SAMOHI — It’s halftime at the first Santa Monica High School football game of the season and Beth Leder-Pack, who is there to watch her daughter on the cheerleading squad, is only half paying attention.
“I looked over,” she said, “and I saw the cheerleaders were holding this banner that said ‘Got rent control?’ It took me some time for my brain to catch up. I was like a deer in headlights.”
Leder-Pack is also an employee of City Hall’s Rent Control department and she does not have a high opinion of the company in question: Lease Buyout Now.
“I’m pretty savvy about these issues,” she said. “I was shocked and dismayed to see this during the halftime show at the football game.”
Lease Buyout Now, which started in San Francisco in 2011, negotiates buyouts for tenants who want to leave their rent controlled apartment. The company takes a cut of the buyout. Buyouts are attractive to landlords because, until a long-time tenant leaves, they cannot raise the rents for the unit to market rate.
Advocates for renters’ rights were up in arms about the halftime show ad, claiming, among other things, that the company seeks out vulnerable tenants and pushes them to accept offers that might not be advantageous in the long-run. This, they said, could also add pressure to the tenants who decide to stay.
The advocates wrote letters and made phone calls to Board of Education members and Santa Monica-Malibu Unified School District officials. The district opted to end the promotion, which offered a chance to win a $5,000 scholarship at every home game if a student could throw a football through a hoop. The district never received any money for the ads.
Robert Ring, the company’s owner, was surprised by the uproar. He first wondered if the blowback might have come from landlords. Ring claims that they never push tenants to move out simply to make some quick cash.
“All we’ve said is that I don’t know if you understand that there is an option,” he said of the company. “The people who really want to stay in Santa Monica will say no. They’ll say, ‘No, I like the situation. I like Santa Monica. And there’s no amount of money that could get me to leave.'”
They chose the Samohi football game, Ring said, because parents whose students are graduating might be interested in moving out.
“Maybe you’re older and you’ve lost your partner and you want to move to Arizona,” he said. “You might not even think to ask for a buyout or you might not have the skill set to feel like you can go to your landlord and confidently negotiate a buyout. I’ve met people who don’t feel like they can even be in the same room as their landlord.”
Ring said that Lease Buyout Now is remedying the “artificial, unintended consequences” of rent control.
“It’s not keeping people there that want to be there,” he said. “It’s keeping people there who don’t have any other choice. You’re enslaved in some ways to your cheap rent. Your options are limited. You can’t move. You can’t look to start your career somewhere. You’re kind of stuck.”
Nicole Phillis couldn’t disagree more. Phillis will likely be a new Rent Control Board member next year; she and two others are running for three seats, uncontested.
“I think Lease Buyout Now is really capitalizing on a vulnerable population who really could use (the Rent Control department) as a resource rather than a for-profit company who is going to take a percentage of whatever their pay-out is.”
As market rates rise so have tenant harassment complaints — council addressed the issue on Tuesday night. Companies like Lease Buyout Now, Phillis said, benefit from tenant harassment.
“If this a tenant who is repeatedly getting harassed by the landlord and that’s what’s precipitating the desire to get bought out, Lease Buyout Now is not going to go to the city attorney and say, ‘We have all these tenants who are getting harassed, knock it off,'” she said. “Lease Buyout Now will capitalize on that harassment and say, ‘Great, more tenants are getting harassed. We can negotiate their buyouts too.'”
When tenants take voluntary buyouts, she said, they pass on long-term rights that they’d be offered if the landlord were to force them out through the Ellis Act. Furthermore, when tenants voluntarily leave, she said, the remaining tenants face additional pressure from the landlord.
“There are people in Rent Control who can provide these people with resources,” Phillis said. “If people are leveraging their rent control relocation benefits and they think they’re entitled to more relocation benefits because they’re going to take a disability increase then they can go to (the nonprofit Legal Aid Foundation),” she said. “Legal Aid is not going to take a percentage of their relocation benefits.”
School Board member Ralph Mechur said that — while he is aware that the company is a political lightning rod in a city made up of a majority renters — the primary reason that the Lease Buyout Now promotion was canceled was because they violated their agreement.
The banner, he said, was not supposed to have been placed on the field and the company’s representatives shouldn’t have had access to the microphone.
“I just think the district got duped,” Mechur said. “The issue about whether it’s a good group or a bad group — if we’re selling advertising, people have the right to buy it. They abused their permit.”
House Principal Elias Miles said it was an easy decision to cancel the program.
“I still don’t know a whole lot about the company except that the renters’ rights people were quite upset,” he said. “If people are upset, we don’t gain anything by having people mad around some of the fun stuff we’re trying to do.”
When Lease Buyout Now came forward with a pitch, Miles said, district officials heard the word “scholarship” loud and clear.
“We’re not exactly the Lakers so providing some entertainment and maybe getting a Samohi kid a $5,000 scholarship seemed like a great idea,” he said. “And we’re in the business of education, so you tell me that anyone, the Daily Press let’s say, is going to offer a $5,000 scholarship for something our ears our going to perk up.”