Hearing Monday : Santa Monica Faces Rent Control Test

If her house had been built one block east--in Los Angeles instead of Santa Monica--90-year-old Lena Schnuck would not now find herself at the heart of a legal battle between landlords and the keepers of Santa Monica’s strict rent control law.

Schnuck’s case has become the vehicle for a group of landlords seeking to overturn Santa Monica’s rent law in federal court. The organization hopes the case will be ammunition for a broader nationwide legal assault on rent control.

The opening hearing is scheduled Monday in U.S. District Court. Schnuck’s lawyers are demanding a jury trial.

Eviction at Issue

Schnuck, who owns an eight-unit apartment house on Franklin Street, contends in her lawsuit against Santa Monica that the city’s rent control law prevents her from evicting a tenant, depriving her of “significant property rights.”

Echoing arguments that have been used in recent U.S. Supreme Court cases, the suit alleges that rent control constitutes a “taking” of property in violation of the Fifth Amendment, which says private property cannot be taken for public use without just compensation.

“This is something we’ve wanted to do since the start of rent control: Get a strong federal case . . . that (challenges) most aspects of rent control,” said K. B. Huff, chairman of the board of the Foundation for the Defense of Free Enterprise, the year-old organization that is sponsoring the Schnuck suit.

“I have every faith that we’re going to be successful.”

In its response, Santa Monica labeled Schnuck’s case a “transparent . . . shotgun approach.” City attorneys are moving to dismiss the case.

Santa Monica’s attorneys go into court buoyed by last month’s U.S. Supreme Court ruling that upheld a San Jose ordinance allowing tenants to contest rent increases greater than 8% by demonstrating “economic hardship.”

The Schnuck case “is their attempt to raise again innumerable constitutional challenges that have been rejected and were rejected again” in the San Jose case, said Deputy City Atty. Barry Rosenbaum, who will argue the case.

“These are futile challenges as far as we are concerned. We are confident the court will see it that way.”

Landlord advocates on the other hand point to another Supreme Court decision on March 8, involving a Santa Barbara case, that cleared the way for a trial on the constitutionality of rent control laws for mobile homes.

Contradictory Signals

“The U.S. Supreme Court has sent what some may think are contradictory signals,” Sherman Stacey, Schnuck’s lawyer, said. “But a careful reading of (Chief Justice William H.) Rehnquist’s decision (in the San Jose case) does not indicate that all forms of control of rent are acceptable.”

The Foundation for the Defense of Free Enterprise is based in Santa Monica but claims membership from apartment-owner groups throughout the state. It plans suits in addition to the Schnuck case, all of which would be fought in federal court to remove the issue from local politics, foundation spokesmen say.

Santa Monica--where 80% of residents are renters--voted rent control into law in 1979. The Santa Monica law is considered one of the strictest in the nation because it does not include vacancy decontrol, which allows rent to be raised when a tenant vacates an apartment voluntarily.

Tenant Protection

Proponents of rent control maintain it guarantees affordable housing for low- and middle-income people and offers other protections for tenants.

In an effort to strengthen the law, Santa Monicans for Renters’ Rights, the political faction that championed rent control and dominates the Rent Control Board, plans to discuss ways to “close up loopholes” in the law in a meeting scheduled for today.

The 15-count Schnuck suit also contends landlords are being forced to bear the brunt of the subsidizing of low-income tenants--tenants, the suit alleges, who often could afford higher rents.

‘Captive Minority Group’

Landlords in Santa Monica have become a “captive minority group (singled out) to bear the cost of the social redistribution of wealth when the beneficiaries are often wealthy and persons of substantial means,” the suit alleges.

Schnuck, a widow who immigrated to the United States from Germany after World War I, lives in one of her building’s two-story, two-bedroom apartments.

After she suffered a stroke last summer, her family sought to evict a tenant from the building’s sole one-story, two-bedroom unit so that she could occupy it. Partially paralyzed and requiring 24-hour nursing care, Schnuck needed one-level living quarters, her family and lawyers contend.

But under the law, a landlord cannot evict a tenant to occupy that tenant’s apartment if the landlord already lives at another unit in the same building.