Rent Control at a Crossroads in Santa Monica : NEWS ANALYSIS

Blame it on the lure of the ocean breezes and speculators capitalizing on the condo craze.

Berate the Ellis Act as the scourge of rent control in Santa Monica. Or bless it as a triumph over tyranny.

Point to the apartment around the corner that hasn’t been painted since “harvest gold” was a trendy color, with rents as outdated as the decor.

No matter how you spin it, the bottom line reads the same: Santa Monica’s rent control law is at a perilous crossroads. And a group of its staunchest supporters is trying to save it by giving landlords a little of what they want--more leeway to raise rents.

The Santa Monicans for Renters’ Rights majority on the City Council is preparing a November ballot measure that would allow limited rent increases when units are voluntarily vacated, a surprising shift in strategy.

For rent control purists, vacancy decontrol has long been viewed as sacrilege, and the council members are being accused of selling out to save their political hides.

Susan Packer Davis, chairman of the Santa Monica Rent Control Board, said council members are “worried and scared.”

She added: “It says to me that the (Renters’ Rights) organization is not what it used to be and does not represent the best interests of tenants in this city.”

There is no mystery why the organization is backing a measure to dilute what is usually called the nation’s toughest rent control law, even if Mayor Dennis Zane prefers to talk of “liberalizing” rent control, not watering it down.

Santa Monicans for Renters’ Rights wants to defeat the more sweeping decontrol proposed by landlords, and its private poll indicates that the group can succeed with a less onerous measure, Zane said.

If only the landlords’ measure were on the ballot, he said, the fight to defeat it would be tougher. That measure, qualified by a petition drive, allows rent on vacated apartments to rise to market levels.

City Councilman David Finkel agreed. “Rent control is an experiment,” he said. “What we’re really doing is rethinking rent control. . . . I really think a fair degree of people will think a change is in order.”

That is because, Finkel said, some rents were frozen 11 years ago at a lower-than-market rate, and it is fair to adjust them upward.

While Zane would not release the poll’s findings, Rent Control Board member Wayne Bauer said more than half of the people polled want rent control changed. The unanswered question is how.

The City Council continued to tinker with the wording of the ballot measure last Wednesday at a continuation of its Tuesday night meeting.

Council members made the measure even more desirable for property owners by dropping a requirement that landlords promise not to go out of business for 10 years. Instead, landlords would have to agree to a three-year tenancy to take advantage of rent decontrol. A final vote on the ballot measure is set for Aug. 7.

As for the landlords, they finally see an opening because tenants have something to fear more than a rent increase: the threat that the landlords will invoke their rights under the state Ellis Act and go out of business.

Apartment owner Al Kindt said the landlords’ strategy is to convince fearful tenants they will not be harmed by vacancy decontrol, which won’t affect them--or their rent--as long as they stay put. The larger threat to tenants is the Ellis Act, which could put them out on the street in a city where finding a vacant rent-controlled apartment isn’t easy.

Landlord Chester Hoover said nothing less than total vacancy decontrol will stem the tide of apartment owners going out of the rental business because rents are too low to make a profit. “It’s going to be Katie bar the door, and you heard it right here,” he said.

An estimated 1,000 units have already gone or are going the Ellis Act route, with condominium speculators buying the usually small apartment buildings, then erecting new condominiums. Many observers, however, say the Ellis craze has temporarily slowed while everyone waits for the voters to speak in November.

Zane said the driving force behind the Ellis phenomenon is the lucrative condo market. “The high value of the condo market in this city simply provides a lure,” he said.

While Zane and his allies on the council are hoping their decontrol measure will provide sufficient incentive to keep some landlords in business, that view is not shared by some, including City Atty. Robert Myers. “All the measures are bad, but operating under the Ellis Act is bad, too,” Myers said at an unusual joint session of the Rent Control Board and City Council on July 19.

In a later interview, Myers said: “I do not think this proposal or any of the proposals before the City Council will have a material effect on when someone uses the Ellis Act. There’s no evidence” to think otherwise, he said.

Myers said he favors using land-use law to address concerns about overdevelopment of condominiums at the expense of low-cost housing stock.

Davis agrees that the decontrol measures are on the wrong tack, both philosophically and as a strategy to halt the loss of affordable housing. “I believe vacancy decontrol should be fought at all costs,” Davis said. “If the city was really serious about stopping Ellis-ing, they’d put a moratorium on condo development tomorrow.”

Veteran council member Christine Reed, meanwhile, is watching the Renters’ Rights camp struggle with the shifting winds of rent control and politics. “It all means the radical left is coming to finally understand the realities of housing economics,” she said. “They’re getting more reasonable. I think it’s painful for all of them.”

It is divisive, emotional and rarely amenable to compromise. As a political issue, rent control is to Santa Monica what abortion is to the United States at large. Here are excerpts from recent interviews and debates in Santa Monica showing some of the range of opinions:

“It all means that the radical left is coming to finally realize the realities of housing economics. They’re getting more reasonable. . . . I think it’s painful for all of them.”--Councilwoman Christine Reed “Something has to be done to liberalize the rent control law. . . . When the condo market is crazy it creates crazy dynamics. . . . The high value of the condo market in this city simply provides a lure.” --Santa Monica Mayor Dennis Zane “The people who voted for rent control in the first place are being sold out. (Santa Monicans for Renters’ Rights) is not what it used to be and does not represent the best interests of tenants in this city. . . . If the city was really serious about stopping Ellis-ing, they would put a moratorium on condo development tomorrow.” --Rent Control Board Chairwoman Susan Packer Davis “What we’re really doing is rethinking rent control. . . . I think a fair degree of people will say a change is in order. . . .”--City Councilman David Finkel “All the measures are bad but operating under the Ellis Act is bad too. . . . I do not think this proposal or any of the proposals before the City Council will have a material effect on when someone uses the Ellis Act (to evict tenants and go out of the rental business).” --Santa Monica City Atty. Robert Myers “If you think you can offer us less than total vacancy decontrol, you’re wrong. . . . It’s going to be Katie bar the door--and you heard it right here.” --landlord Chester Hoover “What we’re offering the people is less than they have now.”--Rent Control Board member Wayne Bauer