Written By Iconic Investments
Legislative risk is an invisible and often overlooked threat for apartment building owners, as changes in laws and regulations - such as rent control measures, zoning restrictions, or tax policies - can significantly impact property values, operating costs, and rental income. Poorly crafted legislation deters investment, inflates compliance costs, and depresses property values, ultimately destabilizing the housing market and eroding the financial viability of property ownership.
A portion of this measure was successfully passed Wednesday, January 15th restricting evictions of unauthorized occupants or pets for tenants displaced by the fires. This broader motion seeks to allow tenants claiming to be affected by the recent wildfires, including those who lost jobs in the fire zones, to avoid eviction. There are no measures discussed for proper oversight or verification. Drawing parallels to the COVID-19 eviction moratorium, this policy could be exploited by tenants without legitimate need.
While it is true that some workers in areas like the Palisades and Altadena have lost jobs due to the fires, the impact is relatively minor compared to the overall workforce in Los Angeles. A more targeted approach, such as providing housing vouchers or direct assistance to those truly affected, would offer meaningful relief without imposing blanket penalties on property owners.
This raises critical concerns about the fate of scheduled rent increases set for February 1, 2025. Many landlords, myself included, rely on these increases to offset rising insurance premiums, utility costs, and inflation. Blocking these adjustments could severely impact landlords’ ability to manage expenses, refinance properties, and maintain stable loan terms.
This proposed policy is yet another example of the City Council placing the burden of the housing crisis on landlords. The City Council is currently deliberating implementing the Tenant Opportunity to Purchase Act (TOPA) program, which would require owners of rental occupied units to offer tenants the right-of-first-refusal when the owner decides to sell the building. This complex act would create a mechanism to ensure tenants are aware of their opportunity to purchase their building before it is sold to an outside buyer, and restrict sales to outside buyers by up to 420 days to provide tenants an opportunity to organize and seek financing. Additional recent proposed mandates, such as the costly all-electric building requirement, would further strain property owners and hinder our ability to adapt to economic pressures.
