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CES In The News
 
Los Angeles Daily News
Friday May 7, 2010

City Council backs rent freeze in LA

by Rick Orlov, Staff Writer
 

Torn between helping tenants and trying not to hurt landlords, the Los Angeles City Council on Friday called for a temporary rent freeze on large rent-controlled apartment buildings.

By an 8-6 vote, the council requested the drafting of an ordinance to impose a rent freeze for at least four months, and possibly six, for tenants in rent-controlled complexes of more than five units.  

City officials estimate that 40 percent to 60 percent of the city's 630,000 rent-controlled units will be exempt from the freeze because they are in buildings with less than five apartments.

Councilman Richard Alarcon, who wanted the rent freeze to apply to all rent control units, said he will continue to fight to broaden the measure.

"I know everyone is hurting in this economy, but renters are hurting more," Alarcon said.

Councilwoman Janice Hahn called for exempting the "mom-and-pop" landlords with five or fewer units.

"I know tenants are suffering, but landlords are people too and we should not punish them," Hahn said.

The matter will return to the council in two weeks when the final legislation is drafted.

Alarcon said he proposed the freeze because of the city's rent law allowing for a 3 percent increase regardless of the Consumer Price Index.

"If we went by the Consumer Price Index, we would see rents reduced," Alarcon said. "Last year, it was a negative 6.5 percent."

A full study of changes to the city's rent control law is underway and is expected to be completed during the four-month freeze, said Douglas Guthrie, general manager of the city Housing Department.

Ryan Minniear, executive director of the California Apartment Association, Los Angeles chapter, said they were glad the council at least acknowledged the problems landlords face.

"We believe the city needs to conduct a comprehensive review of rent control in Los Angeles instead of taking a piecemeal approach," Minniear said. "The 3 percent rent increase is not out of line when compared to other California rent-controlled cities."

Minniear said landlords are faced with other increases while property value have plummeted.

But Larry Gross of the tenants-rights group Coalition for Economic Survival, which supports the freeze, said the council vote was a mixed victory.

"While we are pleased they support the concept of a moratorium, this still leaves too many renters without any protection," Gross said. "Too many tenants are paying 50 percent or more of their income for rents. I am not sure the council really thought this out. Just because someone owns five units or less does not mean they are mom-and-pop operations. This only addressed the annual increase and it didn't affect the other pass-throughs."

Gross said the landlords also could file an appeal to the freeze if they are not getting a reasonable return.

Councilman Bernard Parks pushed for a delay in the freeze, by sending the proposal back to the Housing, Commerce and Economic Development Committee to wait for the final recommendations.

"We have been waiting four years for this study," Parks said. "My concern is we shouldn't cherry-pick any recommendations until the study is completed. I also find it odd that we are looking to give tenants a break a week after we increased electrical rates."

Alarcon said most tenants pay their own electric bills and landlords are still allowed to pass on such costs to the tenants.

"This does not affect the pass-throughs," Alarcon said. "It is only the rent and we are talking about giving tenants a break of anywhere form $24 to $100 a month."

Voting for the proposal were Alarcon, Hahn, Eric Garcetti, Jose Huizar, Paul Krekorian, Ed Reyes, Bill Rosendahl and Herb Wesson.

Opposing it were council members Parks, Paul Koretz, Tom LaBonge, Jan Perry, Greig Smith and Dennis Zine. Councilman Tony Cardenas was absent. 


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