Los Gatos Weekly-Times El Gato tenants fighting owners at every turn on rent hike plan Renters say it's a push to bring in corporate clients Arbitration starts this week By Jeff Kearns Rent control is in the eye of the beholder. At the El Gato Penthouse on E. Main Street, however, the beholders can't agree, and on Nov. 17, a rent increase proposed by management was scheduled to go to arbitration. Tenants and landlords have been trying to iron out a compromise for more than six months. At issue is a rent hike the property owner, Vasona Management, says is perfectly legal under the town's rent control ordinance. Vasona wants to pass on about $1 million in improvements to the property to renters effective Nov. 1, but renters, who say the increase is designed to push them out to make room for corporate renters, are battling the increase every step of the way. The first two stages of the town's rent control dispute resolution process--conciliation and mediation--have already failed. Arbitration will be the final step. Residents say rents are going up from 40 percent to 70 percent, or $400 to $600 per month, but Vasona says the average increase is about 35 percent. Vasona Management vice president Killian Byrne says most rents will increase by $300 to $400. Rents at the El Gato average about $1,000 per month. The process began in May, when residents were first told about the proposed increases. After that, the first stage of the town's rent control dispute resolution process, a July 20 letter of conciliation, failed. Mediation talks, on Aug. 17 and 24, also went nowhere. Vasona made four offers, all of which were declined. Third and last stage, arbitration, ends the process when the arbitrator makes a decision. The town contracts all rent dispute resolution issues to the Santa Clara County Bar Association. Town ordinance allows for a general ceiling on increases of 5 percent per year or 7 percent of the Consumer Price Index, whichever is greater. But, landlords can make reasonable rent increases for certain kinds of improvements, such as operations and maintenance, refinancing debt, or capital improvements. The key issue, both sides say, is what's "reasonable." Linda Maupin, who has lived in the apartments since 1981 and is on disability for post-polio syndrome and narcolepsy, says it's definitely not reasonable. If the rent hike is approved, she's afraid it will leave her in the streets. "Since I'm on a fixed income, I'd probably have to move, but I don't make enough to pay the rent, so I really worry about being homeless," she says. "You can't find an apartment without a job." Other elderly residents also living on fixed incomes worry about being forced out by the increase. Vasona says only one renter has moved out since the increase was proposed, but tenants say that the total is actually four. Some renters say that Vasona is trying to push them out the door to make room for corporate clients with expense accounts, and pass on the costs of the improvements to the permanent tenants. About 60 of the 81 rooms have already been remodeled to cater to corporate clients, but management says they're not trying to push anyone out the door. "We don't want these residents to leave, we really don't," says Byrne, "but we need these capital improvements to be made." Killian says tenants are tenants, and doesn't like to refer to the corporate units as corporate units. But while most tenants pay about $1,000, corporate rooms are renting for as much as twice that amount. Killian says the difference is due mostly to expenses such as furniture, dishes and maid service, which not all renters have. Renters see it differently. They say amenities like the new hot tub, fountain and cheap oil paintings hanging in the hallways are bait for corporate renters. Worst of all, they say, is the increase in advertising designed to bring in corporate renters, which went from $3,625 in fiscal '97 to $26,912 in fiscal '98--shown in a budget provided to residents by the landlord. Dick Porter, who has been leading the residents' charge to fight the increase, says Vasona told renters they were doing their best to bring in corporate clients. "They're recognizing there's a market, and that's what they decided," Porter says. "Vasona is levying these huge rent increases on us to force us to vacate ... It's clear they're trying to force us out." Porter says every long-term resident except one signed a petition. Residents also complain about the work that went on this summer, saying that Vasona tore out perfectly good stoves and heaters and replaced them unnecessarily. Also, they say, water was turned off in the building during the day for several days in a row, and workers walked in without announcing themselves. One resident said workers even walked in on her naked, twice. In a letter sent to residents in September, Vasona outlines $1.04 million in expenses since last year, about 83 percent of that going to capital improvements. Among other things, Vasona put in new double-pane windows for the whole building costing $289,000; new bathrooms for $169,000; and two new air conditioning/heater units per apartment, at $109,000. Vasona has owned the complex, which consists of two four-story towers just across the bridge from downtown, since it was built in the mid-'60s. Tenants took their beef to the Town Council at a Nov. 2 meeting, but councilmembers and town attorney Orry Korb did their best to stay on the sidelines. Renter John Bandei told the council that Vasona was "trying to turn the apartments into a corporate hotel." "We basically have no leverage in this area," Mayor Linda Lubeck said, "This is something we can forward to the Rent Advisory Committee, because they wrote the ordinance and they can see if it needs to be changed." The RAC isn't scheduled to meet again until Jan. 4. [ Back to Contents Page | Los Gatos Weekly-Times Home Page | Archives ] This article appeared in the Los Gatos Weekly-Times, November 18, 1998. ©1998 Metro Publishing, Inc. All rights reserved.