Council Update--Council Ups Ante for Construction Violations to $1 Million

By Jorge Casuso

Landlords who violate a pact that sets guidelines for renovating their buildings could face as much as $1 million in fines under an emergency ordinance approved by the City Council Tuesday night. The law, which goes into effect immediately, was approved 6-0.

The council raised the cap from $100,000, expressing concerns that the amount would be "chump change" for large landlords who have offered tenants as much $25,000 - and in some cases $50,000 - to vacate their units. The fines must be paid within 45 days of the citation.

"One hundred thousand for a construction project may not be a lot," said Councilman Kevin McKeown. "It might be cheaper than paying $25,000 a unit."

"All we're doing is asking for people to be treated with respect," said Councilman Paul Rosenstein.

Under a state rental law that went into full effect Jan. 1, landlords can charge what the market will bear for vacated rent-controlled units. The "vacancy decontrol" law has unleashed a flurry of renovation that some tenants claim is severely curtailing the use of their units or driving them out altogether.

The renovation work, said Kurt Jolson, a resident at Pacific Plaza, "makes the lives of the tenants miserable. They have suffered, some continuously for a year, impositions and indignities," said Jolson, whose landlord, Douglas Emmett & Co., offered tenants of another one of its buildings $25,000 to move out. "At this time these people stand naked before the enemies."

"One hundred thousand is not a disincentive when the sum is applied to a large speculator, though it can ruin a small landlord," said Art Harris, who also resides at the 288-unit Pacific Plaza, which is the largest single residential building in the city.

The ordinance requires landlords to prepare a relocation plan in case the residents need to be moved. "The plan will provide details regarding each tenant's existing housing and special needs, the timeline for notification of tenants, and a timeline and method for the actual temporary relocation," according to the staff report. A "relocation expert" will provide follow-up field inspections.

Landlords also must post a security to ensure that the project follows the approved plan. "Security must be posted for the cost of the construction, as determined by a review of the construction means and methods plan, and the cost of relocation (if required) as determined by review of the relocation plan," according to the staff report.

The ordinance also establishes the maximum rate for each violation at $500 and requires the landlord to provide temporary relocation for tenants displaced by fire, even if the fire is not caused by the landlord.

In addition, the ordinance increases by 13 percent relocation fees established in 1990. This would raise the fees for a single from $3,000 to $3,400; for a one-bedroom unit from $3,750 to $4,250; for a two-bedroom unit from $4,250 to $4,800; for a three-bedroom unit from $5,250 to $5,950 and a four-bedroom unit from $5,500 to $6,250.

McKeown noted that the new ordinance will be proactively enforced. (The city has added a building inspector with 20 years experience).

"We want inspectors to be looking at the buildings," he said.