HERMOSA BEACH — When Greg Galambos' new landlord told him in March that the rent for his one-bedroom apartment was going up 14%--from $520 to $595--he accepted the news philosophically.
Last month, however, Galambos heard from the landlord again. His rent was going up another 8% on Oct. 1, to $645 a month--a 24% increase in six months. This time, Galambos spoke up.
Surveying his neighbors around the pool at the Pepper Tree Apartments, the 30-year-old engineer learned that most of the tenants in the 102-unit complex had also been hit with two rent increases in six months. The increases averaged about 25%, but some rents went up as much as 33%, he said.
In a letter to tenants last February, Pepper Tree manager Jeffrey Ginsburg maintained that "an intensive market survey . . . determined that the rents at the Pepper Tree are 18% to 22% below the market value." When the October increase goes through, the rents will be "close to market value, but still under it," Ginsburg said in an interview.
The increases have sparked a bitter dispute between the landlord and the tenants, and have set off the first grass-roots rumbling for rent control in Hermosa Beach since the City Council rejected the idea five years ago.
Galambos called a tenants' meeting last month and asked his neighbors to join him in a protest against the second increase. He encouraged them to write letters to the building owner, Allen Ginsburg, a Wilmington ophthalmologist and the father of Jeffrey Ginsburg.
Their letters went unanswered, they said, as did their telephone calls to Dr. Ginsburg's office. "The only way I could get hold of him was to be devious," Galambos said. "I had to pretend I was a patient." The doctor told him he had no choice but to raise rents because they were significantly below market value.
Went to Councilman
Frustrated, the tenants contacted City Councilman George Barks, who played go-between on Tuesday night as 70 irate tenants squared off against Jeffrey Ginsburg in the complex's recreation room. Ginsburg said his father was away on vacation and could not be reached.
At the meeting, residents complained that they should have been informed in April, when rents first went up, that a second increase was on the way.
"The monetary value is not my argument," Galambos said. "My argument is the way the landlord went about this. He should have given us time to get out."
Ginsburg acknowledged that both increases had been planned in March but said his father thought it would be easier on the tenants to raise rents gradually. 'We could have done one increase," he said, "but we broke it into two."
Required to Raise Rents
Ginsburg said his father had been required to bring the rents "up to market value" by World Savings, the institution that gave Allen Ginsburg the loan to buy the property in January. However, a World Savings spokesman said last week that such a requirement would be highly unusual.
"I can't imagine the bank getting involved in any forced rent increases," said Al Suebeck, loan officer for the South Bay. "We can't tell them to do anything."
An average one-bedroom apartment at Pepper Tree will rent for $645 in October, up from $525 in March. A two-bedroom unit will cost $850, up from $700. Five rental agencies that were contacted said rents for one-bedroom apartments in Hermosa Beach range from $450 to $750. Rents quoted for two-bedroom apartments ranged from $600 to $1200. Tenants, however, said they are angered by the percentage of the increases, rather than the dollar amount. Under the previous owner, rent increases averaged 7% to 8% a year, they said.
Ask Council to Intervene
A group of tenants plans to ask the City Council on Tuesday to intervene to work out a solution. If that fails, the tenants plan to ask for some sort of rent-protection ordinance, though some tenants oppose rent control, Galambos said.
Rent control would not find favor with the council or the community, Councilman Barks said. "I don't think the community supports rent control. . . . In the long term, rent control is not good for tenants, the city or the landlords."
The council turned down a rent control proposal five years ago, Barks said. A once-a-year limit on rent increases might be more acceptable, he said. He said he had not received any complaints until the current controversy arose.
As for tenant Galambos, he does not plan to wait for council action. He has already made plans to move from the Pepper Tree to a three-bedroom apartment in Torrance that he'll share with two roommates. His portion of the rent? Just $265.