Why does it cost $4 million to make rent control work in Santa Monica?
It is a question that hounds the keepers of the city's rent control law and gives political ammunition to opponents.
Landlord groups charge that Santa Monica's rent control agency has grown into a bloated and inefficient bureaucracy, rife with ideologically inspired mismanagement and a money-wasting budget four times what it was eight years ago.
Rent control officials counter that they are forced to spend big money staving off one legal challenge after another, and to be able to offer expanded protections for tenants.
In Berkeley, a city roughly the size of Santa Monica and with a similarly tough rent control law, about $1.86 million was spent last year to administer rent control; the same amount is budgeted for 1988-89.
Santa Monica spent an estimated $4.45 million last year and has budgeted $4.21 million for 1988-89.
Berkeley only has about half the total number of rental units that Santa Monica has. Still, when broken down to a per-unit basis, Santa Monica spends nearly half again as much as Berkeley.
Both Santa Monica and Berkeley get most of their income from registration fees--a set amount of money annually paid per unit by the landlord that is passed on to the tenants.
Santa Monica, especially, has found that its rental housing stock--and, consequently, the registration fees that can be charged--is shrinking. The Rent Control Board raised the fees this year from $120 to $144 a year per unit; Berkeley charges $80.
A total of 105 units are withdrawn from Santa Monica's revenue base each month through a variety of fee waivers, owner-occupancy exemptions and other removals, according to rent control administrator Mary Ann Yurkonis.
Both cities were hit in 1986 with an expensive, state-mandated program to certify all rents being charged within their boundaries.
The Petris Act, named after Sen. Nicholas Petris (D-Oakland), required officials by Jan. 1, 1988, to notify all owners in writing of the amount of rent they could charge. An appeals process followed.
The Santa Monica Rent Control Board says the Petris Act has cost the board $1.6 million since 1986, with another $152,462 expected to be spent in the future. To cover some of the costs, the board had to borrow $700,000 from the city, about half of which is being paid back this year.
The Petris Act cost Berkeley at least $1 million, according to Jay Kelekian, associate administrative analyst of Berkeley's Rent Stabilization Program.
Santa Monica has had a five-member elected board in place since 1979, when rent control was enacted. Berkeley elected a nine-member board starting in 1984.
The bulk of Santa Monica's budget goes to salaries for 53.1 permanent employees last year, but the number is being reduced to 51.6 this year. The budget calls for Yurkonis to earn $69,255; General Counsel Joel Levy will ear $79,985.
Berkeley rent control administrator Joseph F. Brooks earns $63,000, but his salary is scheduled to go up to $66,000 later this year.
To cut costs this year, the Santa Monica board cut two positions--public information officer and labor relations manager--and eliminated its newsletter.
Santa Monica's payroll includes seven full-time attorneys; Berkeley, which employs 31.5 permanent people, does not have a legal staff, but 2.5 assistant city attorneys are on call for legal cases, Kelekian said.
Yurkonis said the need for a legal staff, plus a heavier day-to-day caseload of rent-related work, are largely responsible for setting Santa Monica apart from Berkeley.
"If rent control had not been under attack since the day we opened the doors, we wouldn't need this kind of staff," Yurkonis said.
"People are very litigious here. This agency has been challenged from Day One," she said. "A lot of litigation is handled here that affects rent control throughout the state."
Staff Has Expanded
Yurkonis added that the staff has expanded as have the services offered. The agency employs hearing examiners, inspectors, information systems analysts and others who process tenants' claims and petitions.
But critics say much of the legal and technical work is gratuitous. They say that rent control commissioners are bringing on numerous unnecessary lawsuits in what critics call an overzealous enforcement of strict rent control.
"It is a make-work agency; they are constantly inventing more things to do to spend more money on," said James W. Baker, a Santa Monica landlord and past president of the Apartment Owners Assn. of Greater Los Angeles.
Baker said much money is wasted on high salaries and what he called "owner-bashing," in which tenants are encouraged to challenge their landlords before the board on often trivial matters, and the tenant-landlord relationship is made especially antagonistic.
"They make a mountain of every molehill," he said.
THE COST OF RENT CONTROL
Santa Monica has had a five-member elected rent board since 1979, when rent control was enacted. Berkeley, roughly the same size and with a similarly tough rent ordinance, elected a nine-member board in 1984.
SANTA BERKELEY MONICA 1987-88 rent control budget $1,860,000 $4,454,000 1988-89 rent control budget $1,860,000 $4,215,000 No. of rental units paying registration fees 19,800 29,300 Annual registration fees per unit $80 $144 Agency staff members 31.5 44.6 Legal staff 2.5* 7
*City attorneys on call