Vacancy Decontrol Avoided by Council in Rent Law Change

Hundreds of tenants packed the Los Angeles City Council chambers Wednesday as council members passed proposals to tighten the rules on some types of rent increases but did not deal with more substantive changes proposed for the decade-old rent stabilization law.

“They’re afraid to say where they stand,” said a frustrated tenant, Bea Lifshin of Woodland Hills after the three-hour hearing and council debate.

Landlords, far outnumbered by renters, expressed displeasure with proposals to further restrict evictions and to limit improvement costs that can be recouped from tenants.

Missing from Wednesday’s session was any action on what is perhaps the most controversial aspect of the city’s rent control ordinance--its so-called “vacancy decontrol” provision. That allows landlords to charge whatever rent the marketplace will allow once a tenant voluntarily leaves an apartment. The law’s limits on annual increases apply to the new tenant--but with the higher rent level as the base.

“Nothing is doing more to diminish the stock of affordable housing and the rapidly escalating rents,” said Councilman Zev Yaroslavsky, who was the only council member who wanted to discuss the decontrol provision.

Largest Turnover

Studies have shown that 82% of the city’s 475,000 rent-controlled units have been decontrolled at one time or another and that rents have jumped more than 100% since 1980. The largest turnover has occurred in the Wilshire area, the Westside and the San Fernando Valley, according to Barbara Zeidman, director of the city’s rent stabilization division. Most of the estimated 300 tenants in the audience were from those areas.

The council did adopt several stricter rules for rent increases based on improvements landlords make to apartments, the costs of which are passed on to tenants.

For example, the council approved a $55-per-month cap and six-year-limit on the amount of capital improvement costs landlords can charge to tenants. It did not, however, vote on two motions designed to clarify what qualifies as a capital improvement.

Additionally, the council eliminated a provision of the law that allowed landlords to get their apartments removed from rent controls if they spend between $10,000 and $17,000 in “substantial renovation,” depending on the size of the unit. The “substantial renovation” clause has removed about 2,294 apartments from the rent control ordinance, especially in neighborhoods that are recently becoming more popular with middle-class tenants, Zeidman said.

The council also voted to make it slightly harder for landlords to evict tenants to do what is known as “major rehabilitation,” at a cost of at least $10,000 per unit. Tenants charged that this has been used as a tool for landlords to escape rent controls. More than 150 in the City Hall audience were from the 800-unit Lincoln Place Apartments in Venice, where tenants have been threatened with this kind of eviction. But two years ago the council placed a moratorium on major-rehabilitation evictions, pending the review that resulted in Wednesday’s vote.

In considering the major rehabilitation issue, the council adopted a proposal made by Councilwoman Gloria Molina to allow major rehabilitation evictions to proceed if 90% of the repair work done requires a city permit.

‘Will Not Stop Abuses’

Without some provision for such renovations, Molina argued, “landlords will probably demolish these buildings.”

But tenant leader Larry Gross, executive director of the Coalition for Economic Survival, told the council: “This will not stop the abuses.”

Almost all changes require permits, he claimed. Later, Milford Bliss, head of the Department of Building and Safety’s bureau of community safety agreed.

“A lot of chicken stuff does require a permit,” he said. “For an air conditioner you need a permit. Expensive cabinets need a permit.” His office had asked the council to specify that the 90% requirement be for permits on work that would “maintain habitability,” he said, as opposed to amenities. “But I guess that didn’t happen.”

The council also added a requirement that 25% of the rental units be returned to their former rent levels after the work is done, and that tenants who had lived in the building for the longest period have first preference to move into them.

Landlords Criticize Action

Landlords in the audience criticized the council action and said owners would now be discouraged from improving their properties. “You want to create another New York City, keep passing this type of legislation,” said Dan Faller, president of the Apartment Owners Assn.

The city’s 10-year-old rent stabilization ordinance calls for City Council review, which was to have been done last year. But the matter was delayed in the Governmental Operations Committee, chaired by Councilman Michael Woo. The issues considered Wednesday were the first to come to a full council vote.

The vacancy decontrol provision, a major issue in the battle between landlords and tenants, was not scheduled for consideration, Woo said, because he did not believe “there’s a consensus on the council.”

“If we are cracking down on the ability of landlords to pay for improvements,” he added, “vacancy decontrol is one of the few mechanisms available to apartment owners to pay for improvements.”

Council members also avoided action on several other proposals regarding capital improvement pass-throughs.