1041 20TH St., LLC v. Santa Monica Rent Control Bd.

250 Cal. Rptr. 3d 376, 38 Cal. App. 5th 27
CourtCalifornia Court of Appeal, 5th District
DecidedJuly 30, 2019
DocketB290242; B290956; B291240
StatusPublished
Cited by4 cases

This text of 250 Cal. Rptr. 3d 376 (1041 20TH St., LLC v. Santa Monica Rent Control Bd.) is published on Counsel Stack Legal Research, covering California Court of Appeal, 5th District primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
1041 20TH St., LLC v. Santa Monica Rent Control Bd., 250 Cal. Rptr. 3d 376, 38 Cal. App. 5th 27 (Cal. Ct. App. 2019).

Opinion

KIM, J.

*379*32I. INTRODUCTION

Plaintiffs, 1041 20th Street, LLC and ASN Santa Monica, LLC, filed petitions for writs of administrative mandamus ( Code Civ. Proc., § 1094.5 ), and 1041 20th Street, LLC also filed a complaint for declaratory relief, requesting, among other things, a finding that defendant Santa Monica Rent Control Board (the Board) was equitably estopped from asserting that rental properties were subject to rent control.1 The trial court granted the petitions and the requested declaratory relief. The Board appeals, contending that it did not have authority to permanently exempt rental units from rent control by a permit pursuant to the Santa Monica City Charter, article XVIII, section 1803(t),2 and thus could not be equitably estopped. We agree and reverse.3

*33II. BACKGROUND

A. Santa Monica's Rent Control Law

"In April 1979, the City of Santa Monica (the City) adopted a rent control charter amendment (... the Rent Control Law) and created an elected rent control board (Board) to regulate rentals. Among other things, the Rent Control Law requires that owners register each rental unit and pay annual registration fees to the Board, establishes *380maximum allowable rents, provides for annual general adjustments and individual adjustments of allowable rents, prohibits evictions except for specified reasons, and prescribes remedies for violations of its provisions." ( Santa Monica Beach, Ltd. v. Superior Court (1999) 19 Cal.4th 952, 957, 81 Cal.Rptr.2d 93, 968 P.2d 993 ( Santa Monica Beach ).)

"The stated purpose of the Rent Control Law, as expressed in the preamble to the charter amendment[s], [is] as follows: 'A growing shortage of housing units resulting in a low vacancy rate and rapidly rising rents exploiting this shortage constitute a serious housing problem affecting the lives of a substantial portion of those Santa Monica residents who reside in residential housing. In addition, speculation in the purchase and sale of existing residential housing units results in further rent increases. These conditions endanger the public health and welfare of Santa Monica tenants, especially the poor, minorities, students, young families, and senior citizens. The purpose of this Article, therefore, is to alleviate the hardship caused by this serious housing shortage by establishing a Rent Control Board empowered to regulate rentals in the City of Santa Monica so that rents will not be increased unreasonably and so that landlords will receive no more than a fair return.' " ( Santa Monica Beach, supra , 19 Cal.4th at p. 957, 81 Cal.Rptr.2d 93, 968 P.2d 993.) One stated intent of the Rent Control Law is "to enable the Board to provide relief to persons facing particular hardship and to protect and increase the supply of affordable housing in the [C]ity." ( Id. at p. 988, 81 Cal.Rptr.2d 93, 968 P.2d 993.) Another purpose is to "attempt[ ] to provide reasonable protections to tenants by controlling removal of controlled rental units from the housing market ...." (§ 1800.)

Section 1803(t) provides one means for controlling removal of units from the housing market, the removal permit. It states: "Any landlord who desires to remove a controlled rental unit from the rental housing market by demolition, conversion or other means is required to obtain a permit from the Board prior to such removal from the rental housing market in accordance with [the] rules and regulations promulgated by the Board. In order to approve such a permit, the Board is required to find that the landlord cannot make a fair return by retaining the controlled rental unit." (§ 1803(t).)

*34In 1983, the Board implemented regulations that govern the granting of removal permits. Those regulations, which are currently suspended, describe four categories of removal permits. Category A permits are for landlords who are "unable to collect the current Maximum Allowable Rent (MAR) on the unit." Category C permits are for landlords who prove a controlled rental unit "is uninhabitable and cannot be made habitable in an economically feasible manner."

In 1984, voters approved an amendment to the Rent Control Law which was intended, among other things, "to ensure due process of law for landlords and tenants, effective remedies for violation of the law, and consistency with constitutional requirements."4

B. In 1993, the Board Granted a Category C Removal Permit to 20th Street Owner

In 1989, 20th Street Owner purchased *381the 20th Street property for $880,000.5 The 20th Street property, which consisted of 13 residential rental units, was registered with the Board on June 15, 1979. The 20th Street property was in poor condition at the time of purchase.

On June 14, 1993, 20th Street Owner filed an application for a Category C removal permit. The application stated it was "hereby made for a permit to remove a controlled rental unit from the residential rental market pursuant to the Santa Monica City Charter ... and the rules and regulations of the [Board]." 20th Street Owner indicated on the application that the removal was for "Renovation of Building."

On October 14, 1993, the Board held a hearing on 20th Street Owner's application. At the hearing, the Board discussed a staff report, including findings by its property inspector. The staff report found that the 20th Street property was uninhabitable, the costs for repairs to bring the building to a habitable condition exceeded the maximum collectable rent, and the owner would not be able to repair the property to habitability in an economically feasible manner.

At the hearing, a Board commissioner asked a Board staff attorney to describe the effect of a Category C removal permit. The two engaged in the following exchange:

*35

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250 Cal. Rptr. 3d 376, 38 Cal. App. 5th 27, Counsel Stack Legal Research, https://law.counselstack.com/opinion/1041-20th-st-llc-v-santa-monica-rent-control-bd-calctapp5d-2019.