By Jorge Casuso

Tenants should be allowed to purchase their units and homeowners to rebuild buildings destroyed by a disaster, such as a fire or an earthquake, in the same style, density and size as the original structure.

Those are the key provisions of a proposed Charter Amendment sponsors say will help preserve the city's rapidly changing housing stock in the midst of a heated rental and real estate market. Opponents, however, argue it will line developers' pockets and lead to tenant harassment.

The proposed Santa Monica Residents Protection and Homeownership (SMRPH) charter amendment must be signed by 9,000 local registered voters to qualify for the November ballot, where it must be approved by a simple majority.

"It is the permanent solution," said Santa Monica real estate attorney Paul DiSantis, who crafted the nine-page ballot measure. "We'll be able to help preserve a building's economic life. We're creating a healthy solution direct to the cause.

"We will not preserve the Santa Monica character unless we preserve the middle class, and to do that, you need home ownership," DiSantis said. "Right now we're headed for crisis. This is the solution to the problem."

Opponents, however, charge that the proposed initiative is a cynical ploy by developers to turn a large, quick profit, providing a difficult to resist temptation to drive tenants out.

"I've heard people call it the Paul DiSantis full employment act," said Mayor Ken Genser. "This would give a landlord an incentive to get a windfall of $200,000 or $300,000 cash. People need to be very cautious."

The provision allowing homeowners to rebuild what was there before a natural disaster - as opposed to rebuilding to current, often stricter codes - already is part of the city's general plan, the mayor said.

"This is just a cynical ploy to pick up votes," Genser said. "Beware real estate attorneys bearing gifts."

The proposed initiative is an update of the defunct Tenant Ownership Charter Amendment (TORCA) crafted by DiSantis and approved overwhelmingly by voters in 1984. TORCA, which expired under a "sunset" clause in 1996, resulted in the conversion to condominiums of approximately 3,000 rental units.

But slumping market forces and tight restrictions made the program obsolete long before it was phased out, said DiSantis, who for 14 years has served on the board of Community Corporation, which builds and manages publicly subsidized buildings in the city.

The proposed initiative - which is less restrictive -- was crafted to address the city's heated housing market in the wake of a state law that allows landlords to charge what the market will bear for most vacated rent-controlled units, DiSantis said.

DiSantis contends that, unlike rent control tenants who often lived in their low cost units for more than a decade, the upscale renters who are replacing them are highly transient. The proposed initiative would provide the stability of homeownership, he said.

"The people moving in are there for the short-term," Di Santis said. "Many just moved into town and are looking for a place to buy but haven't found it. Their incomes would be the same. What is different is their commitment to the community. Homeowners will become active in the community and be more likely to care about their neighbors."

Under the proposed initiative, half of the tenants would have to vote to convert their units, compared to two-thirds under the old TORCA law. The landlord can veto the conversion, as well as convert the units with two-thirds of the tenants' approvals.

According to DiSantis, the after tax cost of owning the unit would be similar to the rent. Unlike TORCA, which was bogged down with red tape, the conversion process is streamlined and there is no conversion tax, DiSantis said.

But DiSantis acknowledges that with the escalating rents, landlords may not be as willing to part with a building as they were at the height of rent control.

"I don't expect there will be a flood of conversions due to Costa Hawkins," DiSantis said, referring to the state law. "There will be some conversions. It's an important tool in the tool box."

Genser, however, contends that the proposed initiative would only increase the harassment he said was used to drive TORCA tenants out of their converted units.

"Tenants who remained in TORCA buildings who wanted to stay on as tenants claimed they were harassed in order for the units to be sold," Genser said. "I think it's probably impossible to protect against. The increased income (for developers who buy converted units) is also greater than under vacancy decontrol."

For a tennant , Genser said, seeing a unit sell as a condo is more "frightening to a tenant" than raising rents of vacated units.