Relocation Fees Rise by 4.1%

City of Beverly Hills announced that relocation fees will incrementally rise according to the percentage change in consumer prices for our region: a 4.1% increase in July. The small bump-up is intended to allow the relocation fees to keep pace with inflation. But the task of the relocation fee is to keep up with rising rents. The difference means tenants actually lose ground over time as the cost of rental housing gallops away from the fees.

In announcing the new relocation fee schedule, the city noted that every year the fees will be adjusted annually each July to reflect the annual change in consumer prices for the Los Angeles-Long Beach-Anaheim area. The consumer price index (CPI) for May, along with the year-over-year change in prices, was recently published by the Bureau of Labor statistics..

The city’s press release:

Based on data obtained from the federal Bureau of Labor Statistics, the percentage increase of the CPI from May 1, 2017 to May 1, 2018 was 4.1%; hence the relocation fees owed to tenants who are evicted pursuant to a “No Cause” or “No Fault” Termination of their Tenancies are increased by 4.1%, effective July 1, 2018

The new fees are reflected in the updated relocation fee schedule:

Unit Type Relocation Fee Add $2000 for any senior,
disabled or minor occupant
Studio $6,446.91 $8,446.91
One Bedroom $9,523.07 $11,523.07
Two bedrooms and larger $12,902.15 $14,902.15

The CPI adjustment ranges from about $250 for a studio to $500 for a 2-bedroom unit.

What does not change with inflation, though, is the $2000 additional fee obligated to a household with a senior, disabled or minor occupant present. That bump-up does not get a CPI adjustment so it will diminish over time too.

No explanation is given; the relevant Municipal Code chapter (4–6–9 RELOCATION FEE) is ambiguous, saying only “the amounts of the relocation fees set forth above shall be increased annually….” The language is excerpted from the rent stabilization amendment ordinance 17-O-2729 adopted in April of 2017.

Are These Relocation Fees Sufficient?

The CPI adjustment announced by the city only underscores the insufficiency of the relocation fees. First, the fees simply can’t keep up with the rising costs of replacement housing. That 4.1% bump-up can’t keep up with BLS data that show a 5% year-over-year rise in rent across our region.

Moreover the 5% figure reflects rents from across southern Los Angeles County and northern Orange County. The Westside is a different rental market and it’s heating up as anyone shopping for an apartment can attest. Not only are rents higher in and around Beverly Hills than the region as a whole; they are likely to rise at a faster rate.

The tenants committee convened last summer for the facilitated dialogues staked out a number of issue positions including on relocation fees. The committee felt that the fee schedule didn’t reflect the actual costs of relocation (the stated purpose of the fee); and that the ordinance didn’t sufficiently address the ancillary costs of moving, such as wages lost while finding, securing and moving into replacement housing.