Copyright KABC-TV
LOS ANGELES (CNS) -- The Los Angeles City Council on Wednesday is expected to consider a proposal that aims to overhaul the Rent Stabilization Ordinance with a new formula that would set allowable increases for roughly 650,000 units at 3% and remove additional charges for electricity and gas -- the most substantive changes to the policy in more than four decades. The ordinance, also known as RSO, regulates rents for apartments built on or before Oct. 1, 1978. City officials have recently discussed potential changes to the policy that they say could assist renters who spend a significant amount of their income on rent while balancing the needs of housing providers amid escalating costs. The council will consider an option endorsed by the five-member Housing and Homelessness Committee in a 3-2 vote last week. Councilwoman Nithya Raman, chair of that committee, called for a 0% floor and 3% ceiling on annual rent hikes for buildings regulated by the RSO. The formula used to set rents would consider inflation, calculating 60% of the Consumer Price Index. Additionally, 1%-to-2% rent increases allowable under the current rules for landlords who cover gas or electricity would be eliminated. The changes would also prohibit additional rent hikes for renters with extra dependents. Raman called for more funding to increase dollars for repairs and rehabilitation measures to help mom-and-pop landlords who own between 2-10 units. The funding would come from Measure ULA and Los Angeles County Affordable Housing Solutions Agency, according to the councilwoman. The council may decide to consider the Housing Department's proposal, based on a city-commissioned Economic Roundtable analysis. This option calls for a 2% floor and a 5% ceiling on annual RSO increases, using a new inflation formula that considers all consumer goods except housing, according to a city report. "I imagine that this conversation will be held very robustly in full council as well," Raman said during the committee's Nov. 5 meeting. "My perspective on this issue, which is fanatically focused on affordability in L.A., is the lens through which I view all of my work. I understand that perspective is not totally shared by the entire council, and I will look forward to the discussion there." Council members Bob Blumenfield and Tim McOsker opposed Raman's plan. Blumenfield had sought what was referred to as "rent banking," which is a way for landlords who choose not to raise rent in a given year to apply an increase in later years with certain limits. "Banking was a really good idea that the department came up with, and conceptually for me that's really important," Blumenfield said. "We need to be smoothing the impacts -- but banking allows us to basically keep the actual cost increase to zero." Both council members supported the Housing Department's proposal. Tenant advocates and housing providers are expected to rally at City Hall on Wednesday and provide comments to urge elected officials for or against changes to the RSO. Proponents of the policy say the changes will not impact new housing. Some landlords refute that claim, noting that any new construction that replaces RSO units will be subject to these strict new rules.'' Landlords say the updated formula will make it more expensive to provide housing, citing rising costs in the city such as utility rate increases exceeding the CPI, rising trash and inspection fees, and higher minimum wage increases affecting their operations, among other costs. Landlords also cite an increase in insurance premiums, as well as the cost of maintaining buildings. "This hypocrisy is driving landlords to the breaking point," said Irma Vargas, an LA-based property manager who works with mom-and-pop landlords who rent condo units and single-family homes. "The city demands compliance with mandates while barring housing providers from raising rents accordingly. Who is supposed to pay for these city-imposed costs? The answer is increasingly becoming nobody, because property owners simply can't afford to stay in business." Meanwhile, members of the Alliance of Californians for Community Empowerment are expected to conduct a news conference outside City Hall at 8:15 a.m. Wednesday to advocate for Raman's proposal.
