LA City Council tentatively approves freezing rent on apartments

A sign for an apartment to rent is seen in Los Angeles on May 27, 2009.
A sign for an apartment to rent is seen in Los Angeles on May 27, 2009.
Gabriel Bouys/AFP/Getty Images

The rent at hundreds of thousands of apartments in Los Angeles would be frozen through Halloween under an ordinance given tentative approval today by the City Council.

By an 8-6 vote, the council decided to move forward with a draft ordinance proposed by Councilman Richard Alarcon to freeze the rent on many units whose owners normally would be allowed to raise prices up to 3 percent on July 1 under the city's rent stabilization ordinance.

"It's the third rail of politics," Los Angeles City Council President Eric Garcetti told KPCC's Patt Morrison. "I'm personally very sympathetic to the imperfections of our rent stabilization ordinance."

Garcetti said he approved of more flexibility with rent control so that units can be improved, since that can be tough to do with the rent increases currently being allowed.

"There's too much at stake here to have political theater in play," said Ryan Minniear, executive director of the California Apartment Association (CAA) of Los Angeles.

"What we're looking at here is investment income versus income to survive," said Elizabeth Blaney, representative from the Los Angeles Right to Housing Collective, a coalition of tenants’ organizations. "You're looking at landlords who already have a house," said Blaney, while tenants are dealing with being able to have food and shelter.

Responding to a caller who called not allowing rent increases "outrageous" and argued for a free market approach, Blaney responded, "Leaving housing to the private market is part of what got us to this crisis."

Under an amendment offered by Councilwoman Janice Hahn, the ordinance would exempt "mom and pop" landlords with buildings of five or fewer units.

The moratorium is intended to help tenants hurt by the recession, but apartment owners said they are also struggling, and the moratorium would unfairly penalize them.

Two building owners complained at a public hearing on Wednesday that rent control made it impossible for them to get loans to make repairs. Another noted that the moratorium would take effect on the same day as a 4.8 percent rate hike on electricity by the Department of Water and Power.

Defending his proposal, Alarcon said tenants "are going to have to cut out vital needs" because of tough economic times. "This will come out of food, shelter and clothing."

Alarcon had wanted to extend the rent moratorium for a full year, but reached a compromise Wednesday with Councilman Herb Wesson, head of the council's Housing Community and Economic Development Committee. The compromise would institute a freeze on rents through Oct. 31, with a possible extension until year end.

Alarcon said he thought he "had a commitment" from Hahn to vote in favor of the compromise and was "shocked" by her proposal, which would exempt many of the units.

"I know everybody's hurting," said Hahn, who said she had a record of voting "100 percent" for tenants' rights. But "I feel like [the proposed moratorium] is a bit unfair at this point to the landlords," given rising fees and utilities costs.

The owners of rent-controlled buildings – properties with two or more units built before 1978 – would normally be allowed to raise the rent July 1 on an estimated 630,000 units.

Douglas Guthrie, general manager of the Los Angeles Housing Department, said that about 32 percent of those units are in buildings with four or fewer units, but he was unsure of the total that would be exempted, putting it between 40 and 60 percent.

The exemption will "open the door to more illegal rent increases" and create confusion for both tenants and landlords, said Larry Gross, executive director of the Coalition for Economic Survival.

The city's rent stabilization law is tied to the Consumer Price Increase, a broadly accepted measure of inflation, which is below zero for the current year, according to Alarcon.

The debate is likely to continue in two weeks when the ordinance to be drafted by the city attorney will come back to the council.

"Let us then argue, fuss and fight," said Wesson, who said he had missed the birth of his second grandchild, a girl, in order to appear for the vote and was anxious to return to the hospital.