U.S. Supreme Court Won't Hear Landmark Rent Control Case

By Jorge Casuso

Monday, May 24 -- The nation's highest court has declined to hear a closely watched Santa Monica case landlords hoped would outlaw rent control nationwide, the Supreme Court announced Monday.

The decision will let stand a California Supreme Court ruling in January that found the city's Rent Control Board's denial of an annual rent increase to an apartment owner did not constitute a taking. The 3 to 2 ruling - with one of the concurring judges suggesting a hearing before the U.S. Supreme Court -- fueled landlord hopes that the landmark case would be heard.

"I feel like… you can't quote how I feel," said Carl Lambert, whose Santa Monica Beach apartment building was the subject of the suit. "I've always felt rent control was an unconstitutional taking. I wanted to stand up for what I believed in. This wasn't about money."

Landlord advocates hoped the Santa Monica Beach case would show that the city's 1979 rent control law had the opposite effect of what was intended - depriving, rather than increasing, housing opportunities to the poor, minorities and other deprived groups.

The rent board disagrees, saying its policies have helped preserve affordable housing, which is being rapidly lost under a state law that allows landlords to raise the rents of vacant rent-controlled units to market rates.

"I believe we can show that," said Rent Board administrator Maryann Yurkonis. "It's not the court's role to evaluate if this was the best possible road to take."

For two decades, landlord and tenant advocates have argued the merits of rent control, interpreting statistics and census data to make their respective cases. The reports have predictably been contradictory.

Had the U.S. Supreme Court taken up the case, its ruling could have held governmental bodies accountable for the effects of their policies, which critics said would have had a chilling effect on policy making.

"Every single law would have to be measured against whether it meets its goals or not," said Councilman Paul Rosenstein. "Who decides that? You can take the same facts and argue them two different ways. Maybe there would have been less affordable housing without rent control."

The decision not to hear the case sent shock waves across the city's landlord circles.

"It's a catastrophe," said Herb Balter, president of ACTION Apartment Association, the city's largest grassroots landlord group. "Sure we're all depressed about it, but we will not give up and we will not give in. It's a big deal, but we've been disappointed before."

"We're disappointed," said Bob Sullivan, past president of the Apartment Association of Greater Los Angeles (AAGLA). "It would have had a major impact on rent control. Our presence in Sacramento becomes more important."

The case, known among landlords and tenant advocates as simply "Santa Monica Beach," after the building on the 900 block of Sixth Street, has been winding its way up the courts since 1994, when a superior court ruled in favor of the Rent Board. Lambert took the case to the appellate court, which in February 1996 ruled 3 to 0 in his favor, finding that rent control was unconstitutional.

The rent board then appealed the decision to the California Supreme Court, which ruled in its favor in January.

Lambert's case may not be dead yet, however. Under a little-known avenue, he could still pursue the case in a separate branch of the California Supreme Court.

"They'll have to take a look at the constitutionality of rent control sooner or later," said R. S. Radford, an attorney for the Pacific Legal Foundation, who represented Lambert in the case.