By Daniel Larios
Staff Writer

September 9, 2014 – The Santa Monica Rent Control Board won a two-year legal battle last month that could preserve as many as 200 affordable units in the upscale bay side city, according to board officials.

The lawsuit filed by on behalf of property owners Deborah and Rober Sidenberg attempted to invalidate a 1994 contract between their parents and the Board. 

The contract requires that the owners set aside two units on their 10-unit property damaged by the 1994 Northridge earthquake to be continuously rented to low-income households, officials said.

“Far too many units lose their affordability to low-income households when the current tenants move out,” said Todd Flora, Chair of the Rent Control Board. 

“The Board’s victory in this case means that these two units will be preserved for those who need them most, and sends a clear message that close to 200 controlled units subject to similar contracts will remain protected and affordable,” he added.

The plaintiff’s attorney, Rosario Perry, declined to state whether or not they will appeal the decision.

“The wheels of justice grind slowly, but they grind very fine,” Perry told the Lookout Monday.

The contract was entered into in the wake of the temblor that battered the city 20 years ago. In order to offset the costs of necessary earthquake-related repairs to the property, the Board allowed the Sidenberg’s parents to re-rent eight of the ten repaired units at market rate. 

At the time, landlords did not have the right to reset rents to market rates after a vacancy because the Costa-Hawkins law – which allows landlords to charge market rates for units voluntarily vacated or if the tenant is evicted for non payment of rent – would not be passed for another two years. 

In exchange for the compromise, the owners agreed to maintain two units in their building as permanently affordable to low-income households.

The Sidenbergs claim that although their parents entered into a valid contract with the Board in 1994, they shouldn’t have to honor the agreement after inheriting the property because the Costa-Hawkins Rental Housing Act allows owners to set the initial rents for any vacated unit.

They also claim that the law allows them to set the rents at any amount regardless of the existing contract. 

The Board, however, successfully argued that the State law does not invalidate contracts entered into prior to its enactment.

“Nothing in this section shall be construed to impair the obligations of contracts entered into prior to January 1, 1996,” reads the Costa Hawkins law, also known as Civil Code Section 1954.50-1954.535.

The court’s ruling makes it clear that contracts containing rent limitations made before 1996 remain valid even after the passage of Costa-Hawkins, officials said.