Supporters of New Rent-Control Plan Face Uphill Battle
The effort to gain public approval of a Santa Monica Rent Control Board program, which allows landlords to sharply increase rents on some apartments in exchange for setting aside an equal number of rental units for the poor at lower rates, apparently will be an uphill battle.
Two weeks ago, Santa Monica’s largest landlord group, Action, overwhelmingly rejected the program.
Last week, a presentation by board members was met with skepticism by a political group made up primarily of renters.
“It’s well-intentioned, but not well thought out,” said a member of the audience after hearing details of the program. “You (the board) can’t even control what you have now. I think it is a pipe dream, a fairy tale.”
‘A Lot of Confusion’
“I’m not surprised,” said Susan Packer Davis, chairwoman of the rent board, after the meeting. “I expected the response to be mixed. There is still a lot of confusion.”
“It’s such a radical change,” said Wayne Bauer, a board member who negotiated details of the program with three landlords. “Those who are upset with it don’t really understand it.”
The board will have at least two more opportunities to ease the confusion over the program. The board will hold a public forum on the program Monday at 7:30 p.m. in the City Hall council chambers, and it will make a presentation to members of Santa Monicans for Renters’ Rights group on July 30.
But, if the reaction by about 90 people who attended last Wednesday’s monthly meeting of the Santa Monica Democratic Club is any indication, the program is going to be a tough sell.
The nearly two-hour discussion became boisterous at times with members of the audience heatedly questioning the board’s intent behind the program.
Bauer, who frequently debated with members of the audience, opened the discussion by trying to assure the mostly elderly crowd at the Retail Clerks Hall that the program was not a fait accompli. He said details are still being worked out, and the board will take a final vote on the program in August with hopes of implementing it in September.
Bauer said a program is needed to protect low-income tenants because the city has been unsuccessful in fighting the state Ellis Act, a 1986 law that allows landlords to evict tenants and go out of business.
No one knows for sure how many apartments remain empty because of the Ellis Act, but estimates range from several hundred to several thousand. It is some of those empty units, Bauer said, that he hopes will return to the market and be rented to low-income people under the program.
Protecting the Poor
Santa Monica has what is considered one of the toughest rent control laws in the nation primarily because landlords are not allowed to raise rents to market levels when tenants voluntarily move out. Bauer acknowledged that, after 10 years of rent control, many high-income professionals and not poor people were moving into the inexpensive apartments.
“If we don’t do something, you’re going to have a tough rent-control law that protects high-income people,” Bauer told the crowd. “These affordable apartments are not going to the people that really need them.”
The proposed program, called “inclusionary housing,” would be voluntary, but it would require landlords to sign a 10-year contract with the board. There would be a one-time opportunity for landlords to leave the program after two years.
Jim Baker, one of the landlords who negotiated with Bauer, said he expects about 50 landlords to participate in the first year.
Under the program, for each unit set aside for a qualified tenant at reduced rent, a landlord could raise the rent of a second unit, which has been voluntarily vacated, by $400 to $900 per month. The amount of increase permitted on the second unit would depend on its size and the income of the tenant of the first unit.
How Proposal Would Work
The rent for the poor tenant would be determined by a rate schedule tied to a percentage of the area’s median income, or by the apartment’s current rate, whichever is lower.
For example, a landlord may be forced to lower the current monthly rent of $480 to $320 for a poor tenant, but could raise the rent of a second unit from $480 to $1,180. The incentive for the property owner is that, instead of collecting $960 for the two units, the landlord could collect $1,500. The appeal for the rent board is that an apartment would be protected for a low-income tenant.
“You have to give them (landlords) money, but we’re getting a lot more in return,” Bauer said. “The additional money the landlord collects is nothing if we can keep a family off the streets.”
Several members of the audience complained that the program squeezes out the middle class.
Bauer responded that the program is not designed to solve all housing problems. “We couldn’t take care of the whole spectrum of tenants,” he said.
Concerns on Board
Although the presentation was directed at winning the support of tenants, some work is still needed to get the full support of the board.
Board member Dolores Press said she generally supports the program but is concerned that all the empty apartments returned to the market will go at the higher rates.
Still, the board won over at least one person.
“I was very skeptical before I came to the meeting,” said Mona LaVine. “But now, after hearing about it, I’m very enthusiastic.”
