Landlords Accused of Rent Gouging Must Now Pay Into Homelessness Programs

The owners of a building in Santa Monica had raised rent from $865 to $3000 in two months
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The owners of a Santa Monica apartment building, who are facing criminal charges for illegal rent increases, were ordered this week to pay $35,000 to support homeless programs and tenant protection groups in the city. 

The humble, 1960s-era dingbat apartments at 1433 Euclid Street were under the same ownership for generations until the 22-unit pair of buildings sold for $4.1 million in 2016. The one-and-two bedroom units currently available are described as a “personal retreat” with luxurious quartz countertops, hardwood flooring, and open floor plans with rents ranging to $3895 per month. 

The tenant who protested accused the owner of harassment by trying to convince them to vacate the unit “through fraud, intimidation, or coercion” according to the complaint. Rent on the unit was increased from $865 a month to $2336 in February 2020 and $3000 two months later.

The state’s price gouging law is punishable by a $10,000 fine, one year in prison, or both. A violation is also considered an unlawful business practice with additional penalties of $2,500 per violation, injunctive relief, and restitution.

The Santa Monica City Attorney’s Office filed a criminal complaint charging the landlord with raising rent by more than the allowed 10% during a declared emergency.

Former Governor Jerry Brown placed Los Angeles County under that protection following wildfires in 2017, and Governor Newsom extended the order through the end of 2021. The state of California and the city of Santa Monica remain under a state of emergency due to the COVID-19 pandemic. County Supervisors are currently studying a proposal to cap rent increases at 3% until 2024, along with adding new eviction protections.

“We want people who owe, like, a third of one month’s rent,” said Supervisor Sheila Kuehl, “not to be kicked out.”