One of the largest expenditures for middle and lower income people is housing, and in and around Los Angeles the cost of housing in many cases is outpacing any rise in wages.
Cities have the ability to implement strategies to curtail rents in multi-use housing, although not everyone is a fan of such tactics.
As a Westside city, Culver City is beginning to experience the boon of the high-tech explosion of “Silicon Beach” located west of Sepulveda Boulevard but in some instances the higher rents associated with other cities as well.
Recently the News asked the seven candidates seeking the three open seats on the city council for their thoughts regarding rent stabilization in Culver City. Currently, the city has no policy regarding municipal control on rental costs.
The council contenders offered disparate views on what some liken to rent control, underscoring the complexity of the topic. And most touched on the topic of affordable housing, an area in which Culver City lags far behind other cities, according to a 2011 state report.
“I do not believe that rent stabilization should be imposed in Culver City, now or in the future. If we impose rent stabilization, it will negatively affect the property values not only of multi-family dwellings but single-family dwellings as well,” said Jay Garacochea, a security consultant and former Culver City police officer. “The value of an income-producing property is largely determined by the rental income. By imposing such an ordinance, we will inevitably see rental properties deteriorate and become eye sores as is common in Los Angeles.”
Attorney Marcus Tiggs does not support rent stabilization but agrees that there are “elements of traditional rent stabilization ordinances worthy of serious community discussions.
“The use of rent control, in my view, can adversely impact property rights of owners while not providing any guarantee of affordable housing in Culver City. Rent control artificially restrains rents, thus having a secondary effect of reducing the incentive of owners to invest in their properties or prospective owners to buy income property in Culver City,” Tiggs argued.
Daniel Lee offered a different opinion.
“Culver City should definitely extend its rental assistance program. With 80-plus children in the Culver City Unified School District identified as homeless or without stable housing it is our duty to provide for the less fortunate in the community. The best way to do this is building more affordable housing,” Lee said. “Working with regional partners, we can find places to jointly build affordable houses for individuals and families. This is the best means to collaboratively address the rising rents in the area.”
Indeed, rents are on the uptick. “Rents in Los Angeles increased by 8.3% in 2015, driven by job and wage growth across the state and country. A two- bedroom apartment in Los Angeles now costs roughly $2, 400,” noted Andrew Woo of San Francisco based Apartment List, an apartment rental online service.
A state law known as the Costa –Hawkins Act prohibits exempts rental units built after Feb. 1 1995 from rent control protections, noted Councilwoman Meghan Sahli-Wells. That is one impediment to a rent stabilization effort because not all renters would benefit.
“We’ve never seen a real estate market like this that is driving housing prices so high,” said Sahli-Wells. I’ve heard from people who have been in Culver City all their lives who are leaving Culver City because they can’t afford the higher rents.
“Even if we could create some kind of rent stabilization, it would not cover everyone and it might give impetus to some landlords to tear down their buildings and build newer, larger ones with higher rents,” she said.
If limits are placed on how much a landlord can charge, property owners will see a reduction in their income and this could restrict their ability to re-invest in the property and maintain it properly, according to Garacochea. “Culver City has seen an amazing turn around over the past two decades. It has become a destination for renters as well as homeowners. With downtown thriving, the last thing we need is to see rental properties become neglected and develop a bad reputation,” he argued.
“The rise in rents is part of the larger problem facing Los Angeles County in general, and the Westside in particular, which is the lack of affordable housing,” said Planning Commissioner Scott Wyant. “Far, far more people want to live on the Westside than there is housing to accommodate them all.
“In Culver City, almost 29,000 people commute to Culver City for work. Even if money were no object, Culver City cannot possibly be home to all those people — most of whom would love to live here. So there’s tremendous competition for any housing in town — for rent or for purchase,” Wyant said.
Sahli-Wells said what she called “the classic form of rent control” found in cities such as Los Angeles, Beverly Hills and Santa Monica would not work in Culver City because of the state law. “To be quite honest, I don’t know what the answer is,” she admitted. “It’s a matter of a lack of affordable housing but it’s become more than that now… it’s a middle-class problem too.”
Lee said city officials should be making certain that affordable housing is available so that the “families that have deep roots here in Culver City who just happen to be renters can stay in the community that they know and love.”
Tiggs said the topic of rent stabilization in Culver City is not a new one. In the 1980s, according to Tiggs, city leaders created Landlord Tenant Mediation Board to tackle topics such as rent increases.
“In my view, because the topic of rent stabilization is very controversial, I would support first a discussion on enhancing the duties and mission of the city’s Landlord Tenant Mediation Board,” he continued. “Once the board’s duties are enhanced it would be healthy to start the discussion on what policy changes, if any, are appropriate. The key is balancing the rights of all stakeholders.”
The board has been criticized as being toothless without any really power to enforce any true verdicts that it votes on and Tiggs has heard the same thing.
“In speaking to some renters, who are about 50% of our city, I am hearing frustration that the board has no teeth and equally important, other issues such as deferred building maintenance, nuisances, etc. are not part of the domain of the board,” he said.
Wyant cited a report from the California’s Legislative Analyst’s office’s http://www.lao.ca.gov/Publications/Report/3345 that was recently published that says rent stabilization is not the answer to the housing and affordability crisis. “Rent stabilization ordinances help a few of those who are currently renting — and the overall affordable housing problem worse,” he said. “As a council person, I would be happy to consider any proposal that can solve this problem. I haven’t seen one yet — and if there was any easy answer, I believe that our current council would have already adopted it.”
The study suggests an increase in private home building in California’s urban coastal regions as a possible remedy to the housing crisis. While it does not specifically say rent control or stabilization is not viable answers to the high cost of housing, it does suggest how other factors can impact the effectiveness of rent stabilization.
“Proposals to expand rent control often focus on two broad changes: (1) expanding the number of housing units covered—by applying controls to newer properties or enacting controls in locations that currently lack them—and (2) prohibiting landlords from resetting rents to market rates for new tenants. Neither of these changes would increase the supply of housing and, in fact, likely would discourage new construction,” the report states.
Sahli-Wells said the council is planning to hold a town hall workshop to gather ideas about improving the landlord-tenant board at a future date.
Candidates Göran Eriksson and Thomas Small did not respond to inquiries for comment on this story.
Gary Walker contributed to this story.