The $4.7 Million Paradox: Pasadena’s Rent Board Delivers High Costs, Unspent Funds, and Escalating Controversy
When Pasadena voters passed Measure H, they ushered in a new era of tenant protections, creating a powerful Rent Stabilization Department (RSD) and a 13-member Rental Housing Board (PRHB) to protect housing stability. Yet, nearly three years after its passage, the new bureaucracy is mired in a paradox: it is funded by millions of dollars in escalating fees levied on landlords, while its own budget reports reveal a staggering failure to spend those funds.
This operational paralysis has left the department’s director, Helen Morales, and the board caught between an enraged landlord community that feels financially targeted and a tenant population still waiting for the full-scale services they were promised.
The New Bureaucracy and Its Leadership
The new city apparatus is led by two key bodies. The first is the Rent Stabilization Department, the administrative wing led by Director Helen Morales, who was appointed in mid-2024. Morales, who previously established a similar division in Beverly Hills, was hired to build the department from the ground up, tasked with everything from implementing a rental registry to educating the public.
The second, and more powerful, body is the Pasadena Rental Housing Board (PRHB), a body with the authority to set rent adjustments, establish regulations, and hear petitions. This board, recently appointing new leadership with Tenant Representative Allison Henry as Chair and At-Large Member Lourdes Gonzalez as Vice-Chair, has become the epicenter of the controversy.
From the moment of its inception, landlord groups have decried the board’s composition as “extremely lopsided.” Critics, such as the Apartment Association of Greater Los Angeles (AAGLA), have publicly claimed the board is dominated by renter-advocates, with insufficient representation for housing providers. This perceived imbalance has fostered a deep-seated distrust, with landlords arguing their concerns are systematically dismissed during public comment, creating an adversarial, rather than regulatory, relationship.
The High Cost of Stabilization
The entire $4.7 million budget of the Rent Stabilization Department is funded not by general city taxes, but by a “Rental Housing Fee” charged directly to landlords for every rental unit they own.
This fee has become a flashpoint. In August 2025, the Rental Housing Board voted to set the 2025-2026 landlord registration fee at $238 per unit. This was a significant hike from the previous year, which itself was a complex, multi-part fee. Landlords who fail to pay face escalating late fees of up to 50% per unit, adding another financial threat.
Department staff justified the increase by explaining that the program’s total costs, including a negative cash balance of over $566,000 from its chaotic launch, had to be divided among a smaller-than-expected pool of eligible units. After thousands of units were found to be exempt, the remaining housing providers were left to cover the entire department’s budget.
For landlords, this is a direct, non-recoverable financial burden. Groups like the Pasadena-Foothills Association of Realtors (PFAR) have argued this “unfair burden” essentially forces the private sector to subsidize a city bureaucracy. This sentiment is the driving force behind a major lawsuit from the California Apartment Association (CAA), which is challenging the legality of Measure H’s relocation assistance requirements, arguing they conflict with state laws like the Costa-Hawkins Act.
The $2.1 Million Question: Services Not Rendered
If the high cost to landlords is one side of the coin, the other is the department’s documented failure to deploy these funds. This is the core of the “services not rendered” critique.
A quarterly budget update presented in April 2025 revealed a stunning fact: with 75% of the fiscal year completed, the Rent Stabilization Department had underspent its $4.7 million budget by 45%.
More than $2.1 million in collected fees sat unused.
The department’s official explanation cited “staff turnover in senior positions” and massive unspent funds in “Services and supplies.” This budget line, intended for contracts, outreach, and technology, was reportedly 60% unspent.
This figure is the most damning evidence for those questioning the department’s efficacy. It raises a critical question: If the department is successfully collecting millions in mandatory fees, why is it failing to execute its most basic function—spending that money to provide services?
For tenants, this underspending represents a profound missed opportunity. That $2.1 million was not just a number on a ledger; it was the budget for the very programs Measure H promised. It was funding for more housing counselors, robust community outreach, a fully functional petitions and hearings program, and legal support for tenants facing eviction. While the department has offered some walk-in sessions for registry help and basic FAQs on its website, its own reports prove it is operating at just over half-capacity.
The department, under Director Helen Morales, is charging landlords for a fully-funded, fully-operational department while delivering—by its own financial admission—a shadow of one.
A Mandate Mired in Conflict
The Pasadena Rent Stabilization Department and its oversight board are failing to satisfy either of the constituents they serve.
Landlords feel they are being financially punished by a “lopsided” board that raises their fees by nearly 100% to cover its own launch-year deficits. They see a system that is quick to levy penalties but deaf to their concerns about maintenance costs and inflation.
Tenants, meanwhile, are the beneficiaries of a department that is, on paper, one of the best-funded in the region but is operationally hamstrung, failing to spend millions of dollars collected in its name.
The mandate of Measure H was to provide stability. Instead, its implementation has created a new, expensive bureaucracy defined by legal battles, financial penalties, and a critical inability to perform the very services it was created to fund.
For more information, here is a video update from Pasadena Media about the new leadership elected to the Rental Housing Board. This clip discusses the board’s mission and the transition from its previous chair, Ryan Bell.
PMN – New Leadership Elected to Pasadena Rental Housing Board
