Photo: Rent control session panelists Helen Morales (left) and Nestor Otazo of Beverly Hills, Anna Ortega (center) of Los Angeles, Dan Costello of Santa Monica and Peter Noonan of West Hollywood
How do the rent control and stabilization laws compare in the four Westside cities that have rent stabilization ordinances? That was the topic of a luncheon panel held Friday in Santa Monica, sponsored by the Beverly Hills/Greater Los Angeles Association of Realtors (BH/GLAAR). If you are considering purchasing units, you need to be aware of the differences - read on!
Under rent stabilization rules, landlords are allowed to raise rents by a certain percentage each year, but the amount of that raise varies from city to city.
Peter Noonan, the housing manager for West Hollywood, told the Realtors the city’s annual rent adjustment for 2018 will likely be in area of 1.75%. The exact figure won’t be determined until the Consumer Price Index (CPI) numbers for May are released in mid-June and will be announced at the June 28 meeting of the city’s Rent Stabilization Commission. Last year’s increase was 1.75%.
In Los Angeles, the annual rent adjustment can range from a minimum of 3% to a maximum of 8% under the city’s rent stabilization ordinances. However, Anna Ortega, director of rent stabilization for the city of Los Angeles, said it has been decades since an 8% increase was allowed. In recent years, the annual adjustment has been 3%. She noted that if the Los Angeles didn’t have a 3% minimum in place, last year’s rent adjustment, based on the CPI calculation, would have been 2.52%.
In Santa Monica, the annual rent adjustment for 2018 is 2.9%, up from last year’s 2.75%. Dan Costello, the Santa Monica Rent Control Board’s public information officer, said they are considering a $60 cap for any of those increases.
Beverly Hills has two categories for rent-stabilized units – those which started with a rent under $600 and those which started above $600 – explained Nestor Otazo, the city’s code enforcement manager. At this point, only about 1.5% of Beverly Hills’s rent-controlled units are still in that first category where rents started under $600. Those units must be the primary residence for the tenants and must be occupied for a minimum of nine months per year. For those tenants, a 1.7% rent adjustment will be allowed in 2018. The overwhelming majority of Beverly Hills tenants fall into the second category. Prior to 2017, Beverly Hills allowed rents on those units to increase by 10% per year. However, following resident complaints, the City Council lowered the annual rent adjustment figure to 3% or the amount of the annual CPI, whichever is higher, said Helen Morales, the city’s deputy director of rent stabilization.
Unit Registry and Airbnb
While West Hollywood and Santa Monica have required building owners to register each rental unit with the city for decades, Beverly Hills and Los Angeles, have only just started such a registry.
In Los Angeles, an optional rental-unit registry was started in 2017, but it became mandatory in 2018. If an owner does not register, he or she does not receive a registration certificate and cannot legally rent any units.
Likewise, Beverly Hills also started its rental unit registry in 2017. “We wanted to collect information about the structures in the city,” said Otazo.
In all four cities, the unit registration can be done in person or online.
Vacation rentals such as Airbnb has been a hotly debated topic in recent years. West Hollywood recently banned Airbnb in all rental apartment buildings. Santa Monica has the same policy. However, both cities allow “home sharing” where home or condo owners can rent out rooms in their home via Airbnb, provided the owner is present during the rental period.
Beverly Hills has not yet adopted a policy regarding Airbnb, but its zoning codes prohibit any rentals of less than 30 days, Otazo said.
As for Los Angeles, Ortega said the City Council has been studying the issue for the past two years, but has not yet passed an ordinance, which means that Airbnb is currently allowed in apartment buildings. “At the moment in Los Angeles, it’s the Wild West,” said Ortega. However, apparently not for much longer. Ortega expects the Los Angeles City Council to soon pass an ordinance prohibiting Airbnb rentals in rent-controlled buildings but will likely allow “home sharing.”
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