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LA Progressive

Thursday September 04, 2014

Confronting LA's Affordable Housing Crisis: We Must Raise Wages as Rents Rise to Prevent Displacement

By Joel Montano

How expensive is it to rent in Los Angeles? Extraordinarily expensive! A recent study published by UCLA in July has classified Los Angeles as the least affordable rental market in the United States. The findings reveal that the average renter allocates 47% of their monthly income toward rent. According to the Department of Housing and Urban Development (HUD), affordable housing is defined as rent not exceeding 30% of one's monthly income.

As the Lead Affordable Tenant Organizer with the Coalition for Economic Survival (CES), a 41-year-old Los Angeles renters' rights organization, I work with low-income tenants living in HUD-subsidized housing whose rents are based on 30% of their income. My work consists of educating residents on their rights and responsibilities established by HUD and encouraging them to organize collectively to speak out against poor habitability conditions, safety concerns and threats to their affordable housing.

While door-knocking at these properties, it is not uncommon to hear tenants say they are hesitant about complaining about their troublesome living conditions in fear of being retaliated against. On many occasions the management representatives have convinced them that they are paying low rents and should be happy that they simply have a roof over their head. This management tactic exploits tenants' additional fear of potentially losing their affordable housing and being thrust back into the harsh housing market of Los Angeles. Acceptance into a HUD-subsidized housing program does not take weeks or months, but rather applicants will typically wait years which underscores the lack of affordable housing in our city. Many of the tenants who now reside in these HUD-subsidized units have dealt with the struggle of being rent-burdened, living with overcrowded units, and even homelessness.

Aside from the monthly rent tenants pay, owners of these properties receive additional monthly rent subsidy payments from HUD, ensuring that their rents add up to fair market value. Often times the rents exceed fair market levels. Owning a HUD rental property has shown to be a wise business investment that will turn a profit. The false notion tenants may have that the owner is doing them an amazing favor can serve as a motivation for greed where priority is mainly placed on rent collection over ensuring tenants a safe, habitable and healthy home.

Through education and organizing, tenants can become empowered through establishing a tenant association to represent them in the operation of the property and most importantly preserving its affordability.

The intent of the HUD-subsidies were not to be permanent, as they have expiration dates and provide owners the opportunity to "Opt-Out," or terminate their participation in the program. These affordable housing units could then be converted to market-rate housing, increasing the already disturbing statistics of unaffordable housing units with rents increasing to outrageous levels. Securing long-term preservation contracts will help expand the life of these affordable housing units for years to come and help future Angelinos struggling with the housing crisis, in line with CES' rallying cry of 'preservation of affordable housing.'

CES receives regular calls from struggling Angelinos seeking Section 8 rental subsidies or other low-income affordable housing. Unfortunately, they are faced with few government housing entities where they'll be lucky if they are able to get added to long wait-lists. The painful truth is that wait-lists can be closed for years at a time, even before an individual can be added

In 1978, CES was successful in leading efforts to win rent control in the City of Los Angeles. The LA Rent Stabilization Ordinance (LARSO) provides most renters not living in HUD-subsidized housing protection against excessive rent increases and unjust evictions that could lead to displacement. LA units subject to rent control must located on a property with 2 or more units and built before October 1978. The 638,000 rent controlled units in LA represent the overwhelmingly majority of the city's rent units. On an annual basis, the Los Angeles Housing and Community Investment Department (HCIDLA) sets the allowed rent increase percentage, based on the Consumer Price Index (CPI), which can range from 3%-8%.

While many landlords may condemn LARSO as an infringement on their property rights leading to showcasing their typical 'bad for business' tirades with city officials, the 'Economic Study of the Rent Stabilization Ordinance and the Los Angeles Housing Market,' published by the Economic Roundtable in 2009, revealed that a majority of owners are profiting well under rent control. The study indicated that close to two-thirds of LARSO units produced a profit or broke even. But over 60% of renters surveyed were either rent-burdened, paying over 30% of their income for rent, or severely rent-burdened, paying over 50% over their income for rent. Given these alarming numbers it is hard to imagine what Los Angeles would look like if LARSO did not exist.

In addition, LA is dealing with a booming trend of landlords permanently removing rent-controlled units from the rental market and displacing tenants through condominium conversions or demolitions. This is allowed under the state Ellis Act, which bars local government from passing laws to prohibit landlords from going out of the rental business. Since 2001, LA has lost over 15,000 rent controlled units as a result of the Ellis Act.

Los Angeles is haunted by a real housing crisis and housing advocacy will continue to forge ahead, but a multifaceted effort that includes other non-housing campaigns like Raise LA will offer huge benefit for renters.

CES fully supports the Raise LA campaign that seeks to raise the minimum wage to $15.37 for employees of large-scale hotels with 125 rooms or more within the City. This increase is tantamount to a living wage that will help provide major relief for the workers who are renters. A higher income will help reduce the severity of being rent-burdened and advance peoples' ability to keep a roof over their families head.

As housing advocates we understand the time is now to Raise LA!

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