LA landlords white-knuckle rent freeze on controlled units

Los Angeles is the only major city with a rent freeze on rent-controlled housing, which ends Feb. 1.

But that’s not soon enough for real estate experts and L.A. landlords, whose rent-controlled units make up three-quarters of the city’s apartments, the Los Angeles Times reported.

While tenant unions praise rent control, some policy experts say the pandemic-era, emergency rent freeze enacted in early 2020 reduces affordable housing by discouraging development and drives providers out of the business. The freeze affects 624,000 rent-controlled apartments.

Los Angeles ended its local COVID-19 state of emergency in February, but allowed the rent freeze to continue until Feb. 1 of next year.

“We have an affordability crisis and a homelessness crisis that absolutely demands urgent action, but a rent freeze is not the best solution,” Michael Lens, associate professor of urban planning and public policy at UCLA, told the newspaper.

Lens said the coronavirus pandemic sent policymakers “reaching for the emergency button,” but that the city should look at policies such as expanding housing subsidies rather than extending the rent freeze.

Many renters see the freeze as a financial lifeline, allowing them to keep a roof over their heads as they kept up with expenses as inflation soared and many lost work hours or jobs.

But landlords say they were forgotten in the debate — and forced to dip into savings and let tenants fall tens of thousands of dollars behind in rent, even selling nest eggs that were supposed to carry them through retirement. 

“In a city like L.A. that needs investment in housing, the last thing you want to do is drive away the people who are going to do the investment in housing,” Jim Lapides, vice president of advocacy and strategic communications for the National Multifamily Housing Council, told the Times. “And that’s what’s taking place right now.”

Evidence suggests that rent control increases the cost of non-rent-controlled units, Lapides said. In San Francisco, one study found that landlords pushed back on rent control by reducing supply by 15 percent — which led to a 5.1 percent rent hike citywide.

Homelessness grew 10 percent to an estimated 46,260 residents in the city of Los Angeles this  year. 

Shanti Singh of Tenants Together warned city officials against lifting the rent freeze and potentially sending more renters into the street.

“Rent increases that were allowable with inflation were still really hurting people,” Singh told the Times.

The city’s “mom-and-pop” landlords say that the onslaught of renter protections in L.A. combined with soaring costs infringe on their ability to operate. The landlords were allowed to apply for a rent increase if their income didn’t cover property expenses. 

But Daniel Yukelson of the Apartment Association of Greater Los Angeles said in an email that completing that application requires “a mountain of financial information” and a number of bureaucratic hurdles.

The association sued the city in July over the rent freeze, citing financial strain on landlords.

— Dana Bartholomew

Read more

Los Angeles

LA landlords file constitutional challenge to pandemic rent freeze

Los Angeles

AAGLA lawsuit demands LA repeal some renter protections

Los Angeles

Landlord group files legal challenge to LA’s transfer tax