Siding with landlords, the state Senate on Tuesday reversed more than a decade of protecting renters and approved legislation that would roll back rent controls in five cities, including Santa Monica and West Hollywood.
Approval of the heavily lobbied bill represented a long-sought victory for landlords, real estate developers and banks. It was a significant setback to tenant organizations, local rent control authorities, senior citizen advocates and the poor.
The chief provision of the bill would allow landlords in rent control zones to charge market level rates--phased in over three years--when a rental unit is vacated voluntarily, a method known as "vacancy decontrol." The housing unit then would be placed under rent controls at the new level until it became vacant again.
While aimed mainly at apartments, the measure also would remove from local controls rents charged after next Jan. 1 on single-family homes, condos and townhouses. It also would exempt from rent controls any new construction that received a certificate of occupancy after last Feb. 1. The legislation would not apply to mobile home parks.
The bill, similar versions of which had been routinely killed by the Senate since the early 1980s under the direction of former President Pro Tem David A. Roberti, finally won approval on a 22-14 vote, one more than the majority required.
The measure (SB 1257) now moves to the Assembly, where its prospects for approval are considered fairly good because the lower house has regularly approved virtually identical bills with ease. Until now, the state Senate had been the graveyard for such legislation.
In Santa Monica, local officials indicated that they still intend to fight the plan but that the Senate action may have been decisive.
City Councilwoman Judy Abdo promised to "work to defeat vacancy decontrol." But fellow Councilman Bob Holbrook seemed more accepting of the outcome, noting that "we lobbied hard against the bill but it has passed now."
He said higher rents won't affect tenants in the city unless renters vacate a unit. "It only affects those who will move," he said.
Although the bill would establish statewide guidelines, it was chiefly aimed at rent controls in Santa Monica, West Hollywood, Berkeley, East Palo Alto and Cotati in Sonoma County.
State Sen. Jim Costa (D-Fresno), author of SB 1257, who said he had unsuccessfully carried similar bills for 10 years, charged that "extreme" local controls have caused construction of new rental housing to decline because owners no longer consider it a profitable investment.
He said the refusal to build additional rental housing works against the interests of seniors, children and low-income Californians who need affordable housing. He said that allowing landlords to charge market-level rates would encourage investment in construction of rental units.
But state Sen. Tom Hayden (D-Santa Monica) warned that lifting rent controls on vacated units would destroy the diverse character of stable communities of renters, where seniors, college students and young families live side by side. They will move elsewhere, he warned, and be replaced by "totally white, totally affluent and totally rich" people.
Hayden said passage of the bill marks the end of an era when millions of California renters could be assured that "Sen. Roberti would somehow take care of them."
Roberti was forced out of the Legislature last year by term limits after a 27-year career. He was a champion of rent controls and a leading defender of renters' rights.
Although the bill applied only to the five cities, opponents warned that it spelled trouble for controls in other cities.
State Sen. Diane Watson (D-Los Angeles) said she rents a home in the Crenshaw district where rates are controlled. Even so, she assailed her landlord as "greedy" and said it was a stretch to meet the rent on her state Senate salary of $72,000 a year.
State Sen. Richard Mountjoy (R-Arcadia) advised Watson to vote for the bill because, he said, it would create more competition among landlords and result in more favorable rents. Watson snapped back: "It's not easy for me to pack up and move."
Times staff writer Frank Williams in Los Angeles contributed to this story.