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Wednesday, March 29, 2017

Echo Park landlord worried over state legislation that would allow for stronger rent controls

ECHO PARK — For more than twenty years the statewide Costa-Hawkins Act has limited the power of cities to adopt new and strengthen current rent control laws. But as rising rents generate more complaints and concern about the lack of affordable housing, state lawmakers are looking at doing away with Costa-Hawkins as part of Assembly Bill 1506, reports The L.A. Times. Not surprisingly, the legislation has generated concerns among landlords big and small, including the owners of Jensen’s Recreation Center, a city historic landmark that rises three stories above the corner of Sunset Boulevard and Logan Street.

Vista Investment Group paid $15 million to purchase the three-story, brick building with 46 apartments in 2014. Jonathan J. Barach of Vista Investment expressed concern that he and other landlords might lose the ability to raise rents without limits on new tenants after units become vacant (increases on existing tenants are capped by existing rent control laws).  He said the flexibility to hike rents to market rates  when existing tenants move out allows him to maintain his buildings in good condition.

Said The Times:

“When Vista purchased the 1920s building in 2014, Barach said plumbing and sewer lines were ‘constantly backing up and pipes were bursting,’ but the problems are now fixed. He said refurbished studio apartments at the building are now going for about $1,700. Some long-term tenants who moved in before the area became attractive to well-off young professionals are paying ‘well under’ $1,000. ‘We want tenants to enjoy the building, but it needs to make sense financially,’ Barach said.

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19 comments

  1. I know I will be forced to sell my duplex in Echo Park which makes me sad because Echo Park is my community and I’m a very good landlord, but the reality is if we can’t raise rents when tenants move out, it becomes too expensive to maintain and ultimately we have to sell to someone generally not invested in the community. Mom and pop landlords generally care and tend to their buildings and know their tenants, unlike larger corporations who hire management companies to tend to their buildings. It’s already crippling to be limited to only a three percent rental raise each year, but if they enforce a law of limiting rent when a tenant moves out, landlords like me will just have to sell out because we won’t be able to make even a small profit so why would we want to keep our properties? It makes more sense to just sell. It’s expensive to maintain vintage buildings.

    • Boo hoo. Then go sell, you slum lord. Or maybe get an actual job and contribute to society instead of bilking working people. We should raise property taxes and vote in stronger rent controls so vultures like yourself get out of the game of mooching off others people’s labor.

  2. Hands on landlords of small buildings already have it rough with regards to the DWP. Landlords required to pay water for their tenants are not able to pass on the increases to long term tenants.

  3. If this happens you will see blighted neighborhoods and properties remain blighted. Without the possibility of raising rents to market what incentive is there to invest money in these old buildings? It costs a lot to repair, upgrade and maintain these buildings, and the current 3% already ties the hands of struggling mom and pop landlords who have to deal with rising construction and capital expenditure costs. This truly is the erosion of property owner rights and will force many landlords out of the business. The same property owners who worked hard all their lives to buy property are going to see the fruits of their labor eaten up by yet another corrupt piece of legislation.

  4. I have absolutely zero sympathy for any of these landlords who just want to get rich by making this neighborhood only for the rich and kicking out hardworking tenants. Don’t like it? Don’t buy a building for working people. I don’t care how nicely you want to keep your building, $1700 for a studio is completely outrageous.

    • Yeah. Tenants are always “hard working”. What about the non working section eighters.

    • $1700 is not completely outrageous considering the location. You’re walking distance to the lake, cafes, restaurants, and a vibrant cultural scene. It’s a desirable location to be in and therefore higher prices. If you can’t afford to eat at benihana’s, then go to McDonald’s or anywhere else more affordable, plain and simple.

      • I’m sorry, but $1700 is pretty outrageous for a studio. The only people who can afford that are way upper middle class folks. Even someone with an 80,000 salary that would have a difficult time making that rent. Let alone for anyone with student loans, family expenses etc. As a pretty privileged person myself, I don’t want the neighborhood to only be for the upper middle class and above. Particularly, because this is a historically working class neighborhood. Insisting all the people who have lived here for years and made the neighborhood what it is just move because investors saw an opportunity to make a buck is a true loss for a community (and really heartbreaking for those people)

  5. As a landlord, I currently NEVER raise the rent on good longstanding tenants. If this law passes, every landlord will be forced to raise the rent 3% each year on current tenants to keep units up to market value because they won’t be able to significantly increase rent when a tenant leaves. Be careful what you wish for.

    • This is an interesting take I hadn’t considered – thank you for sharing it.

      As a longstanding, respectful tenant in EP who fears the dreaded 3% letter every year (but doesn’t always receive one), it’s important to think about the causes and effects of all these things.

    • Well you are one of the good ones. My current landlord promised a 3% each year, and thus refused to give us year long leases (assuring that she had never raised the rent during the year). I knew that was dumb, but very stupidly trusted her for her word because she only raised it 3% for many years. All of the sudden she tried to raise it by $250 randomly during the year. Things like that are why we tenants want rent control. You are a good landlord, but others aren’t so scrupulous and would leave us on our butts to make an extra nickel.

  6. I have never lived in a city where people blame other people for their problems as much as they do in LA. Everyone wants to be subsidized and are surprised when the bad financial/career decisions that they have made come to fruition.
    Renting never makes a property truly yours.

    • HorizontalEpidemic

      Yet you remained to exploit the hot rental market!

      Remember, every action has a reaction…

      Perhaps your “bad financial decision” was becoming a landlord in this problematic city.

    • Seriously? I had a well paying job and it went out of business 2 years ago. I made all the right decisions in life but things just went sour anyways. I now make barely over minimum wage and am trying to keep my apartment in this building. Sometimes life just gets hard but it’s actually not a persons fault. I work really hard everyday but I can’t control how much I get paid

  7. i’ve always known rent went up in EP. but 1700 for a STUDIO?!? thats fucking upsetting.
    I’ve lived in Echo Park all my life. This neighborhood is my HOME. and seeing shit like this really pisses me off. Developers don’t care for the working class. they just want to suck every penny they can regardless who’s paying.
    and adding new building isnt going to help. Stop gentrifying this neighborhood and pushing us Latinos out.
    It’s sad seeing that i dont even recognized the neighborhood i grew up in.

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