Rent Wars Escalate in Santa Monica
Landlord Iona Blackwell’s first assault in the down-and-dirty Santa Monica rent wars was to take parking away from residents of her 11-unit apartment building last year.
That’s when tenants coined her a new name: Iona Blackheart.
Armed with a new state law easing limits on the rent landlords can charge new occupants, Blackwell became a different person, her renters claim.
There were demanding notices, squabbles about late rent and basement storage--all matters that, the way tenants told it, had been good-naturedly talked out only months before.
“Then it hit us like a kick in the teeth,” recalled 15-year tenant Kate Wechsler. “She wanted us all to move out so she could relet the units and raise the rent.”
Across Santa Monica, the stories are the same. Landlords held in check for two decades by one of the nation’s most stringent rent control laws are once again wielding the upper hand. For the past year and a half, they have been able to deal out hefty rent hikes under a new state law that promises to give them even more power by 1999.
The struggle is part of a trend that has seen rent control challenged nationwide. Massachusetts ended rent control in 1994, and in June, New York state legislators will consider ending nearly 50 years of rent regulation in New York City on 1 million apartments.
Outside Manhattan, Santa Monica and West Hollywood have among the highest concentration of renters anywhere in the United States As many as 80% of Santa Monica’s 90,000 residents are renters, as are 85% of West Hollywood’s.
From 1979 to 1995, Santa Monica’s draconian rent control law--hailed by supporters as a lifeline for the poor and elderly--prohibited landlords from increasing rents even when a tenant moved out. Most rent increases were limited to small, annual citywide hikes approved by the city Rent Control Board.
In those days, horror stories were more likely to come from the mouths of landlords, who claimed their properties were literally falling to pieces because they couldn’t generate adequate rental income to pay for necessary repairs.
But under the state law that took effect in January 1996--intended to neutralize tough rent control laws in Santa Monica, West Hollywood and Berkeley--Santa Monica landlords have been able to raise the rent up to 15% when a tenant moves out. And now most tales of horror are coming from the once-protected tenant class, who claim landlords are engaged in a campaign of harassment to coerce tenants into leaving.
There’s the story about the landlord who tried unsuccessfully to evict a tenant because of the oil spot under her car.
There are claims that landlords are arbitrarily trying to evict tenants so that their roommates--unable to foot the entire rent--will eventually move out as well.
Even faithful Fido has become a popular landlord target: In many buildings, tenants say, dogs and cats long tolerated by landlords are being given their walking papers in the hopes their owners will soon follow.
In recent months, there has been a marked rise in the number of renters seeking help through free legal services.
The number of eviction actions filed by Santa Monica landlords against their tenants has remained steady at about 630 per year. But tenant advocates claim many of those cases would have been resolved without a fight before the law changed.
“There’s a lot of tension,” said Anthony Trendacosta, general counsel of the Santa Monica Rent Control Board. “For too many tenants, the pressures have increased immensely. Owners have attempted to see where [the] envelope ends and have gone beyond it.”
Charles Isham, executive vice president of the Apartment Assn. of Greater Los Angeles, points to harassment on both sides--nightmares among both tenants and landlords: “Some of these tenants have been so coddled and spoiled by this tenant-friendly environment in Santa Monica, they will cry foul if you even ask them nicely for the rent.”
Law Restores ‘Vacancy Decontrol’
The legislation that changed the rental game is Assembly Bill 1164, co-sponsored by Sen. Jim Costa (D-Fresno) and former Assemblyman Phil Hawkins (R-Bellflower), which took effect on Jan. 1, 1996. It gutted policies in Santa Monica and West Hollywood by restoring “vacancy decontrol” in five California cities with rent control laws.
Come 1999, landlords will be able to raise rents to whatever the market will bear, although cities will continue to control rents as long as a tenant remains in a unit--much like the laws that have been in place since the late 1970s in the city and county of Los Angeles. Some landlords are pushing for another state law that will eliminate rent controls even for existing tenants.
The battle lines are etched most angrily in Santa Monica, once coined “The People’s Republic” for its rent controls, a place where tenants rights advocates have long used the issue to rise to political power.
Rent control was originally imposed after landlords failed to fulfill an oft-made pledge that rents would decrease after California voters approved Proposition 13, the property tax limitation initiative of 1978. Widespread efforts to convert apartment buildings into more profitable condominium complexes also contributed to anti-landlord pressure.
Since then, a war of rhetoric and dueling, often contradictory, studies has raged between two extreme points of view: Tenants contend Santa Monica’s rent control law preserved the rights of the poor and middle-income. Landlords say it created an unfair advantage for an elite, more affluent group paying hundreds of dollars a month less than was being charged in adjacent Los Angeles.
Both sides agree that the transition to a free-market rental economy in Santa Monica and West Hollywood has been clumsy because of confusion about Costa-Hawkins.
The law provides for rent increases only when an apartment changes hands and, even after the 1999 free market rates, does not allow increases for in-place tenants. City rent control boards retain the right to control rents with annual across-the-board increases that have ranged between 1.5% and 7% in recent years.
While the law specifies that landlords can raise rent only after a voluntary vacancy or an eviction for nonpayment of rent, the Santa Monica Rent Control Board says many wrongly assume they can evict tenants for any reason and receive a rental boost.
Trendacosta remembers a building where the landlord even played cat-sitter for a vacationing tenant. But now the cat has to go.
“Our concern is owners thinking, ‘If I harass her about the cat, she’ll move,’ ” he said. “That’s illegal.”
Some landlords have also refused to accept monthly rent checks only days before filing unlawful detainers against tenants for nonpayment of rent, he said.
Others have delayed making repairs or made numerous requests to inspect units at all hours, sometimes unannounced, according to Denise McGranahan, a Santa Monica attorney for the Legal Aid Foundation of Los Angeles.
“There have always been bad landlords, but now we’re seeing more frequent cases of harassment,” she said. “Landlords are bolder because they think they can get away with it.”
For the residents of Iona Blackwell’s building, Costa-Hawkins turned domestic bliss into a battle with a landlord they say is anxious to recoup years of lost income.
After Blackwell asked for an extra $100 for parking, renters tried to reason with her. The tenants, including couples who had raised their children in the building, felt used by their landlord after many had spent their own money making improvements to their units.
They told Blackwell it was unthinkable for her to abolish tenant parking on their busy block, located just down the street from a post office branch, forcing them to do battle over a small number of street parking spaces.
Then one Saturday night, tenants say, Blackwell closed a parking gate she had built in front of her underground garage, effectively locking people in. Tenants moved their cars to the street after notifying police.
“We felt betrayed she would pull such a stunt,” said 82-year-old retired salesman Larry Carlson, who has lived in the building for 27 years. “Anybody would.”
And so the residents of Blackwell’s building, who had once affectionately regarded their landlord as a friendly eccentric, fought back. They held tenant meetings and planned their strategies. Finally, they took their case before the rent control board.
Following a series of hearings that featured testimony and witnesses from both sides, the board ruled that resident parking was an included amenity and ordered the landlord to redistribute the spaces among tenants.
Blackwell, a 59-year-old Malibu resident, says she got a raw deal.
She said tough times after being laid off from her aerospace engineering job forced her to ask for the extra money--a right she believes is still hers. Earlier this month, Blackwell filed a lawsuit against the rent control board over its decision.
“People who don’t own property don’t know what it’s like,” she said. “I have to make payments, pay taxes on utility bills. Being a building owner is not a piece of cake. These people should be grateful they have someone to provide them housing.”
Still, tenant Carlson feels like an endangered species.
“This law opens the floodgates for landlords to give low-income people and older folks like me the heave-ho,” he said. “It’s a brave new renter’s world and loyalty or living in a place for a quarter of a century no longer count.
“Now it’s a question of money.”
A Landlord Speaks Out
Beth Grunland knows the stories about lazy landlords who sit around and collect their cash. This, she says, is the reality of owning rental property in Santa Monica:
There’s the grumpy old tenant who has held her hostage for 24 years, calling her at all hours to voice complaints. And the family who trashed an apartment worse than a herd of goats, leaving behind a trampled carpet, stained walls and a ruined stove--thousands in damages.
But could she spend the money to make repairs and then raise the rent to recoup her losses? Not in Santa Monica, she couldn’t. Not without a filing a petition with the rent control board and enduring a series of contentious hearings and paperwork demands.
“I’ve had to paste and patch just to get units rentable,” said Grunland, 65, who owns a 15-unit building. “I don’t have the money to do it right. If you . . . go through a rent control board, that’s more like a kangaroo court.”
With her rent increases slow in coming, Grunland makes do with what she has.
“I’m not young anymore,” she says. “But I still fix my own dishwashers and toilets. It’s something I have to do.”
Her complaints are echoed by scores of small-time landlords who look enviously at Los Angeles, where owners have for years been able to raise rents to market limits upon vacancy.
“How would you like to have someone tell you how much rent you could get for your building?” asked Lucille Almir, who has owned her six-unit building for 40 years. “We can’t even make decisions on our own properties. I don’t believe in it. It’s not freedom.”
One landlord study comparing Santa Monica with 10 similar cities found that rent control dealt a death blow to the very people it was designed to help.
The 1993 study found that the numbers of poor and elderly as well as female heads of household with children declined significantly in Santa Monica between 1980 and 1990, while rising in Alhambra, Burbank, Thousand Oaks and Whittier.
The number of disabled people also decreased in Santa Monica and nowhere else.
The conclusion: “Santa Monica sticks out like a sore thumb,” said Michael St. John, a Berkeley economist with the conservative Pacific Legal Foundation, whose work was underwritten by landlords. “Every disadvantaged group lost out.”
One tenant study, by contrast, showed that 53% of rent-controlled units in Santa Monica were occupied by very low or low-income people and another 22% by moderate-income tenants.
The study, conducted in 1995 by the financial consulting firm of Hamilton, Rabinovitz and Alschuler, also showed that the median income of tenants in controlled units was $27,500 compared to $42,500 for those residing in noncontrolled apartments.
“The results were very clear. Rent control works,” said Mary Ann Yurkonis, a rent control board administrator.
Not for Beth Grunland.
In 1999, she hopes to raise rents $200 a month for her two-bedroom apartments.
“With the extra money I plan to fix things up real nice,” she said. “It’s going to be heaven, operating my building will be a joy again.”
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New Rules in Tenant-Landlord Game
* Numerous municipalities have controlled rents for two decades, but locally, only Santa Monica and West Hollywood have prohibited landlords from raising rents when a unit was vacated.
* Two years ago, at the urging of landlords, the Legislature passed a bill that effectively gutted rent control features in Santa Monica, West Hollywood and three other California cities, granting landlords a modified form of “vacancy decontrol”--the power to raise rents up to 15% whenever a tenant moved out, but no more than twice on any unit through the end of 1998.
* Beginning in 1999, landlords in Santa Monica and West Hollywood can raise rents to whatever the market will bear after a tenant vacates--enjoying the same vacancy decontrol as other cities.
* The new state law did not affect the city of Los Angeles. Under L.A.’s rent control law, landlords can raise rent between 3% and 5% annually for existing tenants and can raise rents to market value when a unit is vacated.
