Despite warnings that the move spells legal disaster, the Santa Monica City Council has voted to require apartment owners who want to get out of the rental business to obtain an additional permit before they can reoccupy their buildings.
Critics said the measure is an attempt by Santa Monica officials to undermine the Ellis Act, a 2-year-old state law that allows landlords to evict tenants and remove their buildings from the rental market.
But proponents said the action Tuesday night by the City Council will guard against abuses of the Ellis Act and offers an important protection to tenants.
In a 5-2 vote, the council gave preliminary approval to an ordinance that requires the owner who has used the Ellis Act to empty his or her building to obtain an occupancy permit before reoccupying the property, letting anybody else live there or converting it to a commercial use.
City officials say there have been numerous cases of groups of owners buying buildings with the purpose of using the Ellis Act to evict the tenants and occupy the property. Such a practice amounts to de facto condominium conversions executed without city permission, the city said.
By requiring the occupancy permit, the city has some control over subsequent use of the building and potential misuse of the Ellis Act, officials said.
"This is where the rubber meets the road," Mayor Dennis Zane said in supporting the ordinance.
"If we are going to declare (our) allegiance to the security of tenants . . . (and to) protecting housing against speculative real estate activity . . . we must address these abuses."
The two council members who voted against the ordinance, Christine Reed and Herb Katz, said the measure was punitive and oppressive.
Reed said it would ultimately keep buildings empty or encourage demolitions because apartment owners will be faced with too many regulations and roadblocks stopping them from re-occupying their property.
"We are destroying apartments to save a principle," she said.
"We're making them (owners) to jump through hoops (so that the city can) get around Ellis," Katz said. "We are kidding ourselves. This is going to end up in court."
But Councilman William H. Jennings, who usually sides with fellow moderates Katz and Reed, joined Zane and the council's liberal majority in voting for the law. He said that "without getting into the rationale behind rent control," he could concur that the ordinance before the council was "enforceable and makes sense."
The city has already lost several key court cases involving attempts to regulate how the Ellis Act is used. Landlords warned that the new ordinance will similarly fail the legal test.
The occupancy permit that the new ordinance requires will be issued by the city's planning director. Several restrictions will apply, including a requirement that no more than one unit on the property can be occupied by an owner. Relatives of the owners may occupy other units only if the relatives do not have an ownership interest and do not pay rent.
Katz suggested that such conditions set up city officials to spy into peoples' private lives and bank accounts.
A handful of tenant activists appeared at Tuesday night's meeting to support the ordinance.
"This gives us another weapon that tenants can use to prevent evictions," said Mallory Pearce, head of the Tenant Aid Project.
Several landlords and attorneys also appeared to argue against the law.
As of last Nov. 28, tenants of 381 units in 65 buildings had been formally notified that their landlords planned to use the Ellis Act to withdraw the units from the rental market, according to Rent Control Board records.