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CA Cities Attempt Expansion of Rent Control Measures
CAA Defeats Proposed Rent Freeze in Los Angeles.
The California Apartment Association of Los Angeles (CAA-LA) defeated a proposal to freeze rent increases on rent controlled apartments in the City of Los Angeles. This was an important victory for Los Angeles members and the entire California rental housing industry.
Los Angeles apartment owners who own rent controlled units are allowed at least a 3 percent increase in rent annually. However, Los Angeles City Councilmember Richard Alarcon proposed a moratorium on rent increases from July 1, 2010 to June 30, 2011. This would have blocked a 3 percent rent increase allowed to owners on rent controlled properties.
CAA-LA took swift action and worked tirelessly in opposition to the rent freeze proposal. CAA-LA alerted members through email and phone calls. CAA-LA served as the spokesperson for the rental housing industry and was featured on KPCC Talk Radio, and in the Los Angeles Times, Los Angeles Daily News and Los Angeles Business Journal.
Association members sent email and letters, placed phone calls, met with Council Members and staff and attended hearings to urge the Council to vote no on the rent freeze. CAA-LA members and advocates made it clear to the City Council that imposing a freeze on rents would have significant unintended consequences to the current rental housing stock and would send a chilling message regarding any future private capital investment in the City of Los Angeles.
By the time the proposal had reached the City Council, it was reduced to a four-month freeze with a possible two-month extension. Even with the reduction, the Council voted against the rent freeze during an emotional hearing.
San Francisco Voters Reject Expanding Rent Control
On Tuesday, June 8, San Francisco voters rejected a proposal that would have made it even more difficult to own and rent property in San Francisco. If Proposition F had passed, the measure would have amended the city's Residential Rent Ordinance to add additional provisions for hardship applications. A tenant would have been able to apply for a rent reduction if one of the following conditions applied:
- the tenant has become unemployed;
- the tenant's wages have been reduced by 20% or more compared to the previous 12 months; or
- the tenant's sole income consists of government benefits, such as Social Security or disability, and the tenant did not receive a cost of living increase in the previous 12 months.
The City's Residential Rent Ordinance applies to most rental housing built before June 1979. The Ordinance limits when and by how much a landlord may increase a tenant's rent. For example, landlords may increase rent once a year by a percentage set by the Residential Rent Stabilization and Arbitration Board (Rent Board). The current allowable rent increase for 2010 is .001percent which means a landlord can charge one dollar more for each $1000.
Santa Monica Looks to Extend Rent Control Protections to All Renters
The city of Santa Monica is looking to expand protections for renters, not just to those in existing rent controlled units, but extend these so called "just-cause" protections to all renters in the city including those in non-rent controlled units.
Proposed amendments would give renters additional time to correct lease violations before they could be served with an eviction notice and would afford added eviction protections to senior citizens and those who are disabled or terminally ill.
CAA argues that giving renters additional time to correct lease violations simply will allow bad tenants to continue their bad behavior. Just-cause eviction controls make it extremely difficult for owners to recover possession of their units from tenants who may be engaged in illegal activity or have caused damage to the unit. A property owner will have to jump through new legal hoops, hire a lawyer and prove in court that the tenant is involved in illegal activity or is damaging the property. It is difficult to get other residents and neighbors to testify in fear of retaliation.
Although consideration for the ill, elderly and disabled is noble, it may prove impossible to verify and manage relocation benefits to those who wish to take advantage of the system and claim false hardship. For those, it will be a windfall at the owner's expense and a cost that will have to be borne by the other residents in the apartment community.
Since this is a Charter Amendment, it will have to be amended by an act of the Santa Monica voters. The City Council has directed its staff to draft appropriate ballot language and/or a city ordinance to extend just-cause eviction protections to all tenants in multi-unit residential properties and to extend relocation benefits to tenants of non-rent controlled units.
On a related note, Santa Monica Rent Control Board approved a 2 percent rent increase for apartment units that fall under its jurisdiction. That means owners of most of Santa Monica's 28,000 rent-controlled units will be allowed to boost rents by as much as 2 percent in the next 12 months. Last year, the board approved a 1 percent maximum allowable increase. |
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