KICK ‘EM WHILE THEY’RE DOWN: I just read how a UCSB researcher scored a grant from the Department of Defense for a couple million bucks to study something known as “robust uncertainty management.” While I love the sound of this, I admit I have no clue what it actually means. But I’d be willing to bet the entire grant amount there’s a growing number of tenants on Santa Barbara’s beleaguered lower Westside who could write the book on it. In their case, the uncertainty is coupled with anxiety, as they’re being forced-by the caprice and whimsy of Santa Barbara’s real estate market-to figure out just where they can afford to move next. That’s because a new landlord has taken over their digs-two early-‘70s style apartment houses at 555 and 554 Coronel Place-and is giving them all the heave-ho with a swift kick in the ass coupled with a sharp stick to the eyeball. Not only is the new owner jacking up rents by $600 a month, he’s charging tenants $25 for every non-emergency phone call they make to their new landlord.
For the past 11 years, these properties-with 45 apartments between them-were owned by David Grotenhuis of Santa Barbara Capital. Aside from the usual complaints about termites, mold, noisy neighbors, drug dealers, and unresponsive property managers, the tenants were reasonably content because the rents were within reach. For people with families bigger than their bank accounts, that’s a very big deal in Santa Barbara. Unlike a lot of landlords in town, Grotenhuis was willing to rent to people with Section 8 housing vouchers dispensed by the local Housing Authority. In fact, more than half the units-24 in all-were occupied by people holding Section 8 vouchers.
But all good things come to an end, and after 10 years, Grotenhuis was approached by an investment group out of North Hollywood determined to give him nearly four times what he initially paid for the two apartment houses. Being only human, Grotenhuis-who had paid $3 million for the buildings-found it hard to say no when Interstate Equities Corporation (IEC) offered him a whopping $11 million. That’s a big jump, and to pay for it, the rents will be increased nearly $600 a month.
OUCH! One fellow who’d been living there since 1990 said the rent for his two-bedroom apartment would be adjusted from $1,375 a month to $1,950. I spoke to a 13-year resident-with wife and kids-whose two-and-a-half bedroom unit was jumping from $1,720 a month to $2,300. As for the Section 8 tenants, they’re just getting flat-out evicted. The problem with Section 8 tenants, according to the folks at IEC, is the government can’t and won’t pay what IEC founder Dr. James Wilson Boyd thinks the market will bear. Housing Authority Director Rob Pearson said he’s given some latitude in what the agency can pay, as long as the rents are reasonable. But Pearson said the rents Boyd wants to charge are hardly reasonable, especially for that neighborhood.
Who knows? Maybe the lower Westside is on its way to becoming the new Isla Vista, as landlords compete to meet the growing demand created by City College’s increasingly affluent student population. In any case, Pearson now finds himself with 24 Section 8 families all dressed up with absolutely no place to go. One of the Section 8 tenants is a special education assistant who’s been working for the Santa Barbara School District for seven years. Another is a mother of two who grew up on the Mesa and now works as a doctor’s receptionist and attends City College. Good luck finding a place. It’s always been hard finding landlords willing to take Section 8 certificates; those who do typically have waiting lists two years long.
Boyd, by the way, got his PhD in economics at UCSB in 1974; he’s devised all kinds of scientific-sounding theorems and axioms that, boiled down into plain English and actual practice, involve hiking rents on low-end properties located in slow-growth communities and screwing over the tenants. For many landlords, this is standard practice. What sets apart Boyd and IEC is the $25 they charge tenants for every non-emergency call they make to his property managers. Presumably such calls distract IEC property managers from implementing Boyd’s many theorems and axioms and must be discouraged. I tried calling one of Boyd’s managers and the point person for the $25 project, Manny Estrella-several times, in fact-and only got his answering machine. Although I left several messages, I have yet to hear back from Manny. That’s probably a good thing. He’d probably charge me $50 a call. Manny’s a busy guy. I know Pearson has called several times too, but likewise, has yet to hear back.
YOU CAN HELP: I’m thinking in this new era of the blogosphere and citizen journalism, maybe you can get through better than I can. Maybe Manny will spill his guts and give you the inside dope while he gives me the cold shoulder. I’m not threatened by this new paradigm; I embrace it. So much so that I’m going to give you Manny’s phone number. Call him up. Ask him how he justifies charging tenants $25 per phone call. Ask what he takes to help him sleep at night. Ask him if IEC has considered charging $50 a call. Isn’t it time to really push the envelope? Manny can be reached by calling (818) 766-7344. And if you actually get him on the line, do me a favor. Tell him the Poodle sent you. And then bark a few times.