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Category: Apartments, Multifamily Tags: Santa Monica

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.

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