Santa Rosa is sharply increasing the rent on a house a city employee has occupied below market rate for 17 years.
Denise Cadman, a natural resource specialist with the city's utilities department, learned earlier this month that her rent would increase from $500 a month to $1,525 beginning Jan. 1.
The steep rent hike is the city's latest response to revelations that several homes it owns were mismanaged, including sweetheart deals for city employees and families living in homes rent-free for years.
The move follows a recent market analysis performed for the one-acre property on Occidental Road where Cadman has lived since 1996.
David Guhin, the director of the utilities department, said the original rental deal was “appropriate at the time” but the city failed to update the lease over the years. The increase is the first step in resolving that oversight, he said.
“It's our responsibility, not hers. She's a tenant,” Guhin said. “We needed to address it by figuring out what the current going rate was, get it corrected and move on.”
The rent increase of $1,025 per month amounts to $12,300 annually. It is unclear how much rental income the city missed out on over the 17 years. Rental rates have changed over time and are currently at historic highs, Guhin said.
The rent appears to have been below market rate from the start and became more so over time, said Keith Becker, president of DeDe's Rentals.
Rents in Sonoma County have nearly doubled since 1995. They rose by 50 percent from 1995 to 2000, remained moderate from 2000 to 2010, and have increased substantially since then, Becker said.
He estimated the rental loss to the city at a least $100,000.
“It is absolutely true that there was a lot of money lost,” Becker said.
Cadman said she and her husband, Stuart Schroeder, plan to pay the higher rent in the short term but will have to consider whether the higher rent works for them long-term.