Rent Control Plays 2nd Fiddle, With Plenty of Discord : Santa Monica: Homelessness and development now overshadow this perennial election issue, but 5 of 10 ballot measures deal with rent control or housing. This time around, landlords have some leverage.

After dominating Santa Monica politics for more than a decade, rent control has been eclipsed by homelessness and development as an issue in the Nov. 6 city election.

But let’s understand something: This is still Santa Monica, which means if there is a local election, then rent control is still a contentious subject. The tough rent-control laws that earned the city the nickname “the People’s Republic of Santa Monica” are still in effect. And landlords still despise the laws and are still trying to bring the system down.

Half of the 10 ballot measures before voters deal with rent control or housing issues. Supporters of rent control contend that a sixth measure--one that would make the city attorney’s office an elected position rather than one appointed--is also related to rent control because it is essentially an attack on City Atty. Robert M. Myers, who authored the city’s rent-control law.

In this election, the rent-control fight primarily revolves around two competing ballot issues, one sponsored by landlords and the other by their longtime adversaries, Santa Monicans for Renters’ Rights, the tenant political group commonly known by its acronym SMRR.

Tenants make up 70% of the city’s population, and in past elections they have given their overwhelming support to SMRR and its candidates.

This time, however, the landlords have some leverage they have previously lacked, and their measure has been carefully crafted to appeal to the self-interest of existing tenants.

Proposition U, placed on the ballot after landlords collected nearly 12,000 signatures on an initiative petition, would allow rents to increase to market levels on units voluntarily vacated. The fact that apartments remain subject to rent control even when voluntary vacancies occur is the primary reason that Santa Monica’s rent-control system is regarded as one of the nation’s toughest.

Proposition W, which was placed on the ballot by the City Council at the urging of SMRR, would allow rents on voluntarily vacated units to increase, but would still keep the rents well below market levels.

The prevailing view among those involved in the city election campaigns is that at least one of the two measures will probably pass, which means that new tenants moving to Santa Monica will be paying higher rents. If both measures are supported by a majority of voters, the one with the most affirmative votes would prevail.

Although acknowledging that Proposition W was placed on the ballot to compete with Proposition U, tenant advocates say it was also done in recognition that after 11 years of rent control some changes were needed.

“What we are promoting is a new way of dealing with rent control that is a little more cooperative in spirit,” said Brad Jones, co-chairman of SMRR. “Rent control has been in effect now for 11 years, but after 11 years everything needs a certain amount of revision.”

But landlords say that Proposition W offers them too little, too late, and that the only way to maintain the city’s rental housing stock is to give landlords the significant rent increases that would be achieved under so-called vacancy decontrol.

“Voluntary vacancy does not occur often enough to accept half an increase that Prop. W provides,” said Carl Lambert, an attorney and landlord. “Real increases are needed to provide incentives for landlords to stay in business.”

Proposition W would establish a system of “threshold rent” levels for vacated apartments throughout the city, based on the number of bedrooms and what is considered affordable to households whose income is 70% of the median for Los Angeles County. For a one-bedroom apartment, the threshold rent would be $511, for example, and for a two-bedroom it would be $613.

The citywide average for all rent-controlled apartments is now about $500, according to rent-control officials. Although precise figures are not available, it is generally believed that rents on the majority of rent-controlled apartments in the city are below the threshold levels of Proposition W.

If Proposition W passes, all apartments renting for less than the threshold level would be allowed to rise to the threshold level when a vacancy occurs. Apartments renting for more than the threshold level would be allowed 10% increases when a vacancy occurs, but only if they complied with a set of minimum maintenance standards.

If Proposition U passes, rents on voluntarily vacated apartments could be expected to rise to the levels found nearby in West Los Angeles, where one-bedroom apartments generally go for $800 to $1,000 and two-bedroom units for $1,100 to $1,500.

The landlords’ principal weapon in their fight against rent control in Santa Monica is a 1986 state law called the Ellis Act, which allows landlords to evict tenants and go out of business, as long as they give adequate notice and pay relocation fees. Owners of more than 1,100 units have notified city officials that they intend to take their apartments off the market.

Supporters of Proposition U say the landlord-sponsored measure is the only way to stop landlords from removing their apartments from the market under the Ellis Act.

“The apartment income gap has grown so huge, and the turnover rate is so small that really significant reform is needed to encourage apartments owners to stay in business,” said James Baker, who owns four buildings with 75 units.

Landlords hope to draw a sizable number of tenant votes for Proposition U because they now have both a carrot and a stick for tenants that they have lacked in the past.

The carrot is that if Proposition U passes, rent controls will remain in effect for existing tenants. Substantial rent increases will occur only when a unit is voluntarily vacated. Thus, Proposition U backers are essentially encouraging tenants to inflict big rent hikes on newcomers to preserve their own low rents.

The stick is that if Proposition U does not pass, more landlords will resort to Ellis Act evictions.

SMRR leaders acknowledge that the landlords have new leverage this time, and that the tenants group is less certain to prevail in this election.

Both SMRR and landlords had raised more than $160,000 each as of Sept. 30, according to campaign financial statements filed with the city clerk. Landlords spent about $73,000 qualifying the initiative, whereas SMRR has spent most of its money on literature promoting its candidates and positions on the different ballot measures.

Landlords charge that SMRR, whose candidates control the majority on the City Council and the rent board, is only interested in saving its political future.

“The biggest problem that SMRR has is accepting the fact that maybe (vacancy decontrol) would work,” said Bob Gabriel, a former City Council member who is listed on the ballot argument in favor of Proposition U. “Without rent control, SMRR’s base of power would disappear.”

But rent-control advocates say that SMRR’s opposition to vacancy decontrol is a continuation of its commitment to preserving affordable housing in Santa Monica.

“We think vacancy decontrol is a disastrous housing policy,” Jones said. “The free market does not apply to a good like housing. Government needs to have a policy that is going to maintain housing affordability.”

Supporters of Proposition W also argue that Proposition U would give landlords enough of a financial incentive to harass tenants into voluntarily giving up their apartments.

“Tenants are wrong if they think a landlord won’t try it,” said Lisa Monk Borrino, a tenant attorney who is running for a seat on the Rent Control Board. “Landlords are going to want them out at all costs.”

Landlords counter that existing anti-harassment provisions sufficiently protect tenants.

Jones acknowledged that landlords may not have always gotten a fair shake from the rent board, but said SMRR’s current slate of four candidates for the board represents a new spirit of cooperation.

“This group is strong on defending tenants’ rights, but they have a new approach of attempting to work with people rather than beating them over the head,” Jones said.

The other measures on the ballot related to rent control and housing are:

* Proposition R, which would require that 30% of all new construction of multifamily housing each year be set aside for low- and moderate-income people.

* Proposition V, which would amend the city’s condominium conversion law to ensure that all conversions abide by the city’s Tenant Ownership Rights Charter Amendment process.

* Proposition X, which would exempt state-owned property from the city’s rent-control laws.

SMRR supports Proposition R as a way to preserve a diverse community by ensuring that new housing will include affordable units for people of all incomes. Opponents argue, however, that the provision will discourage development because construction costs will increase and fees normally paid by developers for the construction of affordable housing by the city will dry up.

Proposition X is a narrowly written measure intended to resolve a dispute over whether cabanas and other living quarters on the site of the Sand and Sea Club fall under rent control. The club, on a parcel of state-owned beach, closed last month, but the individual cabanas remain open for their tenants.

SMRR has not taken a formal position on Proposition X, but all four of its candidates for the rent control board oppose the measure because they say if rental units remain on the property they should fall under rent control.

There is little or no opposition to Proposition V.

HOUSING MEASURES ON BALLOT

Among the 10 ballot measures that will go before Santa Monica voters Nov. 6 are these five dealing with housing issues. They are listed in order of appearance on the ballot.

Proposition R (affordable housing)--Would require that 30% of all new residential multifamily units be set aside for low- and moderate-income residents.

Background--Placed on the ballot by the City Council at the request of Santa Monicans for Renters’ Rights, the city’s big tenant organization. It represents an attempt to maintain affordable housing, particularly in the face of the growing number of rental units being lost as landlords go out of business.

City Council candidates in favor--Tony Vazquez, Kelly Olsen, Sharon L. Gilpin, Kathleen Schwallie.

Against--Jean Gebman, Christine E. Reed, Donna Alvarez.

No position--Robert T. Holbrook, Larry Jon Hobbs.

Proposition U (vacancy decontrol)--Would allow rents on apartment units vacated voluntarily to rise to market rates.

Background--Placed on the ballot through initiative drive sponsored by landlords. Rent controls that remain in effect even when a unit is voluntarily vacated are what make Santa Monica’s rent law one of the nation’s toughest. Landlords say passage of this measure is the only way to make it worthwhile to stay in business.

Candidates in favor--Holbrook, Hobbs, Alvarez, Reed, Gebman.

Against--Vazquez, Olsen, Schwallie, Gilpin.

Proposition V (condo conversions)--Would amend the city’s condominium conversion law.

Background--Placed on the ballot by the City Council as a way to ensure that all condominium conversions abide by the city’s Tenant Ownership Rights Charter Amendment process. The city planning staff has been allowing owners who live in the property being considered for conversion to participate in the tenants’ conversion vote. But the city attorney has issued a ruling that such landlords will no longer be allowed to vote unless this measure passes.

Candidates in favor: Holbrook, Vazquez, Olsen, Reed, Gebman, Gilpin, Schwallie.

No position--Hobbs, Alvarez.

Proposition W (rent control)--Would allow rents on units vacated voluntarily to be increased to specific higher levels based on number of bedrooms. Would also establish a set of minimum maintenance standards that landlords would have to meet to be eligible to collect the increased rents.

Background--Placed on the ballot by the City Council at the urging of Santa Monicans for Renters’ Rights to compete with the landlord-sponsored Proposition U. Rents would be allowed to increase, but would remain significantly below free-market levels.

Candidates in favor--Vazquez, Olsen.

Against--Holbrook, Reed, Alvarez, Hobbs, Schwallie, Gebman.

No position--Gilpin.

Proposition X (rent control exemption)--Would exempt state-owned property from the city’s rent-control law.

Background--Placed on the ballot by the City Council at the request of Councilwoman Reed. Designed to settle a question over whether cabanas and other living quarters on the site of the Sand and Sea Club fall under rent control. The club has been evicted from the site, so the measure is essentially moot unless the matter goes to court.

Candidates in favor--Alvarez, Holbrook, Hobbs, Vazquez, Olsen, Reed, Gebman.

Against--Schwallie, Gilpin.