LA LA LAND APARTMENT NEWS

Written by Apartment Management Magazine on . Posted in Blog

Industry News

Big Brother Wants to Peep at Your Papers

The Los Angeles City Council wants apartment owners to provide renters with a written disclosure of rights prior to signing any buyout agreement. They also want any completed agreements to be filed with the City. Agreements must provide a 30-day period in which the tenant can rescind for any reason. Failure of owners to provide the disclosure will make the contracts voidable at any time and subject the owner to a lawsuit by the tenant or prosecution by the City. The council instructed the City Attorney to draft and return with an implementing  ordinance. This is expected to become law in early 2016. Will City Attorney staff now wear referee uniforms and be issued whistles?

Airbnb Flirts with Apartment Industry

Airbnb has pulled off one of the biggest scams in the history of commerce. It has built a $38 billion dollar business by providing housing accommodations without paying one cent to apartment building owners when their tenants rent out apartments to tourists. It’s like having a free hotel and not paying anything for rent, taxes, insurance, employees, utilities, repairs or maintenance. Since many apartment building owners have resisted their scheme, Airbnb has developed a romance plan which it hopes will woo more owners to its lair. Dubbed the Friendly Building Program, Airbnb is offering 5-15% of the nightly rentals to participatimg owners. It is not clear at this time whether they are making this program available in Los Angeles.

Despite the fact that currently most Airbnb rentals in Los Angeles are illegal, the City has no qualms about collecting the Transient Occupancy Tax on them. They have cut a deal with Airbnb to collect the taxes despite most rentals being in violation of City laws. The City is trying to develop regulations to deal with short-term rental but the regulatory wheels don’t move as quickly as the tax wheels.

Gentrification of Los Angeles Neighborhoods-Who’s at Fault?

Gentrification of neighborhoods is the latest sin that the left-leaning press and political agitators want to blame on apartment owners. Government policies for years have discouraged development, created a shortage of housing, causing dramatic rental inflation during a time of otherwise low inflation. Meanwhile, extreme rent control policies have not allowed rents on in-place tenants to keep pace with cost increases. So when newly vacated or developed units are only affordable to more affluent renters than those who previously resided in an area, apartment owners get the blame. And when apartment owners look for ways to escape the prison of below market rents that tenants have enjoyed for many years, sometimes for many decades, the accusatory finger is again wagged in our direction.

Erualdo Gonzales, an associate professor of Chicana and Chicano Studies at Cal State Fullerton, hardly an apartment industry apologist, was quoted in the LA Times with a brilliant observation of government’s role, “Change may be normal, in a general sense, but gentrification is not. Gentrification is often a process that involves private-public partnerships. In Santa Ana, this is the case. Change was engineered.”

At the heart of much gentrification are government policies to upgrade areas to increase city revenues from sales, property and transit occupancy taxes. And let’s not forget the role campaign contributions play in rewarding government decision makers who approve the deals with developers that fuel the demographic shifts.

Wes Wellman

Wellman Realty Company

310-829-7423/wes@wellmanproperties.com

BRE Lic. # 00467451

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