For more than 40 years, the City followed a formula for rent increases prescribed by its ordinance. Now, in the face of tremendous inflationary pressures, it has decided to severely reduce the allowable rent increase prescribed under the law after almost 4 years of zero increases and unprecedented inflation. Rental housing providers in the City of Los Angeles will never have an opportunity to even begin a process of recovery and recoupment of their losses at the hands of short-sighted, government officials. It is perfectly clear, particularly when it comes to Councilmembers Soto-Martinez, Hernandez and Raman, each of whom has proudly declared allegiance to the Democratic Socialist Party, that there is no respect on the City Council for private property owners who have sacrificed to make investments that place roofs over the heads of members of their community.
It should be no surprise to anyone that Councilmember Soto-Martinez, a staunch advocate for extending the freeze on rent increases, himself lives in a rent stabilized apartment while making more than $220,000 per year as a member of the City Council. I am appalled by the pusillanimous action of Councilmembers Krekorian, Yaroslavsky and Price at the November 14, 2023, City Council meeting, who always hide behind state code that is highly ambiguous and recuse themselves on matters of importance to rental housing providers while the renters on the City Council vote to line their pockets with cheap rent.
I appreciate Councilmember McOsker’s attempt to recognize and carve-out a more reasonable increase for struggling, smaller independent owners, but unfortunately, at the end of the day, what we got was “window dressing” in a request for a “report back.” Also, thank you to Councilmembers Lee and Park who both voted against the proposed, lower rent increase as both pushed to get us 7% instead of just 4%.
For almost 4 years and approximately $3 Billion in lost rent increases, the Los Angeles City Council once again has pulled the rug out from underneath housing providers by severely restricting allowable rent increases. Housing providers have for nearly 4 years suffered financially under moratoriums that restricted both the ability to collect rent and eliminated all rent increases while inflation has roared out of control for all types of goods and services, and while the City itself passed through unprecedented cost increases onto owners for various fees, utilities, and taxes. As a result, many particularly smaller, independent owners have been forced to sell their properties either at discounts or in foreclosure.
Today, we face a crisis in California’s insurance market making policies difficult to renew even at 50% or more increases in premiums (if one is fortunate enough to even obtain insurance), and a more than doubling of interest rates. Housing providers who will be required to refinance their properties in the short-term horizon after losing tens of thousands of dollars in uncollected rent, experiencing ever increasing operational and maintenance costs, and not being allowed to increase pricing, will surely not survive in this rental housing business, and with that, the City will lose badly needed, naturally occurring affordable rental housing.
Our elected officials have proven once again that they are willing to sacrifice long-term housing goals for short-term political gains as they pander for the votes of renters and continue to sacrifice rental property owners at the altar. It is we who must bear the burden of providing housing services while government steals from us the fruits of our labor.