What will happen if 1506 passes?

“Vacancy control” is returning to Santa Monica. It will leave the city in ruins, raise rents and cause homelessness.

(All of what follows is not a criticism of the normal rent control that Santa Monica currently has, but solely of ultra-extreme “vacancy control”.)

Vacancy control was banned throughout California in 1995 for the harm it caused. CA Assembly bill 1506 (sponsored by assembly member Richard Bloom) will allow vacancy control to return, specifically to Santa Monica, Berkeley, West Hollywood and East Palo Alto, as the broken housing politics of those cities previously required it.

I am a long term Santa Monica resident with two young children. I love this city. But I didn't love it in the 1980s. It seemed that all the apartment buildings were decrepit slums with peeling paint and dirt yards, and there were no apartments to rent. I don't want my children to grow up in a city like that. I want Santa Monica to stay the attractive city it has become.

The vacancy control that Santa Monica had from 1979 until 1995, (and that AB1506 will bring back,) restricted landlords to tiny rent increases – even after a voluntary vacancy. Owners were never able to charge market rents, and often the allowed rents were way below market. This is rent control to the n’th power, and it leaves cities in ruins – Santa Monica was such a ruined city.

Back then vacancy control kept rents so low that apartment building owners couldn’t maintain them, and the buildings were virtually abandoned. Santa Monica deserved its nickname of “Skidrow-On-Sea.” Talk to those who lived here then to hear the truth about “vacancy control.”

Should AB1506 bring back vacancy control then the renters may initially be happy; Till they find it impossible to rent a pre-1979 apartment, and the prices of the newer ones have doubled.  That is what price caps do when applied to any commodity. The government of Venezuela doesn’t seem to realize that it’s price caps cause crippling shortages. Neither, it seems, does Mr. Bloom. Or perhaps he knows but doesn’t care – it’s just pure politics.

Back then landlords would often keep low rent apartments empty. And when one of those super cheap, shabby apartments did become available there would be hundreds scrambling to rent it, but the apartments invariably went to someone on the inside, who was in no way deserving of this huge, enforced gift. Thus although rents were low in theory, in practice there were no apartments to rent. That is the inescapable truth of price-caps: Goods are cheap, but they don’t exist. Then the black market takes over and illegal subletting (i.e. fraud) is the only option left.

Under vacancy control landlords couldn’t survive, so they began a “demolition derby” of their buildings to replace them with condos.  Then California banned vacancy control, owners could get a fair return while keeping their low-rent tenants, and the number of demolitions declined dramatically, keeping those tenants safe. Should AB1506 bring back vacancy control, the landlords who have been happy having some low rent tenants, (rather than the entire building of low-rent tenants that it would become under vacancy control) will once again be forced to seek demolition to escape bankruptcy - thus passing AB1506 will greatly imperil the very tenants it is claimed to protect.

Although it currently bans vacancy control, California does allow normal rent control. This lets owners ask for market rents after voluntary tenant vacancies. The new tenants are then again protected by rent control. Acknowledging landlords should have that small, constitutional, right and freedom rescued Santa Monica from being from the gigantic slum it once was.

There is so much unfairness here. Should AB1506 pass then pre-1979 buildings will be rendered worthless, but later ones won’t. But they are the essentially the same thing. Similar businesses should be treated the same way. Of course if they had applied rent control to new-build then only a fool would build apartments. Apparently only fools have been buying pre-1979 apartment buildings in Santa Monica, because if Mr. Bloom succeeds then values will collapse, and lots of mom-and-pops will lose their life savings.

And now, finally, we come to the real reasons they need to bring back vacancy control:

• The slow loss of low rent apartments as tenants move has eroded the number of voters loyal to whoever praises rent control the highest in city hall. Thus to keep their jobs rent control politicians need a fresh influx of super-low rent tenants to refill this reservoir of ultra-loyal voters - which AB1506 would (in theory) supply. 
• The fees. The ever-rising wage and pension bill at the rent control office at city hall is confronting the fixed number of rent control apartments. Should AB1506 pass then rent control can be modified without voter approval. Then Santa Monica will put post-1979 buildings under rent control as well, which will have the side effect of halting all new construction and further crippling housing supply.
• It gives Mr. Bloom a golden status amongst the fringes of housing policy and may give him the boost he needs to jump to the senate when he is term limited out. Never mind the scorched earth wasteland of Santa Monica he will leave in his wake.

Should AB1506 become law then say hello again to Skidrow-On-Sea, rental fraud and the loss of old-build apartment rentals. And that is just the beginning.

You must call and write assembly member Richard Bloom.

Phone: (916) 319-2050

Email:assemblymember.bloom@assembly.ca.gov

Tweet: @RichardBloom

Also, call, email and write to your Santa Monica city council members.

Or how about a march on city hall?