Our neighbors in Downtown Los Angeles are leaving. A newly married couple was off to Nashville. A friendly man who livened up our community parties was suddenly gone without a farewell, headed for Houston, we later heard. Another lady, whose elderly mother was ill in Florida, left to take care of her.
All these departures are not a coincidence. The landlord in our rent-stabilized building has been offering “legacy tenants” five-figure buyouts to move away. It’s a practice called “cash for keys,” and it’s happening across Los Angeles. Here’s how it’s playing out in my building.
When I relocated to Los Angeles 14 years ago, I didn’t know rent-stabilization existed in the city. Downtown was frumpy then, but I found an apartment on Bunker Hill, across the street from the strange-hours job that brought me here. I didn’t plan to stay long—I intended to return to the East Coast, where I owned a place, as fast as my new boss would allow.
A few months after my arrival, one of my new neighbors clued me in, and, after calling the city, and learning about the city ordinance dating back to 1978, I discovered that my unit was one of 10 percent in this sprawling complex exempted from rent control. Life marched on, and years later, I moved with my boyfriend into a different, larger unit that had the coveted classification.
A few years ago, as the owners of this 50-year-old property embarked on a $76 million renovation, they counted on typical attrition to clear out the buildings. Residents died or just got tired of living in a construction zone, as apartments were gut-renovated and upgraded with open-plan living areas, better flooring, and nicer appliances. Rents on these places run upwards of a thousand dollars a month more.
The $2,400 a month we were paying for a two-bedroom isn’t cheap, but it is higher than the median citywide. Suddenly, it felt like we had a deal.
City laws still locked in yearly increases for new tenants at 3 to 4 percent. But the nurses, teachers, flight attendants, retired professors, and others like us who’d long called this place home would no longer be able to afford to live here were they just arriving.
As the numbers of legacy tenants began to dwindle, the deal-making amped up.
To entice us to “upgrade” into a new, pricier apartment, we were offered $35,000, cash that would cover the higher, market-rate rent for three years.
Was that money taxable, we asked? Yes, we were told, diminishing the offer even more.
We refused to bite. But at least several of our neighbors did.
“You’re not moving into a renovated unit?” The friendly construction manager would ask in the hallways.
We would answer: “Could you afford to pay $1,000 a month more in rent?”
Soon, other neighbors began to leave, cautioned not to discuss the terms of their departures. Now, each time we look out the window and see a renovation underway, we know someone else decided to take the money and run.
The city requires a landlord to offer a base-level sum to buy a tenant out of a rent-stabilized building.
The amount ranges from about $8,000 to $20,000, depending on your age, whether you have kids or are disabled, and length of residency. If they’re not tearing down the building, they can’t force you to move out, but they can offer more as an enticement. It’s up to you to accept the deal.
And it’s up to the renter to know the rules and their rights. Many do not.
To mitigate that, the city’s “cash for keys” ordinance mandates landlords inform renters of the rent-stabilization rules and to put any offers they make for buyouts in writing, while also listing their offers with the city.
But, housing rights advocate Larry Gross says, despite the new rules, landlords still gamble, push their luck, and count on tenant ignorance, hoping they can just scare the uninformed away—especially the poorest of the poor—with eviction notices.
Gross, who heads the Coalition for Economic Survival, says he’s heard of offers as high as $75,000.
To just about anyone, a sudden windfall of tens of thousands of dollars or more sounds like a winning Lotto ticket. But what’s left after taxes wouldn’t be enough to rent a new, market-rate place in Los Angeles for very long, even if you could find a two-bedroom for the $2,135 median cost.
Gross calls what’s happening an “economic ethnic cleansing.” New residents with higher incomes are moving in, along with amenities catering to them.
Now there are more grocery stores and restaurants and new transit lines and museums for everyone in Downtown. Many of my neighbors, however, won’t be here to enjoy it. We’re grateful for the laws that have made it possible for us to stay. We’ll stick it out as long as we can.