L.A. Council Expands Rent Controls

by Steve Hymon, Los Angeles Times Staff Writer on May 23, 2007

The restrictions will apply to units built to replace existing ones covered by the law

(Ed note: San Francisco confronted this issue with the proposed demolition of Trinity Plaza Apartments, and Los Angeles has now come up with its own solution. This first appeared in the May 22 Los Angeles Times)

The Los Angeles City Council on Tuesday unanimously expanded rent controls to include apartments built to replace razed units that had been under such restrictions. Council members said they wanted to stop building owners from using state law to declare they were getting out of the rental business and then demolishing their buildings – only to later rebuild them as apartments.

Only buildings constructed before 1979 are subject to the city’s rent-control laws.

The new law will allow building owners to set the initial rents at market rates, the result being that rents would be far higher in the new buildings. But future increases would be subject to the city’s rent-control law, which limits how much rents can be raised each year.

Also, if an owner tears down an eight-unit building in which some units are rent-controlled and builds a 20-unit structure in its place, rent controls would be imposed on all 20 units.

Housing activists praised the move. “This will help stop landlords and developers who have been fraudulently evicting tenants by saying, ‘We’re going out of the rental business’ and then going back into the rental business,” said Larry Gross, executive director of the Coalition for Economic Survival.

Tara Bannister, executive director of the California Apartment Assn. of Los Angeles, said she was leery of any expansion of rent control but pleased that the council included exemptions.

At the urging of Councilman Bernard C. Parks, buildings with four units or fewer will be exempt if one unit was occupied by the owner.

The other exemption would be granted if rents on 20% of the new units were set low enough to be affordable for low-income earners.

Housing activists and business owners agreed that the new law would hardly be a panacea for the city’s housing crisis, which is marked by swelling rents and home prices.

There are about 620,000 rent-controlled units in the city. In 2006, building owners removed 4,685 units from the market and 2,068 were demolished. Because city officials did not keep track of those projects until recently, they cannot say how many may have been replaced with new apartments.

Council President Eric Garcetti told his colleagues that the solution to the city’s housing woes would be to build more units that allow people to live closer to where they work and to keep supply ahead of demand.

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