Challenge to Rent Control Dismissed : U.S. High Court Rejects Landlord’s Appeal in Santa Monica Case

Striking down a major challenge to Santa Monica’s rent control law, the Supreme Court on Monday dismissed a landlord’s appeal challenging the ordinance that forbids demolition of apartment rental facilities without city permission.

The landlord, Jerome J. Nash, contended that such permission was virtually impossible to obtain and that the ordinance violated his right to go out of business.

The ordinance was enacted in the wake of concern over a rapid depletion of rental housing in the city. According to city officials, Santa Monica landlords razed more than 1,300 rental units during a so-called “Demolition Derby” during one 15-month period in the late 1970s. Hundreds of other apartments were converted to condominiums.

Permission Refused

Nash, owner of a six-unit building, sought to tear down his facility, saying he intended to sell the land later to recoup the financial losses he had suffered as a landlord. The city refused to permit demolition and Nash filed suit, challenging the ordinance.

But last October, the California Supreme Court upheld the law, saying it was justified by the city’s need to preserve scarce rental housing.

In his subsequent appeal to the U.S. Supreme Court, Nash contended that the city was forcing him to stay in the apartment rental business or face the dubious task of finding a buyer willing to take over the same obligation. If the city is permitted to force landlords to stay in business, he said, it could do the same to grocers, doctors or others providing needed services to the community.

Santa Monica City Atty. Robert M. Myers said Monday he was not surprised by the high court ruling.

“We really believed that the California Supreme Court had properly resolved the state and federal issues at stake and that it was unlikely the U.S. Supreme Court would be interested in this case,” Myers said.

The city attorney called the Nash case one of the three biggest legal challenges to Santa Monica’s controversial rent control law.

“It would have allowed landlords to escape rent control by tearing down their units,” Myers said. “It would have resulted in a substantial number of residential rental units being destroyed.”

Howell Tumlin, the Santa Monica Rent Control Board administrator, said he was “delighted” by the decision.

“It’s obviously a very important victory for the Rent Control Board and significant for the people of Santa Monica,” Tumlin said. “At issue, beyond facts of this particular case, was whether there would be effective rent control in Santa Monica. If someone could simply decide to walk away from buildings and demolish apartments, we would be back to the sort of demolition derby that existed before rent control.”

Four Attorneys Retained

Stephen Jones, one of four attorneys representing Nash, said he was disappointed by the Supreme Court decision because the case raised “important and unresolved” legal issues such as the question of whether Nash had the “right” to go out of business.

The case, he said, was “more of a land-use lawsuit than a rent control lawsuit. It was brought up on the grounds that everyone has a constitutional right not to be involved in a business if they don’t want to.”

Jones said rent control opponents are hopeful that another legal challenge to Santa Monica’s 6-year-old rent control law will prove successful. Attorneys in that case, pending in the state Court of Appeal, have argued that landlords should be allowed to go out of business if they are not making a fair profit.