Plan Would Let Some Rents Rise, Cut Others

The staff of Santa Monica’s Rent Control Board has recommended that board members vote to begin work on an experimental program that would allow rents on some apartments to rise and at the same time provide more housing for low-income people.

A proposal to appoint a team of tenant and landlord leaders who would design the pilot program, dubbed inclusionary housing, is on the agenda for the board’s Thursday meeting. Although rent board administrator Howell Tumlin said the program is the board’s top priority, there is no indication of how board members will vote.

Landlords participating in the program involving 500 to 1,000 units would be required to lower rents for low-income tenants. In return, owners would receive permission to raise rents on some units when they are vacated.

“The board hopes that the program will provide affordable housing that is actually rented to low-income people,” Tumlin said. “They also hope it will provide some assistance to owners who feel they face some financial hardship.”

The rent board staff has recommended that plans for the pilot program be presented to the board by February. If the test program is judged a success, the board may move to make the new plan available citywide.

The rent board staff has written a report that outlines a variety of forms that the new program might take. The report recommends that low-income people pay no more than 30% of their income in rent and that landlords who force out tenants so they can raise rents on vacant units draw strong penalties. The report did not explain how a landlord will determine what is 30% of a tenant’s income.

The report also does not specify how many apartments in a building should be decontrolled for every apartment that is rented to a low-income tenant. It also does not specify whether landlords should be able to raise rents on decontrolled apartments to whatever the market will bear or whether there should be some limit on allowable rent increases.

“The report offers the board a smorgasbord of different variations,” Tumlin said. “This is a program with trade-offs. What the balance is between incentives offered to owners . . . and low-income units can only be determined by community-wide discussion of the issue,” he said.

Landlord Geoffrey S. Strand, who is on the board of a local owners’ group, said he would be willing to participate in an inclusionary housing program if the terms were reasonable.

“We hope that it will prove fruitful, but the rent control board has for seven years had a 100% batting average of never offering anything that substantially solves the problems that radical rent control creates,” he said.

James Baker, a leading landlord spokesman, said inclusionary housing “potentially is a very meritorious concept. But we think that whatever program is negotiated should be attractive to a wide spectrum of owners, not just a few desperate people.”

Baker recommended that the board skip the pilot program and implement a citywide inclusionary housing program designed by small teams of tenant and landlord leaders.

“If there is a will to negotiate a program that will be fair to both sides of the housing equation then there should be no need for a pilot program,” he said.

Tenant attorney Lisa Monk, who is also a member of the Tenant Aid Project, said inclusionary housing is “a terrific idea.”

“The reason I like it very much is it rewards landlords who rent to low-income people,” she said. “The problem is that landlords will have an incentive to evict people in units on which they could raise rents.”

However, Monk said that as long as the city maintains its strict eviction controls, it would be difficult for landlords to abuse the program.

Landlords in Santa Monica cannot evict tenants unless the building is uninhabitable, a tenant does not pay rent, a landlord needs the unit for his family or an owner wants to empty his building and leave the rental business.

“It will be a fine line between how many restrictions on landlords are enough and how many are too much,” Monk said. “But the idea is excellent and I think the technical problems can be worked out.”