Divided Los Angeles County Board Votes to Extend Rent Hike Cap Through 2024

Divided Los Angeles County Board Votes to Extend Rent Hike Cap Through 2024

A "for rent" sign is displayed outside an apartment building in Los Angeles on Sept. 22, 2022. (Allison Dinner/Getty Images)

City News Service

City News Service

6/5/2024

Updated: 6/5/2024

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LOS ANGELES—On a split 3–2 vote, the county Board of Supervisors June 4 agreed to extend through December a 4 percent cap on rent increases for rent-controlled apartments in unincorporated areas.
In response to the COVID-19 pandemic, the county enacted a freeze on rent hikes for rent-controlled units in March 2020. The freeze was extended multiple times, but in November 2022, the board agreed to resume allowing increases, capped at 3 percent for rent-controlled units during 2023.
Last November, the board voted to extend the rent-increase cap until June 30, 2024, but supervisors increased the allowable increase from 3 percent to 4 percent. The cap applies to rent-controlled units subject to the county’s Rent Stabilization and Tenant Protections Ordinance.
In a motion that went before the board Tuesday, Supervisor Holly J. Mitchell noted that since the pandemic, Angelenos have continued to face significant economic hardships, inflation and a rise in housing costs.
“Rent stabilization ordinances provide moderate annual increases to support maintaining housing stability and overall property maintenance,” the motion stated.
Ms. Mitchell told her colleagues, “This option provides much needed stability for tenants, while providing additional allowance for small property owners and luxury apartment owners.”
Ms. Mitchell’s motion contended that low-income Black and Brown residents, who disproportionately are renters, experienced immense public health impacts, loss of employment, and increased healthcare expenses during the pandemic. Consequently, many are still facing significant rental debt.
Speaking at the board meeting, county Department of Consumer and Business Affairs Director Rafael Carbajal said the majority of the calls the county receives on its Tenant Protections Hotline and from partners at a Stay Housed Program are from tenants who can no longer afford rent.
He said allowing higher percentage rent increases “would increase calls and it would definitely have an impact knowing and realizing the actual costs—we’ve seen inflation, we’ve seen the true cost of everything going up.”
The motion also included measures aimed at identifying corporate owners of rental buildings in unincorporated areas, and also defining small property owners who would be eligible to increase rent on a unit by an additional 1 percent above the allowable annual rental increase, not exceeding 4 percent. Ms. Mitchell said defining a small property owner is meant to capture “true mom and pop landlords,” many of whom are Black and Brown, and have either inherited property or invested in property as a means of creating generational wealth.
“The criteria for small property owners in this motion is meant to provide parameters for the property owners who are not corporate landlords to utilize, if they wish, the up to 4 percent,” Ms. Mitchell said.
According to the motion, there are roughly 109,000 renter households in unincorporated areas with around 51,700 units across 10,900 properties subject to rent stabilization under RSTPO, many of them in the South Los Angeles, East Los Angeles and San Gabriel Valley areas, according to the motion.
In addition to extending the 4 percent cap on rent increases for rent-control units, the motion also called on county staff to return to the board with an amendment to the rent-control ordinance establishing a formula for future rent increases when the cap expires at the end of 2024. The proposed formula—based in part on the average change in the Consumer Price Index—would generally cap increases at 3 percent, but would allow up to 4 percent if a property or property owner meets a specific set of criteria. It would also allow increases of up to 5 percent for “luxury units.”
Supervisors Janice Hahn and Kathryn Barger voted against the extension, expressing concern about the lingering financial impact on both corporate and small landlords alike.
Ms. Barger issued a statement after the vote calling rent caps the “wrong approach” to stabilizing the housing crisis.
“Accelerating the development of more new housing in our county is our way out of the housing crisis,” Ms. Barger said. “That includes examining California Environmental Quality Act reform and eliminating red tape. Layering restrictions on property owners wrongly treats a symptom and not the root cause of housing instability.”
She also argued that the proposed future formula regulating rent hikes does not take into consideration mortgage costs and other burdens of property owners, who also must pay bills.
Several homeowners and corporate landlords spoke during the meeting in opposition to the extension, citing issues affecting their bottom line, including higher mortgage interest, insurance payments and maintenance costs. Some supporters, however, pointed to the consequences of higher rents, such as housing insecurity and homelessness.
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