Updates made to Rent Control and Tenant Protection Ordinances

What was originally a clean-up of city ordinances became a more in-depth revision of Culver City's Rent Control and Tenant Protection Ordinances at Monday night's City Council meeting. In addition to proposed administrative changes to these documents from city staff, several material changes were made in response to resident and councilmember concerns expressed at that meeting.

The council moved to include language in the Rent Control Ordinance clarifying how the Consumer Price Index (CPI) is used to calculate rent adjustments and carved out an exception in the landlord occupancy policy to ensure all smaller landlords are allowed to move themselves or their relatives into vacant units they own as part of the motion made Monday night.

The item on Monday night's agenda was initially intended to modify the language in the city's Rent Control and Tenant Protection Ordinances. According to Rent Stabilization Coordinator Shannon Louis, these changes were meant only to codify how the city's staff was already interpreting and implementing the document, and did not fundamentally change any policy or guideline outlined in either policy.

"In response to questions [staff members in the Housing and Human Services Department] regularly receive," Louis said during a presentation to the council Monday, "we felt the need to clarify various areas of the ordinances to reflect how we have been interpreting and implementing them."

These changes include aesthetic edits, such as updating references to the Housing Division to refer to the Housing and Human Services Department, and moving guidelines between documents and sections.

Most of the updates were surface-level, but some represented material changes to how the ordinances functioned. Announcements for the Annual Maximum Permissible Rent will be made annually instead of monthly beginning July 1, 2026, but the concern Monday night stemmed from how these increases were calculated.

Calculations for the maximum permissible rent are based on the Consumer Price Index (CPI), a metric published by the U.S. Bureau of Labor Statistics to illustrate how prices for urban consumers change over time. However, Mayor Dan O'Brien noted that the role it plays isn't illustrated adequately in the ordinance. While it caps the annual rent increase at 5% and allows rents in Culver City to increase up to 2% if the CPI increases by 2% or less, the ordinance does not establish the role of the CPI in the specific calculation of the limit.

"I think that would be beneficial to have in there so people can point to it," O'Brien said of the CPI calculation.

Guidance Document 2020-RC01 outlines in more detail how the city uses CPI and will be referenced in the Rent Control ordinance to ensure concerned residents are able to find information about how the Maximum Allowable Rent Increase is calculated.

Additionally, city staff noted that landlords burdened by increased costs beyond what the allowable rent can cover can apply for a rent adjustment with the city.

This can be used as a way for landlords struggling with increasing operating costs — particularly those whose units couple rent and utilities together — to apply for a rent increase beyond what is allowed if they can prove the financial hardship associated with the units deem it necessary.

There was also concern about how the requirements for landlords or their relatives to live in their own units were written. As originally proposed, the landlord occupancy section of the ordinance could be seen as treating smaller landlords in the same way it viewed corporate landlords.

For a landlord to place a person or occupy their own property, they must be a "natural person or trust that is recovering possession for use of a natural person trustee or trustee's eligible relative," which prevents corporate landlords from filling their own units and depleting local housing stock. A living human being is defined as a "natural person" under this ordinance, with the distinction intended to separate smaller property owners from corporate landlords.

"We don't [want] an instance like a property management company evicting a tenant due to landlord's occupancy and not actually moving a natural person into a unit," Louis said.

However, there was concern that smaller landlords who formed an LLC or LLP could be excluded from allowing family members to stay in vacant units. Councilmember Albert Vera noted that most small business owners organize as LLCs or LLPs and argued that it was unfair that these "mom and pop" landlords would be classified the same as corporate landlords under the public understanding of the proposed change.

"I don't understand that," Vera said. "Now we are penalizing small landlords with one or two or three units that have an LLC or LLP if they have a family member they need to move in for healthcare or whatnot [sic]?"

It was unclear whether or not corporations could utilize these landlord occupancy provisions as previously written, and staff began receiving questions related to that confusion. Establishing the natural person requirement was meant to clear that issue up and make clear that landlords could not utilize this ordinance unless a human owner or trustee were associated with that property.

To alleviate concerns and ensure the spirit of the measure was captured, a second revision to the Rent Control Ordinance approved by the city council was an exception that allowed small landlords organized as an LLC or LLP to move family members into their units. The exception will apply to LLCs or LLPs in which a natural person holds at least 50% of the ownership of the property.

The motion to approve these changes alongside the administrative changes proposed by staff passed 4-0, with Vera abstaining.