At its April 10, 2025, meeting, the West Hollywood Rent Stabilization Commission took steps to reexamine the city’s method for calculating interest rates on tenants’ security deposits, prompted by public comments and a commissioner’s proposal to schedule a future discussion. The decision reflects ongoing efforts to address landlord and tenant concerns within the framework of the city’s rent stabilization ordinance.
The issue surfaced during the public comment period when Kathy Blaivas, a West Hollywood property owner, questioned why the city’s mandated interest rate—set at 5% for the year—exceeded the 3.75% she earned from her bank. Blaivas suggested aligning the rate with local banks rather than national averages, which she noted often reflect the highest rates available. Stephanie Harker, a former commissioner, echoed the sentiment, expressing curiosity about the source of the 5% rate. Michael King, a tenant, added that delays in landlords paying the interest, sometimes until August, highlighted a lack of enforcement, proposing an ordinance amendment to address untimely payments.
The commission’s current policy, as clarified by Rent Stabilization Manager Cameron Kesinger, bases the interest rate on a calculation derived from five banks, announced in the summer and due to tenants by February 1 as a credit or payment. Kesinger confirmed there’s no option to use the actual interest earned by a landlord’s bank, a practice some other rent-controlled jurisdictions allow, as noted by Commissioner Topchian, who referenced Los Angeles as an example.
Commissioner Kurpies moved to agendize the topic for a future meeting, citing recurring public feedback and the policy’s second year of implementation at the higher rate. Kurpies emphasized the need for a public hearing to gather community input, particularly from landlords, to assess the policy’s impact. “We went from five brick-and-mortar banks here that give 0.001% to what are the top five banks in the country, basically, that are now online,” Kurpies said, acknowledging the significant shift and fluctuating interest rates over the past year.
The motion, seconded by Commissioner Copeland, passed unanimously. Commissioners expressed openness to minor adjustments, with Kurpies noting that major changes were unlikely given the policy’s recent overhaul. Topchian suggested staff explore how Los Angeles calculates interest, potentially including actual earned rates, to inform the discussion.
Legal counsel Kellen Martz provided context, recalling past commission debates where some argued the rate was too low, leading to the current formula. Martz indicated that revisiting the policy would require a new agenda item, aligning with the commission’s process to balance competing interests.
The decision to schedule a future discussion underscores the commission’s role as a quasi-judicial body, as Harker described, striving to remain apolitical and responsive to both landlords and tenants. No specific date was set, but Kurpies urged staff to prioritize the item to allow time for recommendations to reach the City Council, potentially influencing the next interest rate cycle.
The meeting also welcomed back Commissioner Kimberly Copeland, who was sworn in by Council Member Lauren Meister. The commission adjourned to its next session on April 24, 2025, leaving the security deposit interest rate discussion set up for further debate.
This is soo ridiculous of a request. Landlords have only had to pay any interest for like 3 of the last 20 years and she’s complaining? It also clearly noted the exact way the rates are determined. It pulls the interest rates from 5 banks from the prior year. She’s getting 3.75% now, but last year there were multiple banks paying 5%. Next year the interest will be lower.
Interest rates on security deposits should be neither an unfair burden on landlords, nor an unfair boon to tenants. It should not be rocket science to determine that fair balance. One can certainly find good interest rates that are usually tied to minimum balances. It is unlikely that any security deposit in West Hollywood matches that minimum balance. WeHo needs bigger thinkers who don’t tinker.
And for how many years did we get -0%-?
Our landlord and our manager do not deem to remind us about it either.
How many people don’t ask, I wonder.
I agree why are Landlord even having to pay any interest on last month security. Repairs have escalated and landlords are responsible. The 5 banks that the council says will pay 5% on $500 or more was false. I called 3 of the unknown banks. I think the council needs to reconsider how they favor tenants to the point of us landlords need to take further action to be fair. I have had the discussion with John Ericsson who has been so understanding. He is a good leader for both parties.