Prominent real estate investor lives in Beverly Hills, but keeps a penthouse apartment in Santa Monica
CITY HALL — Officials here have quadrupled the rent millionaire Robert Bisno must pay for his beachfront Santa Monica apartment, it was announced this week.
A prominent real estate investor with holdings throughout Los Angeles and across the state, Bisno lives in an exclusive enclave of Beverly Hills, but also keeps a rent-controlled penthouse in a high-rise tower in Ocean Park.
Bisno rented his 16th-floor, 1,088-square-foot apartment at The Shores apartment towers in 1996 for a little more than $900 a month, according to city documents. Adjustments for inflation have left his rent at about $1,100. That’s just a quarter of the $4,045 Bisno’s luxury unit would command on the open market, a hearing officer at City Hall decided. A Santa Monica law allows landlords to charge part-time tenants market rates.
While Bisno prepares to appeal the rent hike, he also is leading a court fight against City Hall over the legality of the law, passed by the Rent Control Board in March of 2003.
“The major issue is that this policy … is not something that the Rent Control Board can decide — that’s something only the voters of Santa Monica can decide,” said Allan Abshez, Bisno’s attorney. “This is a pure windfall for the landlords’ wallets. It doesn’t benefit rent control. It doesn’t benefit renters.”
Abshez last week filed written arguments against the law in a state court of appeals, after Santa Monica Superior Court Judge James Bascue threw the case out earlier this year. In his court filing, Abshez maintained the Santa Monica Rent Control Board was acting beyond its powers by enacting the law, which he added does nothing to alleviate the housing shortage or promote affordable housing.
Called Regulation 3304, the law was passed under pressure from landlord groups in Sacramento, who were pushing for a statewide law. Reg. 3304 was designed to weed out renters who use their units as second homes, or for office or storage space.
Tenants initially feared the law would be troublesome because it could encourage landlords to keep tabs on their comings and goings, even rifle through their refrigerators and mailboxes looking for evidence that tenants weren’t using their units full time.
Those fears dissipated when complaints under Reg. 3304 dropped off after the first few months. As of Tuesday, 145 landlord complaints had been filed with City Hall and just 57 rent increases granted, said Tracy Condon, a spokeswoman for the Rent Control Board. The law requires landlords to establish proof that tenants are part-timers, and allows renters to demand hearings and appeals, which the Rent Control Board presides over.
A hearing officer initially determined Bisno was not a full-time tenant in August of 2003. That decision was appealed. After the law was temporarily stayed to adjust the way increases were calculated, the Rent Control Board last summer denied Bisno’s appeal. A separate hearing was held in October to determine the new rent level, and the hearing officer’s decision was announced this week.
In the rent-setting hearing, Michael Boge, a portfolio manager for Douglas Emmett & Co., the company that owns The Shores, asked that Bisno pay upwards of $4,500 a month for his penthouse apartment. Boge pointed out that Bisno rents a corner apartment on the 16th floor, adding it commands superior views of both the ocean and city. What’s more, the building’s penthouse apartments are more prestigious and safer than other apartments because residents need a special access key to reach them.
“It’s a different feel,” added Boge, saying hallway floors are tiled rather than carpeted and historic photographs of Santa Monica line the hallways. “More importantly, there’s a level of exclusivity people want to have on those floors.”
Though he didn’t pinpoint an exact figure, Abshez argued Bisno’s rent should be drastically lower, adding Bisno had spent thousands of dollars repainting and recarpeting his apartment, as well as installing a new dishwasher. Abshez also took issue with the other units in the building Boge chose to compare with Bisno’s, saying he should have looked at more units on lower levels.
“The landlord here simply tried to select the most expensive comparables, not all comparables,” said Abshez, who during the hearing also argued Douglas Emmett already earned a fair return and, therefore, should reduce the current rent.
In the end, hearing officer Lynn Naliboff averaged the rents of 16 identically shaped units rented at market rates since 2000. All of the units were on the 11th floor or above. Naliboff raised the average by $100 because Bisno’s is a penthouse unit, but also reduced the average by $220 for repairs already completed.
Originally published in the Santa Monica Daily Press print edition on December 1, 2004. Read the original PDF.