Los Angeles County Rent Control
Rental Property Investor · Whittier, CA · Member since 2014 · 325 posts · 268 votes
As many of you know, Proposition 10 is on the ballot for November, and if passed, it would repeal Costa-Hawkins which significantly prevents individual cities from imposing rent control. It is shaping up to be a major battle over the next couple of months.
For those in Los Angeles County, there are other attempts at rent control in motion as well. The LAC Board of Supervisors was slated to vote on a motion on a "temporary" 3% annual increase. As of this morning, the vote has been postponed to a future meeting, but it is important for those concerned about this issue to contact the supervisors in the districts where they own property to make their opinions known.
Thank you all for discussing this. I think every single one of us should be concerned about this, and let people know what is going on. This is not just a battle that the big multifamily owners here in LA will have to fight - if anything, those folks are better poised to weather the storm. The heat will come down on the single family investors, especially in areas like Hawthorne, Inglewood, Long Beach etc.
I don't like to do politics on here, but we all know that promising voters something (like lower rental costs) will get votes, even if it is not the reality of the situation. I lived in NYC from 2011 to 2016, with plenty of rent control everywhere, and it remains the most expensive market in the country, with vacancy rates very low. But the supporters of this measure won't mention that.
Yeah that is true. L.A is home to a lot of mom and pop landlords. I've noticed the same thing in the minimum wage debate too...a lot of people talking about multinational companies but it's the small 'mom and pop' businesses that will be affected. They can't afford the automation.
What i've seen in L.A is the mayor and local politicians are constantly promises "affordable housing...coming soon" ...it's the carrot they use to get people to vote for them...even though they know getting one of those affordable units will be like winning a lottery just as it always has been. False promises.
Disappointing for sure how things are being run here. Bad policies left and right.
At this point seems like too much uncertainty to invest in L.A county and if Prop 10 passes maybe the whole state of CA.
Of course if one bought years ago it’s a different story . Many landlords I know some even have paid off buildings in L.A but a lot different if someone is looking to enter the market today.
I did just read an article that came out yesterday about how the uncertainty of Prop 10 is could slow the multi family market . It does make sense people would be waiting on the sidelines. But even if Prop 10 doesn’t pass ... going forward it just seems like this is something that will be continue to be pushed .
https://therealdeal.com/la/2018/09/11/uncertainty-around-prop-10-could-slow-multifamily-market/
It's really important to keep an eye on this. There are several local landlord groups that are fighting prop 10. The two that I work with are the "Apartment Owners Association" and "Better Housing for Long Beach." It's very important to stay involved. A tenant advocacy group tried to collect signatures in Long Beach, CA to get a rent control ordinance on the ballot in November. The grass roots group "Better Housing for Long Beach" was able to block the signature gatherers and keep the ordinance off the ballot. In Long Beach the city council is unanimously opposed to rent control and has made that very clear at city council meetings. Although the majority of the city is renters the vast majority of people who actually vote are property owners. If Costa Hawkins is repealed the rent control fight will get much more intense at the city level.
Actual text of the motion:
Interim Ordinance to Temporarily Limit Rent Increases
Los Angeles County (County) rents are continuing to rise as the stock of affordable and available housing diminishes. According to the California Housing Partnership Corporation (CHPC), the County needs 568,255 additional affordable homes that would house lower-income individuals and families in order to meet current needs.
Housing unaffordability harms renters, their families, and the regional economy. In May of 2018, CHPC found that more than 800,000 County renter households would qualify for affordable housing, were it available. But fewer than 300,000 units are available across the entire County at rents that would be affordable to these residents. Additionally, housing prices in the County have grown four times faster than incomes since 2010. Inflation-adjusted median rent in Los Angeles County grew by nearly 25% between 2000 and 2012, while inflation adjusted incomes declined by 9%, according to CHPC. The effect of rising rents, coupled with decreasing income, has generated an increase in “rent-burdened” households. Rent burdened households are households that pay more than 30% of their income on rent. Many households earning less than half the median income, spend more than 70% of their income on rent, leaving little money for essential needs like food and healthcare.
This year’s Homeless Count revealed a startling 22% jump in people 62 years and older experiencing homelessness. Many studies have demonstrated that rent stabilization is especially helpful for longtime renters who are disproportionately likely to be older adults.
The Board of Supervisors (Board) has taken action, beginning with the creation of the Affordable Housing Coordinating Committee and the Affordable Housing Budget Unit in October of 2015 and the passage of Measure H in March 2017, to stem the tide of the housing affordability crisis, but more must be done.
Therefore, on May 16, 2017, the Board, recognizing the need to preserve existing tenancies, explore methods to protect tenants from displacement and afford them stability in their homes, directed the Chief Executive Officer to convene a Tenant Protections Working Group (Working Group). On August 15, 2018, the Working Group submitted a report to the Board with recommendations for potential tenant protection measures, including a rent stabilization program.
While the Board reviews the Working Group's recommendations, rents continue to spiral upward, making it necessary for us to take action to protect tenants from unreasonable rent increases and evictions without just cause before we have had the opportunity to fully deliberate on and adopt permanent tenant protection policies, such as a rent stabilization program. Some jurisdictions contemplating the adoption of a rent stabilization program have chosen to temporarily limit rent increases above a designated threshold amount while evaluating the issues. This can be accomplished through adoption of an interim ordinance to limit rent increases for certain types of dwelling units for a limited period of time. Most recently, temporary moratoriums have been imposed in jurisdictions considering rent stabilization, such as the cities of Alameda, Santa Cruz, and Santa Rosa.
WE, THEREFORE, MOVE that the Board of Supervisors, also acting as the Board of Commissioners for the Community Development Commission, take the following actions:
1. Instruct the Executive Director of the Community Development Commission (CDC) and the Interim Director of the Department of Consumer and Business Affairs (DCBA), in consultation with the Chief Executive Officer (CEO) and County Counsel, to return to the Board in 60 days with an interim ordinance to place a temporary limit on rent level increases and evictions without just cause. This ordinance should at a minimum:
a. Establish a maximum rent increase amount of 3% annually for rental properties in the unincorporated areas of Los Angeles County, except for those properties that are statutorily exempt from rent control;
b. Have a term of 6 months from the date of adoption with options to extend the interim ordinance as necessary;
c. Provide due process to ensure that property owners are entitled to a fair and reasonable return on their property;
d. Establish as base rent, rent levels as they exist on September 11, 2018, for purposes of determining a fair and reasonable return;
e. Include a provision requiring just cause for tenant evictions;
f. Define “small property owner” to mean a person or entity with common ownership of 50 rental units or fewer within the County; and
g. Permit small property owners to pass through to their tenants the direct cost of the Measure W parcel tax, as applicable, should such parcel tax be approved by the voters. This means the cost of the parcel tax would not be counted as part of rent for purposes of determining a small property owner's compliance with the interim rent increase limitation ordinance.
2. Instruct the Executive Director of CDC and the Interim Director of DCBA, in consultation with the CEO and County Counsel, to report back to the Board in writing in 60 days with recommendations for an interim administrative structure, including a cost estimate, for a temporary rent limitations program and an analysis on how these recommendations may help form the creation of a permanent administrative structure for permanent tenant protections programs that the Board may wish to adopt in the future.
3. Instruct the CEO, in consultation with the Executive Director of CDC and the Interim Director of DCBA, to identify available funding for the preparation of the ordinance referenced in item 1 above.
4. Instruct the Director of the Department of Beaches and Harbors, in consultation with County Counsel, to return to the Board in 120 days with recommendations regarding how rental units located on County-owned property in Marina del Rey should be addressed in a permanent rent stabilization ordinance, should such an ordinance be adopted at a future date.
I did just read an article that came out yesterday about how the uncertainty of Prop 10 is could slow the multi family market . It does make sense people would be waiting on the sidelines. But even if Prop 10 doesn’t pass ... going forward it just seems like this is something that will be continue to be pushed .
https://therealdeal.com/la/2018/09/11/uncertainty-around-prop-10-could-slow-multifamily-market/
Thanks for the article. Nothing earth shattering in it, but it does resonate with me - I have been starting to look out of state and no longer consider local properties to add to our business.
Yo @Joseph M. $700/month is less than Alabama rents. . . That's ridiculous. I'm waiting to see if there will be a rebellion against any new rent control rules because anyone who is newly affect may have standing compared to those who knowingly purchased rent control properties.
VOTE NO ON PROP 10
Yo @Joseph M. $700/month is less than Alabama rents. . . That's ridiculous. I'm waiting to see if there will be a rebellion against any new rent control rules because anyone who is newly affect may have standing compared to those who knowingly purchased rent control properties.
VOTE NO ON PROP 10
Yeah , true . The big thing of investing in L.A has been appreciation but if they do some kind of rent freeze where you can’t even raise the rents much if someone moves out that’ll really mess with valuations i would imagine .
This is part of the ballot .
“
I’m definitely voting a big NO on Prop 10 . The people voting yes don’t realize it’s going to limit supply and making things worse for a lot of renters .
Proposition 10 will have winners and losers, that's for sure. What isn't so obvious is it is not the huge corporate landlords who will be losers. Experienced and scalable property owners have the resources and knowledge to adapt to changing environments, and will do just fine. The small scale property owners will be challenged, and may ultimately sell out.
Some renters will be winners - like the fixed income, never-going-to-move-again renter, but there will be many losers too - the new tenant moving into town, the renter who would like to move closer to work but can't because they're "locked" in with an artificially low rent, the tenant who is moved out and can't find another affordable place because the economics no longer support a home being a rental and it gets sold to an owner occupant.
Consider donating to your local apartment association or other org who is working on "no on 10" campaigning.
This reminds me of what happened in the Mortgage industry years back. Big banks pushed legislation to force Brokers to disclose what they make on each loan under the guise of informing the client. Well, turns out, these big banks were exempt because they were warehousing their loans and the exact amount couldn't be determined until they sold their loans. So the result is, they could hide how much they made and force the brokers to disclose it.
These new laws which supposedly aim to help the little guy are all a move toward oligarchies running industries. In prop 10's place, they could incentivize local developers to construct more low income housing but they will not because it is not about that. It is about large investment groups paying off politicians(who get say claim they are champions of the poor) and results in amalgamation of wealth and control.
Maybe I am jaded and pessimistic here, but I doubt I'm wrong.
Good article Mercury News today about Prop 10 .
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Skelton: California’s housing is a mess — and Prop. 10 won’t help
Fact check on Proposition 10 ads: https://www.politifact.com/california/article/2018...
I hate to be a little extreme, but Prop 10 defies capitalism and encourages socialism. We all know socialism doesn't work because somebody needs to take the risk, and only those who take risks can reap rewards. There are no shortcuts, and those who delude themselves into thinking so are only fooling themselves. Basically, we all need to work hard to earn our place :D
Proposition 10 has failed! We will have to see what that means for the LA county rent stabilization.
I just saw La county Board of Supervisors voted on this today and it passed , unfortunately.
They just passed it in Long Beach but it was called something else. This was right a year after they voted against it.
We need to gather up homeowners, investors, landlords, contractors, realtors, vendors, property managers, and anyone in housing that can fight this locally and as a whole.
Contact your apartment association. AOA.com and https://caanet.org/ and chamber of commerce to see what you can do to fight it
but you can also fight it locally
They're also spreading to Portland, San Francisco, Sacramento, Irvine, Los Angeles, Seattle, Boston and other cites They're trying to fight it in Long Beach and Santa Ana now. Inglewood and Glendale just passed them under the table behind closed doors without votes. Most home owners are against it because of blight and red tape
http://www.tenantstogether.org/resources/housing-long-beach tenant union group with big money from unions promoting rent control
OC Santa Ana
It's really important to keep an eye on this. There are several local landlord groups that are fighting prop 10. The two that I work with are the "Apartment Owners Association" and "Better Housing for Long Beach." It's very important to stay involved. A tenant advocacy group tried to collect signatures in Long Beach, CA to get a rent control ordinance on the ballot in November. The grass roots group "Better Housing for Long Beach" was able to block the signature gatherers and keep the ordinance off the ballot. In Long Beach the city council is unanimously opposed to rent control and has made that very clear at city council meetings. Although the majority of the city is renters the vast majority of people who actually vote are property owners. If Costa Hawkins is repealed the rent control fight will get much more intense at the city level.
Do you have any more info on long beach rent control or could you do more posts sharing information about the rent control that passed
Hi Susan,
Yes, I am happy to help. Long Beach is still finalizing the details of the relocation assistance law. There is a lobbyist named Mike Murchison who is working on behalf of the housing providers in Long Beach. He emailed out a draft of the relocation assistance ordinance this morning. You can view the draft here:
https://www.dropbox.com/s/wuu33kii2on8i4x/Tenant%20Assistance%20Motion%20Official%20doc.pdf?dl=0
Several housing provider groups are still pressing council members to edit the ordinance. You can help by emailing your council member or getting involved with one of several housing provider groups: Small Property Owners Alliance (SPOA), Better Housing for Long Beach, The Apartment Owners Association.
Hi Susan,
Yes, I am happy to help. Long Beach is still finalizing the details of the relocation assistance law. There is a lobbyist named Mike Murchison who is working on behalf of the housing providers in Long Beach. He emailed out a draft of the relocation assistance ordinance this morning. You can view the draft here:
https://www.dropbox.com/s/wuu33kii2on8i4x/Tenant%20Assistance%20Motion%20Official%20doc.pdf?dl=0
Several housing provider groups are still pressing council members to
the ordinance. You can help by emailing your council member or getting involved with one of several housing provider groups: Small Property Owners Alliance (SPOA), Better Housing for Long Beach, The Apartment Owners Association.
Thanks for the info Chad I'll be fighting them as will our friends and neighbors who don't want rent control to ruin a great city
Yes, it's disappointing to have rent control anywhere in California and this is why it's so important to buy an investment property at the right price.
We know here in California we don't necessarily buy for cash flow but for appreciation.
Eventually, everywhere in Sourhern California will be rent controlled. It’s unfortunate and unfair, but it’s inevitable.
I don’t see the state regulating how much other businesses can charge customers.
On a bright note, the rental increase allowance went from 3% to 4% - whoptie!
To your success!
Yes, it's disappointing to have rent control anywhere in California and this is why it's so important to buy an investment property at the right price.
We know here in California we don't necessarily buy for cash flow but for appreciation.
Without rent control there is a correlation between appreciation and cash flow. As a property appreciates, the rents appreciate (in the absence of rent control) which improves the cash flow.
Inversely, the rent control results in reduced opportunity for future cash flow that results in lower appreciation than without the rent control.
Rent control, cash flow, and appreciation are not independent items. Rent control adversely affects the cash flow and the appreciation.
It is why I choose not to invest in rent controlled areas.
Yes, it's disappointing to have rent control anywhere in California and this is why it's so important to buy an investment property at the right price.
We know here in California we don't necessarily buy for cash flow but for appreciation.
Thanks Michael
https://www.latimes.com/local/lanow/la-me-rent-increase-cap-eviction-20190409-story.html
All these people who like free stuff! I want free cars limit my car payment! Limit my steak dinner! I want to live near Hollywood Hills! Cap my hollywood hills rent!