Showdown Today on Rent Control : Amendment Likely as L.A. Council Takes On Explosive Issue

The Los Angeles City Council braced for a showdown today on the explosive issue of rent control.

Almost anything can happen.

The council could vote to keep the current law limiting rent hikes to 7% annually, amend it or even vote to end rent control altogether.

An amendment seems most likely.

City Councilman Joel Wachs, chief architect of the current rent law, said he believes that he has the votes to reduce allowable rent increases.

Wachs, chairman of the Government Operations Committee, is endorsing a proposal linking annual rent increases to fluctuations in the Consumer Price Index, the nation’s most visible inflation barometer. No matter how high or low the index moved, however, rents could not increase annually more than 8% or less than 3% under his plan.

If this approach is accepted, the current 7% lid would drop to 4%, effective July 1.

Supported by Panel

The measure, originally proposed by Councilman Marvin Braude, a member of Wachs’ Government Operations Committee, also has the support of Councilwoman Joan Milke Flores, the third member of the panel.

Wachs said in a telephone interview that the measure is a product of a landmark city study of rent control that, in his view, “justifies a reduction in the annual (rent) adjustment.”

The $600,000 survey concluded that there were no big winners or losers under the ordinance, enacted in 1979. Tenants, on average, were billed for rent increases at about the same rate as their counterparts in nearby cities that do not have rent control, the study said. And landlords’ profits were held down only slightly compared to property owners’ profits in adjacent cities, it said.

The study endorsed no specific approach to rent control. It merely outlined alternatives, including retention of the present law, amending it to tie rent increases to the Consumer Price Index and amending it to tie rent hikes to increases in landlords’ costs.

Organized tenants groups have pushed for stricter controls, contending that landlords are making a windfall at a time of 4% inflation. Not all, however, are happy with the Wachs’ solution.

Other Approaches

One tenant group, the Coalition for Economic Survival, is pushing for a tougher approach--a one-year rent freeze followed by increases limited to 65% of the Consumer Price Index.

Another approach being backed by some tenants would link annual rent increases directly to average landlord costs, as New York City does.

This proposal, according to city calculations, would lead to a flat 3% annual rent ceiling.

Braude’s measure is viewed by city housing officials as an appropriate compromise between the city’s 70,000 landlords and 1.5 million tenants.

As is the case with tenants, not all landlord groups share that view.

Clearly, if they could have their way, property owners would have the council vote rent control into oblivion or, short of that, keep the current law.

Neither landlords nor tenants have given high marks to the study, which was authorized more than a year ago to provide council members with facts they could use in deciding whether the law is fair or needs to be changed. Both sides claim that the study, directed for the city by the Los Angeles consulting firm of Hamilton, Rabinovitz, Szanton & Alschuler, gathered insufficient data about the effect of the law on landlords’ profits.

Russell Proposal

The last time rent control went before the council, in November, Braude, Wachs and six other council members barely turned back a drive by City Council President Pat Russell to scuttle the survey, which was under way.

Russell wanted to link this action with a law tying annual rent increases to 100% of the inflation rate. Ironically, her proposal was similar to the one now endorsed by Braude and Wachs: It set a 7% ceiling and a 4% floor on future rent increases.

The council instead passed a proposal, now favored by some tenants groups, restricting increases to 65% of the current inflation rate. That proposal died, however, when it failed to get a majority in a required second vote. The current law remained in force and the study continued.