After a lengthy discussion, the Los Angeles City Council approved limiting rent increases on rent-stabilized units to 4%, or up to 6% if landlords cover gas and electric costs.
Council members voted 10-2 Tuesday night to move forward on the proposal, meant to limit anticipated rent hikes for properties that are subject to the city's rent-control law.
As part of the plan, the council instructed the Housing Department, in consultation with the United to House LA Citizens Oversight Committee, to develop programs assisting landlords and tenants, as well as for small housing providers, for the maintenance and preservation of rent-controlled units.
The council also amended its proposal to include a report back on establishing a rule or policy that would help distinguish mom-and-pop landlords from corporate landlords, in an attempt to ensure small landlords can receive city resources to stay afloat.
Council members Paul Krekorian, Curren Price and Katy Yaroslavsky recused themselves because they are landlords. Council members Traci Park and John Lee voted against the item.
Tuesday's action was prompted by a Jan. 31, 2024, deadline in which a pandemic-era rent freeze placed on rent-stabilized units is set to expire.
The city's Rent Stabilization Ordinance was adopted in 1979 and applies to rental housing built before 1978. It limits the allowable increase for rent-controlled units, tying rent increases to the consumer price index, a measure of inflation.
In response to the rent hike deadline, Councilman Hugo Soto-Martinez introduced a motion on Oct. 25 that sought to extend the freeze on rent-controlled units.
The motion was then amended by Councilman Bob Blumenfield during the Housing and Homelessness Committee on Nov. 1. Rather than extend the rent freeze, the Blumenfield amendment requested that the city attorney, with the assistance of the Housing Department, draft an ordinance that would temporarily set rent increases for rent-controlled units from Feb. 1 to June 30, 2024.
The hikes would be calculated using a formula outlined in the city's rent control law, using the consumer price index from October 2022 to September 2023 instead of from October 2021 to September 2022.
According to Blumenfield, by using the most recent consumer price index, the formula would allow a rent increase of 4%, up to 6%, instead of what would have been a 7% increase.
"So, that's why I put that forward in committee because it didn't change the formula. It merely changed the window that we look at that formula to make it the most updated window," Blumenfield said.
Housing advocates, tenants and landlords are all "not happy" with the proposal, the councilman said -- which, he added, demonstrates the "compromise probably makes sense because both sides hate it."
"I just hope that folks are ready to look at themselves when we see an increase (in eviction filings) because if we increase rent, people are going to get evicted and we're not going to stop this eviction to homelessness pipeline,'' said Councilwoman Eunisses Hernandez said, who voted in favor of limiting rent hikes.
Councilwoman Monica Rodriguez urged her colleagues to be responsible in how they manage the issue.
"We can't ignore that we continue to put the burden of affordability on private property owners," Rodriguez said. "The people that are left holding the bag has historically been the same housing providers that have unfortunately borne a greater burden in this conversation."
Lee said limiting rent increases would only propel small landlords to sell their proprieties to large corporate landlords.
Previously, several tenants and landlords expressed to council members their support for either extending or terminating the rent freeze.
Casper Martin, speaking on behalf of his parents, who own a rent-controlled, six-unit apartment in the Pico-Robertson area, previously told the Housing and Homeless Committee that his parents love being landlords. While his parents rent out units below the market rate, they can't continue doing so without being able to raise the rent at least a little.
Other landlords who spoke against extending the rent freeze also cited financial concerns.
Renters such as Amelia Kreski, a 10th District resident and member of the Alliance of Californians for Community Empowerment, urged the council to extend the freeze or limit any rent hikes.
Kreski, 70, said she lives off her husband's pension and it will not be enough to cover a rent increase. She said many Angelenos like herself cannot afford higher rent.
Housing advocates and renters emphasized that any rent increases could lead to a rise in homelessness.
The Los Angeles County Board of Supervisors last week took similar action, extending but slightly increasing a cap on rent increases allowed for rent-controlled apartments in unincorporated areas. The board last year imposed a 3% cap on rent increases, but that cap was set to expire at the end of the year. The board voted to extend the cap until June 30, 2024, but agreed to increase the allowable rent increase to 4%.
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