Evictions Seen as Threat to Santa Monica Rent Law
Santa Monica landlords say the recent decision by the owner of a large beachfront apartment building to evict more than 200 tenants provides the clearest evidence yet that the city’s stringent rent-control system is failing to serve low-income tenants and needs to be drastically changed.
Unless the city changes the rent-control law to allow rents to rise to market levels whenever a unit is voluntarily vacated, the landlords say, there will be a surge in evictions by landlords who will choose to go out of the business rather than continue to accept the low financial returns the city allows them.
The landlords’ argument in favor of vacancy decontrol is a familiar one in Santa Monica, but it is gaining some credence as a growing number of property owners follow through on their threats.
Since the enactment in 1986 of a state law called the Ellis Act that limits the power of rent-control boards to force landlords to stay in business, nearly 1,000 of the 33,000 rental units subject to rent control in Santa Monica have been taken off the market--with more than half of those withdrawals occurring in the last nine months.
“There is no alternative,” said Carl Lambert, an apartment owner and past president of a landlords group called Action. “If vacancy decontrol is not instituted, within the next two years, you’re going to lose 5,000 to 10,000 units under Ellis. That’s not a threat, that’s reality.”
The absence of vacancy decontrol is the main reason Santa Monica’s rent-control law is considered among the toughest in the nation. Leaders of Santa Monicans for Renters Rights, the tenants’ group that dominates city politics, say they will continue to resist decontrol because they say it would be the death of affordable housing in the beach city.
“I cannot imagine any circumstance where I would support vacancy decontrol,” said Dolores Press, a member of the city Rent Control Board who was elected with SMRR backing. “It would be suicide for rent control in Santa Monica.”
“With vacancy decontrol the landlords are out there doing whatever they want,” said rent board Chairwoman Susan Packer Davis. “We might as well pack our bags and go home.”
The newest round of debate was spurred by landlord Robert Braun’s notification to the rent board Jan. 25 that he intends to evict the tenants of the 178-unit Sea Castle Apartments on the Promenade.
City officials initially said more than 400 tenants lived in the Sea Castle, but Braun’s attorney, David Shell, said there were just 212. Under the rent-control law, Braun is required to pay each evicted tenant a relocation fee of $2,000 to $3,000, depending on the size of the unit.
Shell dismissed speculation that the eviction notification was a ploy to use as leverage in litigation with tenants. “The tenants are going to have to seek other housing,” he said.
Shell declined to say what plans, if any, Braun had for the Sea Castle. Its zoning classification is R-3, a category that permits apartments or condominiums.
In response to the eviction notice, Mayor Dennis Zane and his City Council colleagues have directed the city’s lobbyist to seek changes in the Ellis Act from the state Legislature. The council also directed the city attorney to prepare recommendations for increased relocation fees for evicted tenants.
But Shell said changing the Ellis Act or increasing relocation fees is not going to stop other landlords from getting out of the rental business.
“Their reaction is so typical,” he said of the council’s response. “Somebody does something that the law allows, and they want to screw us down tighter. But they are going to have to reevaluate their Neanderthal mind set. Denny Zane doesn’t have the answer. I think ultimately it will be decided at the ballot box.”
Considering that renters compose about 80% of the city’s population, landlords appear to be a long way from achieving a significant voice in city politics, but there are indications that some tenants are starting to think that vacancy decontrol might merit a new look.
James Mulryan, who has lived at the Sea Castle for eight years, acknowledged that there are not many incentives for landlords--particularly those with historically low rents--to stay in business.
“The way it stands now, many landlords are not getting a fair return on their money,” Mulryan said. “I think the majority of the tenants in this building, if certain improvements were made, would favor vacancy decontrol if the landlord agreed not to ‘Ellis’ the building.”
Sharon Gilpin, another Sea Castle tenant, also said that perhaps city officials should take a new look at vacancy decontrol.
“Vacancy decontrol is not without its problems, but (city officials) should be willing not to be so rigid with their first assessment and be willing to put aside all those sacred cows,” Gilpin said. “There is a crisis in Santa Monica.”
Still, rent board members are adamant about their opposition to vacancy decontrol.
“It is so antithetical to what rent control is,” said board member Wayne Bauer. “You would be removing affordable housing faster than with Ellis.”
“I am vigorously against vacancy decontrol,” said board member Eileen Lipson. “The situation is very serious, and I am very concerned. But I don’t want to risk the other 30,000 apartments.”
Davis, the board chairwoman, said landlords and tenants should give the board’s Incentive Housing Program a chance to work. The program, unveiled last year with much fanfare as a significant compromise, allows landlords to raise rents substantially on some units if an equal number of units is set aside for rent at low rates to qualified low-income tenants.
So far, however, the city has been unable to get the program off the ground. Julie Lopez Dad, a rent-control board member who cast the deciding vote in favor of the incentive plan last October, resigned in December, and the remaining four board members have been unable to agree on a new appointee.
The deadlock apparently is centered on the Incentive Housing Program. Davis and Bauer want someone who will support the program, while Press and Lipson, who voted against the program, want someone who will look at the program with an open mind.
Landlords for 15 properties have signed up to participate in the program, but applications must be approved by a majority of the rent board.
If the board is unable to agree on a new member, the matter will not be decided until the November city election, when three of the five seats on the board will be decided.
Three of the seven City Council seats are also up for election in November.
Attorney Shell said he thought the growing threat of Ellis Act evictions might work in the landlords’ favor in the election.
“The (city official’s) concern for affordable housing is purely political,” Shell said. “They do not win elections by that much any more. You look at where the properties that are being ‘Ellised’ and you see they are in areas where the current politicians have gotten support. You eliminate the people, you eliminate the power.”
In the 1988 City Council election, a candidate backed by the landlords trailed one of the winners by just 835 votes, about 6%. In the rent-control board election the same time, however, a landlord candidate drew less than half as many votes as the candidates on the SMRR slate.
Bauer, the board member, acknowledged that if a large number of tenants are evicted under the Ellis Act, the balance of power could be tipped against rent control.
“We don’t win our elections by a large margin,” he said. “We not only face losing affordable housing, we may lose elections. We could lose so many tenants that it could tip the balance the other way.”
Lambert said he believes city officials realize that vacancy decontrol is the only answer to stopping the growing evictions under Ellis, but are afraid to admit it.
“They are thinking the same thing, but they haven’t come out of the closet,” he said. “If they would just admit that vacancy decontrol is the only solution to Ellis then something would get done. How many tenants’ lives are they going to play with before they finally admit the inevitable that vacancy decontrol is the only solution?”
