Beverly Hills to Dissolve the Rent Stabilization Commission

City council has tentatively agreed to dissolve the Rent Stabilization Commission. The commission from the outset was beset with operational challenges: discussions were by turns divisive and meandering; commissioners were slow to grasp complex policies; and commissioner vacancies proved difficult to fill. Given the dysfunction this commission was a distraction for rent stabilization staff that had more important problems to address. So city council tentatively agreed to scuttle it. What does that mean for Beverly Hills tenants?

The dissolution of the Rent Stabilization Commission will not affect tenants. The commission has no role in setting rent stabilization policy (which is a council responsibility) and city council mostly ignored it anyway. The commission can’t fulfill perhaps its most important function: to oversee rent stabilization activities in the city. Staff kept the commission largely in the dark and so it could not really report to the public about the state of the Beverly Hills rental housing market. In short this commission won’t be missed.

Seeds of Demise Planted in the Beginning

What did the city create a Rent Stabilization Commission to begin with? Seven years ago tenants and landlords in talks disagreed on many issues but generally agreed on the need for a representative panel that could provide a forum for the resolution of certain tenant-landlord disputes.

City council embraced the suggestion and created the Rent Stabilization Commission in 2019. However in a cynical move our councilmembers changed the mission: they unanimously agreed to task this new commission with making recommendations on certain rent stabilization issues. The issues delegated to the new commission included:

• Whether or not to regulate cash-for-keys tenancy buyouts;
• Whether to change the current relocation fee schedule;
• Whether to adopt a higher local habitability standard for rental units;
• Whether to create a systematic inspection program for rental units;
• Whether to pass-through landlord costs of doing business such as seismic retrofit; and most important;
• What should be the formula for determining the allowable annual percentage rent increase.

These were precisely the issues that city council itself had struggled to decide. Why hand it to a new commission? Perhaps councilmembers had tired of endless comments from tenants and landlords. Maybe they were burned-out from midnight meetings. Also none of our councilmembers rent housing; all of these issues were of no personal concern to them. So they unanimously agreed to hand-off the hot-potato to the new commission.

Handing the rent stabilization discussion to a tyro commission was a cynical gambit that came with predictable results: commission discussions went in circles as commissioners labored over recommendations that consumed as many as five or even ten meetings per issue. For city council it was out-of-sight, out-of-mind. No councilmember paid attention to the commission.

Operational Challenges: Commissioner Resignations But No Appointments

Aside from struggling with issue discussions, the city’s newest commission was beset by operational challenges. Two tenant commissioners resigned in 2021 because they were frustrated with the divisive discussions. They were replaced after a long commission hiatus. Numerous meetings were cancelled.

The next year another tenant commissioner resigned because he moved out of the city. (Residency is a commission requirement.) Then the year after one of the landlord commissioners moved out of town. That created another vacancy. That same year city council itself added to the problem by poaching an at-large Rent Stabilization Commission member to serve on the planning commission. Talk about stepping off a sinking ship!

Throughout the relatively short life of this commission an unprecedented five commissioners resigned. Filling those vacancies has proved a challenge. Indeed no new commissioner has been appointed to the Rent Stabilization Commission since 2022.

Most recently, commissioner recruitment ran aground because city council’s preferred choice to fill the tenant commissioner seat was an applicant who disclosed an ownership interest in no fewer than thirteen rental properties outside the city.

That wasn’t the problem with this applicant, however. Indeed Councilmembers appeared ready to appoint that applicant to a tenant seat despite rental property ownership. But we showed the city research that suggested the applicant’s claimed Beverly Hills tenancy might not be what it seemed. Only then was not brought forward for appointment. Nobody in fact was appointed to the vacant commissioner seats. Not a word was ever shared with tenants and landlords about the behind-the-scenes dysfunction.

The Best and Perhaps Only Option

The crowning blow for the Rent Stabilization Commission came only two weeks ago amid council hand-wringing about what to do with the commission. At that time, two current commissioners who were approaching the end of their terms told the city that they would not seek reappointment. Their terms expire next month. That meant that starting July 1st the commission would not achieve the quorum of members necessary to do business.

Failure to achieve a quorum has plagued this commission since it was created. No fewer than thirteen meetings have been canceled due to lack of quorum – a figure unprecedented for any city commission. This year alone four commission meetings were cancelled. The city has already cancelled the upcoming June meeting making five meetings cancelled.

The commission is already effectively shuttered. Was there an option to dissolving the commission? Not really. To get this commission up and running the city would have to either restructure it or to reopen the commissioner application window and then somehow appoint five new commissioners. That is quite the challenge given the city’s inability to find enough applicants for commission service generally. The most practical option – perhaps the only realistic option – was to pull the plug on the commission.

Unceremonious End is a Symptom of Dysfunction

The dissolution of the city’s newest commission was decided at the Commission Standardization Ad Hoc Committee meeting on May 14, 2024. Read the staff report. Watch the video.

The two councilmembers who are appointed as council liaisons to the standardization committee are Vice-Mayor Sharona Nazarian and Councilmember Craig Corman. Corman expressed skepticism at the unusual 6-member structure for the Rent Stabilization Commission and, in particular, was concerned about the high burden for achieving a quorum necessary to conduct business. His verdict came swiftly: “I recommend we sunset it.” Vice-Mayor Nazarian quickly agreed.

Dissolution will likely be formalized in June. While shuttering the Rent Stabilization Commission may relieve council and staff of one particular operational headache, it won’t address the underlying problem of dysfunction in the administration of rent stabilization in Beverly Hills. The commission’s challenges were merely a symptom of that dysfunction.

Takeaway

The Rent Stabilization Commission was destined to fail because city council had tasked it with an impossible job: making policy recommendations concerning rent stabilization that councilmembers themselves struggled to decide. No new commissioner was prepared for the complicated issues and passionate public concern that so bedeviled city council. In that sense, commission failure was foretold.

Blame surely falls on city council for also allowing this commission to flounder for nearly four years. Despite evident operational dysfunction and related challenges, the two city council liaisons to the commission NEVER ONCE met to discuss the problems. Councilmembers Mirisch, Nazarian and Friedman have all been appointed to oversee the Rent Stabilization Commission at one time or another as members of the commission liaison committee. None evidently saw the need to convene the committee to address the dysfunction.

Shouldn’t they have met? We begged then-mayor Lili Bosse and city staff to convene the committee to get this commission back on track. We were promised a meeting but it never happened. For perspective consider that the council’s committee that oversees Rodeo Drive events and holiday decorations has FORTY times during the same period. That shows the city’s real priority.

Again the dissolution of the Rent Stabilization Commission won’t affect tenants or any aspect of rent stabilization. In fact it could free rent stabilization division staffers to turn to more pressing problems. But we are not optimistic; we expect that the dysfunction will continue because there is no political will to address it.

As for the remaining commissioners, in our comment to city council we urged that they receive priority consideration should they apply for an appointment to another commission. That would only be fair. Instead a city rule prevents all of them for applying for any commission vacancy until one year after their current commission appointment ends. If city council dissolves the commission in June, as expected, they won’t be eligible for appointment until July 2025.