Council Takes 1st Step to Ease Rent Control : Santa Monica: A proposed Charter amendment has been ordered for the November ballot that would allow higher base levels for voluntarily vacated units.

The Santa Monica City Council this week took the first step toward a drastic revision of what is considered one of the nation’s toughest rent control laws.

The council voted 4 to 2 Tuesday night to direct the city attorney to draft a proposed City Charter amendment for the November municipal ballot that would allow rents on apartments voluntarily vacated to rise to new higher base levels.

Also, voluntarily vacated rent-controlled apartments already at those higher levels would be allowed periodic increases of between 10% and 20% in return for landlords meeting minimum maintenance requirements. City Atty. Robert Myers was instructed by the council to return with a recommendation containing specific increases. The council will vote on the proposal July 24.

Landlords who invoked these increases would have to agree not to use the state Ellis Act to go out of business for at least 10 years.

The proposed Charter amendment, based on a proposal by Mayor Dennis Zane, is in response to a growing number of landlords who plan to remove rental units from the housing market because they claim it is no longer economically viable for them to stay in business under the low maximum rents allowed by the city.

The owners of more than 1,000 units in Santa Monica have notified the city Rent Control Board that they intend to evict tenants and go out of business, as allowed under the 1986 state Ellis Act.

Zane and other rent control advocates are hoping the proposed amendment will offer voters an alternative to a landlords-backed initiative expected to be on the November ballot that would allow rents to rise to market levels whenever apartments are voluntarily vacated.

Zane’s proposals are similar to ones approved by Santa Monicans for Renters’ Rights, a tenants’ political group that Zane co-founded and whose members make up the majority on the City Council and the rent board.

Councilman Herb Katz, who was joined by Councilwoman Christine Reed in voting against drafting the amendment, had offerred an alternative that would allow rent to rise to market levels but would require landlords to pay the city 10% of the rent on each unit renting for more than $1,000 a month. The city would use that money to create a fund to subsidize low-income tenants.

Councilman William Jennings was absent from Tuesday’s meeting.

Zane’s and Katz’s proposals were sent to the rent board last month for review.

The rent board staff concluded that vacancy decontrol was a political issue that could not be addressed by the board. Staff also said that Katz’s proposal for 10% rent payment fell outside the purview of the Rent Control Board and that it was more appropriate for city staff to address.

The rent board staff also questioned whether landlords would be interested in participating in such a rent subsidy program when many landlords do not now participate in existing federal subsidy programs.

The rent board staff also disagreed with Zane’s proposed base levels.

Under Zane’s proposal, which is based on the average monthly rent of apartments that have been removed under the Ellis Act, rent for a one-bedroom apartment would be allowed to increase to between $475 and $525 when voluntarily vacated, regardless of its current monthly rent. A two-bedroom apartment would increase to between $600 and $675 a month.

Rent-controlled apartments that are vacated voluntarily and are already at or above the new levels would be allowed increases of between 10% and 20%, with the provision that for a specified number of years--between two and four, for example--no additional rent increase would be allowed when the apartments are voluntarily vacated again. Those landlords would only be allowed the annual general adjustment determined by the rent board.

In return, landlords would have to agree not to go out of business under the Ellis Act for 10 years and would have to meet minimum maintenance standards.

The rent board staff recommended increases tied to a level based on standards set by the federal Department of Housing and Urban Development. The levels proposed are 30% of half of the median income level.

Under this proposal, a one-bedroom would only be allowed to increase to $389, a two-bedroom to $462.

But many of the apartments would be allowed to nearly reach the level proposed by Zane with another allowable increase given to landlords who perform specified maintenance. For these maintenance items--such as painting or replacing carpets or appliances--a landlord would be allowed an additional $75 or 20% a month, whichever is greater.

This would increase a one-bedroom to $464 and a two-bedroom to $537.

But the Rent Control Board ignored some of its staff suggestions in making recommendations to the City Council on Tuesday night.

Rent board Commissioner Jay Johnson told the council that rents should be allowed to increase but left the specific amount to be determined later by the council and the board. Johnson also said that landlords granted increases should be required to set aside the second of every three vacated units for a low-income tenant.

The board agreed with its staff recommendation to allow additional rent increases of $75 or 20%, whichever is greater, for specific maintenance. Future increases on the same unit voluntarily vacated would not be allowed for five years, and then for only 10%.