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!
Today City of Beverly Hills announced a bump-up in the allowed annual rent increase for Chapter 6 tenants. Effective June 12th the cap was raised from 3% to 4.1% – a one-third larger allowed increase. While that may come as a surprise to some, the Municipal Code allows the allowed annual rent increase to rise with the percentage change in the Consumer Price Index (CPI-U) for the Los Angeles-Long-Beach-Anaheim region. As calculated by the Bureau of Labor Statistics that was 4.1% hence the rise in the allowed rent increase from 3% to 4.1%.
I regularly speak with tenants who are not aware that the landlord can end a month-to-month tenancy for any reason or no reason at all. If no local ordinance prohibits it, and Beverly Hills has no such prohibition, the landlord’s good will is all that stands between the home we’ve made and the stomach-churning search for post-eviction replacement housing. Have you thought about what happens next after receiving such a notice? Here’s a primer on no-just-cause eviction: what it is, what to expect, and what you can do.
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.
Tenants are allowed to deduct from the rent the cost of a repair when the landlord won’t make it. Colloquially it’s known as ‘repair-and-deduct’ and the logic is straightforward: the rental agreement says you pay your rent and the landlord maintains the premises. But like so many tenant protections, this one too comes with practical limits. Understand that failing to follow the law carefully may put a tenant in court fighting an unlawful detainer. That’s why I advise tenants against withholding any part of the rent. If you feel that you must deduct, then at least read more before you do.
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.
City of Beverly Hills has hired a director for our Rent Stabilization Program. Helen Morales comes to Beverly Hills after a 10-year career as a manager, hearing officer and housing investigator at the City of Los Angeles Housing and Community Investment Department. Her first day was May 14th and it comes after an eight month search. Yet no press release or website announcement mentioned it. Here is what we know about our new Deputy Director for Rent Stabilization from her LinkedIn profile and the press release that was belatedly posted by the city this week.
“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.
City of Beverly Hills recently convened two ‘community education workshops’ where staff provided both tenants and landlords with a presentation about rent stabilization. Susan Healy Keene, Director of the Community Development Department, provided an overview of the process and then handed it over to Community Preservation Manager Nestor Otazu. He walked though the relatively recent changes to the rent stabilization ordinances and highlighted the key aspects of state law that apply to those who rent housing (and those who provide it). Here is my takeaway.
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!
Landlords largely get free rein in Beverly Hills. The city mandates so few protections for those who rent, in fact, that only residents in 3% of households – those that fall under the city’s earlier Chapter 5 rent stabilization code – can feel like City Hall has their back. Most tenants’ protections derive largely from state law which means a trip to court on our own dime for an uncertain outcome. Discrimination in housing is different: state and federal law provides for significant penalties against any landlord who discriminates, and that protection is backstopped in the courts by state and federal officials and non-governmental organizations that file suit on behalf of tenants.
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.’
Taking in a roommate or a long-term guest seems innocuous enough. Maybe it’s a means to pay the rent or a goodwill gesture to a friend or family member. But the presence of unauthorized occupants may be a breach of the lease or rental agreement so it’s always smart to read what it allows and then secure permission from the landlord if necessary. Lets look at a couple of situations that may get the unwitting tenant into some trouble.
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!
Surveys show that nearly one-third of us live paycheck-to-paycheck. Some of us pay over half of our household income in rent. Many tenants have little savings. And Beverly Hills allow no-just-cause eviction, which can mean an unexpected pack-up and moving expenses we can ill-afford. Because the most effective way to prevent homelessness is to ensure that people stay housed, several efforts are underway to address the challenges faced by precariously-housed tenants in California.
A petition making the rounds of Beverly Hills multifamily areas seeks to put an initiative on the November. The initiative, dryly titled ‘Expands Local Governments’ Authority To Enact Rent Control On Residential Property,’ would repeal a state law called Costa Hawkins Rental Housing Act. That law since 1995 has greatly limited the reach of local governments that would extend rent control protections to tenants. Should it qualify, I hope this initiative finds support among those who rent because it is the best opportunity we have to expand tenant protections both statewide and in Beverly Hills.
Recently an apartment adjacent to mine leased quite quickly. The new tenants, nice guys all, introduced themselves. Three adult men seemed a tight fit for a one-bedroom apartment smaller than 500 square feet. It raised two questions. Why would three men rent that apartment? How many people can a landlord pack into a small place? The answer is not as straightforward as one might think. I did a little digging!