Santa Monica Rent Control Challenge Back in Court Again

What do John Travolta, Bob Dylan and the mayor of Santa Monica have in common?

Probably not a whole lot. But the names of all three are being invoked in a lawsuit aimed at overturning Santa Monica’s strict rent control law.

Attorney Robert J. Jagiello contends that the three are examples of celebrities, high-placed government officials and other well-to-do, upwardly mobile people who lease inexpensive, rent-controlled apartments in Santa Monica.

They are part of the proof, he says, that the city’s 10-year-old rent control law--considered one of the toughest in the nation--has betrayed a key goal and is not helping the poor, minorities or senior citizens but is benefiting the wealthy.

This is one of the claims that attorneys for a 91-year-old landlady will make Monday in federal court in an effort to persuade U.S. District Judge Ronald S. W. Lew to remand the case to trial.

Attack on Rent Control

The case has become a vehicle for landlords who are turning to a more conservative federal judiciary to attack rent control on constitutional grounds.

Santa Monica has labeled the challenge futile, pointing out that the law has withstood similar assaults in the past. Many of the claims that Jagiello is making are irrelevant or meaningless, city attorneys say.

Nevertheless, both sides are watching the case closely.

Santa Monica voters, the majority of whom are tenants, approved a rent control law in 1979. The law puts a limit on how much rents can be raised annually and regulates evictions. Unlike similar laws in other cities, Santa Monica’s version does not allow a landlord to raise the rent when a tenant vacates an apartment.

Landlady Lena Schnuck sued Santa Monica in 1987, claiming that the rent control law prevented her from evicting a tenant from the eight-unit building that she owns and where she lives.

Schnuck had suffered a stroke and needed to move into a tenant-occupied one-story apartment, instead of the two-story unit she already lived in, her lawyers said. The law says owners cannot evict for their own occupancy if they already live in the building.

Lost Property

Schnuck’s lawyers argue that she has essentially lost possession of her property because she is blocked from evicting the tenant. They say that amounts to a “taking” in violation of the U.S. Constitution, which holds that private property cannot be taken for public use without just compensation.

Judge Lew last March denied Santa Monica’s motion for dismissal but at the same time threw out 10 of Schnuck’s 15 claims. Santa Monica’s attorneys on Monday will move for a summary judgment, asking that the judge rule on the case because the plaintiff has introduced irrelevant issues and nothing “genuine (or) triable.”

“There is no basis for a trial in this matter,” Santa Monica Deputy City Atty. Barry A. Rosenbaum, who will go before Lew, said last week. “When the court examines these facts, the court will clearly rule in our favor.”

If Santa Monica prevails, the city’s rent control law would have scored a victory in yet another legal fight, at a time when recent court decisions have been going against the city.

If Schnuck prevails, a trial will follow that could call into question the very nature of rent control.

Hoping to stop the summary judgment and move to a trial, Jagiello and Schnuck’s other attorneys have filed a 34-page response, claiming anew that the rent control law is invalid, irrational and unconstitutional.

They base much of their claim on a telephone survey of 189 owners of 2,226 apartments who offered statistics on the kinds of tenants who have taken up residency in the last two years. In that time, 307 vacancies were reported.

$40,000 Incomes

According to consultant Arnold Steinberg, who designed the survey, 41.7% of the new tenants had annual incomes of $40,000 or more, and 66.9% earned more than $30,000 annually. Just 3.4% of new tenants were black or Latino.

New tenants were largely childless and under 65 years of age.

Jagiello said these statistics prove that generally wealthy, white, young professionals--including celebrities--are moving in to Santa Monica and that the intended beneficiaries of rent control--the needy--are kept out.

Minorities and the poor are not part of the “friendship network” of renters who help their friends get apartments in Santa Monica by telling them of coming vacancies, and they cannot afford under-the-table finders’ fees of up to $3,000, he said.

Instead, landlords end up subsidizing tenants who often earn more than the landlords do, he said.

“There’s an army of doctors, lawyers and stockbrokers who are getting the golden goodies. (The owners’) wealth is being transferred to them,” Jagiello said.

Rosenbaum dismissed these arguments, saying they have nothing to do with the case and, furthermore, are not substantiated.

In his written response, Rosenbaum said the rent control law was not enacted “solely to benefit certain subclasses of tenants” but to protect tenants from arbitrary eviction and excessive rent increases, goals that are being met.

‘Incomplete’ Survey

In addition, he said, the survey is “grossly incomplete” because it only dealt with 2,226 units in a city of 30,000 units.

“Moreover, the fact that landlords select only certain types of tenants for their apartments is not a criticism of the Rent Control Law, but instead demonstrates the considerable flexibility landlords still possess concerning to whom they can rent their apartments,” Rosenbaum said.

And that flexibility, he added, is an important feature that has been used to demonstrate the constitutionality of any rent control scheme.

Jagiello, who recently won a rent control case in an appellate court involving mobile home parks in Santa Barbara, said that if Lew dismisses the Schnuck case in favor of Santa Monica, he plans to appeal.

“The real audience is Washington, D.C., the Supreme Court,” he said. “That is who will ultimately decide this.”

As for Travolta, Dylan and the mayor of Santa Monica, Dennis Zane?

Jagiello offers no proof of the claim that the three live in rent-controlled apartments. He would only tell The Times that the information came from owners of the buildings where the three supposedly rent. A spokesman for Travolta declined to comment, and efforts to reach the other two last week were unsuccessful.

And Jagiello’s legal opponents seem to think that the attorney is resorting to a somewhat silly tactic.

“Maybe it’s catchy, but I don’t think the court is going to base its decision on the catchiness of an introductory phrase,” Rosenbaum said. “It’s not going to get them very far.”