MEASURE H: FAQ about Rent Control in Pasadena

ISSUES WITH MEASURE H

Here are some of the issues with Measure H which have yet to have been addressed:

• The fine print! No oversight and no accountability

• This Amendment creates a Housing Board that would be stronger than the City Council.

• They will decide if and when you can raise your rents.

• The cost for this Board will cost Pasadena owners of multi-family units an estimated $5.8 million or $184 per unit.

• Housing Board members are authorized to receive a salary of 2.5 times Pasadena minimum wage for up to 20 hours a week.

• It’s Rent Control- we know Rent Control does not work. Rent Control reduces the quantity of available housing. In a rent-regulated market without the increased rents required to attract new investment, new housing construction is limited, and no long-term solution resolves the housing shortage.

• Does not encourage growth and reduces the quality of available inventory.

• Fair Return on your investment. This amendment would make it extremely challenging for landlords to maintain their properties or stay up to date on financial upkeep. We’ve heard from many landlords and small housing providers that have said they will be forced to raise rents to stay current; otherwise, they will never meet the financial demands. Rent Control decreases the landlord’s ability to meet expenses by creating a loss of revenue and lower profits and placing an unfair burden on landlords. The loss of revenue from a fair market value on a unit could reduce the landlord’s ability to meet their own expenses and reduce the amount of money that can be spent on maintaining the property. This also raises the question of why the private sector is burdened to provide subsidized housing to the poor and middle class. “Society should rely on broader, more equitable means of subsidizing housing for the poor.”

• Rent Control distributes benefits inequitably since the rich and connected reap more benefits while the poor are at a substantial disadvantage. Even though rent control proponents justify rent control as an anti-poverty strategy, there has been evidence to the contrary in which higher-income households are the primary beneficiaries of rent control. “A study focused on rent control in Berkeley, and Santa Monica concluded that the beneficiaries of rent regulations in those two communities were “predominately white, well-educated, young professionally employed and affluent,” and that rent control had substantially increased the disposable income of those tenants while worsening low-income families’ situations.” It is also difficult for the poor to be able to find housing because of the decrease in the quality of maintenance of existing rental housing and the reduced access to new housing

• Rent Control reduces tenant mobility. The elderly and empty nesters may stay in a rent-controlled unit longer than what makes sense because they do not want to lose their subsidy. The converse is also true. Families may not move to larger homes because they do not want to lose subsidies. When these people do not move, it does not open the units to those who really need them.

FAQ

Most Frequent Questions and Answers on Measure H

What is the Pasadena Charter Amendment Initiative Petition Measure Imposing Rent Control?

The Amendment, among other things, would create a Rental Housing Board that determines annual rate increases and decreases but limit the yearly rent increase to 75% of the Consumer Price Index (CPI), strengthen just cause eviction protections, and provide policy direction for the city.

What type of properties would this apply to?

This Amendment, if enacted, would apply to a vast majority of multi-unit properties in the city. Rental units built after 1995 are not subject to rent regulations pursuant to the Costa-Hawkins Rental Housing Act (Costa-Hawkins). The city estimates that rent stabilization and just cause eviction provisions would apply to 24,852 units in Pasadena’s multi-unit housing stock built before 1995. Rental units constructed after 1995 would still be subject to the Amendment’s just cause eviction provisions. These include 6,464 units in the multi-unit housing stock that were built after 1995.

What's Exempt?

Certain rental units would be fully exempt from all provisions in the proposed Amendment. Examples would include units in hotels, motels, hospitals, and convents. Rental units would also be fully exempt if they are owned/ operated/ or managed by a government agency, or by not-for-profit organization which used tax credits to assist with project financing. Certain temporary tenancies in single-family homes, and situations where a tenant shares a bathroom or kitchen with a homeowner, would also be fully exempt under the proposed Amendment.

What other cities have a similar initiative?

Berkley, Beverly Hills, Richmond, Santa Monica, and West Hollywood.

What will Measure H cost the City and Landlords?

There is an estimated cost to the city of 5.8 million dollars. This would be monies would go to secure 26 staff and technology and office space. As proposed, the budget would be funded by a fee charged to landlords at a rate of approximately $184 a unit.

Can those fees be passed on to the tenant?

NO.

What are the limits, and how would I be able to increase rents?

Under Costa-Hawkins/ landlords would set the initial rent amounts when new tenants move into a unit. Future rent increases of that unit would be regulated under the proposed Amendment. These increases would be tied to the Consumer Price Index/ and only one increase would be allowed each year. The base rent for existing tenants would be established as of May 17, 2021, or the initial rent they paid when they moved into the limit after May 17, 2021.

What if I have an unruly tenant. Can I evict?

The proposed Amendment would allow a tenant to be evicted in certain circumstances, including, for example,/ failing to pay rent or violating the lease agreement. A tenant could also be evicted in cases where the landlord needed to make substantial repairs or improvements to a unit. In some situations, a landlord would be required to provide financial relocation assistance to tenants who are being evicted.

The Amendment would generally prohibit evictions of elderly or disabled tenants. There are also eviction protections for families in cases/ for example, where another member of the family moves into the unit.

Read the report here: Analysis on Ballot Measure for Rent Control