February 2019 Issue

28 FEBRUARY 2019 • WWW.AAGLA.ORG Local Advocacy Update On January 8, 2019, the Santa Monica City Council voted unanimously to increase permanent relocation fees by 66% to 80%. The new fees are effective immediately. Relocation fees are paid by rental property owners to tenants in the case of a “no fault” eviction, including if an owner removes his or her property from the rental market (e.g., under the Ellis Act) or merely wishes to provide an apartment unit to a close family member. The new relocation fees are as follows: In addition, temporary relocation fees will be increased by 56% by raising hotel and motel per diem to $292.13 per day plus $30.00 per day per occupant. Obviously, the Santa Monica City Council has no respect whatsoever for rental property owners, and particularly those smaller, “mom and pop” owners that do not have the means to pay such exorbitant relocation fees. If rental property owners ever raised rents at levels given for relocation fees, from 66% to 80%, without a doubt, there would be riots in the streets of Santa Monica and the City Council would be demanding that owners immediately retract such huge increases. Unfortunately for owners in the City of Santa Monica, what is good for the goose is apparently NOT so good for the gander as renters are given elitist status and are granted “off the charts” relocation fees without any thought of how financially difficult this would be for our members, the mostly smaller “mom and pop” owners to pay these ridiculous amounts. As our Apartment Association advocated at the City Council meeting, our member / owners do not want to be forced to sell their properties or exit the rental business. But it is only when owners can no longer make the operation of their properties “pencil-out” because of rising maintenance costs, property tax increases, rising property insurance, and government mandates (including the new seismic retrofit ordinance and stormwater parcel tax) that they are forced to sell or exit the business. Cities like Santa Monica have made more difficult for those owners with older, rent-controlled buildings, which have far higher repair and maintenance costs, and are unable to reasonably increase their rent in an effort to keep up with ongoing cost increases. Santa Monica will, in the end, lose as these affordable units are forced out of the business. At the City Council meeting, Councilmember Ted Winterer tipped the City Council’s hand at how extreme the City REALLY wanted to go. He referred to a state court of appeals case that recently struck down an ordinance by the City of San Francisco that would have awarded relocation fees of up to $50,000. Instead, he stated that this is the “best we can do,” when what he really meant was the best the City could do “FOR RENTERS.” The City of San Francisco must now revert to an earlier ordinance that limits payments to $6,286.00 per tenant or $18,858.00 per unit regardless of the number of renters. Of course, now with Santa Monica’s new relocation fees, Santa Monica requires owners to pay higher relocation fees then even the City of San Francisco. CITY OF SANTA MONICA DRASTICALLY INCREASES RELOCATION FEES By Janet Gagnon, Director, Government Affairs and External Relations Size Standard Augmented Single or Studio $15,020.51 $15,712.82 One Bedroom $20,705.13 $22,089.74 Two+ Bedrooms $28,810.26 $30,682.05