CORRUPTION WATCH-The County of Los Angeles has revealed another aspect of the Garcetti’s housing fraud.
Since he took office in 2001, he has known that we can increase the amount of rent-controlled housing. As the County’s rent-controlled ordinance shows, apartments constructed prior to 1995 may be rent-controlled.1995 -- not 1979 -- is the actual cutoff date for rent-controlled housing under Costa Hawkins.
Garcetti and his propagandists at the LA Timesare fond of saying that “lack of construction” caused the homeless crisis, but that is false. Because rent-controlled housing is not limited to pre-1979 apartments, the city could have amended its rent stabilization ordinance to add 16 years of rent-controlled housing.
Although the city passed its rent control ordinance in 1979, it has never been stuck with 1979 as the cut off year for RSO units. The city could have increased RSO units by moving the date up each year. In 2002, the cutoff date could have become 1980, and in 2003, it could have been 1981, etc. In fact, in 2018, the 1994 constructed housing could be the newest addition to our supply of RSO units. This process would have slowly brought all the apartments constructed between 1979 and 1995 under rent control. If we had done that, we would have no homeless crisis.
A Good Time to Rehab Rent Controlled Housing
Because placing property under rent control for the greater good of the community against the owners’ wishes is not totally equitable, the city could have helped the owners upgrade their apartments as they transitioned into rent control. Let’s remember that one function of government under the U.S. Constitution is to provide for the general welfare. If we are wise enough to stabilize the housing market, we should also be fair enough not to burden only the apartment owners.
The city could administer programs to relieve the owners of the financial burden for fumigation as well as earthquake retro-fitting and upgrading of plumbing, electrical, re-roofing, etc. The city itself would not have to bear the entire financial burden as there are always state and federal programs. Federal programs will pay for apartment owners to make their apartments disabled accessible. A city government committed to the welfare of the citizens and not devoted aggrandizing the profits of a few billionaires would have established a department to find and maintain these financial streams.
Rehabbing and Adding to the RSO Units Benefit the General Economy
Another benefit to rehabbing RSO apartment houses is that these up-grade jobs are oriented to local contractors rather than international construction corporations. The rehab money would have flowed into our middle-class contractors. Because local middle-class families support other local businesses, this rehabbing would have directed money to the part of the economy which is best for Angelenos. It’s called the Multiplier Effect. It does not help Angelenos if the billionaire contractors buy more homes in St. Moritz.
Sustained Programs are Good for the Economy
Since the transition of the apartments built between 1979 and 1995 into RSO units would have proceeded slowly, owners, repair companies, and government funding could establish reasonable systems to process thousands of buildings. Sound economics favor reliable additions of cash to the economy.
The Corollary to Transitioning Housing into Rent Control -- Stop Tearing down Pre-1979 Rent-Controlled Housing
The Costa-Hawkins Bill did not limit the city’s ability to establish its own zoning and density laws. One factor is known as FARs (floor to area ratio). The city could have passed an ordinance which reduced the FAR of any rent-controlled building by 50% to 66% percent if the RSO units were destroyed under the Ellis Act.
For example, if a developer purchased a rent-controlled apartment with 12 units, he could construct only six units or maybe only four units. That would kill the developer’s incentive to focus on rent-controlled properties which are cheaper to buy than market rate apartments. That is why Garcetti has targeted poor people’s homes and why he has been having women, children, the elderly and the mentally disabled thrown onto LA’s streets – all so his buddies can buy up the cheapest properties. As everyone knows, the game is to buy low and sell high. Thus, when Garcetti made certain that developers could destroy RSO units to construct market-rate housing, he knew that he was maximizing the profits of billionaires on the backs of LA’s poor. Reducing future FARs of destroyed RSO units, however, would have made rent-controlled properties undesirable for re-development.
What Would LA Be like Without Garcetti’s Attack on the Poor?
(1) There would be no homeless crisis.
Rather than suffering a worse and worse homeless problem each year, LA would have a plethora of reasonably priced apartments in good condition. We would have a nice sub-economy featuring the rehabbing of housing transitioning to rent control. New construction would have been based on a realistic assessment of what Angelenos wanted. School teachers, firemen, police, office workers could afford to live in the city rather than moving miles away and then commuting.
(2) There would be less traffic congestion.
Without the densification of mixed-use projects, LA’s traffic would not have grown to the worst in the world. More importantly, developers would have been forced to construct more garden office complexes on the periphery as they could not destroy the old areas in The Basin. Office construction away from the core would have shifted traffic patterns.
(3) Family Millennials would be staying.
Another factor driving up the cost of LA homes is that under Garcetti every project is guaranteed unanimous approval. In LA, zoning isn’t with worth squat. Any family that wants a home has to compete with the developer. Then, the high price the developer pays raises the comps for all nearby properties. After a while, homes are worth their Developer Value which is far above what a Family Millennial can pay.
The Sad Conclusion
If LA had paid attention to the quality of life and stabilized both rent-controlled housing by adding the housing constructed between 1979 and 1995, and if we had stopped jacking up the costs of homes based on Developer Value rather than Living Space value, Los Angeles would not be in decline.
Since Garcetti took office in 2001, LA has gone from the nation’s most desirable urban area to the least desirable urban area. This is due to cold hearted predatory greed in which the only thing that has mattered is maximizing the profits of developers so that they would in turn support Garcetti for President.
(Richard Lee Abrams is a Los Angeles attorney and a CityWatch contributor. He can be reached at: Rickleeabrams@Gmail.com. Abrams’ views are his own and do not necessarily reflect the views of CityWatch.) Edited for CityWatch by Linda Abrams.