Los Angeles is the least affordable rental market in the nation, according to a UCLA analysis.
The actual rents often are outpaced by New York and San Francisco but median individual income — $27,749 in L.A. County, according to the U.S. Census — makes it extremely difficult for everyday Angelenos to get shelter.
A Harvard report over the summer found that 57 percent of L.A. renters were “cost-burdened,” and UCLA researchers say that 54 percent of low-income renters spend half or more of their pay on their housing.
That's a tremendous strain on the region's economy. The U.S. Department of Housing and Urban Development says that paying more than 30 percent of your income toward rent creates serious hardship.
Los Angeles' elected leaders this year started to tackle the housing crisis, proposing to crack down on landlords who convert apartments to condos, and to set up a $50 million fund “to create, preserve and retrofit affordable housing in the city,” according to the office of Mayor Eric Garcetti.
But, as is often the case with L.A. city leaders, the big picture was out of focus.
You see, while they were tackling that cost crisis, another one had been looming for years. The two crises are likely to clash in the coming months.
The L.A. City Council this week voted unanimously to force the landlords of about 13,500 pre-1976 apartment buildings made of wood or concrete to begin retrofitting so the structures can avoid collapse or life-threatening damage during a major earthquake. The city attorney will draft language that will require final council approval of the law.
“We need to address the threat of earthquake,” says Larry Gross, executive director of the renters rights group Coalition for Economic Survival, “but we don't want to create an economic earthquake for a tenant who won't be able to afford this increase and will likely be displaced from their home.”
It could cost up to $130,000 to extensively inspect — including partially dismantling — and then strengthen each building. A landlord's group puts the cost at about $5,000 for a single unit. Under the approved ordinance, owners can pass the entire cost on to renters over a five- to 10-year span.
Renters could see rent hikes as high as $75 a month in the big city with the nation's worst rental crisis.
City leaders decided to mandate now and worry about the rent problem later.
Landlords and renters' advocates seem to agree that $75 is too much. They're pushing and pulling city leaders for a better deal. A 50/50 cost split, whereby landlords would pay about half of the price of the retrofits and tenants the other half, or as much as $38 a month extra, is now on the table.
Jim Clarke, executive vice president of the Apartment Association of Greater Los Angeles, which represents landlords, says the organization opposes a $75-a-month rent hike for seismic retrofitting.
“There's no way we could pass through $75 a month,” he said. “It would drive out our customers.”
The group might support a $38 ceiling, but it's holding out for other “concessions,” Clarke said, such as a reduction by the city in landlord permit and license fees, plus possible county rebates on property taxes. The Legislature this month already passed a bill that would give landlords a 30 percent tax break on the cost of retrofit projects.
This soft stance is coming from a landlord group that wanted to pass the cost of water bills on to tenants in rent-controlled buildings as a way to reduce water consumption during the drought.
It sounds like the powerful group is ready to make a deal. You'd probably never imagine renters-rights advocates and landlords singing “Kumbaya,” but here we are.
Gross, of the Coalition for Economic Survival, says that while this is the worst time to allow citywide rent increases, reality suggests $38 is a good compromise.
“Clearly, given the situation where tenants in this city are now mostly paying unaffordable rents, and most are paying upward of 50 percent of their income to rent, we don't like the idea of one more dollar in rent,” Gross says. “The fact is that right now the current law states tenants could be hit with upward of a $75 increase and would have to bear the burden of the retrofit costs. One hundred percent could be passed on. That's a fact.”
Based on the $38 monthly maximum, the average L.A. tenant would see an increase more like $18, for a range of $1,800 to $3,800 in hikes if somebody rents in L.A. for a decade.
“This proposal definitely strives to establish some degree of equity in regards to who pays for the costs,” Gross says. “We're doing everything we can to try to soften the blow, because we've seen the blow coming.”
He's referring to the fact that the Los Angeles City Council and Mayor's Office have been warned for decades that these old buildings were potential mass killers yet they did nothing.
L.A. Weekly previously reported that the Los Angeles Department of Building and Safety led a key political fight in Sacramento and locally against calls to shore up pre-1976 concrete buildings known as “nonductile,” which have collapsed and claimed lives globally during big quakes. Instead, after the deadly Northridge earthquake of 1994, the City Council encouraged building owners to voluntarily upgrade.
Ever since, city officials have been slow to deal with our disaster-to-be. Yet earthquake experts say Southern California's next Big One, with a potential magnitude of 7.8 or larger, is a matter of when, not if.
In stark contrast to L.A., San Francisco city leaders got moving 10 years ago, holding extensive hearings to come up with a system for identifying each dangerous older building, creating a plan for in-depth inspection and retrofitting and, finally, getting local buy-in on deciding who should pay.
San Francisco landlords have begun retrofitting as many as 3,000 older soft-story, wood-frame buildings at a cost of $60,000 to $130,000 per structure.
Most of that expense is passed to renters via rent increases ranging from $8 to $50 a month, but the blow is softer there since median individual income, at $48,486, is almost twice L.A. County's.
In January, UC Berkeley researchers caused a major stir when they identified, by address, 1,451 “pre-1976 building code … nonductile concrete buildings” in L.A. Some could be prone to collapse in a massive quake. They include malls, hospitals, schools and apartment buildings. Co-author Jonathan Stewart, a professor in UCLA's Department of Civil and Environmental Engineering, says 5 percent could collapse, causing widespread death and paralyzing L.A.
“Experiences have shown from these previous earthquakes that approximately 5 percent or so of buildings that meet that description may collapse when subjected to strong shaking,” he told the Weekly previously.
“It seems like a small percentage, but the number of buildings is large. If we get a large earthquake in L.A., it could be a devastating impact.”
One L.A. councilman believes his poorer Eastside district can't bear another rent increase. Gil Cedillo wants a better deal for renters.
“My office, along with HCID [Los Angeles Housing and Community Investment Department] and the Department of Building and Safety, are seeking additional funding streams in order to lessen the burden off this mandate on both landlord and tenant,” he says. “Until we have a clearer picture as to what resources are at our disposal, we cannot say in definite what the split will look like.”
Let's hope City Hall figures it out before the Big One strikes.