Despite voters rejection of Proposition 10, the Los Angeles County Board of Supervisors voted 4-1 Tuesday in favor of an ordinance to temporarily limit rent increases to 3 percent in unincorporated areas of the county.
Supervisor Sheila Kuehl, who championed the plan to limit rents while the county considers longer-term solutions, said an estimated 200,000 renters would be protected by the county ordinance.
This article was originally published on the Resident Screening Blog.
Since the housing crisis, the demand for affordable rental housing has skyrocketed as Americans have shifted from a homeownership mentality to a renter mentality. As Richard Florida from CityLab might argue, the migration from suburban homeownership to renting has been increasing since 2006. In fact, from 2006 to 2014 the number of U.S. renter households did increase by 5%. With a large percentage of the renter population concentrated in or near urban areas, some of the most major cities in the U.S. lack the necessary housing supply to meet the demand.
BY: ATTORNEY MICHAEL MILLMAN
Over the last several years, there has been a great deal of discussion and notoriety about people making their homes available for short-term vacation rentals and possible home sharing situations. Originally conceived in San Francisco, Airbnb became incredibly popular. First, visiting university professors would make their homes available for short-term rentals whlle they were on sabbaticals or traveling to another university as a “guest professor.” In time, these vacation rental platforms became more popular than conventional motels and hotels. Home away became even more popular.
by Brian Gordon & Vincent Medina | Lotus Property Services
Is rent control coming to Pasadena? There is a new initiative that was just filed with the City of Pasadena City Clerk’s Office mid November. According to reports in the Pasadena News Now, a notice of intent to circulate a petition was signed by Pasadena housing activist Michelle C. White; Nicole Marie Hodgson, leader of the Pasadena Tenants Union; and 85-year-old Pasadena renter Robert Roberts.
by Jessica S. Weisman, Managing Partner of Client Education| Kimball, Tirey & St. John LLP
Many landlords often make the mistake of thinking that they do not need to worry about being up to date when it comes to fair housing law. “I’m an individual landlord” “I run a small operation” “I’m not a big fish” are common misconceptions. Regardless of property/company size, any landlord can find themselves on the wrong end of a fair housing claim and/or lawsuit.
Calls for rent controls to be enforced on Auckland’s heaving rental market to stop price gouging will only create another beast, says Auckland’s landlord association.
Auckland Property Investors Association is responding to this week’s news of a rental agency hiking its rents on vacant apartments by 5 per cent a week during a period when pressure from students surged to record levels.
APIA vice president Peter Lewis says despite people thinking rent control provides long-term security for tenants, and tilts the balance of power away from landlords towards the tenants, they also create a Pandora’s Box.
“People who advocate for controls think they make for a fairer market in which households with lower incomes cannot easily be pushed aside by landlords keen to upgrade their property to a higher specification with a commensurate rent increase,” says Mr Lewis.
By: Wes Wellman | Wellman Properties
“Now we have to work to overturn the Costa-Hawkins Rental Housing Act at the state level in order to have truly effective renter protections,” declared tenant activist James Vann following the passage by 75% of the voters of increased rent controls in Oakland. New rent laws also just got voter approval in Alameda, Richmond, and Mountain View. These victories combined with Democratic super majorities just achieved in both the California Assembly and Senate have the left salivating at the prospect of further gains. Repeal of Costa-Hawkins with its vacancy decontrol provision is the grand prize coveted by tenant extremists. For the left, no victory is ever the end but merely the beginning of new demands.
Since strong rent control measures already blanket most of the greater Los Angeles area new tenant protections tend to be advocated for and accomplished at the regulatory level rather than at the ballot box.
Los Angeles homeowners outraged at the proliferation of McMansions in their neighborhoods have pressured City official to enact Historic Preservation Overlay Zones to somewhat minimize the size of allowable projects. Alert tenant activists have attempted to hijack this politically popular movement to extend its protections to rental housing as a means of limiting the recycling of underdeveloped multi-family properties. Never mind that limiting new housing supply increases demand and prices for existing units, they will deal with that by demonizing landlords and pushing for stronger rent control measures.
Led by Santa Monica and soon to be followed in Los Angeles restrictions are being placed on landlords doing tenant buy-outs. Generally tenants are required to be notified of their rights before making an offer and will have 30 days to rescind their consent. Completed agreements need to be filed with the City. Agreements can be voided in the event the owner fails to give the proper disclosures to the tenant.
Tenant screening just got more difficult with the passage of Assembly Bill 2819. This bill permanently masks all eviction actions unless the owner obtains a judgement within 60 days. When an owner obtains possession of the property prior to the conclusion of a case there is little incentive to go back to court and incur additional costs just to obtain a judgement which is usually uncollectible. Additionally it removes an incentive to resolve a case promptly to avoid the previously required unmasking of the record after 60 days.
Landlord entries into tenant apartments are getting closer scrutiny. Some regulators take the position that the law only allows entry in an emergency, to make necessary or agreed repairs, to show the units to potential buyers, tenants or workers or to conduct a pre-move-out inspection. When entering for one of these approved reasons the owner must give 24 hours advanced written notice, except in an emergency. The notice must include the purpose of the entry. Entry with the consent of the tenant is allowed. This leaves problematic the issues of preventative maintenance inspections and photographing. ACTION Apartment Association, Inc. has asked its attorneys for clarification and advice on these issues and we will update readers in the near future. In the meantime, readers are advised to consult with legal counsel regarding entry into apartments.
Our industry must work tirelessly to repel opposition forces at the ballot box, in the corridors of power and in the courtroom. Westside Apartment Monthly is your on-the-scene reporter.
The type of rent control action which annoys property owners the most are rent decrease decisions. The Santa Monica Rent Board rendered approximately 4,890 of these decisions since April 1979 and West Hollywood issued approximately 4100 of them since June 1985. The West Hollywood is actually worse because they began issuing decisions more than six years after Santa Monica did and because it has far fewer controlled rental units. West Hollywood Commissars love rent decrease decisions almost as much as they love Halloween, (which has actually been declared a holiday in that crazy city).
Santa Monica rent decrease decisions have been much less oppressive since the published decision was issued in Santa Monica Properties v. Santa Monica Rent Control Board (2012) 203 Cal.App.4th 751. In that case the Santa Monica Rent Board went too far by attempting to regulate the timers and the heat of the Jacuzzi and sauna at a luxury apartment building. The Court of Appeal reversed the Board’s decision with an opinion which found that, “. . . the minimal reduction of adult recreational services of a type commonly found only in luxury housing does not justify decreasing rents without evidence that the rent thereby became excessive or the landlord thereby realized an unjust or unreasonable return on the investment in the property.”
The Santa Monica Properties decision reduced the severity of rent decrease decisions in Santa Monica, but unfortunately, West Hollywood Rent Stabilization Commissars refuses to recognize any adverse rent control decision unless their name is on it. Therefore, on April 26, 2016 they rendered the infamous “Turtle Fountain Decision” which they awarded monthly rent decreases for all tenants in a 36-unit apartment building based on the following; (1) reduced accent lighting in plant containers ($3 per unit); (2) vines on pool fence removed while painting the building ($8 per unit); (3) reduction of tables and chairs in the pool area ($6.50 per unit); (4) removal of hallway carpets areas ($20); and (5) non‑functioning turtle fountain by the pool ($3 per unit).
The most outrageous of the rent reduction above was the rent reduction granted for the removal of the turtle fountain. This was based on the following testimony; “[Tenant] testified that there was a working turtle fountain at the mid point of the pool, between the pool and fence. [Supporting witness] testified that the fountain, on the pool deck, made an arc of water into the pool. Now, the turtle fountain is still connected, but it is rusted and not working, [Tenant] added.” The rent decrease decision did not even attempt to say the rent reduction was based upon a “substantial reduction in housing services.” Instead, it states that the reduction was based upon “a substantial decrease in the turtle fountain.”
The decision was quickly appealed to court and the judge issued a stay order was to prevent the tenants from reducing their rents based on the reduction of “housing services” described above. And if you don’t believe it, go to West Hollywood Rent Stabilization Department and ask to read Rent Board Story D-4078. But don’t go there on Halloween because every City office is closed that day. That’s a good thing.
L. Jacobson October 2016
On May 16 ACTION Apartment Association, a non-profit association of landlords, sued the Santa Monica Rent Control Board for a judicial decision as to whether the RCB’s prohibition of passing on actual water billings to tenants violates the Costa Hawkins Vacancy Decontrol Law. The complaint alleges that the vast majority of apartment buildings in Santa Monica are master metered for water meaning that the Water Division bills the landlord for the water used by the tenants. New buildings must be designed to allow separate metering and direct billing from the Water Division to the tenants but older buildings were not designed or constructed to allow this. Despite this situation, the RCB has insisted that landlords must absorb the cost of water used by the tenants rather than allowing a sharing arrangement whereby each tenant pays an agreed share of the water bill.
The complaint alleges that the State vacancy decontrol law allows landlords to establish the initial rental rate by agreement with new tenants and that as part of the rental agreement the parties can agree that the tenant pay an agreed share of the water bill. Prohibiting landlords to establish a water-pass-through agreement places landlords of these buildings at a competitive disadvantage with owners of newer buildings with separate metering and fosters excessive use of water by tenants. This latter situation creates a special hardship for landlords because the water rates in Santa Monica are scheduled to increase by over 41% from 2014 to 2020 and the City has placed criminal and civil penalties on landlords if their tenants’ use of water causes the landlords’ buildings to exceed the mandatory curtailment requirements.
To accomplish its purpose, the RCB has created its own definition of “rent” to include water. The lawsuit alleges that the term “rent” has an ancient and well recognized meaning. Absent special circumstances, it is the cost of housing. It includes the water pipes but not the water. All other utilities, such as, gas, electric, telephone, and internet services, are separately billed and paid by tenants and not considered part of the rent; but in Santa Monica the water utility is treated differently for these older buildings. This is yet another example of extreme rent control as practiced in Santa Monica.
A ruling in favor of the landlords in Santa Monica would be a binding precedent for all landlords in the State as the basis of the lawsuit is that the State enacted Costa Hawkins Act preempts any inconsistent municipal ordinances.
Donald Woods, Esq.
California Senator Mark Leno joined San Francisco Mayor Ed Lee, other elected officials, tenant advocates, labor groups and business leaders to introduce legislation closing a loophole in the Ellis Act that allows speculators to buy rent-controlled buildings in San Francisco and immediately begin the process of evicting long-term renters.
Aiming to mitigate the negative impacts of a recent surge in Ellis Act evictions in San Francisco, Senate Bill 1439 authorizes San Francisco to prohibit new property owners from invoking the Ellis Act to evict tenants for five years after the acquisition of a property, ensures that landlords can only activate their Ellis Act rights once, and creates penalties for violations of these new provisions.
“The original spirit of California’s Ellis Act was to allow legitimate landlords a way out of the rental business, but in recent years, speculators have been buying up properties in San Francisco with no intention to become landlords but to instead use a loophole in the Ellis Act to evict long-time residents just to turn a profit,” said Senator Leno, D-San Francisco. “Many of these renters are seniors, disabled people and low-income families with deep roots in their communities and no other local affordable housing options available to them. Our bill gives San Francisco an opportunity to stop the bleeding and save the unique fabric of our City.”
Ellis Act evictions in San Francisco have tripled in the last year as more than 300 properties were taken off the rental market. This spike in evictions has occurred simultaneously with huge increases in San Francisco property values and housing prices. About 50 percent of the city’s 2013 evictions were initiated by owners who had held a property for less than one year, and the majority of those happened during the first six months of ownership.
“We have some of the best tenant protections in the country, but unchecked real estate speculation threatens too many of our residents,” said Mayor Lee. “These speculators are turning a quick profit at the expense of long time tenants and do nothing to add needed housing in our City.”
Enacted as state law in 1985, the Ellis Act allows owners to evict tenants and quickly turn buildings into Tenancy In Common (TIC) units for resale on the market. In San Francisco, the units that are being cleared are often rent controlled and home to seniors, disabled Californians and working class families. When these affordable rental units are removed from the market, they never return.
Senate Bill 1439 will be heard in Senate policy committees this spring.
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