The Santa Monica Rent Control Board's second attempt at making inexpensive housing available to poor people while providing landlords with a fair return on their investment appears to be falling apart.
The opposition is coming not only from landlords, as was the case in February with the first version of the program, but also from tenants, who are coming out strongly against the so-called inclusionary housing program.
Perhaps the biggest blow to the program came over the weekend when Santa Monicans for Renters' Rights, the big tenants group that is the city's most powerful political organization, rejected the rent board's plan and called for new negotiations between representatives of SMRR and the board to work out some revisions.
"SMRR members have not rejected the concept of an inclusionary program, if their concerns are able to be addressed," said SMRR Chairwoman Dolores Press, who is also a Rent Control Board member. "Most believe the rent increases proposed . . . are excessive."
Further negotiations seem unlikely to accomplish much, however, because the disagreement over the new program is very clear: Tenants believe it gives landlords too much, and landlords don't think it offers them enough.
Emotion is high in both camps, fueled by confusion over provisions of the program and a general mistrust that goes back 10 years, when Santa Monica first adopted one of the nation's toughest rent control laws. Unlike most rent control laws, Santa Monica's does not allow rents to increase to market rates on apartments vacated voluntarily.
The inclusionary housing program unveiled and hailed as a breakthrough in June is a voluntary one for landlords. It permits substantial rent increases on some units of an apartment building to landlords who set aside an equal number of units in the same complex for rental at reduced rates to poor tenants. The program is supposed to start next month.
Although some landlords have said they would participate in the inclusionary housing program if it is not significantly changed, most oppose it as a distraction from their ultimate goal of eliminating rent control altogether.
Tenants apparently base most of their opposition on a belief that the board sold them out by not inviting them to take part in the recent negotiations with landlords that produced the latest version of the program.
Although it is up to landlords to decide whether to participate, tenant support is essential for inclusionary housing to survive. Tenants make up 80% of the city's population and can make their unhappiness known at the polls when members of the Rent Control Board are elected. SMRR now controls a majority on both the City Council and the rent panel.
Mayor Dennis Zane, a founding member of SMRR, called the program exciting and innovative, but said: "We believe there are significant problems yet to be worked out. We want to be included in the dialogue."
One option advanced by tenants is to limit participation to a few landlords and reduce the inclusionary housing effort to what amounts to a pilot program.
At least three of the five rent board members, however, are hesitant to reopen negotiations.
"I am reluctant to go back to square one," said Susan Packer Davis, the board chairwoman. "I don't want to renegotiate the basic . . . program."
"I am not friendly to the idea of making the program a pilot program," said board member Julie Lopez Dad. "Because we are so close to a final program that would supplant the one adopted in February, it doesn't make sense to draw out the process any longer."
'A Terrible Idea'
Wayne Bauer, who was the board's principal representative in the negotiations with landlords that resulted in the June agreement, was blunt: "I think it is a terrible idea. It introduces the program to a political argument as opposed to what is really going to help the people. It will become a political football. It will be decided by what is conducive to being elected to office.
"This is a program that might work. I think that is what everybody is so upset about."
In meetings last month, many landlords sharply criticized the program and few indicated any intention of participating in it. Action, the city's largest landlords group, formally rejected the plan in early July. And Pat Cramer, one of the landlords involved in the negotiations with Bauer, said that if additional concessions are made to tenants, landlords will not participate at all.
"We thought we were (talking) with tenant activists in the board members who claim to represent tenants," he said. If the program falls apart, "the alternative (for landlords) is to wait a few years for changes in the courts and in Sacramento. . . .
"If we can get a reasonable program, I would be glad to stay in the business," said Cramer, who has an interest in 300 units. "But if it continues that I continue to subsidize those tenants every month, then maybe I'll get out of the business."