In January 2018, Assembly person Richard Bloom’s AB 1506 was challenged and defeated in the Assembly Housing Committee. If successful, it would have automatically eliminated and repealed the protections for small apartment owners afforded by the 1995 Costa-Hawkins Fair Housing Act.
After the defeat, tenant activists, eviction attorneys, the Statewide Tenant Union, Tenants Together and the AIDS Foundation, controlled by Michael Weinstein, promoted a statewide ballot initiative to repeal Costa-Hawkins. They were successful in acquiring sufficient signatures and it will be on the ballot.
Concurrently, popular columnists have been relentlessly and aggressively promoting some form of emergency rent control ordinance. A day doesn’t go by when we do not see in our local newspapers or hear on our radio programs some announcement that apartment and home rents have escalated to inappropriate amounts far in excess of 8% to 9% increases per year or more.
The false narrative continues that the high cost of rentals has given rise to more evictions and an intensified removal of tenants into the “homeless population”. Again, very liberal investigations initiated at Stanford and theRandCorporation have proven otherwise. Rent control gives rise to the loss of jobs and units. Also, prominent real estate groups have been promoting and marketing a concept wherein apartment owners should offer their units for sale immediately.
Some municipalities are anxious are trying to develop plans in the event the Costa-Hawkins Act is repealed. For example, in Santa Monica some prominent attorneys and legal scholars have concluded that in the event the protections of Costa-Hawkins are, indeed, repealed, the established, lawful, maximum allowable rent should remain the rent established effective January 1, 2019, and each and every year thereafter perhaps, the increase on a vacant unit would be limited to 5%.
As to historically low rents, managers’ units and units reserved for the owner or their relatives, the rent authorities have not worked out a suitable or appropriate formula. Likewise, the annual rental adjustment, which uses an arcane, illegitimate formatted based upon the Consumer Price Index, may be revisited.
Responsible municipal managers all agree that tenants should pay for water, sewage, trash and municipal fees. A different format or formula should be adopted for sanctioned or approved roommates.
Preemptive Approach – Vacancy Control
In the event strict Berkeley-type rent control is installed after November 2018, some industry leaders and attorneys have made some suggestions. Carve out from the rental arrangement parking, laundry room, water, sewage and trash retrieval. Be very cautious when filling out any registration forms wherein you’re obligated or responsible for identifying the “essential housing services” or “amenities” for each rental unit.
Forty years ago, Santa Monica acknowledged and sanctioned “separate amenity arrangements” for items not historically included in the unit. For example, stoves, refrigerators, dishwashers, garbage disposals, cable access and microwaves.
There is no legal obligation for owners to provide appliances. Again, every jurisdiction has recognized that storage areas and/or parking can be excluded from the rent and thereafter offered for rent by a separate arrangement. Be careful and consult your local attorney.
Tenant from Hell
In some non-rent control jurisdictions wherein an owner may terminate a tenancy by the service of a 60-day notice, without identifying any justification, you should carefully examine your “tenant population” and determine whether there are any tenants who have been habitual complainers or have a history of late payment of rent or creating other problems in the rental complex. Those are the tenants who will receive maximum protection under the new municipal “strict rent control” ordinance. It would not be uncommon for these tenants to refer you to the Building Department alleging building and safety code violations. They will be reluctant to cooperate with municipalities in certifying or affirming their rents. For whatever reason, they have a psychologic need to always be belligerent, antagonistic and difficult. They live for confrontation and some reason the manufacture or fabricate a hostile environment. Yes, the tenant from Hell.
Scholars, industry leaders, and attorneys have urged landlords to lawfully and appropriately notice the removal of these tenants and either leave the unit vacant at the time of rent control or re-rent it at market rates. Never terminate any tenancy without consulting an attorney who will make certain that “fair housing” protocols are addressed, and that there is no basis for suggesting that the campaign to terminate the tenant was a product of discrimination.
Please attend your local apartment association meetings. Ask the attorneys present for insight. Be generous in your contributions to the association’s Political Action Committee. Be respectful when engaging your leaders as to the programs and protocols they intend to employ to defeat or challenge the Statewide Ballot Initiative. Remember, your leaders are mere volunteers.
Michael Millman is an Attorney and a Mar Vista activist and can be reached at (310) 477-1201.