This summer will be a difficult time for some Beverly Hills tenants. The one-year rent repayment period has expired so rent delayed pursuant to the city’s moratorium is now due in full. In July landlords can again raise the rent with the percentage to be decided by city council at the upcoming June 27th meeting. And August 1st is the first in a series of rolling monthly deadlines for repayment of rent delayed pursuant to the Los Angeles County moratorium. Housing costs will be more of a burden than ever. What happened to that Beverly Hills rent subsidy?
Background on the Subsidy
Readers have asked, What happened to the subsidy? To answer that question for ourselves we had to dig back through city meetings and records to see where the proposed program went sideways. We described the situation in our explainer: History of the Beverly Hills Rent Subsidy. To summarize…
Beverly Hills city council enacted our only limited rent-stabilized tenant rent subsidy in mid–2020 to protect qualified rent-stabilized households from the financial impact of the pandemic economic shutdown. Eligible households received $1,000 per month for a maximum of three months under the $1 million program. However only one-third of that money was disbursed. According to a March 2021 update to city council many applicants were disqualified for a variety of reasons. Some applicants say they were improperly disqualified.
One year passed after that initial subsidy program update before city council broached the issue again. In the spring of 2022 council discussed a rebranded ‘housing assistance’ program to tap the unspent $700,000 from the first-round subsidy. This time the city could provide monthly payments of $250 per qualified household to the landlord in order to cushion the impact of what was expected to be a large rent increase.
Santa Monica adopted a similar subsidy in 2022 called Rent Control Adjustment Relief that provided monthly payments to low-income, “severely rent burdened” households (paying more than 50% of household income towards rent) in order to effectively reduce the annual rent increase to 3%. That’s what our city council was proposing and Santa Monica already had the eligibility criteria formalized.
Instead our city council tied itself into a knot in trying to spitball eligibility. Then council agreed to simply refer it to an ad-hoc Housing Assistance Committee for further discussion — often a parking lot for disfavored initiatives. To the committee were appointed councilmembers Robert Wunderlich and Julian Gold who did meet. However the discussion showed that the objectives for the subsidy were still unclear and staff was unprepared to determine the appropriate program scope (i.e., eligibility criteria).
Summer of 2022 was the last the public heard about a rent subsidy that was supported by both tenants and landlords.
In the meanwhile there were added developments. Subsidy champion Robert Wunderlich didn’t win reelection to city council so he was out of the picture. Housing Assistance Ad-Hoc committee member Julian Gold never was interested in the subsidy and apparently has no plan to bring it back to city council.
Will There Be Another Subsidy?
As for the new RSO deputy director we haven’t heard where he stands on a subsidy. So we asked in March and received this generic response:
The program’s status is still pending. There are ongoing conversations about how the funds might be distributed, which the City hopes to move forward soon. There is no scheduled date for this item to be heard by the City Council at this point. Once the Division has a date on the calendar, staff will be sending notices to landlords and tenants to advise. — RSO analyst Cameron Kesinger
Hearing nothing we reached out again in late June and received another non-committal response:
The Division continues to work with our community partners on a proposal to share at a later point in time with a City Council Ad Hoc/Liaison Committee. The meeting with the City Council committee has not yet been scheduled, but the Division plans to inform the public of the meeting once that is scheduled to take place. Any specific details of how the subsidy will look moving forward will need to be determined at the time of the formal meeting. — RSO analyst Cameron Kesinger
A subsequent inquiry produced a more detailed response that suggests we are nowhere close to a subsidy program just yet!
Means testing for tenants, landlords, or both as part of a prospective rent subsidy program is one aspect of an ongoing conversation related to the implementation of a rent subsidy program. However, these parameters will need to be established in conjunction with the City Council (likely via one or several Ad Hoc Liaison meetings)….However, any formal requirements for the program will need to be established through an interactive process between staff, the public, and the City Council liaison members. When this item is placed on a formal agenda, it will be advertised to landlords and tenants for public comment. — RSO analyst Cameron Kesinger
That aside, we noticed a mention of the subsidy in the city’s draft operations budget for fiscal year 2023–24:
Community Development Department Vision Statement #3: Continue to establish a subsidy program for tenants in rent stabilized units whose landlords have completed the mandatory seismic retrofit if a pass-through of seismic retrofit costs is authorized by the City Council. — FY2023–24 Operations Budget p. 107
Yes, we DO review every piece of city business that has some bearing on renting households! The budget item is the first indication we’ve seen that ties the subsidy to a pass-through surcharge. We ran this by the RSO office too. The impact of pass-through surcharges on tenants “especially vulnerable to rent increases” may be a consideration in awarding a subsidy, said RSO analyst Cameron Kesinger.
June 27, 2023 staff report for agenda item G-2 ‘Report on Consumer Price Index (CPI) Data’ makes brief mention of the subsidy on p. 5: “The Rent Stabilization Division is currently in the process of proposing a means tested rent subsidy program to the City Council that is intended to offset the impact of the annual allowable rent increase on the City’s most vulnerable tenants.” The context for the statement is that the few remaining Chapter 5 tenants may be adversely affected by a Chapter 5 rent increase of 5.94% in July if City Council agrees to return to the regular practice of calculating rent increases. The formula for the Chapter 5 rent increase is stated in section 4-5-303 of the rent stabilization ordinance.The
City council has dithered on a rent subsidy for at least two years and the proposal hasn’t even been mentioned since the Housing Assistance Ad-Hoc committee last met but found no path forward. That was in June of 2022. Since that time city hall has advanced the interests of city businesses relentlessly. That has been the top priority of current mayor Julian Gold and former mayor Lili Bosse as reflected in these ongoing initiatives:
- City hall has relaxed the cap on medical uses in the city. The cap has long been in place to keep some balance in the commercial sector and to prevent Beverly Hills from turning into a cosmetic-care destination for the region.
- City hall is making permanent the curbside outdoor dining facilities that have allowed restaurants to maximize their revenue. That’s a giveaway to restaurants the the property owners because it is an effective expansion of dining capacity at the public’s expense.
- City hall is looking to create new incentives for development in the mixed-use overlay zone which spans commercial corridors citywide. That likely will mean allowing greater heights or expanding the reach of that special zone (or both).
Compare that to the stagnation on the rent subsidy!
And remember that single Housing Assistance Ad-Hoc committee meeting last year? The one that went nowhere? Since that time city council has convened no fewer than twenty committee meetings related to a variety of business interests. Among them were meetings of the Small Business Assistance Task Force, the Property Owners Task Force, the Open BH Ad-Hoc and Rodeo Drive and the Conference and Visitor’s Bureau committees. Those meetings are available on demand if you want to catch up.
Or looking ahead just tune into this week’s committee meetings of the Small Business and Property Owners task forces as well as the meeting of the Rodeo Drive Committee. However you won’t find a Housing Assistance Ad-Hoc meeting on the calendar. That’s because business interests are on the city’s agenda but tenant interests are not.
- Explainer: [History of the Beverly Hills Rent Subsidy](History of the Beverly Hills Rent Subsidy)
- News: Will Moderating Inflation Mean a Moderate Allowed Annual Rent Increase?
- Meeting video: June 13, 2022 Housing Assistance Ad Hoc Committee Meeting