Editorial News Alert: Huntington Park Passes Rent Control and Rental Registry
Editorial News Alert
L.A. City Creates New Enforcement Program Against All Non-RSO Property Owners
By Janet M. Gagnon,
Senior Vice President, Government Affairs & External Relations
On November 18th, the Huntington Park City Council unanimously passed an ordinance establishing rent control and a new rental registry for all multifamily properties built prior to February 1, 1995. The ordinance also applies to duplexes when both units are not owner occupied and single-family houses with accessory dwelling units when both are not owner occupied. The ordinance goes into effect on December 17, 2024.
Rent control is now capped at only one annual increase equal to 100% of the Consumer Price Index (CPI) or 3%, whichever is lower. In addition, the ordinance requires that all covered rental units be registered with the City within 60 days of the December 17th effective date, namely February 16, 2024. However, no amount has yet been determined for the amount of rental registration fee that will eventually be assessed as the City will be conducting a fee study to determine it.
The ordinance also contains a tenant anti-retaliation provision that presumes retaliation if an action is taken against a renter by the owner within 180 days of the renter exercising their legal rights, including, but not limited to:
- Reporting habitability concerns or violations to local authorities;
- Joining or organizing tenant associations;
- Participating in the rent stabilization program;
- Requesting repairs or maintenance;
- Filing complaints about rent increases or unsafe conditions; or
- Exercising any other rights protected under either local, state or federal law.
Remedies for retaliation include reinstatement of rental terms prior to the retaliation, emotional distress and relocation costs for the renter, attorney’s fees and court costs. Penalties for violating the new ordinance include civil penalties of $1,000 per violation per day as well as criminal penalties of up to 6 months in jail or a fine of up to $1,000 or both.
Background
The City Council completely failed to conduct any substantial outreach to the community prior to passing this new ordinance. While it had time to hire a consulting firm, RCS, to conduct a detailed analysis of existing rent control ordinances and rental registration fees throughout the state, the City Council failed to conduct even a single community townhall meeting, study session or outreach event to the community to solicit input from both renters and rental housing providers.
Further, the new rental registration program is estimated to cost the city between $740,000 to $920,000 annually. This is a huge amount for a city like Huntington Park, and now the city must come up with funding upfront to hire several new full-time city staff as well as purchase computer hardware and develop software for the rental registration. No discussion was held as to where these upfront funds would be found in the existing city budget nor programs that would need to be sacrificed in order to pay for it.
The City Council gave no thought whatsoever to the fact that by creating this new rent increase limitation, rental property owners would now have to increase rents on a consistent basis annually in order to preserve funds necessary to pay for eventual, unexpected major repairs and maintenance for these older properties. Prior to this ordinance owners would only need to increase rents at the time such repairs and maintenance were immediately required or otherwise as necessary. The City Council fails to understand the basic premise in any business that income must cover costs, or the business will cease to exist. Plumbers, electricians, carpenters, handymen are not free, and neither are new water heaters, furnaces, stoves, toilets, faucets, drywall, paint and lumber.
Due to enacting this new ordinance, if these major repairs and maintenance costs are incurred and owners are not able to cover them, they will be forced to sell their properties to developers that will turn them into luxury housing. Many of these properties are duplexes, triplexes and quadplexes that could easily be turned into McMansions for sale to homebuyers that will fuel gentrification. The larger properties will be converted to condominiums or luxury apartments, neither of which existing renters would be able to afford.
As soon as inflation exceeds the artificial cap set by the city of 3%, there will be a flood of owners rushing to sell their properties as they will no longer have any hope of covering existing repair and maintenance costs. Once sold, these properties will be gone from the city forever as naturally occurring affordable housing and gentrification will then take hold. Also, this will make overcrowding in the few remaining rental properties far worse. It will also cause more delays in regular maintenance leading to more habitability concerns.
Lastly, this ordinance will do nothing to keep existing renters from being evicted for non-payment of rent. Rent control does NOT decrease existing rents. Thus, this ordinance will not help anyone struggling to meet rent right now. Only a direct rental assistance program from the city to help qualified renters who are in financial need due to sudden illness, injury or job loss will provide direct and meaningful help. This would be a far better spend of limited city resources rather than attempting to start up an ineffective rent control and rental registry program.
There was concern by City Council members about existing habitability issues, but those do not require a rental registry to be addressed. The majority of cities already have their own health and safety department that can take complaints from renters and conduct investigations of them. Rather than a rental registry fee put added to the backs of all responsible mom-and-pop owners, it would make far more sense for the City to use existing staff to investigate specific complaints regarding habitability. With this ordinance the City Council is attempting to fix the wrong problem.
CALL TO ACTION
We urge all AAGLA members with properties in Huntington Park to immediately call and email the full City Council to express your outrage over how this ordinance was passed and what it will do to existing small, independent and responsible rental housing providers. Please include your personal stories of how you got into this small business and why you have tried to stay providing naturally occurring affordable housing to your neighbors rather than selling out to developers.
Please be aware that unless the City Council takes further action to revoke this new ordinance, it will go into effect on December 17, 2024.
This article is for informational purposes only. If you have any questions regarding your property or specific tenancies and the requirements of any local law changes described herein, please consult with an attorney.
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