City council explores options for permanent rent control

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After a long, contentious June 11 Culver City council meeting, the city will begin to contemplate options for a possible permanent rent control ordinance.

The meeting was kicked off by a presentation by Bae Economics on a rent control study done for Culver City.

According to the study, there are currently 8,145 units in the city, with 7,555 Rental units in the city are categorized as follows:

20.4% 1 unit (protected by Costa-Hawkins)

21.5% 2-4 units

16.4% 5-9 units

10.6% 10-19 units

13.3% 20-49 units

16.1% 50+ units

20.3% 1940’s or earlier

17.6% 50s

20.3% 60s

22.3% 70s

8.6% 80s

10.6% 90s – present (units built after 1995 are protected by Costa-Hawkins)

Asking rents grew at an average rate of 4.2%, peaked at 8.8% year to year from $1,960 in Q1 2014 to $2,133 in Q1 2015. Multifamily have stayed below 4.5% every year since 2011 except for 2017, which saw the rate at 5%. Despite this median rise, 43% of Culver City renter households spend 30% or more of their income on housing costs, while nearly a quarter use half of their income or more on housing costs.  

Culver City rental houses are generally smaller than those in LA County. 27% of LA County rental units are housing four or more, while only 13.6% of rentals in Culver City have four or more people. Concurrently, 69.5% of rental households in Culver City are housing 2 or less people, while just 57.2% of rentals in LA County have two or less occupants. Nearly 40% of rental households in Culver City have just one person, while that number is at 31.1% in LA County.

A similar percentage of rentals moved in 2009 and earlier, more people moved in LA County from 2010 to 2014, more moved into CC from 2015 and on. As of 2018, median renter incomes were significantly higher in Culver City than in LA County, and while the median income did not change much from the periods of 2006-2010 and 2014-2018 in the county, Culver City’s shot up 21.6% between those two time frames.

There are two main constraints that the council had to consider when deliberating options for rent control. The first is the Costa-Hawkins Act of 1995, which sets limits on the types of units that may be subject to. Most pertinent is the protection of single unit buildings and units built after 1995 from local rent control. The second is AB 1482, which already limits annual rent increases to five percent, plus the change in the regional Consumer Price Index — a metric that measures inflation on products — up to 10% total. Individual municipalities each have differing policies on using the full or partial CPI for their own number. Additionally, calculating the CPI based on the year to year change versus the annual average, as well as deciding whether or not to guarantee certain minimums or maximums based on significant highs and lows in inflation, are aspects that differentiate municipalities’ policies. 

These policies have resulted in a 14% difference between the 10-year rent adjustments in West Hollywood, the city with the lowest adjustment rate among those evaluated, and Beverly Hills, the one with the highest. West Hollywood’s adjustment rate is over 40% lower than what is allowed by AB 1482, and Beverly Hills rate is 31.6% lower.

At a base rent of $1,000, West Hollywood’s max after 10 years would be $1,167, while Beverly Hills’ would be at $1,362. The LA County number, which is what Culver City currently abides by, falls just behind Beverly Hills at $1,329.  

It also places restrictions on “no cause” evictions, which allowed landlords to evict tenants even if they did not do anything to warrant that eviction, like falling behind on payments or receiving multiple noise complaints.

While the Costa Hawkins act prevents local ordinance from enforcing rent control on units built after 1995, it does not limit the power of cities to create tenant protections for renters.

Another facet brought up to council in the Bae Economics presentation was the idea of pass-throughs for certain improvements to the home. The presentation presented two broad options that the company thought “was most pertinent to Culver City,” which was either a 100% full cost recovery pass-through or a 50% partial cost recovery pass-through.

All of these different facets brought much to the table and there was an abundance of speaker cards on the topic. Mayor Goran Eriksson proposed that following an initial set of comments and deliberation, the remainder of the comments would be read, as Eriksson believed it to be the only way to be fair and transparent. And while a decision wasn’t made that night, Eriksson hoped to move forward soon to give people time to gauge how they feel about the rent control ballot initiative by Protect Culver City that will appear in November.

Other important points were the potential overprotection of unruly tenants through a 12-month immunity period enforced by AB 1482, as well as the effect of race on rental unit discussions. 

At the end of the night, city staff was directed to put together a report with potential options to consider at a future meeting, tentatively set for July.