RENT BOARD COMMISSAR SKLAR DECLARES
“PURPOSE OF RENT CONTROL LAW IS NOT
TO HELP LOW INCOME PEOPLE”

In two recent Rent Board Sstories, I reported the wild and crazy things that the Commissars say. In Rent Board Story Part 127 titled, “Rent Board Proclaims ‘Art Is a Basic Living Activity,’ ” Commissar Betty Mueller made the quoted statement to justify tenants using a controlled rental unit for an art studio subsidized by the “landlord” for the very low rent controlled rent of $638 per month. And in Rent Board Story Part 134, titled “Thinking Is Always Painful For Me” I reported a close competition between Commissars Jeffrey Sklar and Joel Koury, which Koury won by admitting that thinking was painful for him.

Although this race seemed to be over for awhile, Commissar Sklar proved that he was the “comeback kid” in this competition because of the statements he made at the Rent Board meeting of January 10, 2008. But before you can appreciate that Commissar Sklar said about the Rent Control Law, you need to know two things the Rent Control law actually says.

First, the Rent Control Law has a Statement of Purpose at Section 1800, which states:

A growing shortage of housing units resulting in a low vacancy rate and rapidly rising rents exploiting this shortage constitute a serious housing problem affecting the lives of a substantial portion of those Santa Monica residents who reside in residential housing. In addition, speculation in the purchase and sale of existing residential housing units results in further rent increases. These conditions endanger the public health and welfare of Santa Monica tenants, especially the poor, minorities, students, young families, and senior citizens.

This provision makes two points concerning the purpose of Rent Control Law; (1) “a substantial portion of those Santa Monica residents” (but not all) need a rent control law, and (2) those people are “especially the poor, minorities, students, young families, and senior citizens.”

Second, the Rent Control Law at Section 1805 (b) (1) requires the Board to do the following:

(b) Annual General Adjustment. Each year the Board shall generally adjust rents as follows:
(1) Adjust rents upward by granting landlords a utility and tax increase adjustment for actual increases in the City of Santa Monica for taxes and utilities.

Now you know two important things about the Rent Control Law, (1) it is intended to benefit poor tenants (or those likely to be poor), but (2) the Rent Board must adjust rents for actual increases in taxes and utilities. Unfortunately, at the Rent Board meeting of January 10, 2008, Commissar Sklar demonstrated that he is not aware of either of these requirements. If you have high speed Internet access, you can find audio and video of  the entire meeting here.

When you get to the correct meeting of January 10, 2008, you can then click on Item 8 A Beaches and Parcel Tax, Proposed Regulation 3108: At the beginning of that discussion informs you about the new parcel tax that was on your last property tax bill and you can hear ACTION member Matt Millen make a speech to the Board in which he states that he will be losing two months of a pass-through because the Board was slow at adopting the Regulation.

At approximately two hours and 7 minutes (2:07– I skip the seconds here) Sklar proves that he does not even know when property taxes must be paid. After it was explained to him and he was informed that landlords would not have to pay the parcel tax for units that had low income tenants, Commissar Sklar makes the following extraordinary statement:

“I have talked about this before and it did fall on deaf ears, which is that the landlords are getting a free ride here. You don’t just benefit from a city by living in it, you benefit from a city by owning property in it. And you don’t have to pay a parcel tax just because the tenants are going to pay it for you, which is fine because they are really the ones living here. I would have apportioned a portion of the property tax by virtue of their mere ownership of the property and their enjoying the beneficial consequences thereof, including the appreciation from living in a city that might have a cleaner beach etc, etc. So I am not concerned about the two or three months or even if it were six months that a slow landlord that gets his registration in line might have to pay. It’s not a design of the statute and I appreciate Mr. Millen’s concern that, he makes a good point from a textual analysis that, I think on a bigger concern that that’s just fine.”

The quotations above establish that the same Commissar who does not know when property taxes are due believes that “landlords are getting a free ride” and does not seem to know anything about Rent Control Section 1805 (b) (1) (quoted above), which requires that rent adjustments be given for the Rent Board must adjust rents for actual increases in taxes. Then, after several false starts while attempting to formulate an intelligent sounding question, he says the following:

“And I will say that according to [Matt Millen’s] other comments about B & B hardware that it misapprehends the nature of rent control. Rent control law is not a law to help low income people. It was never designed for that, and it is a straw man argument and it is ridiculous to assume that rent control’s only value is for the needy. It creates a solid community, it creates a safe community, it creates a community we all like to live in, that has prospered quite substantially and I believe that anyone that tries to divorce the rent control nature from its success does so at their own intellectual integrity. I think that it is a wonderful law we have here and I am proud to sit on this Board and enforce it. And so I would say to those landlords who have enjoyed this community as have the tenants, I believe that it has enured to your benefit.”

For a short and quick version of the Sklar doctrine click here for the youtube video.

Rent Board Commissars always make the most outrageous comments AFTER the public has spoken so that they never have to answer questions. However, his comments do raise the following questions.

IF the Rent Control law is not for low income people, why does the Statement of Purpose say that it is “especially [for] the poor, minorities, students, young families, and senior citizens?”“

IF Rent Control is such a great success, then why did the population of Santa Monica peak at the 1980 census while the population of California has continued to explode? (This seems like the wrong remedy to address “a growing shortage of housing units.”)

HOW do rental property owners benefit from rent control? (A few specific examples would be nice.)

IF everyone is getting along so much better, why is there a great legal service business for tenant evictions being advertised in the yellow pages in rent controlled areas but not other areas of California?

IF landlords benefit from Rent Control, why does the City Council keep increasing the tenant relocation fees and penalties for going out of business under the Ellis Act?

WHY are landlords willing to pay tenant relocation fees and penalties in order to go out of business for many years to avoid being regulated by the Rent Board Commissars?

WHY does this Magazine exist and why am I writing Rent Board Story Part 134?

I believe that all of the questions (except the last one) should be asked of Commissar Sklar because I do not believe his statements are true. Should you decide to do that, you too can be an Internet and cable TV star and be featured in a future Rent Board Story.