HOUSING: Anti-rent control bill approved

Law would weaken East Palo Alto's controls

A bill hailed by property owners across the state but criticized by tenant groups is a governor's signature away from becoming law.

The bill, SB 1257, permits vacancy decontrol in the rent control programs of several cities, including East Palo Alto, and eventually will allow landlords to charge whatever rent they choose when an apartment becomes vacant.

East Palo Alto city officials had lobbied against the measure. The bill passed the Assembly last week and was sent to Gov. Pete Wilson, who is expected to sign it this week or next. Similar legislation had been approved earlier in the state Senate.

The bill, which will become law Jan. 1, 1996, will give East Palo Alto landlords more latitude in setting rents when an apartment becomes vacant. It will also remove single-family homes from the rent control program once they become vacant.

Under East Palo Alto's current law, annual rent increases are limited to inflation unless the owner files a petition with the rent board justifying a larger increase. Rent increases have averaged 3 percent over the last five years.

For three years, apartment owners will be allowed to charge 15 percent more when an apartment becomes vacant. After three years, there will be no limit to the increase, although vacated apartments are then subject to the same year-to-year rent restrictions set by the rent board.

Rent control was one of the key issues during a hard-fought incorporation election of East Palo Alto in 1983, and the rent control law was one of the first passed afterward by the new City Council. The city's voters have since voted for rent control on three separate occasions.

Property owners have been critical of the law and how it is administered, claiming that it doesn't allow them to charge enough rents, which has led to several apartment buildings going into bankruptcy and the physical deterioration of others. Tenant advocates instead say that many of the city's apartment buildings have fallen into disrepair through neglect by their owners.

--Don Kazak