The council voted 6 to 3 in favor of a mandate that would require owners of multi-family buildings with four or more units to compensate tenants when they hike rents more than 10 percent.
Tenants who choose to move out instead of paying the rent increase would get between $2,706 and $4,500, based on the size of units.
“Some people have called this tenant welfare,” said Councilmember Lena Gonzalez. “I would call this relief and improvement of quality of life.”
Before the mandate is implemented, the city attorney will draft a more fleshed-out ordinance that will come back to the council for final approval.
“I’m not 100 percent comfortable with everything [in the proposal], and I don’t have to be,” said Councilmember Al Austin. “The details are going to be worked out over the next several weeks or months.”
In Long Beach, the cost of rent has spiked 25.8 percent over the past five years (to an average of $1,418 for a one bedroom in February) as vacancy rates took a dive, leaving renters with fewer housing options. And, in an indication that rents are being hiked and tenants evicted, more than 350 older rental properties were sold and rehabbed last year, according to a report from the city’s development services department.
Downtown Long Beach, the neighborhood that Gonazlez represents, has boomed over the past several years, displacing “so many of my residents,” she said. “It makes me not sleep at tonight.”
Gonazlez also responded pointedly to building owners who told the council that they charge rents that are below market rate, arguing that having to make relocation payments would be “ridiculous,” unfair, and a financial hardship.
“There were a lot of landlords who said they’re keeping their rents low. If that’s the case, guess what?” Gonzalez said. “This ordinance [would] not apply to you.”
Under the proposal, tenants would be eligible for relocation benefits if their rent is increased 10 percent or more in a 12-month period, or if they’re evicted in order for a building to be rehabbed.
The amounts would vary based on the number of bedrooms in a unit: $2,706 for a studio, $3,235 for a one-bedroom, $4,185 for a two-bedroom, and $4,500 for three-bedrooms or more. (Those are the equivalent of two months worth of average rent on the Department of Housing and Urban Development’s Fair Market Rents matrix.)
Seniors and tenants with disabilities would get an additional $2,000, but landlords would not be responsible for those payments, as city officials plan to find other funding options.
Among the 75 property owners, real estate investors, residents, and renters who signed up to speak at Tuesday’s hearing, spilling out into an overflow room in City Hall, were multiple landlords who told stories of how they scrimped and saved to buy their properties and now rely on rental income for their retirement.
“Moving is hard. But that burden should not placed on owners’ backs to supplement that move,” said Johanna Cunningham, founder of National Short-Term Rentals, which advocates for property owners who rent out their dwellings on short term rental platforms like Airbnb.
“It costs a lot of money, when a tenant moves out. To fill that vacancy is already a huge monetary loss,” said Marlena Baldonado, a landlord and Long Beach real estate agent. “To impose an additional penalty on top of that, my family would suffer.”
But Councilmember Jeannine Pearce said most renters don’t even have nest eggs.
“We are doing the right thing tonight,” she said.
Tuesday night’s hearing also ignited a debate about rent control, safety nets, and the need for more housing in general.
“Lots of folks said, ‘Build more housing,’” said Mayor Robert Garcia. “I agree.”
However, he said, when local leaders propose or support homeless shelters, affordable housing projects, or tall apartment buildings, they are often met with resistance.
“If we’re not going to allow the creation of more affordable housing, which many neighborhoods don’t want, that leaves us to try a multi-faceted approach,” he said.