Landlords Use Eviction Law as Leverage in Initiative Drive

Santa Monica apartment owners are using a new statewide eviction law as leverage in their campaign for a measure that would allow substantial rent increases on vacated apartment units.

The eviction law, which goes into effect in July, permits landlords to go out of business without permission from authorities. It supersedes a Santa Monica law that prohibits an apartment owner from evicting tenants and closing his business without the approval of the city’s Rent Control Board.

Apartment owners said their rent increase proposal would discourage the wholesale eviction of tenants that they contend will occur when the law takes effect next year. Tenant activists say the law will have virtually no effect and have accused landlords of using scare tactics to promote the measure.

Santa Monica City Atty. Robert M. Myers, who is studying the eviction law, said it is too early to predict its effects precisely. But Santa Monica voters are likely to hear two diametrically opposed viewpoints on the eviction threat if the landlord proposal qualifies for the June ballot. The proposal offers remaining tenants a share of the rent increase on vacated apartments.

Results of Survey

Geoffrey S. Strand, an apartment owner promoting the rent increase, said a private survey conducted for apartment owners showed that a large number of landlords plan to go out of business when the eviction law takes effect because they are not making any money under rent control. Strand said more landlords will stay in business if they are allowed to increase rents.

“There’s a very real possibility that 2,000 to 4,000 apartment units will be demolished when this law takes effect,” Strand said. “We think that we’re going to see a real demolition derby.”

Rent Control Board Administrator Howell Tumlin called Strand’s argument “transparently sleazy.” He said most landlords will ignore the eviction law, which was sponsored by state Sen. Jim Ellis (R-San Diego), because city ordinances make it virtually impossible to build anything but another apartment building on land where apartments once stood.

“I can’t imagine anyone making the argument that the law is going to cause a demolition derby. That’s silly,” Tumlin said. “People are not going to slit their throats just to spite the Santa Monica Rent Control Board.”

Councilman David G. Epstein has expressed concerns about evictions but said he is not sure what to expect from the new law. Councilman Dennis Zane said he does not anticipate large numbers of landlords going out of business unless they can afford to leave their buildings empty. But both of them agreed that the landlord proposal has sparked renewed interest in the eviction law.

Apartment owners admit that tenant concern about evictions is key to their plans. To qualify for the June 3 ballot, the landlord organization known as ACTION (A Commitment to Insure Owners’ Needs) must gather 6,000 signatures by the end of February supporting the rent increase measure.

The measure would allow landlords unlimited rent increases on vacant apartments unless the vacancy is the result of an eviction or other coercive means. Tenants would share in the profits because the apartment owner would be required to multiply his monthly profit on the newly rented unit by 10 and distribute that amount one time among his remaining tenants.

For instance, if a landlord raised his monthly rent on one unit by $400 a month, he would owe $4,000 to the rest of his tenants. He would not be allowed to raise the rent on his vacant unit if he failed to pay tenants their share of the profits within 30 days of the unit’s rental.

Strand said the payment to tenants is designed to increase their interest in the proposal while assuring them that they are protected. He said the measure would also encourage landlords to rent an estimated 1,500 units that have been held off the market in protest of rent control.

“Rent control is, without a doubt, the No. 1 issue in this town,” Strand said. “But tenants are very fearful about evictions. They realize that they have an incredible bargain in rents here in Santa Monica. And we basically fitted this measure to match their concerns.”

Santa Monica’s rent control law, considered one of the nation’s toughest, prohibits a landlord from raising rents when a vacancy occurs. The Rent Control Board awards one across-the-boards rent increase per year and supporters of the law have argued that stable rents are an essential protection for low-income and elderly tenants.

“This is not some left-wing, progressive concept,” said Rent Control Board Commissioner David Finkel. “It’s a very serious issue. . . . And it would be my expectation that tenants would realize that the kind f bribe they (landlords) are offering doesn’t give them the protection they need. . . . “

Most of city leaders have said they oppose the measure.

Councilman Zane, a leader of the liberal Sana Monicans for Renters’ Rights, the organization that campaigned for the rent control law in 1979, said tenant activists refuse to support any measure that raises rents.

“We’re not going to compromise away the interests of tenants under any circumstances,” Zane said. “We’re always willing to discuss things that benefits renters. But we won’t discuss something that allows landlords to buy out some renters and sell out others.”

The Santa Monica Tenants’ Alliance board of directors also opposes the landlord proposal. Lynn Corum, a spokeswoman for the group, said the initiative could lead to higher rents.

Mayor Christine E. Reed, who is backed by the moderate All Santa Monica Coalition, said she hopes landlords will back away from their initiative plans.

“I want to see if there is some way to arrive at a proposal that would not make it necessary to have a divisive rent control campaign sponsored by a small group of landlords,” Reed said. “But it’s too early to say what will happen. (The landlords) are frustrated. They’re an abject minority.”