WAM- Sacramento Update, March 2002

Sacramento Update, March 2002
By Carl Lambert, Esq.

INFORM YOUR TENANTS ABOUT SMRPH

As most of you know, SMRPH (Santa Monica Residents Protection & Homeownership) has been qualified for the November ballot. SMRPH is basically a revision or a revival of the very successful TORCA (Tenant Ownership Charter Amendment). Under the old TORCA law, approximately 5,000 units were converted to home ownership for tenants.

SMRR doesn't like home ownership because it erodes their voter base. However it's very important to note that virtually all of the SMRR leadership are homeowners. The great American dream is okay for them but not their constituents— what hypocrisy.

This is where you come in, it is important that every owner talk to at least a couple of friendly tenants in their buildings to explain to them the benefits of SMRPH and home ownership. We must encourage them to then disseminate the information to the other tenants in their building and Santa Monica. SMRR will bombard the tenants with a campaign alleging that SMRPH will be the end of Rent Control. However, nothing could be further from the truth. Remember SMRR and truth have never been close allies.

Recently I ran into a long-term tenant in one of my buildings during a property inspection. She asked me about SMRPH. She wanted to buy her unit. She reminded me that ten years ago before I bought the building in 1992 several condo converters approached the tenants about converting. At the time the converters wanted to sell the three bedroom two story units north of Wilshire for approximately $180,000. However at the time the building was full of MBA's, Financial Analysts, a factory owner and other high net worth tenants who over-negotiated with the condo converters. Years later, the tenants of course are all sorry that they blocked the TORCA conversion.

Home ownership is the largest store of wealth for most Americans. This is the "evil" that SMRR wants to protect tenants from. It is important that we get the word out about SMRPH before SMRR starts their SMR campaign.

However had the tenants bought their units for $180,000 the current value today for those units would be approximately $500,000. Thus, the tenants would have made over $300,000 in equity and their mortgage payments would be less than their current rent even under rent control.

I realize that most apartment owners are not in the business of converting their units to Condo's. However it's important that we all support this bill because property values for both apartment buildings and homes will increase as the percentage of home ownership goes up. Everyone wins with home ownership. The tenants who buy, the homeowners in the area, the city coffers and apartment owners. Only SMRR loses.

If you have any anecdotes about how your tenants have benefited under the TORCA law, please give me a call and I will incorporate it in the next issue.