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Update: Rent Hikes Frozen by L.A. Mayor’s Orders as Mom and Pop Landlords Fear for Their Own Mortgages

Update March 30, 2020: In an emergency executive order, Mayor Garcetti called for a rent freeze on all apartment units that fall under the rent stabilization ordinance (like Karen's apartment). A rent freeze means that rents can not be increased. The emergency executive order is non-retroactive though.

[dropcap size=big]C[/dropcap]ome April 1st, Karen isn’t paying her rent. She can’t.

A day player in the television industry, all of Karen’s work evaporated in mid-March when the coronavirus forced productions to end early.

Not only is the rent due, but it’s also actually going up.

On Tuesday, Karen received a notice from Integrity Property Management, a Burbank based company that manages over 1,300 apartments including Karen’s one-bedroom in Silver Lake. Her rent-controlled unit is being raised the allowable three percent under the rent stabilization ordinance.

When Karen called the number that was on the notice, she got an answering machine, the office has been closed due to the coronavirus.

It’s always difficult to get in touch with Integrity Property Management Karen says. “They’re awful.” A couple months ago she locked herself out of her apartment while doing laundry. She tried to get IPM to help her but they refused. Shoeless, and without a phone or wallet, ultimately, Karen had to hire a locksmith.

On another occasion, she says that someone entered her apartment without giving notice and took a circular saw to her shower before realizing they were in the wrong unit, “Now my beautiful antique tub is botched and shitty.”

Karen isn’t alone. Integrity Property Management has a two-star rating on Yelp. Dozens of other renters echo Karen’s claims. Integrity is difficult to get in touch with, tenants have a hard time getting them to do repairs and some buildings have been infested with cockroaches and bed bugs, according to yelp reviewers. “[They are] not a good place to rent from. They won't fix anything when you ask them. They are crooks. Stay away,” Jasmine G from Victorville said in July.

Although Karen qualifies for unemployment, the weekly checks just barely cover half of her rent, which doesn’t leave her with enough money for food or to pay other bills.

“So many issues with this property management company. I had roaches in my unit as soon as I moved in. three to four times they came to spray and took so many days off to clean out my unit. They finally agreed to break the lease as I couldn't even sleep in my unit. I reported them to the city and I finally moved out,” Ani K said in 2015.

Karen thinks the rent increase is a tone-deaf response to a worldwide crisis. Trying to find a new job right now would be difficult and more importantly, it defies the mayor’s orders to stay at home and self-isolate. “It’s the ethical responsibility for people that provide housing to continue to provide housing at this time,” she said over the phone. “Were all in the right to demand that rent not be collected during a global pandemic.” Instead, she got a rent increase. 

Despite Karen’s untimely rent increase, she informs L.A. Taco that it is not enough to deter her from her home, a 1925 Spanish-style apartment. “It really feels like a relic of old Silver Lake. I plan on staying here my whole life.”

Although Karen qualifies for unemployment, the weekly checks just barely cover half of her rent, which doesn’t leave her with enough money for food or to pay other bills. She also points out that the way unemployment works and its lack of incentive to help yourself out. Currently, any additional income that you make gets deducted from your weekly unemployment check. So if you’re receiving $200 a week in unemployment and you pick up an odd job to earn an extra $50-100 a week, you get $50 to $100 less in unemployment.

"Councilmembers probably don’t even understand how unemployment works.” Karen’s been following city politics closely hoping that the city council will pass a moratorium on rent that protects her but she’s wary of public officials. Karen tried to contact the mayor's office but his voicemail was full. As it stands the mayor’s executive order doesn’t ban rent increases.

In the 12 years that she’s owned the duplex, she says she’s only raised the rent on one of her tenants twice, “It’s not like I’m some evil rich asshole.”

When asked what she would say to small mom and pop landlords that can’t pay their mortgages as a result of tenants not paying their rent, Karen pauses for a moment before saying, “I haven’t really thought about that.” 

Tomorrow, Friday, the city council will hold an emergency meeting to consider passing a moratorium on evictions and other important motions to help Angelenos during the coronavirus pandemic. 15 councilmembers have the difficult task of balancing the needs of renters and landlords alike. Last week, L.A. Taco revealed that eight out of the 15 current city council members are in fact landlords themselves.

The specific language of the ordinance will decide who can benefit from the rent moratorium and how long they will have to pay back their landlords. They’re considering anywhere from six to 24 months.

“I just hope it’s fair. I just want to keep my home.”

“Six months would impact me greatly. Longer than that could cause me to lose my house,” said Tara, the owner of a modest duplex in Highland Park, a place she describes herself as “the epicenter of gentrification.” Tara is concerned about her own job security. As a pharmaceutical salesperson, she typically meets with doctors. She’s been working from home but doesn’t know how much longer she’ll be employed, “Everybody is predicting layoffs.”

The $2,050 that Tara collects from her two tenants doesn’t even cover her $2,300 mortgage, “That ‘profit’ is always swallowed up by repairs.” In the past, she’s had to fork over $20,000 to replace the roof. On another occasion, a new retaining wall cost her $10,000.

In the 12 years that she’s owned the duplex, she says she’s only raised the rent on one of her tenants twice, “It’s not like I’m some evil rich asshole.” Defaulting on her loan would result in her losing the house. “So instead of me owning it and charging a reasonable rent, a developer would probably buy it.”

Millions of people’s lives will be affected by a decision that only a handful of people actually have control over.

Tara spent years “working her ass off” to be able to afford the duplex while living with four roommates in Silverlake before being priced out. After saving up, she purchased the duplex right before the housing market collapsed, “I bought it and the market tanked.” 

Tara spent three years living paycheck to paycheck with two roommates to pay the bills and fix the place up, “I just went with my gut and took the plunge because I dreamed of homeownership since my parents never owned anything.”

Like most people, Tara is concerned about the larger ramifications of COVID-19. Mass layoffs, a global economic depression, losing loved ones to the virus are all things that she’s contemplating. But as a self-described optimist and employee of the pharmaceutical industry herself, she remains hopeful that a miracle drug will come through and save us all. As for the eviction moratorium that the city council is proposing she said, “I just hope it’s fair. I just want to keep my home.”

On Wednesday, Governor Newsom announced that most of the major banks had agreed to postpone mortgage payments for at least 90 days. Tara’s mortgage is with the one bank that didn’t agree to Newsom's plan, Bank of America. They would only agree to 30 days.

Friday’s emergency city council meeting will be a pivotal moment for both renters and landlords. There are city councilmembers like Mike Bonin pushing for a longer repayment window and less limitations on who qualifies for the forbearance and other councilmembers like Paul Krekorian and John Lee who are trying to limit the repayment period and other aspects of the ordinance. Millions of people’s lives will be affected by a decision that only a handful of people actually have control over.

You can read a draft of the ordinance, which is subject to possible changes, here.

Update March 27, 2020: The city council unanimously passed an ordinance that expands renters protections, giving them 12 months to repay unpaid rent but fell short of passing a full moratorium, which would have temporarily halted all evictions city wide. Tenants can still be evicted for "at fault" evictions and if they can't pay their rent during the emergency order, they must notify their landlords within 7 days (April 8, 2020) and maybe asked to provide documentation to prove that they were impacted by COVID-19.

The L.A. Times published a helpful explainer detailing all the fine details of the ordinance that the city council passed.

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