THE HUTCHINSON REPORT
Los Angeles, Inglewood, Santa Monica, Culver City, West Hollywood and a few other cities locally have some kind of rent cap measure in place.
Now the state has stepped into the rent battle enacting its version of a rent cap. There are lots of caveats and qualifiers in these measures, but at least they are there. But are they enough?
The controls are in place for two reasons. One is that housing activists, renter groups, tenant’s rights organizations and thousands of individuals fed up with escalating rents demanded city, county and state officials do something about the housing crisis.
Thousands of renters in L.A. County were being unceremoniously dumped from apartments and even homes after landlords, developers, and investors bought their buildings and then immediately jacked the rents up to the sky.
The tenant had 30 or 60 days to pay up or pack up and vacate. The howls of protests hit crescendo volumes. Angry protesters popped up everywhere with their ubiquitous “the rent is to damn high” signs and slogans. The officials then had little choice but to act.
The other reason they acted is because they could not take two steps throughout the city and county without seeing streets that in some paces looked like the streets of Calcutta. Rows of tents, shopping carts, blankets, tar paper enclosures and mountains of litter and refuse stacked up on countless corners, under freeway underpasses, in parks and at bus stops.
The Mad Max futuristic dysphonia scenes made L.A. and surrounding cities a national shame and disgrace.
So the rent caps are welcome. However, here are the continuing problems.
President Donald Trump’s much ballyhooed “opportunity zones” that supposedly create thousands of jobs and lots of new affordable housing do neither. Instead, they are tax dodges and profit grab schemes for rich investors and developers.
They can slap up the usual glitzy array of upscale townhouses and condos, and boutique businesses in a distressed area. The residents mostly blacks, Hispanics and the poor are then quickly given the boot from the area with few housing options other than the streets.
Rent control caps won’t halt this. That will take public investment by cities and counties in affordable housing, job creation and infrastructure expansion to provide the jobs for low- and moderate-income persons.
Rent caps also won’t deal with another problem. It’s not just that the rents are too damn high. It’s also that wages for many low-income workers are too damn low. The minimum wage has risen in the state.
However, so has the overall cost of living, which has matched or exceeded the increases. So for many, it’s a wash.
The National Low-Income Housing Coalition in a report in 2018 found that a full-time worker needs to make $22.96an hour on average to afford a modest two-bedroom rental. The national average renter’s hourly wage is $17.57 ― well above minimum wage yet below the threshold needed to afford most apartments.
The result: renters spend more than 30% of their income on housing costs, nationally. In Southern California, the percentage figure is much higher.
Then there’s the ancient war cry that developers shout to knock down rent cap laws and initiatives. That is rent control will kill any new construction since developers supposedly can’t make a buck off tossing up developments that cater to low- and moderate-income residents with their rents controlled.
This line has been totally debunked in countless surveys and studies. However, it’s still a powerful argument and one that has effectively stopped rent control efforts in many states and locales dead in its tracks. That scare tactic still works in other ways.
The California Legislature was careful not to call its rent control measure that. It called it “an anti-rent gouging” measure.
It is loaded with attached strings, exemptions and time limits, and conditions for applying the caps. All done with an eye on developers, and their threat to take their dollars and go home and not build.
Cities also have strings attached to their rent control measures that allow rents to rise to whatever price the market will bear if a tenant vacates a rent-controlled unit.
Then there’s the problem of ultra-tight lending standards for home purchases. This has shoved many working class and lower-income people into the rental market. With the supply of rental units at a premium and an endless number of individuals needing a rental, it has allowed apartment owners to soar rents to the skies.
There are also the cutbacks in federal rental assistance programs, a deeply hostile Trump administration to expanded rental assistance programs for the poor, and restrictive zoning laws that bar building multi-family homes in and increasing number of areas.
Rents caps in L.A., and now statewide, are a good thing. But it’s going to take much more than that to knock down L.A.’s outrageous rents.
Earl Ofari Hutchinson is an author and political analyst. He is the author of the forthcoming “The Gentrification Wars” (Amazon Kindle). He also is a weekly co-host of the Al Sharpton Show on Radio One and the host of the weekly Hutchinson Report on KPFK 90.7 FM Los Angeles and the Pacifica Network.
By Earl Ofari Hutchinson