November 2022 Election – Ballot Measures Update

As August ballot measure deadlines are approaching, City Councils in cities such as Santa Monica and Pasadena have been discussing and approving ballot initiatives for the upcoming November 2022 General Election.

Santa Monica

In Santa Monica, the City Council recently approved several extremely detrimental rent control charter amendments that will be on the November 2022 ballot for voter approval, summarized below.

• Annual General Adjustment

The City’s annual general adjustment formula, as set forth in the City Charter is 75% of the percentage increase in the Consumer Price Index (CPI) with a cap of 6%.  Based on this formula, the 2022 General Adjustment was set at 6% or $140 per month, whichever is less.

The ballot measure, if approved by the voters, will change the 2022 general adjustment and permanently change the general adjustment formula going forward. 

For the period of February 1, 2023 to August 31, 2023, the maximum general adjustment would be drastically reduced from 6% to 0.8% with a maximum dollar amount limit of $19 per month. The ballot language also seems to provide the City’s Rent Control Board with the authority through regulations to “increase the Adjusted GA for landlords who did not increase their rents by the full six (6) percent prior to February 1, 2023, so long as the average rent increase for the period of September 1, 2022 through August 31, 2023, does not exceed the lower of 3% or $70 per month.” 

The permanent annual adjustment formula thereafter would be limited to a maximum of the lower of 3% or $70 per month.

This ballot measure also includes changes to the City Charter’s owner-occupancy provisions.

• Imposition of a 2-year Residency Requirement – Owner / Owner-Relative Move-In Tenancy Terminations

This measure would require that owners and/or qualifying relatives reside in the unit for a minimum of two years unless there are extenuating circumstances. Currently, the requirement is that the owner intend to occupy the unit as their primary residence for at least one year. Owners would be obligated to provide a right of first refusal to re-occupy the unit to their vacated renters if they fail to meet the 2-year requirement unless extenuating circumstances exist. The ballot measure also extends the period in which the owner or the owner’s qualifying relative must move into the unit from within 30 days to within 60 days.

The City Council also approved another ballot measure that would provide the City’s Rent Control Board with broad unilateral authority to eliminate or modify allowable rent increases.

• Grant the City’s Rent Control Board (RCB) Sole Authority to Freeze or Limit Rent Increases During a Declared State of Emergency: Would allow the Board to unilaterally suspend or reduce the amount of otherwise allowable rent increases during a declared state of emergency.

Pasadena

In the City of Pasadena, a measure called “The Pasadena Fair and Equitable Housing Charter Amendment” was qualified and placed on the November 2022 ballot through an initiative petition for voter approval. This measure would impose strict local price (rent) controls and rent regulations, a new administrative bureaucracy with an estimated upfront cost of $5.8 million and establish a Rental Housing Board, whose powers and duties potentially conflict with the City Charter and authority of the City Council.

At Monday’s August 8^th Pasadena City Council meeting, the City Council considered whether to take a formal position on the ballot measure and submit written arguments against the measure. Prior to the meeting, the Association submitted a letter to the City Council urging the Council to formally oppose this detrimental flawed measure which we reiterated during the meeting’s public comment period.

Following a lengthy discussion by the City Council, in which several City Council members raised concerns about the measure’s negative impacts on the City’s rental housing providers, the City Council voted to not take either an oppose or support position.  (Mayor Gordo who owns rental property in Pasadena recused himself from the deliberations and vote.) It is important to note that individual members of the City Council may support or oppose the measure.

The Association is strongly opposed to these extremely detrimental ballot measures which would have tremendous negative consequences on the multifamily rental housing industry. We encourage members who reside in Santa Monica and Pasadena to review the full details of these ballot measures and join the fight in ensuring their defeat.