In Los Angeles, rent demands are set to escalate, with more than 30% of tenants’ income already consumed by housing costs, placing 59% of renters in a position classified by the federal government as ‘cost-burdened.’
This month, new rent caps are poised to take effect, allowing potential increases of up to 5% for rent-controlled apartments unless the City Council intervenes swiftly.
There’s an ongoing proposal on the table that aims to limit rent hikes to just 2%, but the council’s lack of action in the face of an independent rent control study submitted over a year ago has raised alarms among tenant advocates.
Frustration is palpable among those advocating for tenants, as they watch significant delays unfold over what they believe to be crucial updates to an outdated rent increase formula that has remained unchanged for more than 40 years.
Pablo Estupiñan, a coordinator with the Keep L.A. Housed coalition, expressed his concern, noting, “Other things have been prioritized, with the wildfires … and the budget crisis. There’s a lack of commitment from council offices on moving forward.”
The study, commissioned by the City Council in 2023 and submitted to city officials by the Economic Roundtable in May 2024, paints a troubling picture for renters.
It details aspects of L.A.’s Rent Stabilization Ordinance that have seemingly favored landlords to the detriment of tenants.
In light of the report’s findings, the L.A. Housing Department has put forth recommendations that, if implemented, would cap allowable rent increases at 2% starting July 1, but the council has yet to schedule a vote, with summer recess looming.
At the forefront of this politically charged debate is Councilmember Nithya Raman, the chair of the Housing Committee.
A spokesperson stated that her office is making attempts to schedule a vote on the revised rent control rules this month, though the likelihood of passing such measures before the council’s summer break is uncertain.
Landlord perspectives are also crucial in the discussion.
Fred Sutton, a spokesperson for the California Apartment Association, warned against excessive limitations that could hinder landlords from managing the rising costs associated with property ownership.
He remarked that the city is fostering a “stifling environment,” following a series of policies such as rent freezes and eviction moratoriums during the pandemic.
According to the Economic Roundtable’s report, many landlords felt the financial strain during the pandemic due to local restrictions on rent hikes and evictions for non-payment.
As costs for maintenance, utilities, and insurance have surged beyond inflation rates, some landlords are opting to exit the L.A. rental market altogether. Bruce Painton, once an owner of a 33-unit rent-controlled building, has recently sold his property and is now eyeing investments in Texas, citing the numerous hurdles encountered in Los Angeles.
He lamented, “Some months I had no income — it was all expenses,” adding that other states do not impose the same fees and issues that he faced in California.
The need for a balance between tenant and landlord interests remains a convoluted issue, as highlighted in the Economic Roundtable report.
It notes that, despite the challenges faced during the pandemic, a notable number of landlords could manage expenses due to turnover rates; approximately 40% of units vacated between 2020 and January 2023 enabled landlords to increase rents to market levels upon new tenancy.
Conversely, the report reveals a grim reality for many tenants, with some spending more than 90% of their income just on rent.
Cristina Campos, a long-time tenant in South L.A., shared her struggles with rent and the increasing costs in her neighborhood.
Having lived in her rent-controlled apartment for 23 years and raised two children there, Campos fears that continued rent hikes could push her family out of their home.
“I always say, I don’t want to go live with my neighbors under the bridge, but I might have to leave the unit if they keep raising the rents so high,” she stated in Spanish.
While the L.A. City Council managed to implement significant tenant protections during the COVID-19 pandemic, recent debates surrounding tenant issues have become increasingly contentious.
A proposal to freeze rents and limit evictions following the Palisades and Eaton fires was met with intense disagreement, and similar measures have since been enacted by the L.A. County Board of Supervisors.
Dan Flaming, co-author of the Economic Roundtable report, acknowledges the complexity and political sensitivity surrounding rent control policies.
“They’re contentious,” he explained. “It’s challenging for the council to parse this and enact changes to the status quo.”
Currently, L.A.’s rent control laws typically pertain to apartments constructed before October 1978, accounting for about 70% of the city’s total rental units.
With 64% of households renting rather than owning, these regulations play a vital role in housing affordability for countless families across the region.
Existing tenants are restricted to annual rent increases capped at a set percentage based on local inflation rates, which currently ranges from 3% to 8%.
In instances where landlords cover a tenant’s gas and electricity costs, they can add an additional 1%, allowing for maximum rent hikes to reach up to 10%.
This maximum increase is significantly higher compared to other Southern California cities, such as Santa Monica and Santa Ana, where rent hikes are limited to 3%, or certain unincorporated areas of L.A. County which cap increases at 5%.
As the July 1 deadline approaches, the stance of City Council members on the rent control policy remains ambiguous.
LAist reached out to all 15 district offices, with only three council members clearly expressing their views.
Councilmembers Hugo Soto-Martinez and Eunisses Hernandez advocated for a cap on rent hikes at 3%, aligning with the positions held by advocacy group Keep L.A. Housed.
Meanwhile, Councilmember Bob Blumenfield indicated support for the Housing Department’s recommendations, which suggest an allowance of 2% to 5% increases.
Other council members, including Imelda Padilla, John Lee, Ysabel Jurado, and Tim McOsker, have yet to take a definitive position, as have Council President Marqueece Harris-Dawson and Housing Committee Chair Nithya Raman.
Councilmember Curren Price has recused himself from votes regarding rent control due to his status as a landlord, and attempts to reach others, including Adrin Nazarian, Katy Yaroslavsky, Monica Rodriguez, Heather Hutt, and Traci Park, have not yielded responses.
As summer approaches, the uncertainty surrounding the City Council’s actions leaves tenants worried about impending rent increases.
The possibility of hikes ranging from 3% to 5% is anticipated to commence on July 1 if the council fails to act.
Last year, rent increases fluctuated between 4% and 6% amid heightened inflation pressures.
In its findings, the Economic Roundtable identified a troubling element within L.A.’s existing rent control structure: a 2% annual utilities surcharge perceived as excessively favorable to landlords.
This surcharge has historically contributed to rent hikes often exceeding actual utility costs over time.
In response to these findings, the L.A. Housing Department has proposed eliminating this utilities increase.
Officials also favor adopting a different inflation measure for calculating rent hikes, one that excludes shelter costs from the equation.
Meanwhile, tenant advocacy groups like Keep L.A. Housed continue pushing for more drastic changes, including a potential zero percent rent hike in years of stagnant or negative inflation, contrary to the Housing Department’s stance.
They also seek the removal of the contentious 10% increase that landlords can impose when additional tenants join a household.
The July 1 deadline looms, with both the Housing Department and Keep L.A. Housed proposing that rent increases be set at a minimum of 2%.
If the council does not act, tenants could be subjected to increases between 3% and 5%.
Christina Boyar, an attorney associated with Public Counsel and a member of Keep L.A. Housed, stressed that seemingly minor adjustments can significantly impact housing stability.
A differential rent increase of just 1% or 2% could rapidly become hundreds of dollars over time, especially for families already grappling with financial strain.
“While it may seem like a small difference,” Boyar emphasized, “that is hundreds of dollars for working families who are already struggling.”
image source from：https://laist.com/news/housing-homelessness/los-angeles-city-rent-stabilization-ordinance-rso-control-city-council-new-limits
