Glendale landlords will soon have to offer their tenants a one-year lease and pony up relocation fees if the rent is hiked more than 7% and the tenant opts to leave, punctuating a years-long discussion by city officials about how to prevent rising local rents from displacing residents.
Glendale City Council on Tuesday night voted 3-0 to adopt what’s known as the Right to Lease ordinance, set to take effect March 14, in an attempt to reach a compromise that would keep more residents in their homes without overburdening landlords.
In the end, both sides expressed disappointment with the ordinance.
“That actually is a sign of a good compromise, when no one’s happy,” said Councilwoman Paula Devine, echoing her colleagues. “This is not going to be perfect. Someone said to me today, ‘Perfect should not be the enemy of good.’ What we’re trying to do is good.”
Calls for mutual understanding didn’t seem to quell the anxiety of some landlords concerned that their property values might decline. Nor did it convince tenants’ rights advocates that the specter of relocation fees would deter landlords from jacking up rents to the point of triggering displacement.
“The people that get most affected by this are the innocent ones, the [property owners] that kept their rents low,” said Gregory Alexanian, an executive at a local real estate investment firm. “Those are the ones that, when they do go to refinance, when they do go to sell, they will not get the fair market value for their property.”
Then there were those on the other side of the issue.
“They should call it a Right to Leave ordinance because that is exactly what it is,” said Monique Tallon of the Glendale Tenants Union. “It is an ordinance that will give you a very small amount of money to leave your residence.”
Exactly what apartment owners are on the hook for regarding relocation fees is complicated. It depends on how many units they own, how long the tenant has lived in the same unit and how much money the tenant makes.
Properties with two units or less are exempt from the ordinance. For properties with four units or fewer, landlords have to pay all tenants a flat three months of the tenant’s current rent.
Owners of properties with five units or more have to pay tenants who have lived in the same unit for three years or fewer three months of the proposed rent the tenant has decided is too high for them to continue living there.
If the tenant has lived in the same unit for four years or fewer, the amount jumps to four months of rent. Five years or fewer gets them five months of rent. Those who have lived in their apartments for more than five years will qualify for six months of rent.
However, if a tenant has an income significantly exceeding Los Angeles County’s median income, they will receive three months of the proposed rent no matter how long they’ve lived in the same unit.
The median family income in the county was $69,300 in April 2018 according to an estimate by the U.S. Department of Housing and Urban Development.
Council members also changed the ordinance to require landlords to offer tenants a new lease 90 days before the old one expires, rolling the requirement back from 120 days.
Much of the nuanced fee scale and other changes were added into the ordinance during a short recess of the meeting at around 11 p.m.
It was an action driven by temporal pressure. Council members have been racing to pass an ordinance before a temporary rent freeze that went into effect at the end of December expires at the end of this month.
Some landlords have already sent out rent increases above that cap set to take effect March 1, City Atty. Michael Garcia said last week.
When the ordinance goes into effect in mid-March, all existing rents will roll back to where they were on Sept. 18, according to Garcia.
A similar ordinance came before council in 2016 but was scrapped because there was similar disagreement, according to Councilman Vartan Gharpetian.
“Three years later, we’re still talking about it,” Gharpetian said. “If we had [passed the ordinance] at that time, we would have been in much better shape today. So, I’m not willing to postpone this anymore.”
Two council members with opposing views on the issue — Ara Najarian and Mayor Zareh Sinanyan — recused themselves from the vote.
Since November, Najarian, who has publicly stated his opposition to rent control, has been barred by a federal agency overseeing conflict-of-interest laws from participating in all rent-control discussions because he owns an interest in several apartment buildings in Glendale.
Last week, he said he has divested from his property interest so he can rejoin discussions. This week, he said he will be cleared by Oct. 1.
A small group of people accused Sinanyan, who previously supported rent control, of violating a federal law prohibiting renter discrimination for saying on an Armenian-language TV show that Armenians are disproportionately impacted by rising rents.
Sinanyan left the dais both this week and last week at the recommendation of city staff, but he said he is seeking clarification from oversight agencies.
Before recusing himself before the subsidy discussion, Najarian vowed to revisit the Right to Lease ordinance when he is allowed to rejoin discussions.
“I’m going to be proposing that we clean up the issue,” Najarian said.
Discussion of a direct rental subsidy also began in earnest on Tuesday, with council members directing staff to look into a program that would primarily benefit disabled senior citizens with very low incomes.
“This may be a good way to ease the pain somewhat,” said Sinanyan, who was permitted to take part in the subsidy discussion.
A tentative plan emerged that would send $200 to $300 to 1,000 households for one to two years. A more detailed report will most likely come back in a few months, coinciding with the arrival of its likely funding source: revenue from a recent, voter-approved sales tax hike known as Measure S.