The War on Los Angeles Housing Providers Rages On!

What did we do to deserve it? For years, we worked two jobs, our real 9-5 job and our rental property owner job. We saved and sacrificed to invest in income property so that someday, with any luck, we will have more than just Social Security to retire on. Our ulterior motive is nothing more than to provide for ourselves and family, and to invest in and house members of our local community. Sometimes, our investments would house ourselves and our families. Nothing more, nothing less.

The stripping away of basic, inalienable property rights from me and others like me means that the ability to manage our rental property is diminished, and the risk that any property owner has taken on as an investor and provider of necessary housing has significantly increased.  Control of my property and those of others just like me have now shifted from owner hands to the City Council and the City’s renters.  Under normal housing policy, we as owners should have earned the respect and appreciation of renters by providing something very meaningful and important like the housing services that deliver the very roof over a tenant’s head, which has only been made available to tenants through our hard work and much sacrifice, saving, investing, risking capital, and then maintaining  our investment by paying our mortgages, taxes, insurance, repair bills and multitudes of other expenses.

Yet, for our very generous act of risking our hard-earned money to invest in a rental property and to provide the very important resource of housing (a/k/a, roofs over the heads of those living in our community), we are excruciated and attacked by renter groups and city officials for our efforts to provide safe, affordable housing. We do not control housing policies and are mere recipients of expensive and punishing regulations that rapidly drive up costs and force so many out of this rental housing business, which along with the failure to construct more housing is one of the leading causes of today’s housing shortages. Don’t even get me started on our growing homelessness problem because we as housing providers have no control over mental health, addiction, or abuse, which are the real causes of the “unhoused” problem ignored in today’s political dialog. Why face reality when elderly landlords can be the scapegoats of a housing problem that remains unsolved and has no workable solutions? If our politicians continue to blame anyone other than themselves, there can never be a solution.

In some of the latest and most outrageous attacks on innocent housing providers like me, the City of Los Angeles passed two ordinances that have taken “landlord oppression” to the highest levels ever imagined. Los Angeles City Ordinance No. 187763 imposes a financial threshold of past due rent (equal to one month’s fair market rent) which must be met prior to initiating eviction proceedings, and the City’s Ordinance No. 187764 requires rental housing providers to pay substantial penalties when rent increases on housing legally exempt from either local or state rent control rules exceed a specified percentage (for 2023, the percentage is 10%). These new rules continue to chip-away at property rights of housing providers and make it extremely difficult to operate in the housing business. This is just “flat-out” stealing. No other conceivable business would ever be subjected to this level of thievery at the hands of a democratic government, if that’s what we are dealing with in the City of Los Angeles.

Conceived and pushed for by leading L.A. City Council Democratic Socialist, Nitya “Nikita” Raman, Ordinance No. 187763 allows any renter in the City, despite the existence of and language contained in a legal agreement known as a lease, to choose the amount of rent they wish to pay. Don’t like the price tag? No problem, pay what “you tenant” feel is appropriate. Under this ordinance, any tenant can withhold payment of an amount of rent for as long as and so long as the financial threshold is not exceeded, and renters may do so, for months or even years depending upon how much they decide to “short pay” of their monthly rent. Just as bad, rent that remains outstanding for 12 or more months can almost never be collected under California law due to the statute of limitations. In other words, this is pure and simple stealing!

Also emanating out of the minds of our Socialist aligned City Council members, Ordinance No. 1877764 is a complicated and potentially costly regulation that imposes severe financial penalties on property owners who, for 2023, increase rent on rent control exempt properties by more than 10%. Imagine the millionaire renting a Bel Air mansion – this millionaire is also protected by this new ordinance and could be the beneficiary of a payout equal to 3 months’ rent plus moving costs if his or her rent increase were to exceed the limitations imposed by this ordinance. This ordinance provides protection to the City’s wealthiest renters at the detriment of unsuspecting rental property owners. Even worse, those single family homeowners that someday might wish to downsize in retirement while at the same time c to continuing to own and rent out their larger home to supplement their retirement income rather than sell their property and pay significant capital gains taxes, they too will be subjected to this same complicated, costly and risky new regulation.

As I write this, we are awaiting a “report back” in 60-days from City of Los Angeles’ staff on the latest shoe to be dropped on our heads, a “Right to Counsel” ordinance that will supply private attorneys, free of charge, to renters facing eviction for a variety of lease infractions, including non-payment of rent, conducting criminal activity, destroying property, allowing unauthorized pets or occupants, and others. The city anticipates spending between approximately $30 million to $40 million of taxpayer dollars for this latest endeavor. It truly saddens me that the Los Angeles City Council has chosen to pursue this program that only evidences their misplaced hostility towards rental property owners providing housing to those unable to afford or choosing not to buy a house in the City.

For years, before our recent political environment of punishing regulations and tyrannical risk of penalties (made even worse during the COVID-19 era), and we shun the use of the word, we “landlords,” those of us in the rental housing business, had always worked things out with our customers, our renters. Rather than constantly attacking us with threats of fines, regulations that continually strip away our property rights and strangle our operations, and in some recent ordinances if you can believe it, threaten “us” with jail time, mediation would be the most successful and expedient means to work things out and maintain housing for renters, even when they miss a rent payment or two. However, today our City officials see themselves as “guard dogs” and the problem is that right now, City staff members and elected officials are acting as tenant advocates instead of neutral third parties. We need them to be mediators wanting to find solutions that work for both renters and the rental housing providers, but in today’s environment rich with anti-housing provider sentiment, this easily workable solution is far beyond our reach.

As rental housing providers, we have long advocated for the City (and other jurisdictions) to create rent relief funds to assist renters that are in financial need in order to help them pay the rent that they owe. As a result, there are now many local jurisdictions that are providing Guaranteed Income programs or giving short-term financial assistance to tide individuals and families over when they experience sudden job loss, illness or injury, or other unforeseen major financial obligation. Unfortunately, it is simply more convenient for the City to vilify rental housing providers for the City’s lack of public housing and longtime refusal to allow necessary development – it is merely a tactic of scapegoating not seen since 1930’s Europe.

Unfortunately, we have been left with no recourse and no other means to deal with these two new ordinances other than to file another lawsuit, our fourth such lawsuit against the City of Los Angeles during the past three years. Yes, it is a waste of our time and hard-earned money to wage these legal battles, but we are left with no other choice than to seek the assistance of a hopefully, neutral court system that can provide some balance and help meet the needs of those of us struggling day to day to stay in the rental housing business. There are no assurances we housing providers will stick by Los Angeles for another few years let alone for the long-term.  Doing so may ultimately be made impossible.