APARTMENT FEE JUST THE START OF NEW TAXES.

Byline: Harold Johnson 

WILL Los Angeles create slum housing in the name of fighting slum housing?

Many observers are hailing the state Supreme Court's ruling Jan. 8 upholding a $1 per month fee imposed by the Los Angeles City Council on all apartment units in the city, to pay for locating and repairing substandard housing.

Those applauding the court's decision in the case of Apartment Association of Los Angeles vs. City of Los Angeles overlook the disturbing precedent of allowing new property-related taxes without a popular vote.

This particular tax is small potatoes, admittedly. But now communities in California have been told how they can tailor new taxes on property so they needn't consult the electorate, you can expect there will be many such fees - and they won't all be small.

How does greasing the skids for new property fees threaten to encourage more slum housing? Consider some common-sense observations in a how-to book for small landlords, published by McGraw-Hill. In ``The New No-Nonsense Landlord,'' author Richard Jorgensen spends most of the pages giving practical tips on how people can build for their futures by buying and managing a house or duplex as a rental property. But along with advice, Jorgensen issues an indictment of politicians who've declared war on mom-and-pop landlords - and on the health of neighborhoods more generally - with high taxes on property.

``In some cities and communities . . . taxes have become so destructive that it's virtually impossible to realize any profit in real estate investing,'' Jorgensen writes.

``High taxes eat up the profits and eliminate any incentive to invest.

``Unless the (politicians) . . . recognize the problem and awaken to the reality that it's got to be stopped, they will find in their communities that people won't want to buy property (for investment). Unused properties will ultimately be boarded up and there will be no tax income at all from properties. Real estate will no longer be a viable business, and the communities will end up with slums and deteriorating neighborhoods.''

If you're skeptical about the destructive effect of shaking down landlords, consider what happened in Santa Monica when landlords' profits were slashed by severe rent controls during the 1980s and 1990s. In many cases, cash-strapped property owners weren't able to maintain buildings adequately.

It was no surprise, then, that some of the heaviest property damage during the Northridge Earthquake was to apartment buildings in Santa Monica, where foundations and walls had been weakened by termites and dry rot.

Galloping taxes can have the same corrosive effect: They pinch pocketbooks and undermine incentives.

But didn't we deal with the problem of out-of-control taxes on property back in 1996, when California voters enacted Proposition 218, the ``Taxpayer's Right to Vote'' initiative?

Well, yes - or at least that was supposed to be the case. The aim of that initiative was indeed to protect owners of property from being unfairly singled out for waves of new fees targeted exclusively at them. It mandated that property-related charges could be imposed only with a majority vote of affected property owners or two-thirds approval by local residents.

Unfortunately, last week's 5-2 Supreme Court decision may have put the torch to those protections. The state's 2nd District Court of Appeal had rejected the Los Angeles apartment fee as a violation of Proposition 218, because the City Council imposed it without voter assent.

But the state Supreme Court's majority last week overturned that decision, declaring a loophole in the law. Justice Stanley Mosk found the fee legitimate because it was related to regulation of the business of landlording, rather than to mere ownership of rental property.

Because the language of Proposition 218 doesn't support such a creative distinction between the use and the ownership of property, Justice Janice Rogers Brown was spot-on, in her dissent, when she accused the majority of ``turning a deaf ear'' to voters by drilling holes in a taxpayer shield. She found it all reminiscent of how an earlier taxpayer-protection measure, Proposition 13, has been eroded over time by inventive courts and politicians.

You can be sure the Supreme Court got the attention of tax-happy public officials up and down the state.

Now, by calling a new property tax a ``regulatory'' fee, they have a shot at imposing it without the inconvenience of asking voters for their OK.

In Los Angeles, it's only $1 per month this time. But the next fee may be larger - and the one after that, bigger still. And many moms and pops in the landlord business will have new reason to ask themselves why they bother.