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Quake Puts Dent in Rent Control : Housing: Hundreds of units may return to market level as rebuilding costs are passed on to tenants.

March 03, 1994|NANCY HILL-HOLTZMAN | TIMES STAFF WRITER

The Santa Monica City Council and the Rent Board this week set earthquake rebuilding policies that could result in the loss of hundreds of rent-controlled units and raise rents in hundreds more to market level.

In a joint session Tuesday that drew a large crowd to City Hall, officials from the two bodies reluctantly signed off on the rules, which are subject to final council approval by the end of the month.

"Believe me, we have to do it," Rent Board member Suzanne Abrescia said.

Abrescia was responding to a disgruntled tenant who complained about the policies at a joint meeting of the council and Rent Board.

"To permit this pass-through (of repair costs to tenants) is to change for all time the face and character of Santa Monica," said the tenant, Sylvia Schniad.

But landlords had their own tales of woe. Mary Tabatabai, who owns an eight-unit building, said she has a $400,000 mortgage and needs $500,000 worth of repairs, which she can't afford. She said her building--where she lived until the earthquake damaged it--didn't withstand the quake because strict rent control made it impossible for her to adequately maintain it.

"I couldn't afford to repair the building," she said. "My family is homeless. Everything is gone."

In setting the policies, the council and rent board acknowledged that the face of Santa Monica has already been changed by the Northridge earthquake, which heavily damaged the city's older housing and commercial structures.

In a vote that would have been unheard of before Jan. 17, the council agreed to allow both residential and commercial buildings to be restored to their pre-earthquake size and use--even though current zoning standards are much more restrictive.

That means a seven-story commercial building destroyed by the quake could be put right back up, though others could only build a two-story building in the same area.

Nor would the rebuilt structures be subject to current parking standards, a major concession, recognizing that older buildings, both commercial and residential, lack adequate parking.

Mayor Judy Abdo said parking is a hard issue, but she did not want to overburden already beleaguered property owners. "There are going to be enough barriers for these owners to get their buildings on line."

The biggest of these barriers is getting financing.

"We have no easy answers that lenders are going to be stepping right up and lending money," said Suzanne Frick, the city's planning director.

Representatives of the business community and landlords said financing would be hard to come by, particularly for multifamily housing. They say reasons for this include city requirements that 30% of units in new condominiums be affordable units and that only earthquake-related repair costs be passed on to tenants.

In most cases, earthquake repair would not include the installation of much-needed new plumbing and other hardware that would be most easily done during the rebuilding process.

"The lender we met with was concerned about only allowing earthquake-related damage (costs) to be passed through," said Rent Board administrator Mary Ann Yurkonis. Lenders, she said, want plumbing and other systems upgraded to enhance the value of the building.

Councilman Paul Rosenstein, though he voted for the policies, said he was uneasy that they were not accompanied by a financial analysis of their impact.

"I still feel we're flying in the dark, and these proposals won't be adequate," Rosenstein said.

Others, however, said Tuesday's action represented a much-needed first step toward reconstruction. Most property owners, they point out, have been doing nothing because they do not know what the city's final rebuilding rules are.

There are 392 red- and yellow-tagged residential buildings in the city, representing 1,900 apartment units, 200 condominiums and 41 single-family homes.

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