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Thursday December 25, 2014

WeHo Rent Tries To Remain Stable 30 Years Later
City touts mediation results for rentals

By Jonathan Van Dyke

When West Hollywood became a city in 1984, one of the tenets it was founded on was rent control. Shortly thereafter, the city council passed the city's landmark rent stabilization ordinance, which was designed to keep rents from spiraling out of control in the face of gentrification.

Since then, the state passed the 1995 Costa-Hawkins Act, which states that when tenants moved out of a rental unit, the owner could increase the rent to the market rate or above, ostensibly overruling West Hollywood's law. City officials said the rent stabilization ordinance is still working for the people of West Hollywood, even if it is weaker 30 years after its inception.

"It isn't affordable housing, which is often lower than rent stabilization," said Elizabeth Savage, director of the West Hollywood Department of Human Services and Rent Stabilization. "What it has allowed is for a good, stable community with people able to afford living in that place. It allows people to have a good quality of residential life, which is one of the city's core values."

The city's rent stabilization ordinance actually allows for rent increases, which officials said residents often forget. In West Hollywood, landlords can raise the rent by 75 percent of the Consumer Price Index (CPI) each year.

West Hollywood rent is set to increase 1.25 percent for 2014-2015. By comparison rents will increase in Los Angeles by 3 percent, Santa Monica by .8 percent, San Francisco by 1.9 percent and Oakland by 10 percent, according to the Coalition for Economic Survival.

All units that were built before Jan. 1, 1979, are under the rent stabilization ordinance. Anything built after that date is not subject to rent control. Also, any time a tenant moves out, the Costa-Hawkins Act allows the landlord to raise rent outside of the parameters of the city's law. Once a new renter is in place, the pre-1979 rental units are again under the rent control ordinance.

"When the law changed so rents could be raised to whatever the market will be, it did make a change, but we still have many units under rent control," West Hollywood City Councilwoman Abbe Land said. "For the most part, our rents are not outrageous."

There are 24,468 residential housing units in West Hollywood and 16,916 are part of the rent stabilization ordinance. According to city records, between 2000 and 2013, 62 percent of the rent control inventory has flipped renters, allowing landlords within that period at least one opportunity in which they brought their units up to market value or higher.

During the last 10 years, West Hollywood's housing stock has grown by 2 percent, or approximately 375 new units, meaning there are not an overwhelming amount of new units coming into the market that are exempt from the rent stabilization ordinance, officials said.

"It's better affordability, but that doesn't mean they're getting a boondoggle," Savage said.

In 2013, a one-bedroom housing unit cost $1,570 monthly on average. Before 1996, that price was $901 on average. A two-bedroom unit today costs $2,125 monthly on average. Before 1996, a two-bedroom unit would cost $1,202 on average.

In 2013, there were 295 units that changed renters, and therefore, could change to a higher rent than allowed by the rent stabilization ordinance.

"It ostensibly puts a bullseye on long-term tenants," said Larry Gross, executive director of the Coalition for Economic Survival (CES). "Landlords, many, will do what they can legally or illegally in order to be able to raise the rent."

Savage said she and her colleagues are attempting to stop those kinds of incidents from occurring, and she believes that renter-landlord dynamics are the place they can help the most since the Costa-Hawkins stripped the city's ordinance of some of its powers.

"We do a fair administration of the rent stabilization ordinance and we serve landlords and tenants," she said. "We balance those interests and the ordinance was crafted wisely so we are able to do that. Who are we serving? Strongly, we are serving both."

In 2013, the department's public interactions consisted of 55 percent tenants and 40 percent landlords, with 5 percent brokers.

The city has experienced a decline in rent hearings, from 133 in 2012 to 97 in 2013. The city's mediator served approximately 1,040 constituents in 2013 and resolved 485 conflicts through a combination of telephone calls and face-to-face meetings — issues included maintenance, parking, pets, roommates and other habitability concerns.

"I think the number of hearings tells you that things are settled well beforehand," Savage said. "I think it isn't just about rent, but the core value of residential life."

The rent stabilization ordinance can impact landlords and tenants in other ways, officials said.

"We have maintenance standards, which has helped leave many units in good shape," Land added.

Looking forward, Land said the biggest challenge to affordable housing in the city could be looming earthquake-vulnerability concerns. She noted many of the older structures that fall under the rent stabilization ordinance are the "soft structure units" with wooden framing over garages. Those units have come under increased scrutiny, especially in Los Angeles Mayor Eric Garcetti's recent improvements proposal.

Through it all, the rent stabilization ordinance is still worth fighting for, Gross said.

"What the law is doing right now, its enabling West Hollywood to maintain the diversity of having a mixed-income community," he said

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