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Los Angeles officials decided that renters and landlords will equally share the cost of retrofitting the city’s residential building stock in anticipation of a major earthquake. City officials and tenant advocates are calling the deal a successful compromise as owners could have passed 100 percent of the cost on to tenants without the new ordinance.
Last year, Los Angeles passed the strictest mandatory retrofit laws in the nation, requiring buildings owners meet new standards to protect citizens during an earthquake.
But they didn’t set up a plan to pay for it until now, in what Mayor Eric Garcetti called a “fair outcome for all” in a city filled with rent-controlled units.
“Keeping this city safe is my top priority,” Garcetti said. “Last fall, we passed a historic measure to protect our most vulnerable buildings from the next big earthquake. City council also protected tenants from absorbing too much of the cost of these life-saving improvements.”
The ordinance ensures that the cost will be split equally and caps the amount that landlords can increase rent to pay for retrofits at $38 per month. If the new ordinance had not been approved, property owners could have raised rents by as much as $75 per month. Landlords can adjust the rent if new funding becomes available to the city.
Councilman Gil Cedillo, 1st District, said the compromise came after more than a year of public meetings with landlord and tenant advocate groups.
“From the beginning, I stated that the entire burden to pay for the retrofit would not fall on tenants alone,” Cedillo said. “We want to reduce the damage potential for future earthquakes. This ordinance does just that while preserving affordable housing in our city at the same time.”
Since Los Angeles has one of the highest rent rates in the nation, advocates worried that the “pass through” to renters would be too much to handle.
Seventy-eight percent of tenants in the areas where the soft-story buildings are located earn incomes that fall at or below the threshold for “low income households.”
Los Angeles currently has the largest number of rent-burdened households in the nation. Fifty-nine percent of renters are considered “rent burdened,” meaning they spend more than 30 percent of their income on rent, and 33 percent are “severely rent-burdened,” meaning they spend more than 50 percent of their income on rent.
“….The potential to overburden these low-income tenants and compromise their ability to afford their rent is significant,” a report from the city read.
Officials estimate the average cost to retrofit each unit is approximately $4,300, and since it can be spread over a longer period of time, the rent increase is expected to be about $11-$17 per month, or about 1 percent of the average rate of a rent-stabilized unit, which is approximately $1,800.
“In reality, one dollar more is too much for a tenant to pay,” said Larry Gross, the director of the Coalition for Economic Survival. “But $17 is better than $75.”
Gross said he hopes the city continues to seek other sources to fund the retrofit costs.
Apartment advocates, however, have said they are concerned with how the plans will be implemented.
Beverly Kenworthy, executive director for the Los Angeles division of the California Apartment Association, has been working with the city. She said the group never questioned the retrofit mandate, but has concerns about its feasibility. The group questions whether building owners will be able to pay for the costs.
She explained that improvements like retrofitting buildings require loans, and many building owners are restricted from applying for more than they already have. She said the group is disappointed the city changed the rent stabilization ordinance to favor tenants, and added that they aren’t sure the city has the ability to process all the permits and if the pass through will work.
“We understand why they [split the cost,] but it’s not what we wanted,” she said. “We’re interested to see how this plays out.”
Last October, the city approved the retrofit regulations, mandating the retrofit of wood-frame buildings with soft, weak or open front walls, and existing non-ductile concrete buildings built prior to 1980. Soft first-story buildings have open sections on the first floor, such as garages, tuck-under parking spaces or large windows that create a weak first story. Property owners will have seven years to strengthen “soft-story” wooden apartments and 25 years to strengthen concrete buildings.
City staff estimates that there are approximately 13,500 soft-story buildings with 171,000 units, 99 percent of which were constructed prior to 1979 and are subject to the city’s rent stabilization ordinance.
The list of concrete buildings includes Park La Brea, and management has more than two decades to work with the city and tenants on the best plan moving forward, if one is even deemed necessary.
Chris Scroggin, senior vice president of operations at Park La Brea apartments said they are in the embryonic stages of figuring out retrofit measures, as they are not sure what, if anything, needs to be done to comply with the city’s new standards. The administration is waiting for the city’s correspondence before beginning the analysis process, but Scroggin said they appreciate that the city wants safer buildings.
Colonel Donald Harris, secretary and treasurer for the Pak La Brea Residents Association, said the 50-50 split is proper. He said the group is in favor of sharing the costs between landlord and tenants on all improvements and safety measures. He said even though the Park La Brea towers are made with steel and the garden apartments are made with stone, anything that can be done to increase safety in regard to earthquakes should be done. Preparedness is one of the association’s top concerns.
“The cost the tenant will bear is a cost of safety,” he said.
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