Prop. 98 debate: Is rent control worth saving?

A number of smart people have been encouraging me to post on the dueling eminent domain propositions, Proposition 98 and Proposition 99. Because I could not get an appointment for an elective root canal today and was turned down in my bid to volunteer for jury duty, it appears a political discussion cannot be avoided (Aside: there is an election coming up, on June 3, in California).

Naturally these are somewhat complicated propositions, and there is a slim chance that over time I will do justice to the subject. Slim. But not now, not here. My question is this: is rent control worth keeping?

Proposition 98 would outlaw new rent control laws and phase out the old ones. From the Legislative Analyst's Office summary: "The measure generally prohibits government from limiting the price property owners may charge others to purchase, occupy, or use their land or buildings. This provision would affect local rent control measures. Specifically, government could not enact new rent control measures, and any rent control measure enacted after January 1, 2007, would end. Other rent control measures (those enacted before January 1, 2007) would be phased out on a unit-by-unit basis after an apartment unit or mobile home park space is vacated. Once a tenant left an apartment or mobile home space, property owners could charge market rate rents, and that apartment unit or mobile home space would not be subject to rent control again."

Good idea or a bad idea? Make your case. E-mail story tips to peter.viles@latimes.com.

Comments

[MyLessThanPrimeBeef]

I am in favor of gas control - how much a gas station can charge for gas and how much a person can discharge his/her gas, which, I was told once, by a doctor not less, is the main culprit for the excess methane in the atmosphere and a huge factor in Global Warming.

[Liz Wetzel]

My father has has a 12-uint in Glendale and this is what he does, he would rent a new apartment at a very high price. If he likes the tenants he wouldnt raise the rent for a long time. One of the units are occupied by a Filipino couple, both professionals and have two children both born while they are his tenants. My father hasnt raised their rent for 8 years now. In return, the couple treat the unit like their own, like changing the countertop on their own, keeping a clean yard, doing his taxes for free, etc. They also painted the inside on their own. He said the couple reminds him of my Mom and him when they were just starting and he has never seen a more hardworking and grateful couple. Frankly, my father is the most annoying perfectionist, racist person i have ever lived with. I cant live with him even if its a rent-free arrangement.

[Eliza]

Considering how high rents are even WITH rent control, phasing out or eliminating rent control is a bad idea. Los Angeles is quickly becoming one of the most expensive cities in the world and eliminating rent control will make it even less affordable for renters to live in Los Angeles.

[Todd]

In replying to Scott, YES, I am a landlord. Being a landlord has been quite good to me. I am tired of seeing landlord treated like the oil companies. We provide a hell of a product to the market place. Like oil companies, we are in a capital and labor intensive building. Landlording and owning incoming property is far from being glamorous or clean. It is dirty and filled with headaches and takes years for revenue streams to really produce.

Who is to say what a 2 bedroom in Silverlake is. Remember, landlords do not set rents....tenants do. I have plenty of example of me trying to get $1,200 for a 1 bedroom and not getting one phone call until it hit $1,095. The renters told me what it was worth, it was worth $1,095/mo. Landlords do not set rents, tenants and the market place do.

Rent control exists in very, very ,very few places. Phoenix and Chicago are two cities to mention. Locally, Burbank does not have RSOs. Why are building with CofO's dated after October 1978 are free of rent control? This law benefits owners who have the capital to afford newer buildings or to build their own. The "Mom and Pop" or those who are not extremely well capitalized, cannot afford non-RSO inventory. We can see how rent control laws have a greater effect on the smaller owners more than the big well healed and capitalized ones.

The rich dudes like Sterling and developers of Hollywood and Downtown do not care about RSO....for virtually all their inventory is non-RSO. A commerical or industrial building converted to R use is automatically non-RSO.

Most landlords are not well heeled and rich. They all sure hope to be.... and may they all get there. Most landlords are a paycheck or two, or a building emergency or two from losing their crap and becoming a tenant themselves.

[tew]

Rent control is a terrible idea and imposes arbitrary revenue losses on owners and arbitrary benefits to tenants. Why should one tenant pay half or less what a neighbor pays just for being there first? Why should one building owner get half the revenue of somebody else just because his/her building has tenants who won't budge?

That said, why should owners get Prop 13 benefits unless they also keep rents in line with the Prop 13 cap? Prop 13 is kind of like a rent control for owners...

[the problemwithcaring]

Free markets don't really exist - anywhere. So the argument here is that apprently they should exist only for the poor, broke and/or landless?

Seems like there are already plenty of allowable rent increases now - http://www.lacity.org/LAHD/increase.pdf

[Dave]

I live in West Hollywood with stringent rent control and during my tenancy:

My landlord, in response to my having called to say I had no hot water, told me he could get it fixed in a few days, said, that in the old country, when he was young, they had to bathe in puddles.

The refrigerator that came with the unit went out and he only agreed to replace it if I paid half the cost of it.

My roommate and I replaced the kitchen tile and put new hardware on the drawers and added a decorative walllpaper border. No comment from him.

The law requires him to repaint the walls every four years and that the carpets be replaced every five years. Neither had been done before we moved in and we've long exceed those deadlines.

He someone come in to hardwire the smoke dectector in the apartment. That handyman put the detector too close to the outvent of the heater, making the alarm go off every time the heater went on. We waited for him to fix it and we took it off after a few weeks. We're still waiting.

The list goes on. With the market as bad as it is in Los Angeles, there's no incentive but the law for SOME landlords to maintain their properties. I shudder to think what removing the law will encourage them to do.

[Susan Hilton]

Being from Texas I don't understand rent control at all. Why should anyone tell me how much I can charge for my property? Why not allow free market handle it and take the government out?

[Angela Haward]

My building is under rent control protection, so our "smartass" landlord, who inherited the building just a year ago, figured a way around it by changing all the windows in the building, repainting it and ....passing the cost on to tenants. It doesn't bother anyone that nobody asked tenant's opinion at the time, or discussed the matter beforehand. Tenants took the matter into a court, which ruled out the cost should be proportionate to the number of windows in each appartment, but overall rent increase is legitamate.

The bottomline, however ,is this-as homeowners are pushed out from their properties and demand for rental appartments increases, landlords and developers smell new possibility for profiting and actively pushing for a new, so-called 98 proposition.

[JohnnyB]

Many years back I lived in a west side rent control apartment where I was paying many times what other neighbors were paying. And, some of those others were not the original tenants... they just happened to know the original tenants and got in on the sly to maintain the ultra cheap unit.

I didn't like rent control then and I don't like it now. It's inherently unfair, biased and flawed in it's implementation.

All depends on your perspective... if you're one of the select few who get to live for 20 cents (or whatever) on the dollar it's probably pretty sweet. The reality is that everyone else directly and indirectly subsidizes those "previous residents" living on the cheep in mixed rent controlled apartment buildings.

What DOES make sense and what is CRUCIAL is to have and maintain annual rent increase CAP limits that prevent owners from gouging renters, driving tenants out, etc. etc. with unreasonable increases after the tenant has moved in. But, to establish parity, those currently in rent controlled apartments should be subject to several times that mandatory cap limit until things even out.

So much has changed regarding living spaces in California in the last 20 years. The huge disparities in rent payments within buildings - and the way the rent controlled units are manipulated - make zero sense as is (unless you’re in one of those units).

[rob]

I am a property owner, a business owner, and a renter. I think rent control is a fair system that helps keep the cost of living down for some people who would otherwise not be able to afford living in the city or close to work.

For my rental property I have some long term tenants that I know will not move out because they have below market rents. This is good because then I do not need to worry about renting the unit, paint, etc all of that stuff when it becomes vacant. Of the units that are paying market rent I have a much higher turnover. I make good money on them, but maintenance on this units is higher.

As a business owner I am happy that rent control has let some of my employees prosper as the salary increases that I have given them over the years has not always gotten eaten up by rental inflation.

As a renter I am in someplace that is not under rent control, but when negotiating a lease renewal I am able to use the city rent control guidelines for increase during the year as part of my bargaining.

[Enlightenment]

I think all the metro counties (LA, OC, SB, V) should have stronger rent laws to protect the renters:
- Law to cap the percent incease in rent per year.
- Law to create an independent agency to hold deposit money, so bad landlords can't scam people when they move out. All of the deposit money would be invested in bonds or interest drawing fund to help pay for the service.

I don't belive in freezing rent, but I do believe that rent increases should be capped!!!

Renters need more protection!!!

[Elle]

How can people who have lived in rent-control building want to vote for prop 98? Where did the logic come from?

[left of lefty]

i see rent control for renters as similar to prop 13 for owners. both protect the occupants from unforeseen price increases beyond their control.

i'm willing to let go of rent control for renters as long as owners are willing to give up prop 13.

disclaimer: i'm both an owner (not a landlord) and a renter (not under rent control). i own a home, but rent somewhere closer to work.

[Enlightenment]

We need to cap the rent increase to some percentage a year, like 5% or 7%, or possibly the published USA inflation rate for each year plus some flat amount of percent. I'm cool with all increase caps, but I don't believe in freezing rent prices.

[RayDeluxx]

I own two small apartment buildings. One has rent control the other does not. Guess which one gets maintained? Hint, its not the rent controlled building. You see, I am subsidizing the rent of a single mom that does not work and just has another child. She pays $1000 for a 3 bd/2ba unit.The city of Los Angeles just raised my taxes and utilities which do not have price controls. My other building has new paint and carpet. Why?because I use the rent income to maintain it. I can not willy nilly raise the rent because I will have a vacant building. All I want is a fair return on my hard earned investment.

[AK]

"98 won't pass because most Californians lack critical thinking skills."

Couldn't have said it better myself.

Vote YES on 98 and NO on 99 on June 3rd.

[Julie L]

Let's not forget that the landlords were all in favor of Proposition 13 back in 1978 and claimed that high property taxes were driving rents up, and that rents would go down if Prop 13 passed.

How'd that work out?

[Bubblewatcher]

More and more, living here in West Hollywood where something like 300 renters lost their homes to condo development last year, I'm seeing the detrimental effects of rent control. Many of these displaced renters have been in their homes for 30 or more years, with rent control creating a stronger and stronger incentive not to buy themselves a home of their own. Now, at an age when having some equity -- perhaps even a paid-off mortgage -- would be ideal, they're forced to pull up stakes and pay several times the monthly rent, in most cases in an unfamiliar neighborhood.

Conversely, you've got the detrimental effect of rent control on these older buildings, which are falling apart from deferred maintenance since their owners are (in inflation-adjusted terms) collecting less and less rent as the structure requires more and more maintenance. Just the other night, our City Council approved the demolition of an unkempt but lovely 1924 courtyard building, displacing several long term tenants, in favor of yet more million dollar condos (with nine months of condo supply on the market already).

At some point, I think rent control needs to go. This may not be the proposition to do it, though -- the environmental concerns are a bit scary and sweeping.

[renterinmidwilshire]

With the exception of those who took out adjustable ARM loans (to afford a house they couldn't afford), homeowners don't see their mortgage jump at least 5% every single year after year. 5% is the current maximum increase allowed under current RENT CONTROL laws. That wasn't such a big deal when rents were $800 a month. But now that they're more like $2000 a month (for a 2 bed in a decent neighborhood) you're looking at an annual rent increase of $1200 a year. (Year after year). No one claims foul when the guy who bought a house 25 years ago only pays $900 a month in mortgage. His mortgage doesn't jump up.
Renters are the biggest byproduct losers in this whole Los ANgeles real estate bubble. Renters do not get any tax write offs, unlike homeowners. Nor do they get any equity. Nor do they have the privledge in living someplace they can truly call their own. Rents have SKYROCKETED here, not so much on supply on demand but because since house values were escalating 25% annually, landlords felt, hey, let's make rents skyrocket along with it. (Again, with renters not allowed any of the benefits of homeowners).
And by the way, I am a renter in a non rent control building. I'm all for rent control. Landlords are businessmen and they will squeeze renters for as much as they can get, just like the people selling their home are trying to ask ridiculous price for their crappy little property. THe real estate bubble has changed the landscape of LA for the worse. Just like home prices, rents are not in line with people's incomes. There needs to be MORE to protect renter's rights.

[Santos Aviles]

Why should landlords be abligated to supply subsidized housing for low income workers? Shouldn't it be the employers? Or we could spread the burden to all businesses in the city of Los Angeles. For example, gas stations charging less for gas based on income, same for grocery stores etc. etc. Why is the state forcing socialist/communist practices in a free market economy? If the state is interested in subsidizing housing, it could send direct subsidies to the tenants or subsidies to the landlonds? Rent control makes no sense.

[Tokyo Temp - ex LA Renter]

Susan from Texas,

That's because Texas has reasonable rents. The quality of rental units in LA for any reasonable amount of money is nuts here LA is a lot like Tokyo. A lot of apartments, but most of it is old, junky and over priced.

That being said, I think Rent Control is ridiculous and has caused rents to increase. Though I doubt it will have any affect on the maintenance of the existing apartment stock. The current lot of landlords in LA seem to care not one whit about their buildings.

[Joe Oliva]

Yes on 98
NO on 99

nobody who has rent control now loses that protection

this is just permanent decontrol
right now we have decontrol recontrol
Rent control is bad for the community. It makes landlords and tenants into adversaries.
In what other business is there such hostility to customers or businessmen?
Freedom to bargain is an important freedom
The big losers will be the rent control bureaucrats.
They will need to find new jobs. That is why they are ferociously against 98

[Belle]

I would vote in favor of outlawing rent control if I could get a rate hike cap for rent. I live in a non-rent control area. At my last place, my landlord raised the rent by 18% after my first year there. I see something like 5-10% annual cap being reasonable.

The rent hike wasn't my only motivation for moving (story below) but I definitely saw it as a tool used to try to force us to move out and get one of her friends into our place. She even gave us a dollar incentive to move out early so she could get her friend in earlier.

Storytime!
My landlady would send us a list of the things we needed to clean to maintain her property or she would hire someone to clean for us and bill us. I thought she was pretty nutso so we decided to move with extra motivation from the rent increase. We're paying more money for a nicer place but at least the landlord doesn't have ridiculous expectations. Not only that, she required we had the carpets professionally cleaned yearly at our expense.

[gary]

what a bunch of idiots, its more than just rent control, god almighty I bet you all plan to vote for mccain also.