State Law Proposals Target Slumlord Rents, Buildings : Housing: Three bills seek to counter the deterioration of affordable housing in California’s major urban centers.

Assembly Speaker Pro Tem Mike Roos unveiled a legislative package Monday aimed at cracking down on slumlords by threatening to seize their rents and place control of their buildings in the hands of private property managers.

Designed to counter the deterioration of affordable housing in California’s major urban centers, the package of bills was conceived by Roos and Los Angeles City Atty. James K. Hahn with the help of the city’s Housing Enforcement Task Force.

As housing costs spiral throughout the state, “a decent place in which to live is rapidly becoming a scarce commodity in many inner-city neighborhoods,” Roos (D-Los Angeles) said.

Most of the legal remedies available to city and state officials involve financial penalties and jail sentences, but many buildings remain in disrepair and are infested by vermin, lack hot water and heat and pose severe fire hazards.

Perhaps the most controversial part of the package is a bill that would enhance the power of judges to appoint a receiver, or private property manager, to oversee renovations of slum buildings whose owners have refused to bring their properties up to code, Roos said.

The bill would allow the receiver to seize rents and pay for repairs.

Roos said that facet of the package is likely to face stiff opposition from banks, savings and loans, mortgage companies and others in the finance industry who believe that placing a substandard property into receivership could inhibit its sale to a new owner and allow the receiver to stop making mortgage payments until the repairs are completed.

A second bill would prevent the sale of a property in violation of slum laws unless the money needed to make repairs is set aside in an escrow account. A third bill would prohibit slumlords from using their substandard buildings as collateral for other loans.

Roos said the number of rental units that do not meet basic health and safety standards in Los Angeles climbed from 14.5% in 1977 to 23% in 1988, or about 165,000 units with 450,000 residents.

In San Francisco, about 19% of the apartment dwellers in that city and county live in substandard buildings.

Despite a growing success in prosecuting slumlords, Hahn said his office has seen “more and more surreptitious real estate deals involving sophisticated owners transferring slum properties like hot potatoes.”

“Often these transactions were accomplished with the blessing of a lender or with lenders claiming that they had no ability to do anything about the problem,” he said.

Hahn’s office filed a massive lawsuit last year after uncovering an alleged conspiracy on the part of dozens of lenders and slumlords to use loopholes in the law and real estate transfers to avoid making repairs and at the same time extract maximum profits.