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Rent Control Letter Challenged

December 07, 1986

The author of a recent Beverly Hills rent control letter (Times, Nov. 23) is long on mathematics but short on facts. While she correctly states that, mathematically, a rental of $800 compounded annually at the allowed 10% would produce near $1,300 in five years and near $2,100 in 10, what she ignores is that, except for rents that are well below market, 10% annual increases will also produce empty apartments. On the very day that the author's letter was published in your paper professing that $800 was the lowest-priced advertisement of Beverly Hills apartments in a Beverly Hills newspaper, the said paper's advertising reflected four one-bedroom Beverly Hills apartments at $625, $700, $725 and $750. With "for rent" signs all over Beverly Hills, does she really believe that owners can raise their rent 10% per annum and avoid gross vacancies? Who's kidding whom?

Further, her use of the phrase "luxury" apartments is misplaced. The word "luxury" is not mentioned in any of the ordinances or amendments passed by the Beverly Hills City Council. Beverly Hills is a "free enterprise" city and its purpose in enacting rent control was not to put all apartments under rent except "luxury units." Instead, its purpose was to not interfere with a free market except as to those tenants present in 1978 who were on fixed, low incomes and for which adjustment to market levels would have been disastrous.

Incidentally, the recent Beverly Hills Rent Stabilization Committee on which I had the privilege of sitting heard from several young professionals who moved to Beverly Hills in recent years. One drives a Mercedes-Benz and, believe it or not, two drive Rolls-Royces! Does the author of the said article really believe that such people should be subsidized by owners by way of below-market rents? Who's kidding whom?

SAM SCHERMER

Beverly Hills

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