The city of Los Angeles is gearing up help pay rent increases faced by qualifying tenants through the end of the year.
Tenants who earn less than the area’s median income and whose rent is hiked more than 9 percent will be eligible for financial assistance, under an “Emergency Renters Relief” program approved unanimously by the Los Angeles City Council today.
“Far too many are on the precipice of becoming homeless in the face of unscrupulous rent gouging,” Los Angeles City Councilmember Paul Koretz said in a statement after the vote.
To qualify, tenants must earn 80 percent or less of the area median income; that’s $58,450 for a one-person household and $66,800 for a two-person household, for example. The city will cover the amount above 8 or 9 percent, and the subsidies will be paid directly to landlords. (The housing department will land on the exact threshold before implementation).
Paying landlords directly was a provision required by the city attorney, says a spokesperson for Los Angeles City Councilmember Nury Martinez, who initiated the program.
“We’re not in love with that provision,” says spokesperson Rick Coca. “We don’t like rewarding bad actors, but the alternative is a whole lot worse, and people could end up in the streets.”
The program is aimed at helping tenants before California’s rent control law, known as Assembly Bill 1482, takes effect January 1.
The state law will cap rent increases at buildings not already under local rent control at 5 percent, plus the local rate of inflation. In Los Angeles, that will be 8 or 9 percent, according to the Housing and Community Investment Department
(The city’s rent stabilization ordinance, which caps rents at 4 percent, will continue to apply to buildings constructed prior to 1978. The state law will cover buildings that opened between 1978 and 2015).
The city’s Housing and Community Investment department predicts most tenants will need rent subsidies for two or three months “at most,” because rent increases of 10 percent or more require a 60-day notice. The city is setting aside $3 million for the program.
“Many of these increases are predicated on the avoidance of rent limitations imposed by AB 1482 on January 1,” says a report from Anna Oretega, director of enforcement operations for the Housing and Community Investment Department.
“Gentrification and rising rents provide an incentive to landlords to evict long-term, lower-income tenants, in order to raise rents and attract wealthier tenants, particularly in advance of January 1,” the report says. “Forced relocation and economic displacement impact tenants’ housing stability, both short and long-term, as well as the stability of our communities.”
Martinez’s office gave an example of how the program might work. If a qualifying tenant’s rent is increased 50 percent, from $3,334 to $5,001, they would be eligible for a monthly subsidy of $1,367. That would cover 41 percent of the increase (after 9 percent is subtracted).
It’s unclear when the rental subsidy program will go into effect. A spokesperson for Martinez says the framework approved today is designed to get it up and running as quickly as possible. Once it is running, the last day to apply will be December 31.
Martinez had initially sought to place a freeze on all rental rate increases in the city before the state rent control law goes into effect. But the city attorney’s office said that would be illegal under California’s Costa Hawkins Act.
In another move to help renters before January 1, the City Council passed an emergency moratorium last week to bar property owners from evicting tenants—unless they have “cause.” That moratorium is now in effect.