Who would have thought that our homeless population is hopelessly linked to rent control, also known as tenant welfare?
Sometimes, the best of intentions end up producing the worst of results as unintended consequences. Many renters, government officials and city employees think that artificially induced price controls on rent will help community members. This is evidenced by the City of San Mateo’s recent imposition of rent control in August and by the city of Glendale putting rent control on the upcoming ballot. And, more and more cities are implementing intrusive city inspections like Long Beach, Highland and Santa Ana.
Forty-three out of the 50 states have outlawed rent control because rent control policies don’t work. Yet, California is still trying to impose rent control.
This reminds me of a story to illustrate the point. Pedro and Maria Gonzalez worked hard to be contributing members of their community. They each worked several jobs, established a nice home and enrolled their three children in a good, local charter school. They were able to save a little money for their family.
When the recession hit during the 2009 through 2012 time period, Maria and Pedro used their savings to buy a 20 unit apartment building for pennies on the dollar. They were really excited about their accomplishment and felt they finally had a piece of the “American dream.”
Until … a city inspector showed up at their Boyle Heights building. They invited the inspector in because they were very proud of their building and the work they had done to improve the property.
Pedro and Maria were shocked when they received the list of violations issued by the inspector. The Gonzalez’s were told to replace the roof because two different roofing materials were used – tar and gravel and composite shingle. This roof style had been used on many neighboring buildings but the roofs were not leaking. New roof replacement cost – $30,000. Inspectors wanted the building re-piped from galvanized to copper piping. Plumbing cost estimate – $40,000. All cracked caulking and grout had to be replaced even though there were no leaks. Four finished garages had to have wallboard replaced while carports needed reinforcement. Inspectors found a 4 inch by 4 inch peeling paint area on the underside of the roof eaves and demanded repainting of the entire building. And the list went on, totaling nearly $100,000 in repairs. Maria and Pedro had 30 days to correct their citations. They were unable to afford these cosmetic – not habitability – issues.
The building fell into REAP (Rent Escrow Account Program) whereby tenants only pay 50 percent of the rent to the Gonzalez family. The rest of the rent went to the city. Now, Pedro and Maria had no funds to make repairs.
Just cause evictions went hand in hand with the over-reaching inspection ordinances. Pedro and Maria could no longer evict problem tenants without a new layer of bureaucratic red tape. Good tenants complained abut hoarders, water wasters, gangbangers and criminals in the building. Whereas, before just cause eviction laws were in play, Pedro would just issue a 30 or 60 day notice to remove the “bad actors”. Now, the complaining tenants would have to take time off work, go to court and testify against the criminals. This just didn’t happen.
Good tenants moved away. More bad actors began hanging around the building. It became impossible to find good tenants who wanted to live in the apartments.
Pedro and Maria lost the building in a short sale to a developer who tore out several apartments on the same block. Developers gladly paid the $20,000 relocation fee to the remaining tenants and began their new projects. The displaced tenants moved on, used up their relocation fees in less than a year and many of them ended up on the street as part of the 46,000 homeless population in Los Angeles.
All of these steps lead to more tenant welfare that they call rent control. Many government officials believed that “rent control” would help the tenants avoid living on the streets. However, the regressive road this form of government began with the “silent killer”- over-reaching inspection ordinances.
STOP intrusive government inspections of your property!
STOP the forced sale of your property as the new eminent domain!
STOP the imposition of “just cause” eviction laws!
STOP the Regressive Road to more and more tenant welfare!
[AOA: Please email this article or a copy to every politician you know and to the editorial section of every newspaper in your area. Thank you!]
Nancy Ahlswede, a 30 year veteran of the rental housing industry and works with Better Housing for Long Beach, a broad-based coalition of owners, Realtors, investors, veterans, bankers, title and escrow agents. Renters affected by inspections are also welcome to join the campaign to retain private property rights. Nancy can be reached at [email protected]