Nov. 1, 2012, 1:13 am

Parimal M. Rohit / Staff Writer

Santa Monica voters will decide Nov. 6 whether the City should change its methodology in calculating annual rent adjustments and base such modifications on a regional inflation rate. The rent control ballot item, Measure GA, is the latest attempt to amend the Santa Monica City Charter.

If approved by Santa Monica voters on Election Night, the ballot measure would amend the City Charter to limit general adjustments for rent-controlled units to 75 percent of the annual percentage change of the Consumer Price Index (CPI) with a zero to six percent adjustment range. The Rent Control Board would also have the “discretion, after holding a public hearing, to impose a dollar limit, within that (zero to six percent) range.”

“It is a formula to make things more predictable. It’s an attempt by rent control to streamline the process,” Robert Kronovet, who is seeking re-election to the Rent Control Board, told The Mirror.

According to a Santa Monica voter information website, the proposed adjustment “is done to ensure that rents for in-place tenants remain approximately stable, (and) is known as the annual general adjustment or ‘GA’ for short.”

“While most jurisdictions now calculate their GA with reference to the rate of inflation as determined by the federal government, Santa Monica uses a more complex formula that is intended to reflect actual changes in the cost of operating rental property in this city,” a statement on the voter website said.

“Measure GA will work to benefit rent controlled tenants in Santa Monica by simplifying the calculation of the annual General Adjustment so it is more predictable and by limiting the maximum possible adjustment for future annual rent increases,” Planning Commissioner Jennifer Kennedy told The Mirror.

“The measure retains the Rent Control Board’s discretion to determine a dollar amount maximum. These amendments will continue to ensure stability for tenants, which is the purpose of the Rent Control Charter Amendment,” Kennedy said.

City officials added an amendment to the charter was necessary because only 12 percent “of local landlord costs could be determined from reliable, available data.”

“Because the formula was so complex, it was often the subject of actual or threatened litigation,” a statement by the Rent Control Board said. “The Board, therefore, recommended that the GA calculation be changed to: save public money; avoid costly and time-consuming litigation; and provide for greater transparency in the GA-calculation process.”

Kennedy added the transparency is “built into” the proposed amendment.

“The oversight is built into the change of methodology. The CPI-based proposal and the current methodology have been historically consistent over the past 30 years. Ultimately, Measure GA will strengthen our rent control law, which is good for tenants and our community,” she said.

Arguments opposing Measure GA were not filed in the State of California’s published Voter’s Guide. Still, Kennedy explained the effects on rent control should Measure GA fail.

“If the measure does not pass, the Rent Control Agency will continue to calculate the annual adjustment using the methodology they currently use. The current formula is complicated and takes into account some costs that are just estimates,” she said. “Disputes over cost increases sometimes lead to litigation, which is an inefficient use of time and public money.”

Council members supported the measure at their July 24 meeting.

“If adopted, this measure would make less complicated the annual rent control general adjustment process. It would also make the annual adjustment methodology easier to understand,” a City staff report stated.

Under law, between one and five council members were allowed to submit arguments in favor or against the ballot measure. As four council members are up for election on Nov. 6, Mayor Richard Bloom said the argument could only be written by any of the three other members.

Council member Pam O’Connor drafted the argument in favor of the charter amendment.

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