Rent Control Most Controversial Aspect of 3-Year-Old City : West Hollywood--Southland’s <i> Enfant Terrible</i>

Editor’s note: Rent control was the rallying cry three years ago when the residents of West Hollywood, mostly apartment dwellers, voted to incorporate. The new City Council, dominated by tenants, quickly passed one of the nation’s strictest rent control laws. That was just for openers. West Hollywood, long a haven for gays, is hardly your typical town.

It once was home to F. Scott Fitzgerald, a hangout for Bugsy Siegel, an unincorporated haven of gambling and prostitution just outside the city limits of Los Angeles and stuffy Beverly Hills.

Three years after apartment dwellers voted in the name of rent control to make a legitimate city of the place, West Hollywood is the bejeweled enfant terrible of Southern California.

Few cities can boast more glitter. Crowded into 1.9 square miles are 28 nightclubs, 20 art galleries, 8 theaters, 650 design firms and 100 restaurants, including some of Southern California’s finest--Chasen’s, Trumps, Spago, Scandia.

$2.6-Billion Revenue Base

Its 37,500 residents--on the lower end of the state’s income scale--are in charge of a $2.6-billion revenue base equal to the gross national product of the kingdom of Nepal.

West Hollywood had long been a haven for homosexuals who preferred the laissez-faire style of the county sheriff to the stern surveillance of the Los Angeles Police Department. There is an annual Gay Pride Parade.

After incorporation, the gay-dominated City Council astonished the bourgeoisie by outlawing discrimination against homosexuals, making an official celebration of Halloween and giving “domestic partners” rights formerly reserved for married couples, such as hospital and jail visitation privileges.

The council, attempting to be fair to a large population of Jews, also stripped Christmas of its status as a city holiday and sent out officers to issue parking tickets as though Dec. 25 were any other day.

Eyebrows were raised further when Valerie Terrigno, the nation’s first avowed lesbian mayor, resigned her council seat in April, 1986, after her conviction for embezzling money from a counseling center before she became mayor.

Meanwhile, rolling in cash that previously had disappeared into county coffers, the city increased social services spending sevenfold, with large chunks going to programs for AIDS patients, the homeless, the elderly, homosexuals and Russian Jews, who make up nearly 13% of the population.

Violent Crimes Decrease

Violent crime has fallen, and streets are cleaner thanks to increases in law enforcement and public works budgets. There’s an $11-million surplus, and plans are to use it to build civic, senior and recreational centers.

Rent control was and remains the main issue, however. Behind the city’s glitzy facade, fewer than one-third of West Hollywood’s households have income exceeding $20,000 a year, compared with 45% of Californians statewide. Twenty-six percent of the city’s residents were over 60 at the 1980 census, while senior citizens made up only 14% of the state’s population.

When rents began to double and triple for apartments in other Los Angeles County communities and the county announced it would allow its weak rent control ordinance to lapse, West Hollywood’s tenants, who make up 85% of the community’s population, organized. In November, 1984, they voted to form a city.

The tenant-dominated council quickly passed one of the nation’s strictest rent control laws, limiting annual rent increases to 75% of the rise in the consumer price index, making maintenance mandatory and requiring landlords to make relocation payments of up to $15,000 to tenants forced out by condominium conversions.

As a result, boiling resentments underlie West Hollywood’s municipal well-being.

“You see apartments that would bring $1,000 on the market being rented for $200,” said Jim Pifer, an agent at Fred Sands Realtors.

“There’s absolutely no justice for landlords,” said Charles Isham, executive vice president of the Apartment Assn. of Greater Los Angeles, a trade group representing many West Hollywood landlords.

Fair Return Claimed

Rent control advocates insist that landlords are making a fair return.

“No one’s selling their property because they’re not making a profit,” said Larry Gross, executive director of the Coalition for Economic Survival and godfather of Los Angeles County’s tenant movement.

Fewer than 200 units have been taken off the market since rent control took effect, said Richard Dorsey Muller, head of the city Department of Rent Stabilization.

Landlords say they cannot afford to sell. Apartment building prices have fallen from 5% to 50%, Pifer said. With their equity wiped out, West Hollywood’s landlords are biding their time, hoping rent control will be eliminated in court, he said.

Previous legal challenges to rent control have failed. But this year, heartened by two U.S. Supreme Court decisions requiring governments to compensate landowners deprived of the use of their property by zone changes or access requirements, landlords in California, Massachusetts, New York and New Jersey mounted a new effort under the banner of the Coalition for the Defense of Free Enterprise.

The newly formed group filed a lawsuit in U.S. District Court in Los Angeles in September on behalf of Lena Schnuck, an 89-year-old landlady refused permission by the Santa Monica rent board to evict a tenant in order to give the apartment to a live-in nurse.

Coalition spokesman Geoffrey Strand said if the Schnuck case is dismissed, five more lawsuits--all based on the premise that rent control is an unconstitutional taking of private property--are ready to go.

For now, however, the landlords’ challenge is no more than a distant ink spot on West Hollywood’s rainbow.

“Of course, one has to be somewhat concerned when you have a more conservative court,” Gross said. “But we feel rent control is constitutional and will be upheld.”