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Measure for Measure

By Frank Gruber

Here are my thoughts on the local measures on this year's ballot.

Measure EE: The School Parcel Tax. The true no-brainer. Vote YES! There is no better investment that anyone in Santa Monica and Malibu could make than putting $300 per real estate parcel, or your allocable share, into the schools.

Measure FF: Tenant Protection. This is a measure that I would like to support, not only because the intent is good, but also because the official ballot argument against it, by attorney Rosario Perry, is so wildly over-the-top it invites skepticism. However, I can't support FF, for a couple reasons.

The measure would, in effect, create a "descendible" right to a rent-controlled apartment, by allowing the grown child of a tenant to take over the apartment on the tenant's death. Yes, according to the measure the child would have had to have lived in the apartment for at least a year, but that is a fact that is easily fudged.

For instance, could a grown child own a house somewhere else and still "live" in the apartment for a year before the parent's death and take over the apartment?

There are too many instances in Santa Monica of people using their rent-controlled apartments as offices or pieds-a-terre. Rent control exists to protect the housing status of the people who live in the apartment, not their children.

Santa Monica needs to protect existing tenants, but after that, it needs more apartments on the market, not fewer.

I also don't like the language added to the charter that a landlord who loses an eviction case shall be liable for punitive damages, "including damages for emotional distress."

The City Council members who voted to put this measure on the ballot are the same ones who complain about how terrible it is for landlords to Ellis their properties or use TORCA to turn them into condominiums, but what do they expect if they add laws that turn landlords into giant targets for tenants and their lawyers?

Measure GG: Increase in Rent Control Board Compensation. Yes. This fee hasn't been increased for 23 years. As someone who was on a couple commissions, let me say that the amount of time that commissioners and such spend at public meetings is only a fraction of the time they spend carrying out their responsibilities.

Measure HH: VERITAS. No. I wrote about Veritas previously and explained why it's a bad idea or, in any event, a bad collection of ideas some of which individually and separately might have some merit. You can read what I wrote before, ("Something Causes Grumpiness in the City of Santa Monica," Dec. 14, 2001) but to summarize, I can't understand why any Santa Monican would give up the right to vote for all seven Council members. In return voters would get the right to vote for only one Council member, once every four years, and the right to vote for a mayor without executive powers who would nonetheless have a veto over all legislation. Bad idea.

Measure II: SMRPH, or TORCA II. Yes. While Rosario Perry's diatribe against Meas. FF sets a high standard for inflammatory rhetoric, the arguments against Meas. II coming from Santa Monicans for Renters Rights (SMRR) similarly trigger my "doth protest too much" meter. When condo-conversions are politically tied to the living wage, and emotional appeals are made on the basis of skimpy facts, I have to wonder what's going on.

SMRPH is a new version of TORCA, a program that allowed landlords between 1984 and 1996 to get out the rental business by converting their apartments into condos. Existing tenants had certain preferential rights to buy their units, or they could choose to remain as tenants protected by rent control.

SMRR supported TORCA, as did the voters, who approved the program and extended it a couple times by large margins.

According to Rent Control Board statistics, under TORCA, 324 properties containing 3,243 units were converted to condos. As of 2000, 1,913 of these units had been sold in 235 properties.

I support SMRPH not because I believe there is anything mystical about owning one's residence. There are, however, tax advantages to ownership that make renting disadvantageous to households with at least middle-class incomes.

Santa Monica has pursued policies that have made it hard to build new apartments that people with moderate incomes might live in, either on a rental or ownership basis. As a result, Santa Monica has more poor people and more rich people, and fewer middle-class people, than the county averages.

Santa Monica has also pursued policies that make it less rewarding to be a landlord.

Condo-conversions maintain existing, older and more modest units that are more affordable to buyers. The alternative to condo-conversions for a landlord who wants to get out of the rental business is removal from the rental market via the Ellis Act. According to the Rent Board, as of 2001, landlords had Ellised 276 properties, with 1,350 units.

Developers typically tear down Ellised apartments and build luxury condos.

One cannot evaluate SMRPH against some fantasy of everyone living forever in rent-controlled apartments that never fall down. The reality is that apartments over time wear out and need reinvestment. Condo-conversion is superior to tear down and build.

Measure JJ: The Living Wage. YES. I have written in favor of the living wage ordinance several times, so I won't use this space to repeat my arguments, except to say that so long as employers block union organizing, workers will pressure government to do what unions do in unionized industries -- protect their interests.

Measure KK: TORCA Funds. Yes. The TORCA tax was collected on TORCA conversions because in the pre-Costa Hawkins environment, removing an apartment from the rental market likely meant removing an affordable unit. The expectation was that TORCA tax revenues would help low and moderate income households buy their units, and maintain a mixed demographic.

Of course, there was no limit to whom the first buyer could sell, so the TORCA tax program did nothing to help with affordability in the long run.

In any case, and for whatever reason (there is a lot of finger-pointing on this one), the TORCA tax funds were never used much for their intended purpose. Meas. KK allows all the funds to be used to build affordable housing, thus achieving the original intent of an economically diverse community.

The views expressed in this column are those of Frank Gruber
and do not necessarily reflect the opinions of The Lookout.
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