The beginning of the end of Rent Control or not?

Death by a thousand cuts describes a form of torture. One or two cuts would not hurt. However, after many or a thousand cuts, the injuries can cause death. The court of appeals recently denied decrease in services petitions for two Santa Monica tenants. This decision might be another decrease in the effectiveness of rent control.

Two tenants filed similar petitions for rent decreases with the Santa Monica Rent Control Board. The tenants alleged decreases in rent were justified because the landlord had reduced housing services. The reductions were that the landlord changed the property’s hot tub’s hours. The landlord also installed a sauna timer that reduced the time that the sauna would stay heated from one hour to 25 minutes. The Rent Board agreed with the tenants and reduced their rent by about $25 each month. The landlord then filed a writ in the superior court. The trial court agreed with the Rent Board regarding the decrease in services. The landlord appealed.

The court of appeal found “the minimal reduction of adult recreational services of a type commonly found in luxury housing does not justify decreasing rents without evidence that the rent thereby became excessive or the landlord thereby realized an unjust or unreasonable return on the investment in the property.” In other words, the reduction of the hours of a hot tub and sauna did not necessarily mean that a tenant’s rent was excessive. While this case might not be alarming in isolation, one should be alert for a series of incremental decreases in services.