Presented to W. Hollywood Council : Voluminous Rent Law a Creature of Compromise

When West Hollywood City Atty. Michael Jenkins handed in his latest draft of the city’s proposed rent control law early last week, the bulky ordinance filled 42 pages.

“All those pages are double-spaced,” Jenkins later said, explaining the measure’s heft. “It would be a lot more compact if we kept it single-spaced.”

Whatever the spacing, the city’s long-awaited rent control proposal is acknowledged by both supporters and detractors to be among the most detailed rent codes in the nation. The culmination of more than two months of exhaustive research, volatile public hearings and marathon council debates, the proposal has evolved into a document that reaches into some of the most minute facets of landlord-tenant relations.

“The law reflects the council’s effort to be fair to everyone and take into account as many situations that could possibly arise,” said Councilman John Heilman. “It’s complex and it’s detailed, but I don’t think too many rent control laws have had as much deliberation as we’ve given to ours.”

Further Changes

The measure, expected to be approved at the council’s next meeting May 27 and go into effect immediately, may still undergo further changes in language. But the major provisions have now solidified into a law that apparently satisfies the desires of a tenant-strong community where more than 85% of the inhabitants are renters.

Council members portray the proposal as a creature of compromise, designed to provide strong rent control protections while not destroying landlords’ financial incentives. Tenant activists say they are satisfied with the proposal, with some reservations; landlord organizers, who see little evidence of compromise, say it will bring perpetual conflict between apartment owners and the city.

The measure’s most controversial section would limit rent rises when apartments are vacated by tenants. Landlords would be allowed to raise rents by 10% after a vacancy, but not more than once every two years.

To the council members who crafted the limited vacancy decontrol, the 10% cap is an attempt to find a shade of compromise on an issue normally dealt in black-and-white terms. Santa Monica, for example, has full vacancy controls, allowing vacancy rent increases only when landlords upgrade apartments. At the other end of the spectrum, Los Angeles allows landlords to raise rents as much as they want after an apartment is vacated.

“Most cities either have total controls on vacancies or have no controls at all,” said Ken Baar, a rent control expert who has been advising the West Hollywood council on its law. “West Hollywood is trying to find a place somewhere in between.”

For landlords, the cap on vacancy decontrols is far too restrictive. “By doing this, the council in effect prevents owners from renting at market value,” said Grafton Tanquary, who heads West Hollywood Concerned Citizens, a group composed largely of landlords and real estate agents.

But the same provision appears too lenient to Larry Gross, coordinator of the Coalition for Economic Survival, a tenant activist group that forged a strong power base last November when candidates it supported won four of West Hollywood’s five council seats. Gross and his two strongest supporters on the council, Heilman and Helen Albert, would prefer to see vacancy rent increases permitted once in five years instead of two. Council sources doubt they will find a third vote.

“As long as you allow increases every two years, that’s a tremendous incentive for evictions,” Gross said, adding that if there are no further changes in the ordinance, he would still be satisfied: “I think West Hollywood would end up with one of the strongest rent control laws in the country.”

Gross and his supporters won a key victory three weeks ago when they were able to get council support for a second rollback of rents. The council had already agreed to roll rents back to August, 1984, levels to nullify many rent increases that occurred after the county Board of Supervisors decided that month to allow West Hollywood to vote on incorporation.

Further Rollback

But three weeks ago, the City Council rolled back rents further, deciding that when the rent law goes into effect, rents will start at their April 30, 1984, levels. Councilman Steve Schulte, who cast the crucial vote for the second rollback, said he changed his mind after being convinced by tenants that many rent increases occurred in June and July, 1984.

“I realized that we hadn’t gone back far enough,” he said, adding that he was further convinced by a city-funded housing survey that reflected similar figures.

Schulte’s vote for the second rollback won new friends among tenant activists and may aid him when he runs for reelection next March along with Heilman and Albert. Schulte, the only one of four council candidates who did not receive the backing of the Coalition for Economic Survival, now may be in better position to get its help next March.

“We think that Steve’s been doing a good job,” Gross said. “We’re pleased he’s coming around.”

Shock to Landlords

The rollback vote came as a shock to landlords, who had hoped to benefit by what they perceived as a schism between Heilman and Albert, who are rent control activists, and the other council members. “We felt betrayed,” said Sol Genuth, a spokesman for the Apartment Assn. of Greater Los Angeles. “Obviously the council members were under a lot of pressure.”

Genuth and other landlord spokesmen maintain that the rent law’s toughest provisions--the cap on vacancy decontrols, the rollback and the annual rent increase of 75% of the consumer price index--will lead to a severe deterioration of apartment maintenance.

Bringing up the specter of Santa Monica, where maintenance problems have been epidemic in apartment units since that city passed a rent control initiative in 1979, landlords insist that a similar result will occur in West Hollywood. “It’s the only way for apartment owners to recoup their losses,” said Tanquary. “They will provide only the bare essence of maintenance.”

To ward off that eventuality, the council added a unique provision to its rent ordinance: a strict set of maintenance standards. Once a rent control administration is in place, it will enforce maintenance standards that include apartment painting every four years and the replacement of drapes and carpets every seven years.

“It’s the most innovative part of the law,” said Councilman Alan Viterbi. “I think it will make sure that maintenance is kept up.”

Landlords agree the city may be able to enforce maintenance, but not the quality of maintenance. “They can’t get that specific with their enforcement,” Tanquary said. “You can’t prevent a landlord from buying cheap paints. Owners have a lot of discretion in the maintenance they can provide. They can buy $500 drapes or they can buy their drapes at Sears.”

Earlier Deterioration

Some city officials suggest that deterioration has already set in at many apartment houses. “Some of these places have had terrible maintenance for years,” said Barbara Grover, chief aide to council member Albert.

And Schulte suggested that if the city can show that maintenance standards are financially feasible for landlords, any drop in maintenance levels would be perceived as “a tactic on the part of the landlords.”

Innovation is not restricted to the rent law’s maintenance standards. The measure would also break new ground in providing eviction protections against the domestic partners of apartment tenants. Under the law, tenants could bring in one domestic partner or one relative without fear of eviction. That provision would provide some legal teeth for the domestic partnership law passed this year by the council and hailed by West Hollywood’s sizable homosexual community.

Another rarely seen provision would force landlords to pay relocation fees to tenants if tenants were being evicted so that landlords could move themselves or relatives into the vacated apartments. And landlords would also be required to place renters’ security deposits in interest-bearing accounts and refund the interest to tenants every five years.

Administration of the law would be handled by a five-member rent board. Unlike Santa Monica’s rent administration, West Hollywood’s board would not delve into policy matters. City officials expect administration costs to start out at about $750,000 a year, which would force the collection of an annual fee from tenants that might approach the $72 yearly fee collected by Santa Monica’s rent board.

But West Hollywood officials say they expect their board will not be as large as Santa Monica’s 45-member staff. Instead, it will probably number between 15 and 20 officials, with enforcement of maintenance standards handled by the city’s Building and Safety Department.

Despite those optimistic predictions, the proposal’s details and the administration burdens that may ensue have city officials girding for the worst. In a recent report prepared by West Hollywood’s rent control consultant, attorney Laurie Lieberman warned that the law would create an overburdened bureaucracy, troubled by frequent delays and late mailings.

The maintenance standard provision will also create problems, Lieberman noted, because of the extra time required for enforcement. “The attempt to extend regulation beyond rents and into unit maintenance creates substantial problems,” she said.

Swamped by Petitions?

She also warned that landlords might add to the problem by adopting the tactic of swamping the new rent board with hundreds of rent increase petitions. Tanquary and other spokesmen for landlords said they doubted that would happen. “I wouldn’t think they’d get more than a dozen petitions at first,” Tanquary said.

Still, city officials are bracing for a counterattack by landlords. Originally prepared to accept rent petitions in July, the council moved the date back to October “so the board will have more time to prepare for the landlords,” one council source said.

And city officials also expect dozens of lawsuits, most by landlords with individual complaints. “Most of the provisions have been already tested in court,” said City Atty. Jenkins, “and we feel that the more unique parts are on firm legal grounds.”

Jenkins said he would not be surprised if landlords sued the city to force an environmental impact study before the law was made permanent. Last week, attorney Steven Jones, who has worked with landlords in lawsuits against the Santa Monica rent law, said the absence of an environmental study was a serious flaw in West Hollywood’s ordinance.

Must ‘Look at Alternatives’

“An environmental impact report forces a city to look at alternatives that are less harmful than the course they are set on,” Jones said. “We think the rent control law as it stands now would have a strong detrimental effect on the housing stock in West Hollywood.”

On May 6, the council adopted a negative declaration, a brief document that sometimes takes the place of an environmental study if a legislative body believes a full study is not required. “We saw no reason for a full environmental study,” Jenkins said. “It’s another example of landlords attempting to bring up obstructionist-type arguments that have no merit at all.”

Jenkins said he viewed the demand for an environmental study as a prelude to a lawsuit. “I’m an optimist and, naturally, I’d like to see my client not have to go to court,” he said. “But I’m also a realist. This seems like a prelude to legal action.”

Projected Milestone Dates for Rent Law

- July 1: Apartment registration fee amount announced

- July 15-Sept. 15: Apartment registration period

- Aug. 1: Landlords allowed to give rent adjustmentnotices to tenants

- Aug. 1: Rent Board appointed

- Sept. 1: Rent adjustments permitted

- Oct. 1: Landlords allowed to petition Rent Boardfor further rent adjustments

- In October: Registration fees collected

Key Provisions of Proposed Rent Law

- Annual rent increases at 75% of the consumer price index (all apartment units built since 1979 and all units built in the future will be exempt from the entire rent control law).

- 10% rent increases allowed when an apartment is vacated, but only once every two years. Apartment is re-controlled after rent rise (rented single-family houses are exempted from vacancy decontrols and rents can be raised to any level after a house is vacated).

- Maintenance standards will be enforced, including requirements that rental units be painted every four years and new carpets and drapes be installed every seven years.

- Rents will be rolled back to levels that existed on April 30, 1984.

- A five-member rent board will be appointed to handle administration of the law.

- A tenant will be allowed to move one spouse, child, parent, grandparent, sibling or domestic partner into a rental unit without fear of eviction, and the new tenant can stay in the apartment even if the first tenant dies or is incapacitated.

- Tenants who have lived in an apartment more than 1 1/2 years are entitled to relocation fees if they are evicted because a landlord wants to move in or bring in a relative.

- Violations of the law are punishable by up to a $1,000 fine and a six-month jail term.