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Rent Control in Los Angeles

September 05, 1988

As an attorney representing landlords the last 10 years, I am minutely familiar with the Los Angeles Rent Control Ordinance. I challenge the naive analysis by Heskin.

Heskin claims that capital improvement "pass-through" increases force tenants to vacate. He fails to discuss the mechanics. Upon approval of a capital improvement increase, rent may be raised by a pro-rata share of the improvement amortized over five years. If an improvement affecting all units in a building containing 10 units costs $6,000, the tenant's monthly rent increases $10. A consumer who receives an improved product is expected to pay for it. If an investor cannot recapture his outlay, he has no incentive to invest. Improvements are not to be confused with maintenance. There is no pass-through for routine expenses.

The writer claims that many tenants have been forced to move because of demolition. He neglects to mention relocation benefits. A landlord must pay $2,000 to $5,000 per unit.

It is true that many people on fixed incomes are unable to pay increased rents, but the same situation applies in other industries. Owners of residential buildings should not be singled out to subsidize the community.

Eastern cities with long-term rent control show the horrors facing Los Angeles if the limited decontrol following vacancy is eliminated and other stringent restrictions take effect. Throughout the East, neighborhoods contain gutted buildings occupied by drug addicts and squatters. Owners abandon their property because they cannot make their mortgage payments. When a landlord cannot charge a fair amount on a controlled unit, he must charge a higher amount on a newly decontrolled unit to compensate.

VERNA L. PORTER

Los Angeles

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