Beverly Hills May Limit Rent Increases to 10%

Apartment house owners would be limited to one 10% rent increase a year under a proposed ordinance designed to block rent gouging in Beverly Hills, the City Council decided Tuesday.

The decision came after a committee of landlords, renters and a neutral chairman met seven times but ultimately filed three separate reports because they could not agree on how to limit the amount of rental increases.

As expected, said Michael J. Fasman, chairman of the committee, “East is east and west is west and never the twain shall meet.”

Each of the three owners’ representatives recommended different rental ceilings--15%, 17.5% and 20%--while the renters proposed that hikes be limited to 8% or linked to increases in the consumer price index, whichever is lower, Fasman said.

“After hours of discussion your chairman recommended as a compromise figure that 10% of (the) April 30 rental be the maximum increase allowable,” Fasman said. The owners’ representatives at first endorsed his recommendation, but later settled on 15% as their proposal. They said in a separate letter that they decided to go with the higher figure because the tenants rejected Fasman’s 10% compromise.

In an informal study session, the council accepted the chairman’s figure and instructed the city attorney to prepare an ordinance to that effect. The new law will take the place of an emergency measure freezing most rents in Beverly Hills, which was passed in June after Donald T. Sterling, the city’s largest landlord, imposed increases of up to 30% on some apartments.

Sterling, owner of the Los Angeles Clippers basketball team, did not take part in the committee meetings, but his assistant, Ina Poncher, said, “We always abide by whatever rent control rules and regulations there are.”

Sam Schermer, an owners’ representative on the committee, said the landlords felt 10% was too low, since many apartment house owners have kept their rents down over the years.

However, he said, “We’re going to have to live with it, whether we like it or not. We think the City Council is trying to do the best for the city, and we’re going to work with it.”

For their part, renters’ representatives found the 10% limit too high, arguing that while many landlords asked for lower increases in the past, others now would be tempted to go for the maximum every year.

“Over three years you would have a 33% increase,” said Herb Shultz, an alternate member of the renters’ delegation. “This can’t go on, or in a few years people’s rent will not only double but triple as a result of increases down the line.”

Despite their differences, the committee agreed on some points, including a consensus that April 30, 1986, be set as the basis for computing future increases, that increases be limited to once a year, and that notices of rent hikes should be given at least two months in advance.

In the course of the meeting, Councilman Max Salter jokingly suggested that gangland-style vengeance be meted out to Sterling for upsetting the status quo among owners and renters in Beverly Hills.

“There is one more thing that has to be addressed--who puts the contract out on Sterling,” Salter said. When the small audience in the council’s study chamber erupted in laughter, Salter laughingly added, “I didn’t say it.”

Asked about the statement, Sterling’s aide called it absurd. “I don’t even think that a statement like that deserves a response,” she said.