One of the more frustrating aspects pro-tenant work is recognizing how the deck is stacked against those who rent. There are many provisions in the law to keep the tenant in line. Keep a pet or live with an unapproved partner or roommate? The 3-day notice may come. A few days late (or a dollar short) on the rent? Sudden death for the tenancy. Yet the rules are much more lax for landlords, and the bad apples among them withhold repairs, enter the unit unlawfully, and even retaliate. Holding them to account is the tenant’s challenge because often the city won’t.
Landlords claim that we tenants were a happy lot before City of Beverly Hills mucked around with the rent stabilization ordinance last winter. They say they hardly ever hit us with excessive rent increases; that properties were maintained just fine; and that no-cause eviction was not even a thing. So why fix what wasn’t broke? To back up those claims they have analyzed four years of Code Enforcement complaints. However this latest Hail Mary attempt to tank our rent stabilization program will persuade nobody that the system didn’t need fixing.
When rental property owner Sharon Darnov appeared before City Council on August 7th she shared an observation. “There are good landlords and there are bad landlords,” she said. “There are good tenants and there are bad tenants.” Darnov didn’t talk about bad landlords but did have a word to say about ”extortionists” and “grifters” among her tenants. Every landlord has a story! Watch the video for Darnov’s story.
The HR&A analysis underpinning the rent stabilization policy discussion has done our city a service: policymakers, landlords and tenants now have some idea about the character of rental housing stock in Beverly Hills and the tenants who inhabit it. Our city has had a rent stabilization ordinance on the books for four decades yet our city had no accurate tally of rental properties. We had no comprehensive assessment of character or ownership. Nor did the city understand the rental market and where Beverly Hills fit in. The city’s rental unit registry and the HR&A Advisors study has filled in those gaps.
Landlord Kevin Davis penned a letter to the Courier in the June 13th issue that warned of a “massacre” upon those who lease apartments should the Beverly Hills rent stabilization program continue. While we are accustomed to hyperbolic bloviating by property interest associations (like the hammer-and-sickle theme from the Apartment Owners Association of LA), when landlords offer specious and unfounded claims they should be knocked down. Here is the Renters Alliance rebuttal was published in the July 20th issue.
A couple of months ago I got to thinking about how Beverly Hills calculates allowable annual rent increases. A formula tied to consumer prices long kept increases very low for Chapter 5 tenants. Indeed in a period of low inflation Chapter 5 increases long averaged about 1% annually. Then it jumped to an average of 1.7% this year in a reviving economy. But now the annual rent increase effective in August nearly doubles to 3.3%. What’s going on?
To a tenant accustomed to the 3% cap on annual allowed rent increases, the city’s announcement that the allowance has risen to 4.1% was a surprise both for the change and for the magnitude of the jump. As I explained in a recent post, the bump-up may have been predictable given the change in consumer prices lately even if the increment was larger-than-expected. The culprit? Rising rents!
City Council kicked-off the extended rent stabilization reform discussion in January of 2017 without much discussion about goals and objectives. Councilmembers heard plenty from tenants about rising rents, but they left unresolved the question of who should benefit from rent control. They heard about capricious landlords and predatory practices but they recommended no new tenant protections to keep renters housed. While no specific objective was identified for rent stabilization, the Rent Stabilization Program has found one – and it needs revision.
Landlords are making significant improvements to their properties in an effort to enhance curb appeal in today’s hot real estate market. Paint and landscaping is one way. Remodeling vacant units to fetch higher rents is another. Maximizing fees for late payment, pets, and other ancillary revenue streams yet a third way. But key to what the real estate industry dispassionately calls ‘market repositioning’ is getting rid of longtime tenants.
Last year Beverly Hills landlords saw their allowed annual rent increase drop from 10% to 3% and the city imposed a relocation fee for any involuntarily-terminated tenancy. They lost the battle for the rental unit registry and the approximately one-in-ten who had long avoided paying business taxes finally had to obtain the required business license. If 2017 was a tough year then 2018 looks only worse if the Affordable Housing Act ballot initiative wins the approval of voters in November.
California voters may have an opportunity come November to overturn the state’s Costa Hawkins law, which prevents localities like Beverly Hills from extending protections to all who rent housing. This “gift to landlords” (in their words) has handcuffed local officials for decades. With the Affordable Housing Act initiative about to qualify for the ballot, the stakes are high and landlords are apoplectic at the prospect. Let’s take a look at the law’s affect on rental housing in Beverly Hills and the proposed initiative’s objectives.
“Justice delayed is justice denied.” We all know this well-worn aphorism. It means that a remedy for an injustice should be delivered in a timely manner or otherwise it stands as no remedy at all. (Read more about the history of the phrase and a follow-up deeper-dive.) The aphorism comes to mind whenever I hear that the required relocation fee is unpaid at the time the tenant vacates the apartment. The fee is intended to assist a displaced tenant with securing replacement housing and starting again in a new apartment. But when payment is late, perhaps months late, the law, and our city, has failed that tenant. That’s why I say a relocation delayed is truly an instance where justice is denied.
City of Beverly Hills recently hosted Community Education Workshops for landlords and tenants (read my summary). The purpose of this ’community education workshop’ was stated plainly on the flyer: to provide an “overview” of the rent stabilization program. On the workshop agenda was a recap of recent changes to the rent stabilization ordinance and a heads-up about the next steps in the policy process. There was also a follow-up Q&A. However what was not on the agenda was tenant empowerment. That was a reminder: when residents who rent find ourselves on the losing side of the tenant-landlord power imbalance, we must remember that no cavalry from City Hall comes to our rescue.
Resident ‘landlord crusader’ Dan Yukelson recently shared his thoughts about rent stabilization with the Weekly and he’s not happy! This former Planning commissioner (and current executive director of the Apartment Association of Greater Los Angeles) capped his career in corporate finance with the purchase of a fourplex in Beverly Hills. That looked like a good investment until City Council amended the rent stabilization law. He says it crimps his cash flow and now he’s got buyer’s remorse. But Mr. Yukelson is no naïve investor: rental housing in Beverly Hills will always be the best place to park his investment dollar!
Tenant and landlord representatives sat down for a series of facilitated dialogues last summer to talk about a rent stabilization policy changes and we agreed that bad actors cause the most grief: predatory landlords who take advantage of tenants and problem tenants who are a thorn to landlord and neighbors alike. While landlords have the means to flag potentially-problematic tenants, though, a prospective tenant cannot do the due diligence: there exists no means to reliably vet a landlord before signing a lease. That puts the lie to caveat emptor: ‘Let the buyer beware.’
His landlord, Stephen Copen, served David and his his two sons with a 60-day, no-just-cause notice to evict after 29 years in his apartment at 458 South Roxbury Drive. The family’s final pack-up culminated in a harried garage sale, filled-up refuse bins and an uprooted garden. David’s priority now is simply to stay housed so his two kids can finish high school. The family’s final exit from Beverly Hills can’t come too soon for him.
Last year, Copen also threw out David’s upstairs neighbor for no cause. She had been there for 30 years. Her eviction came within a year or so after Copen bought the building, adding it to at least six other properties owned with his wife, Naghmeh Makhani. Copen is a longtime Beverly Hills rental property owner but these folks don’t even call our town home.
David’s eviction put me in mind of a remark he made to City Council exactly a year ago. There were some changes to the rent stabilization law and Copen wasn’t happy. “You haven’t discussed whether people living in a two bedroom apartment across from Roxbury park with a view of the clubhouse should maybe economize,” he told the councilmembers, before grousing further about how he “subsidized” his tenants. If you are a Copen tenant the video is worth a watch. Have you a story to share about the Copens? Something concerning no-cause evictions, sham tenants, or substandard property maintenance, perhaps? I’m all ears.
Update: with 29-year tenant David Berke out, Copen could move in a tenant for the briefest of tenures and then move that tenant out and then raise the rent to market. That’s what we’re told anyway. And that’s what he evidently did after he kicked-out David’s 30-year upstairs neighbor.
Copen evidently made few or no upgrades to the property exterior (or unit exterior) while his longtime tenants resided there. But once David was out it was a different story: time for curb appeal! A refresh of the exterior (below) and an interior renovation (without permits) repositions the property for that next lucky Copen tenant!
Councilmember Lili Bosse closes out her year as Mayor next week when City Council chooses the next Mayor and Vice Mayor on March 20th at the Academy of Motion Picture Arts and Sciences. As we look ahead to our next Council leaders, Gold and Mirsch, I want to thank Mayor Bosse for her support on behalf of tenants.
What do Republican tax cuts mean for those who rent housing? A recent opinion piece in the NY Post suggests some good news: ‘New tax law is a huge win for renters’ reads the headline. But don’t be fooled. The American Apartment Owners Association calls ‘tax reform’ a gift to landlords. Indeed headlines like ‘GOP Tax Bill Rewards Real Estate’ and ‘GOP Tax Plan Holds Benefits for Landlords’ suggest the actual beneficiaries of so-called reform. With that ‘huge win for renters’ canard out of the way, let’s have a look at the real gifts bestowed by the Republican Tax Cuts and Jobs Act. There are many!
Beverly Hills offers few protections to the 8,600 households that rent. Unlike rent-stabilized cities that prohibit no-just-cause evictions or mandate minimum habitability standards, Beverly Hills simply falls back on the state’s civil code. That means tenants are on our own to defend our housing rights in court; we can’t depend on the city to step up. It is crucial that tenants get the most we can out of the city-funded housing rights legal services program.
Beverly Hills residents take well-kept properties for granted. High-and-rising values generate resources for maintenance and, in turn, maintenance keeps property values up. But maintenance is not part of the business model for some owners of residential rental property. Instead their priority is cash flow. But scrimping on maintenance not only affects tenants; it also augurs an overall decline in the city’s rental housing stock.