In response the growing tactic of unscrupulous landlords attempting to coerce tenants living in rent controlled units to move by offering them “cash for keys,” the Los Angeles City Council Housing Committee considered a Tenant Protection Buyout Program proposal on August 17, 2016.
The Los Angeles Housing + Community Development Department (HCIDLA) presented their proposal to amend the Rent Stabilization Ordinance to prevent tenants from entering into buyout agreements without a full understanding of their rights. The proposal is based on a similar program adopted by the City of Santa Monica.
The Coalition for Economic Survival (CES) and tenants currently facing landlord pressure to sign buyout agreements testified in support of the buyout proposal.
Landlords are using these buyouts to get tenants out without having to go through the Ellis Act Eviction Process or filing a Tenant Habitability Plan, two programs that protect tenants against abuse. By avoiding these processes landlords can obtain higher rents without paying correct relocation amounts, providing tenants the legal amount of time to move, providing tenants temporary relocation housing while the building is being renovated, being limited in raising rents and being prohibited from re-renting the units for 5 years, depending on what their intentions are for the property.
CES Director of Organizing Carlos Aguilar told the Committee, “While Ellis Act evictions spread throughout the city, we have seen an additional trend that greatly concerns us. Landlords are even bolder using more illegal tactics and offering cash for keys to get tenants out.”
Aguilar also said, For the most part, low income, immigrants and non-English speaking tenants are targeted for the lower illegal amounts. Many tenants don’t know they rights and believe they have no choice but taking the money and leaving.”
LA City Council Member David Ryu in a letter to the Committee stated, “The Rent Stabilization Ordinance was created to protect residents from excessive rent increases and limit reason for evictions. Yet, landlords will often offer “voluntary” buyout agreements to avoid these protections and skirt the law. As the real estate market has recovered, developers have been taking advantage of these “cash for keys” buyout tactics more frequently.”
The proposal would do the following:
- Create a definition for a Buyout Agreement and Buyout Offer.
- Require that landlords provide tenants with a written disclosure notice of the tenant’s rights under the RSO with regard to eviction and relocation assistance, including contact information for the HCIDLA landlord/tenant hotline.
- Allow tenants to rescind buyout agreements for any reason for up to 30 days after the agreements are fully executed.
- Further provide that the tenant may rescind agreements that do not satisfy the stipulated requirements at any time.
- Require that landlords file copies of all buyout agreements with HCIDLA’s Rent Stabilization Division.
- Provide tenants with an affirmative defense to an unlawful detainer and a civil remedy for actual damages and civil penalties against landlords who fail to comply with the buyout agreement regulations.
The Housing Committee adopted the proposal and moved it to the full City Council for approval.
With a unanimous 13-0 vote the Los Angeles City Council voted to extend the City’s Foreclosure Eviction Ordinance to protect tenants living in rental properties not subject to the City’s Rent Stabilization Ordinance (RSO) from eviction on the grounds of foreclosure for another two years. Tenants living in rent controlled units have had these protections.
Multi-family rental units built after 1978 and all single-family home rentals are not subject to the City’s rent control law.
The Ordinance extension approved on December 15, 2015 prohibits lenders from evicting any tenants in the City merely because of foreclosure on their landlords.
The law requires landlords seeking to recover possession of a rental unit from a tenant, must comply with all the RSO requirements and provisions for eviction, including the payment of relocation fees for no-fault evictions. Since the passage of the Ordinance, more than 59,000 properties containing over 79,000 units have been foreclosed on in the City.
The Foreclosure Eviction Ordinance was originally passed on December 17, 2008 and was nation’s first Foreclosure Eviction Moratorium. It has been extended every year since in response to a national crisis that has not subsided.
The Coalition for Economic Survival (CES) advocated for the original law in 2008 and every extension since then.
CES Executive Director Larry Gross stated, “The foreclosure crisis and its impact on hardworking Americans is a national disgrace. It’s especially unjust for the forgotten victims — tenants.
They’ve done nothing wrong. Paid their rent on time. But, without this protection these heartless banks could evict evict them simply because they’re living in foreclosed rental property.
Gross went on to say, “We applaud the Council in providing national leadership by enacting the strongest tenant foreclosure protections in the country. It provides tenants with a little bit of hope and justice. This action is an action needed to help keep these banks accountable. It truly is a tenants’ rights victory.”
The LA Housing and Community Investment Department Foreclosure Registry data for 2015 indicates that the foreclosure crisis continues to affect City residents and neighborhoods. A total of 10,381 properties were registered in the City’s Foreclosure Registry from January through November 8, 2015, comprised of 4,273 first time property registrations and 6,108 re-registered properties (with a notice of default and/or foreclosure from 2014). This reflects a ten percent increase from 2014 registrations, which totaled 9,431.
When San Francisco apartment house owners retrofit their buildings, the entire cost will be passed on to their tenants. City Councilman Gil Cedillo has promised that won’t happen in Los Angeles. Today, his committee is taking up what could be the most extensive retrofitting requirements in California history. Who should bear the cost of making those buildings earthquake safe?
We need to address the threat of earthquake,” says Larry Gross, executive director of the renters rights group Coalition for Economic Survival, “but we don’t want to create an economic earthquake for a tenant who won’t be able to afford this increase and will likely be displaced from their home.”
It could cost up to $130,000 to extensively inspect — including partially dismantling — and then strengthen each building. A landlord’s group puts the cost at about $5,000 for a single unit. Under the approved ordinance, owners can pass the entire cost on to renters over a five- to 10-year span.
Gross, of the Coalition for Economic Survival, says that while this is the worst time to allow citywide rent increases, reality suggests $38 is a good compromise.
“Clearly, given the situation where tenants in this city are now mostly paying unaffordable rents, and most are paying upward of 50 percent of their income to rent, we don’t like the idea of one more dollar in rent,” Gross says. “The fact is that right now the current law states tenants could be hit with upward of a $75 increase and would have to bear the burden of the retrofit costs. One hundred percent could be passed on. That’s a fact.”
Based on the $38 monthly maximum, the average L.A. tenant would see an increase more like $18, for a range of $1,800 to $3,800 in hikes if somebody rents in L.A. for a decade.
“This proposal definitely strives to establish some degree of equity in regards to who pays for the costs,” Gross says. “We’re doing everything we can to try to soften the blow, because we’ve seen the blow coming.”
LOS ANGELES (CBS) — The Los Angeles City Council Housing Committee considered a Housing and Community Development Department proposed compromise in which building owners and renters would share the financial burden equally of earthquake retrofit cost that will be mandated for some 13,ooo concrete and soft story apartment buildings in Los Angeles. Under the plan, tenants would face rent increases over a 10-year period, with a maximum increase of $38 per month.
KNX Newsradio’s David J. Singer talks with Coalition for Economic Survival Executive Director Larry Gross on the impact this could have on tenants.
Gross said, “Clearly everyone wants to see these buildings made safe. But the key question here is who pays, how much and for how long.
KPCC AirTalk Radio Debate on Who Should Pay for Earthquake Retrofitting With CES Executive Director Larry Gross
According to an L.A. Times article, Councilman Gil Cedello said the way costs ought to be shared required further review. Officials from the Los Angeles Housing Department recommend a cap for rent hikes at $38 a month for five or more years to cover the costs of retrofitting.
How do you think the cost should be handled among tenants and property owners?
KPCC’s AirTalk With Larry Mantle – Program Aired Thursday, September 17, 2015.
Larry Gross, executive director Coalition for Economic Survival, a tenant advocacy group
Jim Clarke, Executive Vice President of Apartment Association of Greater Los Angeles