Tenant advocates are taking aim at rent control provisions that allow rent increases during sharp economic downturns. In Los Angeles, City Council member Richard Alarcon has called for the passage of a one-year moratorium on rent increases for more than 600,000 apartments across the city. The proposal would block landlords from imposing the 3% rent increase that would otherwise be allowed on July 1 under the city's Rent Stabilization Ordinance (LARSO). The proposal will be heard in committee this Wednesday.
In Los Angeles, landlords may raise the rent 3% regardless of economic conditions. This imposes a significant burden on tenants already struggling in a difficult economy. As noted by Larry Gross, executive director of Coalition for Economic Survival (CES) in Los Angeles, the city's own Rent Stabilization Ordinance Study, released last year, recommended the elimination of the 3% "floor" on annual rent increases. That recommendation has yet to be implemented.
The 3% floor is not an issue during more robust economic times, since the allowable annual increase, which is pegged to the inflation rate, will often exceed 3% in those years anyway. When the economy nosedives, however, as it did last year, tenants find themselves with less income and higher rents in jurisdictions like Los Angeles that provide a “floor” for rent increases.
San Francisco, West Hollywood, Oakland and Berkeley tenants are not subjected to these types of increases. In each of those cities, the allowable increase is tied to the change in the Consumer Price Index (the inflation rate), with no guaranteed minimum increase. This means that when the economy flat-lines, rents do too. As a result, in San Francisco, for example, last year’s allowable rent increase was 0.1%.
Coalition for Economic Survival (CES) explains the situation in Los Angeles: “The current CPI rate for 2010 is -.62 %, which means that renters will face unjustified rent increase of 3%, due to the "floor" beginning July 1, 2010, unless the rent increase moratorium is passed.”
Tenants in Los Angeles can take action to support the proposed one-year rent freeze by contacting their council members (contact information is listed on CES’ action page) and coming to the meeting of the City Council Housing, Community & Economic Development Committee on Wednesday, May 5 at 8:00 am in Los Angeles City Hall, Room 1010.
Dean Preston is the executive director of Tenants Together, California’s Statewide Organization for Renters’ Rights. For more information about Tenants Together, go to www.tenantstogether.org.