Apartment Management Magazine More Restrictions on Small Landlords Only Leads to Loss of Affordable Housing
More than four decades of retreaded housing policy have only led to an increase in housing shortages and homelessness
By Jenifer Anisman, Partner, Harold Greenberg Law Firm
This article discusses the unintended ramifications of tight control over evictions. Tenant advocates are fighting for stricter landlord laws, including proposals that would require landlords to pay tenants’ attorney fees in the event of an eviction. It’s not a secret; however, that the most stringent rent control and eviction laws exist in cities with the highest rates of homelessness.
Yet the answer is to implement even stricter laws, and the result? Well I see more roaming. Is it a chicken or egg situation? Are the two even related? People experiencing homelessness come from a multitude of backgrounds and situations. Do all homeless people want to be housed? This is a complicated question. Tenants’ rights groups that identify as “homelessness prevention” fighters have no basis for this claim. They are simply using it as a ploy to win their case and recover attorney fees from the owners. Do you disagree? If so, read on …
I work for a law firm that represents both landlords and tenants. Most of our owner clients are minority, native, retired, and small business, mom and pop owners. Many own between 2 and 8 rental units and often one of the units is owner-occupied. Most of our clients own pre-1978 properties subject to the Los Angeles Rent Stabilization Ordinance. These are the people I will be talking about in this article. This article does not apply to large business management companies or real estate investment trusts with hundreds of units or more. This letter also does not address COVID-19 reasons for not paying or collecting rent.
If a single unit in a small building does not generate rent, it negatively affects the whole building. Of all the landlords I have personally represented, none of them wanted to evict a tenant in an attempt to collect a higher rent. It’s quite the opposite. Our landlords have a great relationship with their long term tenants. Many small owners are retired or have unrelated day jobs and family responsibilities. They prefer to have a long term tenant who pays the low rent on time and respects the property, as opposed to a higher paying, higher turnover unit. Imposing prohibitive legislation and costs on landlords who have to evict a non-paying tenant or a tenant who otherwise breaches the lease will take a toll on Los Angeles roots, small landlords with long-term tenants.
For example, we have a couple of owners now in their 80s who own multiple unit buildings next to the promenade in Venice. Their long-time tenants pay barely four figures for their one and two bedroom units and these landlords would not change that. Properties have long been amortized and rents provide them with a comfortable life in addition to providing affordable accommodation in Venice. When a tenant needs to be evicted, either for non-payment of rent (not related to COVID) or for breach of the rental agreement (usually hindering the peaceful enjoyment of other tenants), currently it costs the landlord between $ 20,000 and $ 60,000 to evict them due to lawsuits, jury trials, motions and findings by tenant rights lawyers. They fight really hard to keep the bad tenants so they can recoup huge legal fees. If the tenant wins and the landlord also has to pay the tenant’s attorney fees, that amount doubles or more. For landlords who offer affordable housing, that’s more than what they get per year from their tenants in a four-unit building.
What would you do if it was you? Well, being located on Speedway in Venice, seems like an easy multi-million dollar sale to the developers. And what will the developers do? Looks like a new multi-unit building with luxury units would be the best ROI. Where are the good tenants going? At the tent camp down the street? Seeking government help through Article 8? These are their options. Do you think I am speculating? This is exactly what happened and what is happening. Look around you.
Another example is a young Hispanic family who saved their money to buy a quadruple in the USC area. The family lives in the quadruplex and the woman manages it. She and her husband work for the city of Los Angeles. Their children are of school age. She has a tenant who is an 80 year old man who has lived there for many years and who pays around $ 450 per month, well below the market rate. She would never consider deporting him. He is kind and helpful, works around the property and pays on time. Where would he go? The third unit contains a long term tenant who pays low rent dislikes new owners. The previous owner never increased the rent. This new landlord granted tenants an eligible rent increase of 3%. His response was to start harassing new owners, smashing windows and screens, removing smoke detectors, and then filing complaints with the housing department and the Ministry of Building and Security. He puts on loud music and shouts insults at them when he sees them, even in front of children! He also harasses the woman who lives in the fourth apartment because she refuses to go on board with him to harass the owner. This fourth tenant successfully obtained a restraining order against him. She eventually moved and her unit remains empty. When the landlord tried to evict this bad tenant, he hired a tenant rights lawyer who demanded $ 125,000 for him to move out. Due to the moratorium on COVID-19 evictions, he has been living there free for two years, although it started the eviction before the moratorium. She currently has a paying tenant, the old man. Now that she has used up her savings, she has to take out a loan to cover construction costs, mortgage, taxes, etc. beautiful building she was so happy to own, but the tenant won’t let the appraisers in. to lose this beautiful old building. Probably the developers who will tear it down to make way for luxury units.
James Burling, vice president of legal affairs, Pacific Legal Foundation in Sacramento said it best:
“It should be noted up front that landlords are not in the business of eviction; their mission is to provide housing to those who can afford it. Most landlords in a situation like today’s crisis will try to find a solution with troubled tenants without them being responsible, as opposed to tenants who are struggling. Homeowners are neither a charity nor the source of unlimited resources through which they can maintain housing in good condition while paying taxes, interest, and utilities for free. Any lease which results in an eviction represents a failure for both the lessor and the lessee. No one wants to evict a tenant and no tenant wants to be evicted. But sometimes eviction is the only cure. (Burling, James: California Litigation Vol. 34 No. 1 2021 p. 31).
To drive home the point, during my 12 years of practice in real estate and commercial litigation, NOT ONCE has a landlord come to evict a tenant in order to collect more rent. It is almost exclusively a question of non-payment of rent or of hindering the peaceful enjoyment of other tenants. This is reflected in the many affordable units across Los Angeles where families have lived peacefully for many years with low rents and no issues. We believe that tougher eviction control laws will drive out small businesses, ‘moms and pops’ and minority landlords, leading to increased development of high-end corporate-owned properties, gentrification and wealth disparity. . Again, look at Los Angeles, San Francisco, New York. Strict rent control / eviction control and highest number of homeless people. Coincidence? I do not think so.
Jenifer Anisman, Esq. is a lawyer with the Los Angeles law firm Harold Greenberg specializing in landlord / tenant issues. You can reach Jenifer at [email protected] or by phone at (323) 732-9536.
