DOWNTOWN LA — A landlord campaign against a rent freeze extension in the city of Los Angeles bore fruit yesterday when city councilmembers voted to cap allowable rent increases at 6%, instead of nine, and maintained the freeze’s February end date. The plan advanced out of committee on a contentious 3–2 vote.
Rents for the city’s rent-controlled housing stock have been frozen since the beginning of the pandemic, in spring of 2020. Though rent-controlled apartments have restrictions on how fast rent can rise, the rules have traditionally allowed landlords to raise rents by around 3% per year to keep up with inflation. But with so many pandemic provisions ending, the city was set to grant landlords the right to increase rents as much as 9%, all at once, when the freeze expired February 1. Backed up by fierce tenant protest, Councilmember Hugo Soto-Martinez proposed extending the freeze by six months, pointing to federal research showing homelessness spikes dramatically when rents go up.
Councilmember Bob Blumenfield blew up that plan at Wednesday’s Housing and Homelessness Committee meeting, where he is a swing vote with huge power over critical city housing policy. (Tenant organizers compare his influence to Joe Manchin in congress.)
“Are some people on the margin? and a rent increase could push them over the edge? Absolutely,” Blumenfield told LA Public Press after the meeting.
“But how do we, you know, justify just putting that on the back of the housing provider?” he added.
That’s the term for landlords preferred by Dan Yukelson, executive director of the county’s landlord trade group, the Apartment Association of Greater Los Angeles (AAGLA), which lobbied in favor of the increase.
“We’re working on every possible angle and talking to council and staff,” Yukelson said over the phone before the meeting, adding that Councilmember Hugo Soto-Martinez is a “pig.”
The group had set up five calls with different councilmembers, Yukelson explained.
“We’ve contacted Blumenthal’s [sic] office about it,” Yukelson said. “We’re going to try to get this thing turned down.”
Now, under the compromise proposed by Blumenfield — which still needs approval from the full city council — landlords will be allowed to raise rent by only 4% if tenants pay their utilities beginning in Feb. But landlords will also be able to add an additional percentage point if they pay for gas, and another if they pay for electricity. The increase will affect hundreds of thousands of units: Roughly 70% of LA city’s rental housing stock is rent-controlled, even though the city’s rent stabilization ordinance applies only to buildings constructed and occupied before October of 1978.
Progressive councilmembers Nithya Raman and Marqueece Harris-Dawson voted with Blumenfield in favor of his amendment, and councilmembers John Lee and Monica Rodriguez voted against it.
“The fight isn’t over,” Councilmember Hugo Soto-Martinez said over the phone. “It now goes to full council and we’ll have the opportunity to try to lower it as much as possible. So, not ideal — but we gotta take the small victories where you can and just keep building off of it.”
Many tenants speaking before the committee said any rent increase at all would mean the difference between keeping their homes and eviction.
They packed the committee meeting to capacity, outnumbering the landlords who waved signs and burst into applause when councilmember Monica Rodriguez announced she would vote no on the freeze extension.
“Renters cannot afford an increase of seven or nine percent,” Leticia Flores of Boyle Heights told the committee through an interpreter. “The working class cannot afford an increase like that. It will only bring more people to live on the streets.”
When proposing a rent freeze, Councilmember Soto-Martinez cited a study from the U.S. Government Accountability Office which found that an increase of just $100 dollars corresponds to a 9% rise in homelessness.
Blumenfield said he was unfamiliar with the study, but mused that it likely oversimplified the relationship between rent increases and homelessness increases.
The Los Angeles Tenants Union (LATU pronounced lah-too) is still campaigning for a total rent freeze. Roughly 50,000 eviction notices have been issued to tenants in the city of Los Angeles this year alone, said organizer Elizabeth Blaney, citing data from the city controller’s office. Ninety-six percent of the notices were issued for nonpayment of rent.
“If people can’t pay their current rent, how are they going to pay it with a 4% increase?” Blaney said, calling the committee decision “absurd,” “irresponsible and immoral.”
In October, hundreds of tenants marched through Boyle Heights with LATU demanding a rent freeze. At that protest, police violently arrested an organizer. The marches will continue on a monthly basis, Blaney said.
The city calculates allowed rent increases based on the Consumer Price Index, which is one measure of inflation. But the increase initially proposed for next year, 7–9%, was based on out of date CPI data, Blumenfield told the committee. His amendment uses more recent data and produced the lower increase.
Blumenfield joined his conservative colleagues on the housing committee, Democratic Councilmember Monica Rodriguez and former Republican Councilmember John Lee, in their argument that rising expenses would put small landlords out of business without a compensatory rent increase.
That is the position of AAGLA and of landlords at public comment. Rodriguez insisted that these actions were a defense against the further “corporatization” of LA’s housing stock.
Lee pointed to research that two-thirds of the city’s rental housing is corporately owned. “I shudder to think what happens if that number grows,” said Lee, who is being investigated by the city’s Ethics Commission. Ethics investigators say Lee accepted “multiple gifts from a businessperson and a developer, most of which exceeded the gift limit,” including on a debaucherous Vegas trip that saw his then boss, former-councilmember Mitch Englander, imprisoned.
Blumenfield said a California Supreme Court decision, Birkenfeld v. City of Berkeley, guaranteed landlords of rent-controlled properties a reasonable return on their assets, which means extending a rent freeze, in his view, is illegal.
Tenants reject the idea that landlords are not turning profits in Los Angeles, where the median rent is nearly $3,000 per month.
They also reject the idea that a rent freeze would trigger a foreclosure tsunami anywhere near the magnitude of the eviction tsunami underway.
After the vote, LAPP asked Blumenfield if we have any data showing that huge numbers of landlords in Los Angeles will lose their properties if they are not allowed a rent increase.
“The broader we is probably true, but the me is probably no,” Blumenfield said. “I don’t have that data at my fingertips. I’ve seen and read a lot of different things, and maybe we could dig something up for you. There’s probably information like that that’s out there. But I don’t have access to it.”
Still, the San Fernando Valley councilmember insisted he wanted to find an increase cap that wasn’t randomly selected, but based on data.
“Initially people were talking about trying to create some compromise and pick a number out of thin air,” he said. “I wasn’t comfortable with that.”
The text of the motion passed is below:
Housing and Homelessness Committee
November 1, 2023
Item #12 CF 20-0407-51
I MOVE that Item #12 BE AMENDED as follows:
1. REOUEST the City Attorney, with the assistance of the Los Angeles Housing Department (LAHD), to draft an ordinance to temporarily set the rent increases for units covered under the Rent Stabilization Ordinance (RSO) – February 1, 2024 through June 30, 2024, to be calculated by the rent formula allowable under the SO based on specifically the Consumer Price Index from October 2022 through September 2023, compared to October 2021 through September 2022 (4%).
2. INSTRUCT LAHD to consult with the United to House LA Citizens Oversight Committee on developing programs to assist rent-burdened tenants, as well as for small housing providers with building maintenance, rental debt, and/or preservation of RSO units.
Elizabeth Chou contributed reporting to this article.