Pasadena Local Rent Control – Effective December 22, 2022

Local Rent Control To Limit Annual Allowable Rent Increases, Establish “Just Cause” Eviction Regulations and Create a Rental Housing Board

With the November election behind us, the voters of Pasadena have approved Measure H which amends the City Charter to establish local rent control within the city of Pasadena. The measure will restrict the amount that rental housing providers can increase rent, institute “just cause” eviction requirements, and establish an autonomous Rental Housing Board. The charter amendment goes into effect on December 22, 2022.

Some of the key Charter amendment provisions are summarized below. We encourage members with properties in the city of Pasadena to review the full details of the measure and to consult with an attorney regarding specific tenancy questions.

Limitations on Annual Rent Increases and Rent Roll Back:

• Establishes limits on permissible rent increases to one rent increase within any 12-month period, with an annual rent increase cap of 75% of the Change in the Consumer Price Index (CPI).  If the percentage change in the CPI is negative, no rent increase will be permitted. The Charter amendment also sets forth the circumstances when a rental housing provider will not be permitted to issue a rent increase.
• The base rent is the rent that was in effect on May 17, 2021. This means that any allowable rent increases are to be calculated using the rent amount that was in place on May 17, 2021. Rental housing providers who want to increase rents from the May 17, 2021, level need to serve their renters with a 30-day notice of the increase. If the initial occupancy was after May 17, 2021, the base rent will be the rent paid at the start of the occupancy.
• Exemptions: Pursuant to Costa Hawkins, multi-family rental units built after February 1, 1995, single-family homes, and condominiums are exempt from the rent increase limitation provisions. In addition, rental units governed by Pasadena’s inclusionary housing and density bonus provisions are exempt to the extent permissible by law. However, please note these properties are not exempt from the “just cause” eviction regulations.

Rental Housing Board:

• The amendment directs the establishment of an independent eleven (11) member Rental Housing Board, of whom seven (7) members must be renters, to be appointed by City Council within 120 days of its effective date, by April 21, 2023.
• The Board is designated with broad powers and no oversight by the City Council, City Manager or City Attorney. Among the Board’s powers and duties, they will set annual allowable rent increases, may conduct investigations, establish regulations, maintain the Rent Registry and determine the related annual rental housing fee.
• Rental Housing Fee: The Board will finance expenses for the administration of the program and rent registry by charging rental housing providers an annual rental housing fee.  The fee is to be paid entirely by rental housing providers, as no portion of the fee may be passed through to renters.

 
Rent Registry:

• The rent registry is to be operational within one year of the measure’s effective date, by approximately December 22, 2023.  Once operational, rental housing providers will be required to register all rental units not otherwise exempted, no later than 90 days thereafter and annually no later than April 1^st of each year.  Registration must also be updated within 30 days of a change in property ownership.
• As part of the registration process, rental housing providers must provide information related to property ownership, unit details, rental amounts, tenancy dates, and services and amenities. Some of the information provided will be made available through an online portal.

 Limitations on Evictions - “Just Cause” Regulations:

• Establishes “just cause” eviction regulations for at-fault and no-fault eviction – evictions allowed only if included in the list provided under the measure. This includes failure to pay rent, breach of lease and creating a nuisance. It is important to note that several of the just cause eviction grounds require that the rental housing provider serve the renter with a written notice to cease, as defined in the Charter amendment, to provide the renter with an opportunity to cure the violation.
• Relocations fees: The Charter amendment does not specify the amount of relocation fees that must be provided for non-fault evictions, stating the Rental Board will establish regulations “for establishing the amount of Relocation Assistance applicable to any given Tenant household.”  The amendment does indicate that a minimum of fifty percent (50%) of the required relocation fee must be paid within ten (10) days of service of any written notice of termination.

Posting and Notice Requirements:

• Rental housing providers with rental units subject to the measure are required to post a notice in a form prepared and authorized by the Rental Board “in a conspicuous location in the lobby of the Property, near a mailbox used by all Tenants, or in or near a public entrance to the Property.” The notice must be posted in English and Spanish and potentially other languages that may be required by the Rental Board.
• Rental housing providers of any covered rental units are also required to provide renters with a written notice in a form prepared and authorized by the Rental Board, on or before the start of the tenancy, which includes information regarding the local rent control law, the renter’s right to petition against certain rent increases, and instructions on accessing the rental registry.  The initial written notice must be provided to the renter in the language used to negotiate the tenancy or in another language if requested by the renter and if a translation of the notice has been made available by the Rental Board.

Please note that at this time, the Rental Housing Board has not been established and the related forms are not yet available. As a result, the requirements do not go into effect until the forms are made available by the Board.

In addition, the Charter amendment includes retaliation and anti-harassment provisions, a Tenant Buyout Notification Program, a petition process for rent adjustments, and civil and criminal penalties for violations.

Key Dates to Remember:

• December 22^nd, 2022 – Effective Date
• April 21, 2023 (Estimated Date) – Appointment of Rental Housing Board
• December 22, 2023 (Estimated Date)– Rental Registry set to be Operational

CHARTER AMENDMENT

This article is for informational purposes only. If you have any questions regarding your property or specific tenancies and the requirements of any local law changes described herein, please consult with an attorney.