Seacliff Residents Could Be High and Dry After Rent Hike

Bill and Joan Cathcart didn’t anticipate spending their retirement wondering how long they could stay in their home.

After all, their cozy beach cottage was paid off--even if they did have to pay $930 a month to rent the ground beneath it in the tranquil ocean-side subdivision of Seacliff.

Now, though, they and many of the 49 other families in the gated community off Old Pacific Coast Highway fear that a massive rent increase might force them out.

“We’d have to sell at a fire-sale price,” said Joan Cathcart, a retired high school teacher whose monthly rent would go up to $2,910. “How many people would want to buy here? You’d have to be either a millionaire or crazy.”

In one of the last arrangements of its kind along the Southern California coast, residents at Seacliff own their homes but pay the Seacliff Land Co. monthly lease payments for the land they occupy. Many of those payments will more than triple in January unless a middle ground acceptable to the residents and the land’s owners can be found.

Founded by descendants of Ventura County pioneer William Dewey Hobson, the Seacliff Land Co. has rented lots to Seacliff homeowners for more than 50 years. Homes are just yards from the ocean and recently have ranged in price from $600,000 to more than $1 million, according to real estate brokers familiar with the area.

Rick Hambleton, a Seacliff Land Co. partner, said the pending rent increase simply reflects the real estate boom of recent years.

“Certainly everyone is aware of the tremendous increase in real estate values over the last few years, particularly of oceanfront lots,” he said. “Part of the procedure for adjusting rent is considering the fair market value of the land.”

Since the early 1950s, land rents have gone up every four years, Hambleton said, adding that buyers are told of the procedure before they put their money down.

But previous increases generally have been in the single-digit range, residents say. Some who bought their homes in the last year say they would have steered clear of Seacliff Beach Colony if they had known the size of the increase that was looming.

Last January, Giles Gunn met with Seacliff Land Co. representatives before he closed on his beachfront home.

“We were told that rent increases would be larger than in the past but that they would not be disproportionate to the increases of the past,” he said.

In June, he and other Seacliff owners received a letter with the bad news: Rents would triple to quadruple, depending on the homeowner’s lot.

For Gunn, a professor of English at UC Santa Barbara, ground rent would soar from a little more than $900 to about $3,600. On top of his mortgage payment, the load would become unbearable, he said.

“We’ll be wiped out,” Gunn said. “We can’t possibly sustain it.”

With Gunn’s wife suffering from ovarian cancer for five years, the couple had poured their resources into the home they call “Recovery House.”

“It certainly doesn’t feel like that now,” he said.

Residents understand the need for some rent increase, said George J. Bregante, head of a group fighting the hike. But he said the amount demanded is so excessive that disclosure of it “has sucked out our equity.”

“We can’t sell, and it’s difficult to get loans,” he said. “We’re basically held hostage.”

Leases between the residents and Seacliff Land Co. call for arbitration to settle rent disputes. As that takes place, some residents also have conferred with attorneys over possible litigation. Meanwhile, people like Gary Goldberg, a Santa Barbara real estate agent with extensive experience selling at Seacliff and other beach areas, wait.

Goldberg was buying a Seacliff home himself when the company announced the new rents. “I was just as stupefied as everyone else,” he said. “I was totally blown away.”

Goldberg said he and the seller have extended the property’s escrow period until the lease dispute can be resolved.