A newly organized group of landlords has taken aim at Santa Monica's tough rent control law in mounting what it hopes will become a major legal challenge to rent control statewide.
The group, called the Foundation for the Defense of Free Enterprise, is sponsoring a series of lawsuits aimed at overturning rent control in Santa Monica and other Californian cities on constitutional grounds.
One lawsuit was filed against Santa Monica last September in U. S. District Court in Los Angeles, and five other suits are "ready to go," Geoffrey Strand, a Santa Monica landlord and spokesman for the Foundation, said.
Although the organization was formed in Santa Monica--home to one of the toughest rent control laws in the nation--it claims members from apartment-owner associations in at least six other California cities where rent control is law, Strand said.
By joining forces statewide, by turning to federal courts, and by launching a significant fund-raising drive, the landlord group hopes to score a victory in what has been a protracted fight against strict rent control.
In the past, landlords have often won cases against rent control in local courts in Santa Monica, but the rulings were regularly overturned at the appellate level.
Proponents of rent control say the law guarantees affordable housing for low- and middle-income tenants. It became law in Santa Monica, where 80% of residents are renters, in 1979 and has been a hot political issue ever since. Landlords opposed to strict rent control contend it infringes on their private property rights and cheats them out of a fair income.
"The only way to pursue the injustice of rent control is to be prepared to take these cases all the way to the Supreme Court," Strand said.
"Up to this point, Santa Monica fought its battles, West Hollywood fought its battles, everybody was fighting their own battles," he said. "Now we are going in a legal direction that is a statewide effort . . . that will bypass Sacramento, bypass a politicized local judiciary, go to the federal courts . . . and go after rent control on constitutional questions."
Strand also said he believes both the state and U. S. Supreme Courts may be "more receptive" to "free enterprise cases." Both courts are generally considered to be more conservative now than in the recent past.
Wayne Bauer, a member of Santa Monica's Rent Control Board, labeled the new assault on rent control "very disturbing."
"We are bracing for a new round of challenges," Bauer said. "It is unfortunate to have to allocate money for this. It is expensive and time-consuming (for the city)."
Bauer said that if legal challenges mount, the Rent Control Board may have to increase the size of its legal staff. He suggested landlords apparently have been frustrated as their efforts to defeat or modify rent control have failed at the polls and in appellate courts.
"There appears to be a continuing effort to undo rent control in the courts as well as the legislature," said Joel Martin Levy, general counsel to the Santa Monica Rent Control Board.
History of Challenges
He added, however, that legal challenges to rent control "are nothing new," pointing out that Santa Monica's law stood up to a particularly active flurry of lawsuits in 1979 to 1983, the first years of Santa Monica rent control.
"We weathered that barrage pretty well," Levy said.
In the first case that the Foundation for the Defense of Free Enterprise has sponsored, Lena Schnuck vs. the City of Santa Monica, the plaintiff is asking that the rent control law be invalidated, and she is demanding a jury trial and damages.
Schnuck is identified as an 89-year-old apartment owner who suffered a stroke earlier this year. Her family sought to evict a tenant so that Schnuck could occupy his apartment.
According to the suit, the Rent Control Board said that she could not follow through on the eviction. Under the law, a landlord cannot evict a tenant in order to occupy the unit if the landlord already occupies another unit at the same building.
'Denied Use of Own Property'
"Here's a lady who is 89 years old, worked many years to acquire this (property) . . . and she's denied use of her own property," said K. B. Huff, a Santa Monica landlord and chairman of the foundation.
"But it's a lot more. There are a series of charges (in the suit) . . . covering many of the problems that exist in radical rent control."
The suit also alleges that because of rent control, tenants have made a business of selling "their right to occupancy to non-tenants" and that tenants "as a matter of common practice and routine, sublet premises and . . . charge higher rents than the existing tenants pay to the landlord and pocket the difference."
Levy labeled the Schnuck case ill-conceived, predicting it will be short-lived. He said the right to choose successive tenants or to sublet has always been "in the hands of the landlord, before rent control and after it."