Little-used housing rules may already allow apartment owners to pass on all seismic retrofit costs to tenants in Los Angeles, according to city officials.
The rules may allow owners to impose higher rent hikes than normally allowed under the city’s rent control law. Such rent increases could encourage owners to strengthen apartment buildings at risk of collapse in a major earthquake.
The laws were uncovered following questions by Councilman Bernard C. Parks to the city’s housing department, as city officials debate whether to require retrofits of quake-vulnerable buildings.
Tenants rights activists say low-income tenants cannot afford to bear the entire burden of seismic retrofit costs. Others have held out hope for financial aid, such as a state bond measure or federal grant money.
Parks, however, said state and federal aid could be many years away.
“We’ll have several earthquakes before you’ll ever bring those to fruition,” Parks said.
Current rules allow owners to apply to pass all the costs to tenants for city-required seismic retrofitting. In the 1990s, after the city identified and ordered about 8,000 brick buildings to be seismically retrofitted or demolished, an exemption to rent control was granted to owners of these buildings. All unreinforced brick buildings in the city have since been retrofitted or demolished.
Under that law, which applies to city-mandated rehabilitation, rent increases must be spread out in monthly payments over at least five years and the monthly increase cannot exceed $75 a month.
The existing law also allows owners to pass on all of the costs of voluntary structural renovations over a 15-year period or up to 60% of capital improvement costs over at least five years.
Parks submitted a motion last week asking city staff to study all options as the City Council considers how to require seismic retrofits on buildings at risk of collapse in an earthquake. The motion will be discussed by the council's planning committee.
Parks said he has been receiving calls from property owners who said they need help to pay for retrofits. “Given a clear understanding that within the city’s rent stabilization ordinance, there’s a clear mechanism to incentivize owners to get it done. No longer can people say, ‘Hey, I don’t know how to get it done,’” he said.
Although some tenants have criticized the possibility of rent increases, Parks said they shouldn't have to live in dangerous buildings.
“I think it’s unfair if you live in an unsafe building. Because I think if something occurred to them and their family, they’d be the first one to sue the owner,” he said.
Parks’ idea renews a decades-long debate in Los Angeles and elsewhere about who should pay to retrofit dangerous buildings. Twenty years ago, the upper floors of the Northridge Meadows apartment complex collapsed during the Northridge earthquake, killing 16 residents on the lower floor.
Los Angeles officials have known about the dangers of older concrete and wooden apartment buildings for years, but concerns about costs killed earlier efforts to require retrofits of privately owned buildings.
In San Francisco, officials waive rent control limits on rent increases when owners seismically retrofit their apartment buildings. Owners are allowed to pass along the full retrofit costs to tenants, including those on rent control, over a 20-year period. Extremely low-income tenants, such as those on food stamps, are exempt from the rent increases.
The San Francisco Board of Supervisors last year required about 3,000 wooden apartment buildings with weak ground floors to be strengthened.
They house more than 55,000 residents, and officials warned that the loss of so much housing at once could force displaced residents to move as far away as the Central Valley, where housing is plentiful. Their destruction would also take thousands of rent-controlled apartments off the market permanently.
The San Francisco law makes owners responsible for completing the retrofits. Owners can finance them with private loans or city loans that could be repaid through additional property taxes.
After the retrofit, tenants would see monthly rent increases of probably $8 to $50 a month if they were not classified as very low income. Retrofitting an apartment building in San Francisco is estimated to cost $60,000 to $130,000.
Not everyone was happy about the law, but Lee said there was consensus that the safety of residents was more important than arguing "we can't stand for any rent increase."
"We lose 55,000 lives if we don't do anything," Lee said.
Other cities are also debating who should pay for mandatory seismic retrofits. In Berkeley, owners must apply for permission to the city's rent board to raise rents beyond the rent control limit.
Santa Monica recently decided to resume enforcement of its seismic retrofit program. Some property owners are also asking the city to pass on retrofit costs to tenants.