Beverly Hills Rent Subsidy: More Talk or Real Action?
Rent increases for Beverly Hills rent-stabilized tenants took effect on July 1st. Most tenants will see a maximum annual increase of 3.2% while a very small number of tenants with tenancies regulated by Chapter 5 of the rent stabilization ordinance can see a maximum 5.9% rent increase. The latter percentage is higher than any time in the past three decades. When agreeing to those percentage increases City Council revived talk about a proposed tenant subsidy. Is this talk to deflect political heat or will eligible tenants actually see relief?
Backstory
Talk of a rent subsidy seems to come whenever City Council talks about a big rent increase. In 2018 councilmembers contemplated a new formula for rent increases that might have raised rents faster than the rate of inflation. A subsidy would cushion the blow on tenants most in need, they said.
Former councilmember Robert Wunderlich was the subsidy proponent and he brought the concept back in the first year of the pandemic economic shutdown. The city rolled out a $1 million subsidy program but two-thirds of that money was never disbursed. Some tenants said they were unfairly excluded from eligibility.
The subsidy idea returned in the spring of 2022 when high inflation threatened to push-up the annual allowed rent increase to as high as 8%. City Council rebranded it a ‘housing assistance subsidy’ to offset potentially large rent increases. As it happens the City Council election was approaching. Council instead agreed on a moderate 3.1% increase. Council then appointed an ad-hoc committee to discuss the scope and eligibility for such a program. And that’s when the trail went cold.
The ad-hoc committee was comprised of former councilmember Bob Wunderlich, the subsidy’s prime proponent, and current Mayor Julian Gold. By then Wunderlich lost his seat and Gold was apparently content with representing the interests of business stakeholders. The ad-hoc did not agree on purpose, scope or eligibility.
We have discussed the demise of the rent subsidy in our post, What Happened to the Beverly Hills Rent Subsidy? And we did a deeper-dive in History of the Beverly Hills Rent Subsidy
Subsidy Rises Again
We shouldn’t have been surprised when the prospect of a rent subsidy was raised during the discussion about the new rent increases at the June 27, 2023 meeting. Perhaps we should have expected it. But Mayor Julian Gold does not appear to be a subsidy supporter and he could keep it from reaching the Council’s agenda.
Indeed it was Councilmember Lili Bosse who broached the topic. She noted that there was money set aside which wasn’t disbursed in the first round of the subsidy. How much was available? Assistant City Manager Ryan Gohlich said there was $700k leftover but $100k would be consumed by administration costs. That leaves $600,000 for a subsidy. Their conversation continued:
Lili:Is the Rent Stabilization Commission working on the guidelines?
Gohlich: The Council’s ad-hoc committee is assigned to it. The National league of Jewish women has come up with a framework for means-testing to define eligibility, it will come back to the ad-hoc committee.
Lili: And the timeframe?
Gohlich: We’re trying, we are transitioning to Nestor [Otazu, the new deputy director for rent stabilization].
Otazu: “Very shortly.”
Well the ad-hoc committee hasn’t met in a year and there is no indication it will meet. Indeed Gohlich and Otazu seemed put on-the-spot to say that the subsidy wasn’t actually a dead letter.
Now, perhaps we are too cynical. But our queries to Rent Stabilization staff in recent months produced only noncommittal responses. Frankly we thought the subsidy was a dead letter.
Our Take
Well it is premature to say that there won’t be a subsidy. But if there was a subsidy in the offing, why not have brought it to Council in time to cushion the impact of a 5.9% rent increase on Chapter 5 households?
If nothing else this brief discussion gives us something concrete to which we can point later when the subsidy falls off the radar. Our files are full of reminders of worthy yet half-implemented or abandoned initiatives. In a few months we will get back in touch with management to remind them. “About that subsidy,” we will say. “Remember when staff said it was coming ‘very shortly’?”