Owner Wins Legal Battle : Senior Citizens Complex Allowed to Raise Rents

After seven years of legal battling between the residents and the owner of a University City senior citizens complex, the state Supreme Court has ruled that the owners have the right to raise rents and to rent apartments to younger people.

The decision “is a devastating blow to all of us,” said Gertrude Evans, 72, a tenant in University City Village, formerly a senior citizens complex on Governor Drive.

The 15-page decision issued Dec. 31, in which Chief Justice Rose Bird was the sole dissenter, is the result of a legal battle by the tenants and the city against the owner of the complex, Sports Arenas Properties Inc., said Dwight Worden, attorney for the tenants.

In 1962 the city issued a conditional use permit for the 542-unit complex, which was built in 1964. The permit required that the complex be for senior citizens only and be nonprofit, which meant that rents could not exceed the operating costs of the complex, a spokesman for the owner said.

The complex, originally financed with a loan guaranteed by the U.S. Department of Housing and Urban Development (HUD), went back to HUD in foreclosure and, in 1968, HUD sold the property to its current owner.

But HUD made no provision at the time requiring that the complex be solely for senior citizens or that it operate on a nonprofit basis, said Bruce Ray, attorney for the owners.

HUD regulated rents, Worden said, but the owner contended that, after the loan was repaid in 1980, the regulations no longer applied.

In 1979, when the City Council rejected a petition by the owner for condominium conversion, citing the original permit, the owner took the case to court.

A Superior Court judge ruled in 1982 that the complex must remain a nonprofit senior citizens complex, a spokesman for the owner said. The decision was overturned on appeal in 1984, Worden said.

The tenants then appealed to the state Supreme Court, which ruled that the city permit conditions no longer applied because the building had passed through federal ownership, Worden said.

The rent increases are retroactive to Nov. 1, and will raise the rent an average of $50 to $60 for each apartment, said Harold Elkan, president of Sports Arenas Properties.

Worden questioned the legality of retroactive imposition of rents, saying, “We may have to fight on that one.”

Evans, co-chairman of the tenants association, said she believed the average rent increase was higher. “Our rent was raised $98; some were raised $91, some $75,” Evans said.

Elkan said some rents were not raised at all.

Even with the increase, “senior citizens still can’t get anything cheaper,” Elkan said.

Worden said that, according to his figures, 75.6% of the tenants are retired and on fixed incomes. Since 1980 the city has allowed the owner to rent to people at least 55.

Elkan said he plans to tear down the complex in sections and rebuild it with as many as 2,000 units, but intends to keep it for senior citizens.

“If he does all that, the rents are going to go up, and what he’ll have is rich seniors, not poor ones,” Worden said.

Elkan said he plans to raise rents again later this year, but it will be a small increase. He said some arrangement will be made for tenants who really cannot afford the increase.

At a meeting Wednesday, tenant association officers and Worden decided to survey all the tenants to see whether they favor taking the case to the U.S. Supreme Court, Worden said.

San Diego City Councilwoman Abbe Wolfsheimer, who represents the 1st District, where the complex is situated, said she was “very disappointed with the decision,” which she called “outrageous.”

“I don’t feel it was a just decision,” she said. “The court didn’t take due care in reading the specifications put forth in the conditional use permit. They need to reanalyze the terms seniors and low-cost housing.”

Wolfsheimer said the City Council has no options left. “We have done what we can,” she said. “There is really nothing left for us to do at this point.”

Wolfsheimer believes the tenants don’t have much chance of winning a case in the U.S. Supreme Court. “We’re talking federal law now, and HUD is their baby,” Wolfsheimer said.

“I have not drawn any conclusions on it,” City Atty. John Witt said. “We’ll discuss the matter with the City Council.”

Evans said that, no matter what the outcome, she and her husband, James, will stay.

“What are we going to do?” she said. “We have no place to go. When we first moved in, we thought it was our next to last move, and the last move is not voluntary. You go out feet first.”