Karen S. Kim
Whether a proposed rent-control charter amendment would hold up
under the scrutiny of a judge is a question being asked by those for
and against the measure.
The proposed initiative calls for a 3% annual cap on residential
and commercial rents. But according to state law, regulating rents on
commercial properties is expressly forbidden, opponents of rent
control contend.
"Were this to pass, there would certainly be a court challenge,"
Glendale attorney Pat Liddell said Thursday. "It seems kind of silly
to put in a provision that's already in conflict with state statute."
Glendale Tenant Assn. President Ken Carlson, who is spearheading
the effort to establish rent control in the city, said his proposed
charter amendment is legally sound. As a charter city, Glendale can
pass laws that defy state statutes as long as they are matters of
local concern, said Carlson, also an attorney.
California's civil code calls commercial rent control a matter of
statewide concern and bars the "imposition of artificial barriers to
commercial rents" in all cities.
"Price controls on commercial rents discourage expansion of
commercial development and entrepreneurial enterprise," the code
reads. "Because the impact of these controls goes beyond the local
boundaries within which the controls are imposed, the adverse
economic consequences become statewide."
Carlson disagrees with that reasoning.
"Inherently, it's a municipal affair tied to the land within our
borders," he said. "What law made within a city doesn't somehow
affect somewhere outside its borders?"
Because no city in California has rent control on commercial
properties, there is no case law to back up the code's argument that
the issue is a matter of statewide concern. Glendale could be the
first to tackle the law, Carlson said.
"More likely than not, commercial rent control is a municipal
affair, and Glendale does have authority as a charter city to enact
commercial rent control in defiance of the current statewide scheme,"
Carlson said.
USC Professor David Dale-Johnson, an expert in finance and
business, said rent control on commercial properties is unheard of.
"I'm not aware of anywhere in the country that has commercial rent
control," he said. "Generally, commercial rent control is not very
successful because business owners recognize that for investors to
provide space for their use, they have to charge market rent.
Successful cities have high-market rents; unsuccessful cities have
low-market rents."
The petition to get rent control on the ballot needs to obtain
signatures from 15% of Glendale's voters within 200 days of
publishing the amendment. The amendment has yet to be published.
