In a decision that caught West Hollywood landlords by surprise, the City Council has voted to reduce the rent increase that tenants will pay in their first year under the city's new rent control law.
Although the formula in the city's new rent law would have permitted a first-year rent increase of 4.75%, the council last Thursday voted 4 to 1 to further slash this year's rent hike to 3%.
Landlords, who have been meeting this week to formulate a response to the passage of the new permanent rent control law, were caught unprepared by the vote. Representatives of apartment-owner groups have been present for every major rent control vote in recent months, but none was on hand last Thursday.
"This came out of the blue," said Grafton Tanquary, who heads the West Hollywood Concerned Citizens lobbying group and has been the landlords' main link with the council. "The city even printed all its new rent control forms with the 4.75% figure. This was totally unjustified."
The new rent control law permits a yearly rent increase equal to 75% of the annual rise in the consumer price index. Because the city rolled back rents to April 30, 1984, city officials originally applied the consumer price index formula to a 16-month period stretching from that date to Sept. 1 of this year (when the rent control law will go into effect).
Under the formula, the 4.75% increase would have been allowed. But in recent days, the council has come under pressure from the Coalition for Economic Survival, a tenant activist group, and from individual renters.
"We were concerned about that 4.75% figure," said Larry Gross, the coalition's coordinator. "Here you have the City of Los Angeles, which supposedly has a much weaker rent control law, and they're allowing only a 4% rent hike this year."
Although Gross agreed that the 4.75% figure was correctly calculated according to the new rent law's consumer price index formula, he said many tenants were uncomfortable with a rent hike higher than Los Angeles' increase. "Sure, it's a matter of perception," he said, "but people were wondering what was going on here."
Councilman Steve Schulte, who introduced the motion to cut the rent increase, justified it by saying that "the 3% range was what we've been discussing all along. I think people were dismayed when they began realizing the first rent increase would be 4.75%."
But some political observers suggested that Schulte, who won support from Gross and tenant activists for his earlier vote to roll rents back to April, 1984, after they had already been rolled back to August, 1984, was trying to strengthen his base among renters for next year's election.
Although Schulte was the only council member among the five who failed to receive Gross' support in last year's election, he appeared to score well in a council "report card" released this week by Gross' coalition.
Council members Helen Albert and John Heilman, who are also members of the coalition, came in on top of the report card. Schulte finished third, with what Gross considers a "respectable" score.
"I think Steve did well on the scoring," Gross said, adding that he felt all five council members "passed."
Although the coalition has not taken an official stance on next year's election, Gross said Schulte is perceived as a tenant advocate. "At this point, I don't see any reason why we shouldn't support him," Gross said.
Alan Viterbi, who was ranked fourth in the coalition's survey (Mayor Valerie Terrigno received the lowest score), was the only council member who voted against the first-year rent reduction. "We adopted the rent control law with 150 people in the room, and then, with the cameras turned off and no one around, we go back on our word," he said.
Viterbi said he worries that the vote to reduce the rent increase could set a precedent for future council action. "It means that what we agree on in our law is meaningless," he said. "Every time we come under some pressure, are we going to turn around and keep changing the law?"
Tanquary, too, said he expected the rent control law to "undergo constant revision. There will be constant chaos. It shows that it's impossible for this council to make a decision and stick to it."
Tanquary met with landlord organizers Wednesday night to discuss the new ordinance and how to respond to its intricate provisions. This week, the city began a registration period for landlords, which will last until Sept. 15.
So far, according to city officials, the registration (which is being conducted in Hall B of Plummer Park from noon to 8 p.m. Monday through Friday) has attracted few landlords. Temporary rent control administrator Adam Moos attributed the low turnout to the fact that the city has yet to mail out letters explaining the new law.
"I expect we'll get going in the next few weeks," Moos said.
He added that landlord reaction to the law has been uniformly grim. "We haven't had too many say they love the law," he said.
And in several cases, Moos said, landlords' anger has boiled over, including one apartment owner who "threatened to blow me away." A sheriff's deputy has since been stationed at the Plummer Park Hall where Moos is working on registration.
Staff Will Expand
The small rent control administration, which Moos now heads, will eventually expand into a staff of 20 to 25 workers. Expecting rent control administrative costs to be at least $1.15 million in the first year, the council voted last week to collect a $48 fee this year from tenants to pay for the rent board.
Moos said the fee (which will be paid this fall by landlords, who will then be reimbursed by their tenants) will probably cover most of the administrative costs. But Moos added that the council is trying to develop standards to exempt low-income and handicapped residents from paying the fee.
Moos estimated that the exemptions could mean a loss of up to $200,000 a year, which could be made up from the city's general funds. "The city is in good enough financial shape that we won't need to worry," he said.
The rent control administration's budget could also be affected by the number of lawsuits filed against the city by angry landlords. Within the $1.15-million figure, the city has allocated at least $90,000 for legal fees. But Moos and other officials do not expect to contend with nearly as many lawsuits as the City of Santa Monica, which has had to defend itself against more than 300 anti-rent control lawsuits.
In recent meetings, Tanquary has suggested that landlords might sue to force the city to prepare an environmental impact study. Tanquary said he and other landlord organizers would be meeting this week with their lawyers to decide whether to respond legally to the new rent law.