The City Council unanimously approved the $2.876 million operating budget for the City’s new Rent Stabilization Department, which will be sourced from a rental housing fee to be paid by owners for each of over 30,000 rental units in Pasadena.
While Councilmember Tyron Hampton supported the proposal, he urged the Department to explore the possibility of having reserves as he pointed out there is no guarantee the Department will be able to collect the full amount from landlords.
“As it is set up right now, it seems like we are living check to check,” he remarked.
Responding to Hampton, City Manager Miguel Márquez said the Rent Stabilization Department should be treated like other city department. Márquez explained that none of the city Departments have reserves but they can use reserves available for the City.
“We’re ready for our storm but we’re not ready to take on another Department storm. This is not like a regular city Department because the City Council has no authority besides putting this budget together,” said Hampton in response.
“The PCOC [Pasadena Center Operating Company] has reserves, the PCAC [Pasadena Community Access Corporation] has reserves,” he added.
City Attorney Michele Bagneris said the Rent Stabilization Department should be careful if it sets up additional fees to establish a reserve.
“There may be another basis or another source of funds to create a reserve but it wouldn’t necessarily come from the fee that is charged,” she said.
“We have strayed far from the ‘will of the voters’ which was $310,000 start up costs and a non-City Department,” Councilmember Felicia Williams told Pasadena Now. “Now we are looking at $3 million through June. At what point do we notify the voters that this could cost millions of taxpayer dollars annually before any fees can be collected which could impact vital services like homeless outreach, park programs, street repairs, and public safety?”
Meanwhile, Vice Mayor Steve Madison does not think landlords will have difficulty paying $91.85 a year per rental unit as he pointed out that rents are bringing them up to $60,000 a year.
“The notion that we’re not going to collect the fees that the voters have overwhelmingly empowered is crazy,” said Madison.
“If there is a problem collecting that $90 a year then we need to build an enforcement mechanism so we can enforce penalties and interests,” he added.
Rent Stabilization Department Interim Executive Director Phillip Leclair earlier said the 2024 budget of Rent Stabilization Department will be used for hiring 12 full time equivalent employees, establishing of a rental registry database and securing an office location and purchasing of office furniture and technology, among other things.
The proposed rental housing fee incorporates the repayment of $500,000 advance from the city’s General Fund which the Rent Stabilization Department has been using to fund its start-up expenses.
The bulk of the proposed 2024 budget or $1,005,426 would go to personnel costs, $1,531,500 would go to services and supplies and $339,306 would go to Internal Service Charges.
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