AAGLA Sees Ghosts in the Affordable Housing Act Initiative

Affordable Housing Act initiative homepageLast 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.

Where Sacramento legislators failed to address the rental housing affordability crisis the grassroots has stepped up with an initiative to repeal the state’s Costa Hawkins law – the legislature’s “gift to landlords” (their own term) that serves to exclude an ever-larger proportion of tenants from the protection of local rent stabilization. The Affordable Housing Act if on the ballot and approved by voters would take a GIANT step toward allowing localities to craft their rent stabilization policies to fit their circumstances.

Affordable Housing Act illustration
Any tenant interested in greater protections should ink that little circle on November’s ballot so we can repeal this preemption law and return regulation of rental housing to Beverly Hills where it belongs. Read the fact sheet!

The Battle Against Rent Stabilization Was Always Local

By definition rent stabilization is a local issue. Local governments add tenant protections and even price controls to bare-bones state tenancy laws that do little to protect us. City Council’s action last January to change our ordinances made Beverly Hills ground zero for an assault by landlord and their front organizations like Apartment Association of Greater Los Angeles (AAGLA – “The Voice of Multi Family Housing Since 1917”). This is the lobbying arm of the apartment rental industry, and AAGLA’s lobbyist was a regular presence at city meetings all last year.

To no good end. AAGLA got little traction with City Council given the magnitude of tenant complaints about rent hikes, habitability, evictions and associated landlord malfeasance. Consequently there was a staff shake-up. AAGLA hired Beverly Hills landlord Dan Yukelson to bump-up its ground game and the lobbyist decamped for Sacramento to the California Apartment Owners Assocation. Or was it the Apartment Owners Association of California? (There are so many landlord lobbyist organizations that I get confused!)

Who’s Leading the Charge? Dan Yukelson. He brands himself a ‘mom-and-pop’ owner with an Olympic Boulevard fourplex he bought three years ago. Yet in the same breath he talks about the property as an investment as you might expect a finance professional would. With skin in the game he brings some energy to the fight in Beverly Hills. However he can’t avoid some measure of hostility and hyperbole when he talks about rent control. You see he’s also a free-market ideologue.

But the battle has gotten away from Dan and AAGLA now. With an initiative to repeal the Costa Hawkins law awaiting qualification for the November ballot, the fight for tenant protections is now a statewide thing. The stakes are much higher.

The Stakes are High

The stakes for both tenants and landlords got much higher when tenant advocates took the fight to the voters. In a sign of how significant a threat it poses to landlords, front groups like AAGLA have come out swinging. The firearms are blazing. They’re ready to ‘go nuclear’! (Choose your favorite metaphor.) Although the Affordable Housing Act measure has not yet qualified for the ballot, landlords are concerned that the initiative will resonate with voters because there is a housing crisis affecting millions of state residents.

The AAGLA lays down the battle lines in the May issue of AAGLA’s Apartment Age magazine. “Ladies and gentlemen, we are under attack!” exclaims executive director Yukelson in an editorial.

A voter initiative being proposed for this November’s ballot would, if passed, repeal the Costa-Hawkins Rental Housing Act of 1995, an important law that limits the scope of rent control ordinances. Supporters of the repeal measure include the resurrected ACORE [sic] group, an eviction defense law firm and a no-growth billionaire zealot (the “real money” behind the initiative) named Michael Weinstein.

Yukelson grouses about how repeal would take away cherished giveaways to landlords like these:

  • Exemptions from rent stabilization for all post–1995 buildings now and in the future;
  • Exemptions from local protections for any family that rents a house or condominium unit or even an accessory structure like a garage apartment; and most significant,
  • ‘Vacancy decontrol’ which allows a landlord to ask whatever rent he likes each time a unit turns over.

That last provision is especially important to landlords because it’s where they generate much of their cash flow. If the price control effectively disappears when a tenant departs, with turnover the property is continually resetting to market rent. That’s great for landlords because rent stabilization has only a modest bite (despite the bloviation to the contrary).

Unfortunately for tenants, though, vacancy decontrol becomes an incentive to evict tenants or pressure them to leave in order to raise the rent. And longer-term tenants are most vulnerable. These are precisely the tenants who will fare worst re-entering the rental housing market. Next to the harm done by allowing no-just-cause eviction, vacancy decontrol is the greatest threat to our city’s residential stability among those who rent housing.

Yukelson is disturbed not only by the policy particulars of the potential Costa Hawkins repeal but the force behind the initiative: Weinstein and his AIDS Healthcare Foundation (AHF).

The Battle Gets Personal

What appears to rankle Yukelson the most is that in the AHF landlords are finally facing a formidable opponent. Good intentions in the legislature is no match for landlords, their associations and their lobbying clout. Indeed regardless of party, majorities in the Assembly and Senate are bought-and-paid for by landlords. (That’s why it is near-impossible to get any meaningful pro-tenant legislation from Sacramento.)

AAGLA has influence at all levels

But bring Weinstein and AHF into the mix and you have a battle engaged! You see, Weinstein has a track record of backing disruptive initiatives; he’s a serious contender. To put Costa Hawkins repeal on the ballot, his Housing is a Human Right project (an offshoot of AHF) has already collected more than a half-million signatures.[1] Compared to tangling with Weinstein, buying off the legislature is nothing more than dangling candy before a baby.

But AHF and the millions it can put behind the initiative is a different story and clearly it rankles Yukelson to have such a worthy opponent.

So, Who Is This Michael Weinstein? Michael Weinstein is the reported “polarizing and controversial” President of the A.I.D.S. Healthcare Foundation… It is a multi-hundred million, and by some accounts one billion, per year operation that for all intents and purposes runs a profitable, nationwide pharmacy operated as a non-profit organization.[2]

Get the innuendo? AHF is a profit-making organization “operating” as a nonprofit, he says. That’s how AHF can afford “plush, 21st floor offices near the corner of Sunset Boulevard and Vine,” he suggests. There must be some subterfuge at work! That “plush offices” bit also elaborates on Yukelson’s prior arguments that rent control proponents are merely well-advantaged free-riders looking for a sweet deal on the backs of hard-working mom-and-pop owners like him.

Yukelson soon dispenses with such frivolities. “Some might characterize the A.I.D.S. Healthcare Foundation similar to a drug cartel, but our research could neither confirm nor deny this characterization.” He offers no evidence to support that insinuation. But whatever!

The Battle Gets Ideological

Yukelson then pivots inelegantly from impugning Weinstein as a shady profiteer to casting him as a RED. Ironic!

You see, he has been characterized as a Socialist stalwart that once taught Socialism at the college level. And, he has now surrounded himself with radicalized groups of tenants’ rights advocates that are staging ongoing protest marches, storming local city council meetings to profess the virtues of rent control and filling the media with false claims about rental rates, rent increases, property conditions and horrible tales of poor tenant treatment by property owners like you and me.

It is difficult to know who’s more of a ‘radical’ threat to landlords in Yukelson’s view: college professors, tenants-rights advocates or actual socialists? (Presumably all must be vanquished.) Yukelson wears his right-wing ideology on his sleeve when he casts tenants as a threat to life, liberty and the pursuit of happiness. Or at least a threat to his cushy retirement. He told councilmembers back in September that owning residential rental real estate was the only way he could continue to live in Beverly Hills into his old age. Changes in the local rent law, he suggested, would put him and his wife out of house and home just as he’s approaching retirement.

Now I don’t think Yukelson saw any ‘radicalized’ tenant advocacy organizations at that meeting. There was no protest march and no meeting was stormed by radicals or anyone else. He is seeing ghosts. Indeed in his editorial he muses on Weinstein’s darker, subversive motives. It reads like a latter day ‘red scare.’

His far-left leaning philosophies led him to form, in 1974, the Lavender and Red Union, a Marxist organization that eventually merged with the Spartacist League. The Spartacist League is a Trotskyist political group and serves as the United States section of the International Communist League. This Spartacist League named themselves after the original Spartacus League of Weimar Republic in Germany, but the current League has no formal descent from it. The League self-identifies as a “revolutionary communist” organization.

Communism! It is a latter-day ‘red scare.’ Check out the not-so-subtle hammer-and-sickle!

Costa Hawkins Repeal banner with Sickle

Yukelson moves on to a litany of unsubstantiated allegations concerning fraud and kickback schemes and even Weinstein’s purported support for Roman Polanski. (No detail is too irrelevant to include.) And wait for this best part: “He has been accused of homophobia, even as a gay man.”

Again Yukelson provides no evidence for any of these claims and all appear to come from one dubious source. In my view, Weinstein should bankroll his Affordable Housing Act initiative with a defamation suit against Yukelson.

Our man at AAGLA closes with a battle cry and an inevitable fundraising pitch:

If Weinstein brings $20 Million to the table in support of the initiative, we need to bring 4-times that amount if we are ever going to beat him, and we will. You can help save your investments by helping us to help you… Now, more than ever, your full support is needed. The future of our apartment industry is at stake!

Hardly: one need only look at the prices paid for rental real estate in Beverly Hills today (about $1M per ‘door,’ as they say in the industry) to see that landlords like Yukelson still see plenty of upside whatever the voters decide in November.

462 South Rexford sold MLS listing
Seems like close to $1 million per unit is a pretty strong vote of confidence in Beverly Hills residential rental real estate!

Yukelson’s battle suggests some urgency for tenants as we look ahead to skirmishes over the Affordable Housing Act and, on the horizon here in Beverly Hills, more rent stabilization discussions at City Council this fall. Maybe I should take a cue from AAGLA and start to call out ghosts as I see them: hard-right libertarian property owners who summon up the worst fears of any Marxist.

  1. For more visit the Housing is a Human Right website. To all who signed or was ready to sign the Affordable Act Petition, I thank you. Clearly they delivered a half-million signatures without our help. But we will need you at the polls in November!  ↩
  2. Daniel Yukelson. “The So-Called Affordable Housing Act.” Apartment Age Magazine May 2018 (pp. 44–46).  ↩

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