In February of 2019, the State of Oregon became the first in the nation to establish statewide rent control measures. Although states like California, New York, Maryland and New Jersey have had rent control for many years on the local level, no state had ever been successful at passing legislation that took away the decision from local jurisdictions.
Now that California has followed in the footsteps of Oregon by approving Assembly Bill 1482 on September 4, 2019, cities are scrambling to take some control back by establishing their own rent control ordinances rather than being left at the discretion of the State. While some believe the market should dictate rents, it is evident that California’s housing crisis is not going to get any better unless cities can find a way to make housing affordable and available to all income-levels.
Staff has experienced a rise in phone calls and counter visits from residents who are concerned about increasing rents. In an effort to look into their concerns, staff has followed the news and made inquiries with SCAG, the Gateway Cities Council of Governments, and other surrounding cities to see how everyone is reacting to the new State rent control provisions. We have found that the County of Los Angeles and the Cities of Inglewood and Culver City have all adopted either interim or permanent ordinances to establish rent control measures and policies to protect tenants from becoming displaced.
Keeping in mind the housing crisis, the homeless crisis, commuting times to and from work, and the increasing gap between the haves and the have-nots, staff believes it is in the City’s best interest to establish a temporary moratorium on rent increases over 3%. This interim ordinance will give staff adequate time to research the issues and come back with more concrete measures in an effort to be fair to both tenants and landlords.
It is clear that rent control, or lack thereof, both have negative impacts on tenants and landlords. While rent control helps those with less resources, it also discourages investment in communities that desperately need it. To quote Jim Lapides, a vice president at the National Multifamily Housing Council, who opposes current rent control restrictions, “Rent control is definitely having a moment across the country. But we’re seeing folks turn to really shortsighted policy that will end up making the very problem worse.”
By establishing a temporary freeze on excessive rent increases (i.e., over 3% increase), staff will have time to research and give the City Council enough data to make an informed decision on a permanent ordinance. According to a September 19, 2019 article in the New York Times, studies have shown that newer rent control policies are effective in protecting tenants from evictions and sudden rent increases, which often lead to homelessness, especially for the lower-income and elderly who are at a higher risk of becoming homeless. Also, the article states that many of the newer policies are less strict than older policies that have been in effect for decades in places like New York and San Francisco.
Staff has thus far looked at actions from the following three agencies:
1. County of Los Angeles;
2. Culver City; and
3. City of Inglewood.
County of Los Angeles
According to the Los Angeles Homeless Services Authority (LAHSA), the County of Los Angeles has the highest rate of unsheltered homeless people in the country. LAHSA further shows that more than 25% of those individuals became homeless for the first time in 2017. The sudden rise in homelessness is now being correlated to having an affordable place to live in. On September 11, 2018, the County Board of Supervisors adopted an interim rent control ordinance restricting landlords from raising rents more than three percent (3%) per year. This is the example staff is using, which staff considers to be fair to both the tenant and the landlord until further research can take place. In November of 2018, the County further voted on an ordinance to apply the “rent freeze” only to unincorporated Los Angeles County and only to multi-unit buildings constructed before 1995 (excluding condominiums and single-family homes).
On August 12, 2019, Culver City adopted an urgency ordinance establishing interim rent control measures that were modeled after the Los Angeles County ordinance. In addition to a maximum rent increase percentage, the ordinance also included “just cause” and “no fault” eviction provisions, a rental registry, and relocation assistance benefits. Staff will be looking further into these tenant protection provisions to create an ordinance that will best fit the needs of Bell Gardens.
City of Inglewood
The City of Inglewood has experienced a drastic increase in rents primarily due to the influx of wealth coming in via its new football stadium. Property values have skyrocketed and landlords are now seeing a rise in demand and are raising rents to meet that demand. Since 60% of Inglewood’s population are renters, this has had a big impact on its residents. On March 5, 2019, the City also adopted an urgency ordinance placing a moratorium on rent increases, which was effective immediately for 45 days, after which they extended it for up to a full year. Inglewood’s ordinance is similar to LA County’s in that it excludes condominiums and single-family homes. However, the ordinance is less stringent on rent control in that it allows for a 5% increase versus the 3% adopted by the County and proposed by Bell Gardens.
Although not required for an urgency ordinance, staff provided the attached notice three (3) days prior to the meeting. If the Council decides to move forward with the urgency ordinance, Staff intends to conduct a public workshop to receive input from the public before a permanent ordinance is drafted for the City Council to consider.