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Opinion: How Renting in Los Angeles Could Go From Bad to Worse

Renting in Los Angeles is about to get more difficult for many people.

The last of Los Angeles’ pandemic-era tenant protections has expired February 1st. For the first time since April 2020, owners of rent-stabilized apartments — 70% of rental housing in the city — are authorized to increase rents. And the last installment of any unpaid rent is due.

Don’t expect a soft landing. Depending on how the city responds, it could find itself in a lose-lose conflict with local landlords, and the pain would be felt widely: More than half of Angelenos live in rental housing.

The city is already bracing for an increase in evictions and homelessness. Approximately 90,000 homes have unpaid rent debt from when pandemic protections were in place, and about 60% may be unable to pay it.

The city’s newest renter assistance program only distributed a fraction of its budget of 30 million dollars; it has 30,000 applicants requesting a total $473 million to cover the rent arrears. A small minority of applicants have been approved but have not yet received any money; they were given a 120-day grace period to avoid deportation. But most applicants still don’t know if they will be approved.

The dominoes started falling last year. Eviction Filings double from 5,000 in February to 10,000 in April and May after tenants were again required to pay the full monthly rent (separate from unpaid rent arrears) to avoid eviction. Since then, evictions have remained 20 to 25 percent higher than the old benchmark.

After the uncertainty of recent years, many landlords are likely to be looking for more income and stability. The pandemic was a healing experience for small landlords, many of whom found themselves stuck because their non-paying tenants were protected by the city and rents remained frozen amid historic inflation. Of course, owners are not entitled to perpetual positive returns. Housing, like any asset, carries downside risk. Some landlords — especially those who aggressively purchased new rental properties hoping for a sure-fire payday — lost that bet during the pandemic.

At the same time, landlords have the right to evict tenants who do not pay. They would also be justified in vetting potential tenants more carefully within the confines of the Fair Housing Act. Rather than renting units quickly, they may leave units empty while waiting to find more financially established tenants. This could make it even more difficult to obtain affordable housing in Los Angeles, particularly for those with unstable incomes (gig workers, entrepreneurs, artists) as well as those with potential red flags that Background checks will inevitably reveal (like justice-involved individuals and tenants). with poor credit history or previous evictions).

The city has launched a tenant rights awareness campaign, which could deter some overzealous landlords. The city also aims to aggressively increase the availability of legal advisor for people threatened with eviction.

Legal representation is an essential part of the legal process and it is crucial that tenants are protected against illegal evictions. However, paying a fleet of public defenders to challenge and delay any eviction attempts could add fuel to the fire while draining city and landlord resources.

While universal right-to-counsel programs boast high success rates When it comes to keeping people in housing, it’s unclear what percentage of those successes are avoiding an illegal eviction versus a landlord giving up and taking on the cost of lost rent. Ninety-six percent of evictions in Los Angeles in 2023 came from non-payment of rent, which should be mostly straightforward cases. There are also other, less expensive, ways to prevent illegal eviction requests from reaching court. In some cities, tenants who complain about their living conditions can protect themselves from landlord retaliation by legally withholding their rent and depositing it with a third party. escrow account.

Providing advice is expected to cost the city $68 million each year – and remember that the city only paid out $30 million for its rental assistance program. These resources could be focused on rehousing displaced families as quickly as possible. Instead, the city is pursuing a policy that further antagonizes landlords and sends the message to tenants that they could be able to get by without paying rent if they fight hard enough.

Los Angeles does not need to directly adopt the most costly and divisive policy to reduce evictions and prevent homelessness. In PhiladelphiaLawmakers made permanent an eviction diversion program at a cost of $15 million. Landlords seeking eviction are required to participate in a 30-day mediation period with one goal: to resolve disagreements amicably and without eviction. Under this program, more than 70% of disputes have been resolved out of court. Hawaii did the same, with 87% of cases resulting in settlement.

Los Angeles cannot afford a drawn-out power struggle with landlords. This risks creating a “survival of the fittest” landscape in which only landlords able to resist and adapt to tenant protections remain in the market. Companies already have more than 40% of rental housing in the city, a figure that could rise if small landlords follow through on their threats to exit the market, either by selling to landlord companies or by taking their homes off the market. This potentially represents a huge problem for this rental market, which is already among the worst in the country when it comes to housing production.

On a more promising note, the economy has been roar with job creation and higher wages for those who work Low end of income distribution. Many have returned to work after a tumultuous year of strikes. This bodes well for tenants facing their first rent increases in four years.

But the fact remains that Los Angeles is one of the least affordable places to live in the country. This is the root cause of the looming eviction crisis and why tenants needed so much protection in the first place. If the city prefers to continue to strengthen tenant protection while prevent developers from building affordable housingPrepare for a new status quo: a tighter, even more expensive rental market, under increasing scrutiny from annoyed landlords and faceless corporations.

George Zuo is an associate economist at RAnd and professor of political analysis at Pardee RAnd High school.

California Daily Newspapers

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