Santa Monica Multifamily Market Update
The City of Santa Monica recently passed a proposal (Ordinance No. 2776) impacting multifamily property owners. The proposal outlines the city’s aim to focus on tenant protection and fair housing practices, covering all types of housing, including non-rent-control buildings.
Key points that property owners need to be aware of:
Rent Increase Rules:
Owners who increase rent by either the Consumer Price Index (CPI) plus 5% or by a flat 10% increase must pay a relocation fee if the tenant chooses to move out. This ensures that tenants are not unfairly burdened by sudden rent hikes.
Relocation Fees:
If a tenant vacates due to harassment, illegal lockouts, uninhabitable conditions, or other constructive situations, the owner may be liable to pay a permanent relocation fee.
The current relocation fees stand at $18,250 for single units, $25,150 for one-bedroom units, and $34,950 for units with two or more bedrooms. It’s important to note that even if a tenant wishes to move into their own unit, they are still subject to these relocation fees.
Buyout Agreements:
Owners are mandated to offer buyout agreements – an agreement where a landlord pays a tenant money or other consideration to vacate a rental housing unit – at a fee no less than the permanent relocation fee required by the City Council resolution, ensuring transparency and fairness in buyout negotiations.
In addition, attempting to buy out a tenant twice within a six-month period can lead to legal repercussions, providing added protection for tenants against repeated buyout pressures. Violations of these rules can result in a fine of $20,000 per violation.
Accepting Housing Vouchers:
Landlords are required to accept housing vouchers from renters, promoting inclusivity and accessibility in housing options. Housing vouchers are utilized by formerly unhoused applicants who do not have a rental housing history or landlord references.
Eviction Restrictions:
A landlord will be unable to evict a tenant for unpermitted work on a unit. This ensures that tenants are not penalized for making improvements to their living spaces.
