The Housing Authority of the City of Los Angeles, (HACLA), recently reviewed their rental rates on a city-owned, senior apartment building in Eagle Rock and proposed a 6 PERCENT rent increase on those tenants. They chose to ignore their own allowable 3% increase that is enforced on all owners under the L.A. Rent Control Law stating that a 6% increase would bring them closer to current market rates! What a joke! This is the case for most apartment owners who were caught with low rents at the inception of rent control.
Rent Control Protects?
L.A. Rent Stabilization’s allowable annual increase, (currently at 3%), was designed to “protect renters from substantial rent increases” – but when it came to the city-owned apartments, they chose to ignore it. A HACLA executive rationalized that the higher increase of 6% was needed to keep up with area rents. (No kidding, they are right on!) And … they were ready to impose the higher increase on an unsubsidized, city-owned building that is filled with elderly, disabled and tenants on fixed incomes.
I guess that “protection” and their concern for their senior citizen renters apparently flew “out the window” when they realized their rents were way below market value. Hmmmm…..
Rent Control is Criminal!
Many rental housing providers have tenants that are paying rents that are substantially lower than current market value. One owner with a two-bedroom unit may be getting $900 a month when the market rate for that unit is $1,500.00. Do you think the tenant that occupies that unit is ever going to leave? Why on earth would they? It could be decades before that housing provider actually gets what his unit is worth.
The imposed rent control law is actually “stealing” that difference – $600 a month. Stealing from the very people who are already providing much needed housing in the city of Los Angeles. It is nothing but tenant welfare provided by housing providers!
What’s Good for the Goose…..
When the city hearing was attended by angry senior citizens and HACLA found out that lawyers and a “tenants’ union” were against the 6% raise, they “scrapped” their proposal and announced the rent increases would remain at 3%. Only after disputing whether or not the building was under the jurisdiction of rent control, HACLA cited “concerns expressed by our residents,” and announced rents would rise just 3 percent, in line with allowable increases under the city’s rent control law.
Perhaps NOW, they understand the business of owning rental property in L.A. city and how rent control laws suffocate investors. Let them choke on that for awhile.
Patricia Harris is Senior Editor of the AOA Magazine – the Apartment Owners Association News and Buyers Guide.