Landlords: Tenants Must Be Happy With RSO Because We Didn’t Complain

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.

Let’s be clear at the outset: the impetus behind the landlords’ ‘analysis’ of Code Enforcement complaints is not to inform an understanding of the problems affecting the rental housing market; instead it is another effort to thwart the city’s attempt to effectively regulate the apartment renting and leasing business in Beverly Hills. Landlords have already sued the city (not once but twice!) to invalidate the rental unit registry at the core of our rent stabilization program. Now they claim that the city acted capriciously — indeed acted in bad faith — when it adopted the first urgency ordinance last January. (That ordinance lowered the cap on allowed rent increases, imposed relocation fees for all tenants and created the registry.)

Rent stabilization in Beverly Hills didn’t need a fix, the landlords say, because it “worked exceptionally well for 39 years.” Well, we have no doubt that the system worked well for landlords. After all, no landlord has called for a change in the rent stabilization law. In fact landlords have doubled down on it: they urged the city only to add a couple of additional code enforcement officers to shore up the existing gimcrack system of non-regulation. That would help no tenant!

The Landlords’ Analysis

A few of the landlords have offered an  ‘analysis’ that purports to show how anecdotes and allegations dominated the rent stabilization discussion to the exclusion of facts. To make their case the landlords have tallied “complaints investigated by Code Enforcement” between March of 2013 to March 2017. That is a period that closed shortly after the city’s urgency ordinance took effect.)[1]

In those four years, Code Enforcement investigated 54 non-habitability complaints, they say, but only 7 concerned rent increases and just 18 were categorized as “eviction related.” And three of those eviction-related complaints ultimately resulted in the rescission of the eviction notice. The implication: even those few tenant complaints hardly stand up after investigation. (The analysis did not review habitability complaints.)

Landlords Elia Weinbach, Harvey Miller, Dan Yukelson and Jimmy Killian summarize their analysis this way in a July 6th missive to City Council:

The number of complaints relating to excessive rents is virtually non- existent; the number of complaints relating to evictions is similarly virtually non-existent; and, the City simply did not rely upon any reliable data to conclude that there was any real, let alone substantial, danger to ‘public peace, safety, and health.

That latter point refers to the findings in the January urgency ordinance:

Studies, which were presented to the City Council and are part of the record regarding the adoption of this ordinance, have shown that there is a shortage of the number of apartment units that are available for rent and that the rents that are being charged for apartment units are increasing dramatically, especially within Southern California and within the City of Beverly Hills. — Urgency ordinance 17-O–2725

The landlords say that few tenants experienced any problem. But here’s where the landlords’ analysis comes up short: it excludes so many tenant contacts about problems. This is the caveat behind the analysis:

To be clear, by “data” we refer to complaints investigated by Code Enforcement. The “data” does not include anecdotal and unverified comments, remarks, observations, and complaints made to and/or by the [Human Relations Commission]. The data we examined does not include any analysis of any habitability issues or health and safety code violations. (Emphasis mine.)

Tenants in numbers more than 150 complained directly to city officials at meetings last year. The landlords simply dismiss them as “unproven allegations.” City Council bought them hook, line and sinker, the landlords say.

But what really rankles is the suggestion that the system worked fine for tenants if relatively complaints were investigated. Landlords know well that tenants are reluctant to even file a complaint because we could be evicted for simply speaking up. That’s why the city provides the little-known means to make a complaint anonymously.

Tenant Inquires Tell a Different Story

Thankfully the city’s RSO office provided a tally of constituent inquiries to the rent stabilization program and it is broken out by category. These calls in the aggregate suggests a significant, collective dissatisfaction on the part of tenants. Here is the city data reformatted by Renters Alliance for our own analysis coming soon.

Constituent inquiry tableLet’s compare the city’s tally of constituent inquiries to the landlords’ analysis of ‘investigated complaints.’

  • Where the landlords cites an average of 13 complaints investigated by Code Enforcement per year, the city shows more than 2400 total inquiries to the Rent Stabilization Program in the last fiscal year (exclusive of calls about the registration process).[2]
  • Where the landlords ‘analysis’ shows just 4 eviction-related investigated complaints per year on average, constituent calls about evictions numbered 431 in the year.
  • Where fewer than 2 complaints about unlawful rent increases were investigated per year according to the landlords analysis, constituent calls to the city about rent increases total 542 in the year.

Why the big discrepancy between the constituent inquiries and complaints investigated? There are many reasons (below) but the short answer is that a seemingly improper or unlawful landlord practices that are reported to the city may not actually violate the city’s rent stabilization ordinance.

Our Takeaways from the Landlords’ Analysis

Comparing the landlords’ data with the constituent inquiries prompts a few reflections about tenants’ concerns and the process the city has to address them.

The vast majority of inquiries are never referred to Code Enforcement. Of 2424 non-registration inquiries in the 2017–2018 fiscal year, only 8% (191) were actually referred to Code Enforcement. Why were fewer than 1-in–10 inquires referred? We can’t know from the data as provided. Some inquiries are undoubtedly addressed simply by informing the constituent about the law. Instances where the law may have been violated may be resolved by corrective action after an informal call from the city. Whatever the reason for the large volume of inquiries not referred, the landlords show us only the tip of the iceberg because their analysis only includes investigated complaints. [3]

An inquiry referred to Code Enforcement may not result in a substantiated violation. Although a landlord may run afoul of the law, the Code Enforcement process gives him ample opportunity – sometimes months – to correct an unlawful action. Take for example an excessive rent increase: once contacted by Code Enforcement the landlord can simply rescind the notice. Voila! No violation. Or consider the improperly-noticed tenancy termination: after a call from the city the landlord can simply re-post the notice lawfully. In both instances the tenant’s complaint has not proceeded to a violation (much less been referred for prosecution).

The complaints that are investigated by Code Enforcement are more likely to concern Chapter 5 tenants than Chapter 6. Chapter 5 tenants enjoy greater protections and for them Code Enforcement is quick to step in. That includes cases of unlawful no-cause evictions, instances where relocation provisions were not followed, and many other protections that elude Chapter 6 tenants. (Code Enforcement cases usually note right at the top: ‘Chapter 5.’) Even if Chapter 5 cases get the attention, those tenants are fewer than 5% of all renters. The 95% of tenants who are Chapter 6 will learn that seemingly unlawful practices like a 10% rent rise or eviction without cause are actually lawful. Chapter 6 tenant inquiries better reflect the impact on families of the rental housing crisis, but their inquiries are much less likely to require investigation and thus be represented in the landlords’ analysis.

Though constituent inquiries signal the state of tenant-landlord relations, many of them are not meaningfully categorized. Fully 41% (992) of non-registration inquiries last year were categorized as ‘general inquiries’ about which we know nothing. Also there were 107 ‘general complaint’ inquiries. What good is a ‘general complaint’ if there is specific issue identified? In total there were 1100 ‘general’ calls that resulted in no referral or investigation yet they suggest widespread concern about some or other aspect of the rent stabilization process.

The large number of inquiries about rent increases and evictions suggests real concern among tenants about residential stability. Rent raises and evictions alone accounted for nearly 1,000 inquiries last year, yet cases reviewed by the landlords over four years show only 54 such ‘investigated complaints.’ Even if every single one of those inquires were found to concern a lawful action which needed no investigation, those inquires suggest a magnitude of tenant concern wholly absent in the landlords’ analysis.

Habitability complaints are not included in the landlords’ analysis. This would seem to be a real head-scratcher! Among the concerns most often cited by tenants is deferred maintenance and even health and safety issues like poorly-functioning plumbing or lack of heat. Because habitability concerns were mentioned time-and-again by tenants, elevated habitability standards found some agreement among tenants, landlords and city officials too. Yet habitability complaints don’t show up in the landlords’ analysis because worn fixtures and degraded furnishings don’t even warrant an investigation under current habitability standards.

What About Habitability Issues?

Of all the inferences to be made from this apples-and-oranges comparison, perhaps habitability is the one category of inquiry that most stands out: many tenants have called it a problem but few have complained. The city’s constituent inquiry tally bears that out: only 58 inquires last year concerned habitability — just 2% of all non-registration calls. Why so few? We can make an educated guess! We heard countless tenants ask this question of the city: Doesn’t my landlord ever have to replace my carpets, or my appliances, or even paint my apartment? The answer: No, so those complaints need no case opened.

Neither the data from the landlords nor the constituent inquiries reflect the extent of tenant concern with regards to habitability.

What is the Landlords’ Angle?

The landlords are less interested in identifying tenant problems than indicting the city for acting in bad faith. “The City simply did not rely upon any reliable data to conclude that there was any real, let alone substantial, danger to ‘public peace, safety, and health,’ they claim. Indeed by design their ‘analysis’ of Code Enforcement actions takes no account of the many tenant testimonials to City Council or to the Human Relations Commission (over the 18 months prior to adoption of the urgency ordinance).

To punctuate their findings, the landlords cite these “consequential and deleterious impacts” that the urgency ordinance has wrought:

  • negative impact on the incentives for rental property owners to continue to maintain the rental housing stock;
  • negative impact on property tax revenue;
  • negative Impact on the City’s budget;
  • the cap on the allowed annual increase is not a ceiling but a floor; and,
  • annual rent increases on average have increased from 2.5% per year to 3%.

To those assertions we would respond:

  • Some property owners never maintained their premises anyway, but because smart landlords know that their margin depends on tenant turnover (and higher asking rents) they are now investing in maintenance;
  • Property values for multifamily rental housing is setting new records despite rent stabilization as both cost per square foot and price-per-door reach new highs (the city gets a share of the swelling property tax assessments);
  • Asking rents are rising at an accelerating pace as some landlords exploit the housing crisis (as the January 2017 urgency ordinance said); and,
  • The city is receiving more business tax from landlords than ever before because the tax is based on gross receipts (rents) which rise (again) despite the changes to the rent stabilization law.

On that last point: the registry has required all landlords to obtain a required business license in order to rent an apartment. The scofflaws among them have escaped business taxes for decades but are now paying their due. The city’s coffers are likely much more full for it.[4]

What’s the Landlords’ Angle?

We are always happy to engage a debate, but the specious arguments put forth in the landlords’ missive are intended only to lay the groundwork for their next act: persuading City Council to accept a ‘proposal’ rehashed from last year’s facilitated dialogues:

  1. Set the allowed annual rent increase at 7%.
  2. Exempt from RSO (and tenant protections) all 4-unit-and-under owner-occupied properties (a potential benefit to hundreds of owners).
  3. Continue to allow landlords the ability to evict households for no cause whatsoever.

Having failed to stop the urgency ordinance in January of 2017; then failing to snuff rent stabilization reform at the ballot box in March 2017; then failing to invalidate the registry in Superior Court; then failing in Council chambers to brand tenants as mere grifters and gripers; the landlords now look for traction with an ‘analysis’ that portrays tenants as happy clams all along. But they are not fooling anyone!

  1. Landlords were able to pore over four years of official complaints made by tenants simply because they asked for them. Any tenant who may have thought her complaint was privileged would be mistaken. And even if the name was redacted the tenant is identifiable by unit number. There is a way to file a complaint anonymously, however, as we have pointed out in our post,  ↩
  2. The city has tallied constituent calls across categories including two categories related to rental unit registration (categories that accounted for nearly half of all inquires). We excluded registration-related calls from the inquiries tally and categories breakdown because these calls relate to only one aspect of the program: the registration process. In any case, those calls were more likely to come from landlords than tenants because tenants don’t register their units. And if those inquiries did include tenant calls, then likely those calls were likely related to the certification of rents.  ↩
  3. Holding landlords to account is not only very difficult, it is near-impossible to know if it ever happens. For example, many months can pass after a relocation fee is withheld and still the landlord may not pay a penalty (nor even the fee). But we simply don’t know how often that may happen because the city’s online portal does not show substantiated violations. We can’t learn how many complaints are filed; how often they proceed to substantiated violation; or how many of those are actually referred for prosecution. The process is totally opaque. It has let landlords off-the-hook and keeps tenants from being able to do their due diligence when leasing an apartment. No wonder they landlords doubled-down to keep Code Enforcement in charge: there is scant accountability for them.  ↩
  4. Come budget time next year we will all know much more about how much more in business taxes are paid by landlords. Looking back we will also know just how significant was the tax evasion by landlords… until the rental unit registry made them register for the required business license.  ↩

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