CAL MATTERS--In the months until a new law takes effect, tenants rights advocates are scrambling to combat what they say is a wave of landlords exploiting a temporary loophole. Could it have been avoided?
Alex Espinoza isn’t sure what next month will look like for his family — where he’ll find work, if his wife will find a seasonal job like the one she has with a local taco truck, where they’ll buy groceries for their 2-year-old daughter and 10-month-old son.
All he knows is that in the next three weeks, they’re moving out of their two-bed, one bathroom Los Banos apartment that he’s lived in for the last five years, and moving in with his mother-in-law in Utah.
That’s because the new owners of the Canal Farm Gardens, a 50-plus unit complex of fourplexes, gave Espinoza and at least 30 of his neighbors a choice: Pay more than $1,200 a month for a newly renovated unit — a nearly 50 percent increase above the rent he pays now — or expect to be evicted.
If Espinoza’s Sept. 16 eviction notice had arrived after Dec. 31, his landlord would owe him a month’s rent in relocation assistance. And evicting the entire apartment complex would be a much more expensive proposition.
The mass evictions in this Central Valley town are among rising reports across California of landlords removing tenants from their properties ahead of a statewide change taking effect Jan. 1 — a law that will make evictions more costly and difficult for landlords.
“It’s not worth it to live here for that much,” said Espinoza, 26, who works making granite countertops. “They don’t give a shit about where we go. They’re too worried about their money.”
The new law, championed by Democratic Gov. Gavin Newsom as the strongest statewide renter protection in the country, caps annual rent increases at 5% plus inflation, while also forcing landlords to specify a legitimate reason for evicting tenants and to offer relocation assistance for no-fault evictions.
But in the interim months until the law kicks in, tenant rights groups are scrambling to combat what they say is a wave of landlords exploiting a temporary loophole that allows them to get rid of tenants now. That way they can raise rents beyond the rent cap, avoid having to pay any relocation help to displaced tenants, and simply remove tenants they view as problems without going through additional legal hurdles introduced by the new law.
It’s unclear whether the new owners of the Los Banos apartment complex were motivated by the new law; they did not return multiple messages seeking comment left with the complex manager and a real estate agent involved in the property sale.
But eviction reports are coming in elsewhere, too. “My office alone saw more than 40 separate buildings with no-cause (eviction) notices in the last three weeks,” said Elena Popp, co-founder of the Eviction Defense Network, which provides tenant legal services in Los Angeles County.
Her organization typically sees four or five mass evictions a week, she said, but since a prominent attorney in Southern California was quoted in the Los Angeles Times advising property owners to evict tenants as soon as possible, those numbers have soared.
The Los Angeles City Council passed a temporary eviction freeze Tuesday to prevent landlords from trying to skirt the new state law. Tenant groups are urging other localities to enact similar measures.
Lacking reliable, timely eviction data, neither policymakers nor renters groups know precisely how many more evictions are occurring ahead of the law taking effect.
Landlord groups and some supporters of the law argue that the vast majority of landlords aren’t trying to evade it, and that the industry shouldn’t be demonized for the rogue actions of what they say are a few.
“While I wish we could wave a magic wand when it comes to what owners are doing now, I think we have seen some attorneys outside of (our organization) give advice about terminating tenancies to avoid the application of (the law),” said Debra Carlton, vice president of public affairs for the California Apartment Association. “And we have commented that this is unconscionable.”
But others in the industry expect an uptick in evictions before Jan. 1.
“It somewhat reminds me of the Obama administration and everything they were trying to do to restrict guns,” said Steve Hrdlicka, a lawyer who specializes in evictions and debt collection in the Central Valley. “And people who would not have normally thought about buying a weapon thought this right is being taken away from me — and gun sales skyrocketed.”
Landlords fear more cumbersome evictions
In California now, landlords can evict tenants at the end of their lease without specifying any reason, as long as they give advance notice of 60 days, or 30 days if the tenant has lived there less than a year.
Come January, landlords can legally remove renters from their property only if they have a “just cause” — such as if renters violate the terms of a lease, fail to pay rent or cause a nuisance to neighbors.
Canal Farm Gardens is a 50-plus units apartment complex in Los Banos under renovation. A renter who now pays $850 a month for a two-bedroom will see the rent rise to more than $1200 — or face eviction. Photo by Anne Wernikoff for CalMatters
At Canal Farm Gardens, every unit in the apartment complex is undergoing a major renovation, which qualifies as a circumstance under which even the new rules would allow “no-fault” evictions.
“When you’re doing a renovation, it’s very costly,” said Suzie Lucero, the apartment manager on the property for 25 years. “I think they’re worth the price they’re going for.”
But a key provision in the new law forces landlords to provide one month’s worth of rent as relocation help to those displaced by renovations or other “no-fault” evictions, such as when a landlord moves in with a family member. That’s a major expenditure when evicting 30-plus units.
Jennifer Tran, a lawyer for Central California Legal Services, said no tenant that she’s been in contact with had been offered relocation assistance or had their last month of rent waived.
Tenant groups contend that many landlords are simply profit-maximizing: evicting tenants who are paying rents below what the market can bear while they still can.
Hrdlicka, the Central Valley landlord lawyer, said that while he’s heard some stories of landlords pursuing that strategy, he doesn’t believe the practice is widespread. But he acknowledged that he has advised some clients to initiate evictions now, before they might have to prove a tenant’s bad behavior in court.
“The bottom line is that a very effective tool is being taken away from (landlords),” said Hrdlicka, who cautioned that his clients can no longer afford to take a wait-and-see approach with problematic tenants who could cause trouble down the road. “Landlords in my experience do not serve terminations for no reason. There’s always a reason.”
Could these evictions have been avoided?
Popp, the eviction defense attorney in Los Angeles, praised state lawmakers for passing the new law, which advocates call the most significant statewide tenant-protection legislation in decades.
But she expressed frustration that more wasn’t done to stop what she says was eminently foreseeable: some landlords would try to get ahead of the law any way they could.
“They should have just had this go into effect immediately, and then we wouldn’t have these emergency problems,” said Popp. “Did the state Legislature make this bill strong enough? Absolutely not. Did we need this bill? Absolutely yes.”
Assemblyman David Chiu, the San Francisco Democrat who was the bill’s lead author, said having the bill take effect immediately was neither politically nor practically realistic.
“Urgency measures” — state laws that go into effect as soon as the governor signs them — require a two-thirds vote in California’s Legislature. The Assembly approved Chiu’s bill with 48 votes, five shy of that supermajority threshold.
“This behavior of predatory no-fault evictions has been happening for decades with no transparency,” said Chiu. “And that’s exactly why we did this bill, and come January 1st, 8 million Californians will no longer be exploited in this way.”
The new law does aim to block landlords from raising rents beyond the new cap before the new law takes effect: Landlords can still hike rents as much as they please before the new year, but if they exceed the cap, they’ll just have to reset them back to March 2019 levels once the new law kicks in.
“We can’t legislate away every bad actor,” said Chiu.
Some landlord groups argue that the Legislature could have deterred some of the behavior happening now if it the new law allowed “banking” — allowing them to raise rents above the allowable annual increase if they didn’t raise them to the full cap the previous year.
In the meantime, Chiu’s office is counting down the days until November 2 — the last day it says landlords could legally issue 60-day eviction notices unaffected by the new law’s constraints.
A boon to 2020 rent control initiative?
Other cities may join Los Angeles in passing temporary eviction freezes, but renters shouldn’t look to the state.
When asked if the Newsom administration was planning any statewide emergency action to halt evictions, a spokesman for the governor said in an email:
“These kinds of unfair evictions are exactly why California passes AB 1482 and the very situations it will protect against. Tenants have rights and access to legal services. They should contact local legal aid clinics if they believe they are being illegally or unfairly targeted or evicted.”
One reason the rent-cap/just-eviction measure passed at all was the threat of a looming 2020 ballot initiative that would allow cities to impose tighter rent controls than what the new state law allows. The California Apartment Association, the largest interest group for major landlords in the Capitol, withdrew opposition to the bill at least partly so it could argue the 2020 initiative was no longer necessary.
Now, amid reports of an eviction rush, the sponsor of that initiative said it’s already garnered more than the 700,000 signatures needed to place it on the November 2020 ballot — and that the 74,000 signatures collected last week marked a more than 60 % increase over the previous week.
“By and large, (the new law) was sold as a solution to the issue of housing affordability. I was surprised that it was proven so quickly it was not,” said Michael Weinstein, president of the Los Angeles-based AIDS Healthcare Foundation. The foundation’s affiliated housing group Housing is a Human Right opposed the law, arguing a 5%-plus-inflation cap was too weak.
But Carlton, lobbyist for the California Apartment Association, says she doesn’t think anecdotal reports of eviction will matter: A previous version of that initiative, also sponsored by Weinstein, lost by nearly 20 points last year.
“We’ve got to find a better solution,” said Carlton. “It can’t just be about pointing the finger at these landlords, it’s got to be about finding the market balance with new construction.”
Back at the Canal Farm Gardens in Los Banos, apartment manager Lucero says she’s seen a steady stream of applicants for the newly renovated apartments, with many prospective renters from the Bay Area expressing interest in units going for $1,295 a month.
Los Banos is about 80 miles southeast of San Jose, where the median two-bedroom rents for nearly $2,700.
The apartment complex owners did allow intake workers from various safety net agencies to spend a day trying to help relocate residents, many of whom are farmworkers or have other low-wage jobs.
Sargeez Teimoorshahi, program director at the social services nonprofit Turning Point, said that despite efforts to connect evicted residents with county funds for security deposits and extended motel stays, he expects some will be unable to find stable homes.
“Unfortunately without available affordable housing, that will lead to some families becoming homeless,” said Teimoorshahi.
(Matt Levin writes for CalMatters … where this piece was first posted.)