Hot Properties : In New Rent Flare-Up, Landlords Charge Board With Revenge

Santa Monica rent control brouhahas are a lot like Malibu brush fires.

Now and then, locals can count on a big one that will rage out of control, leaving devastation in its wake.

Just Such a conflagration is sweeping through Santa Monica right now. Landlords are accusing the Santa Monica Rent Board, an elected body that administers the complex system, of retaliating against them by recently voting for the lowest rent increase in the 16-year history of rent control in the city--1.5%.

Landlords are particularly incensed because the board’s own 50 staff members were recently granted a 2% cost-of-living raise. The rent board’s $4.4-million budget comes from tenants, all of whom pay about $500 a year to finance the system.

The impetus for the board’s action, landlords say, is a state Senate bill that would allow rents to be raised to market level when a tenant voluntarily moves out. The bill recently passed the Senate after eight tries and is expected to pass the Assembly.

“The only way it doesn’t pass is if there’s a 6.1 earthquake on the day of the vote,” quipped rent board member Lisa Monk Borrino (CQ).

The so-called “vacancy decontrol” measure runs counter to Santa Monica’s strict rules, which keep rents far below market value.

In Santa Monica, a landlord cannot raise rents each time a new tenant comes in. Thus, the median rent in the beach city is $575, substantially less than in surrounding Westside areas.

Theoretically, the legislation would not affect current tenants as long as they stay put. But rent control advocates fear that tenants will be harassed out of their units by landlords eager to raise the rent.

Chris Harding, an attorney for the Greater Los Angeles Apartment Owners Assn., said the rent board is harassing the landlords.

“They’ve been extremely vindictive ever since the bill passed” the state Senate, Harding said.

Rent control officials said the board used the same formula as always for granting rent increases, which are based on actual costs incurred by landlords in a given year.

Like others on the panel, rent board member Suzanne Abrescia said she was perplexed by sudden charges of revenge.

“I’m not in a them-versus-us mentality,” Abrescia said. She suggested that the charges may be part of an orchestrated effort to discredit the board and further the landlords’ cause.

But lead rent board attorney Tony Trendacosta hinted that there may have been a change in strategy by saying: “For the past five years, the rent board has been flexible and it hasn’t gotten us anything.”

An example of that flexibility was the board’s response after the Northridge earthquake. The panel moved swiftly to get quake-damaged properties habitable again by allowing owners to pass on repair costs to tenants over 10 years, though the rent increases were unpopular with tenants and many rent control advocates.

Without such a program, landlords could not show they had sufficient income to qualify for loans.

Rent increases from the program have ranged from $5 to $150 a month, averaging about $30, said rent board administrator Mary Ann Yurkonis. The program expires Friday, and board members said they are not going to extend it.

Landlords would like the program to go on. Apartment building owner Norma Williams, who has battled with the rent control board for years, said she is worried that additional earthquake damage might be discovered during reconstruction.

But property owners are less concerned about the demise of the earthquake recovery program than about the board’s sudden change of heart on a safety proposal.

Board members said they will revoke an earlier decision that permits landlords to automatically pass on the cost of mandatory earthquake retrofitting to tenants.

The swing vote on the retrofitting plan was Borrino, who said she about-faced after reading a tenant’s anguished letter printed in the Santa Monica Outlook. The letter accused the board of forsaking its mission to protect tenants.

The board’s reneging on the program and allowing only a small rent increase has convinced landlords that once again they are at war with rent control advocates.

“It reminds me of the end of World War II,” said Herb Balter, president of ACTION, a local apartment owners group.

Robert Sullivan, a spokesman for the Greater Los Angeles Apartment Owners Assn., said the board is lashing out because it fears that the bill to allow rents to rise upon voluntary vacancy will become law.

“It’s retaliatory,” Sullivan said. “It’s a mean-spirited, knee-jerk reaction.”

The bill, sponsored by state Sen. Jim Costa (D-Fresno), cleared the Assembly Housing Committee on Wednesday and must win approval from another committee before a full vote of the Assembly.

Rent board member Jay Johnson said the sudden flare-up of landlord criticism may be an emotional reaction to long-past battles with the board.

“There has been a steady decrease in personal verbal hostility between the renter community and the landlord community. . .and an increasing respect for the board,” Johnson said. Since the earthquake, he added, “landlords have suffered as much or in some cases more than the tenants. Now is the time to heal it on both sides.”