For decades, Los Angeles has championed tenant protections – and in many ways, rightly so.
But in its rush to safeguard renters, the city has created a new class of casualties: the small, independent housing providers who make up the backbone of our rental market. These mom-and-pop owners – many of them immigrants, minorities and longtime community members – are being regulated into financial and operational distress.
The City Council’s most recent vote to cap rent increases for rent-stabilized units at 4% (and as low as 1%) was hailed as a win for tenants. But for small housing providers, it is yet another blow. Over the past five years, these owners have been allowed to raise rents only twice – for a combined total of just 7% – while their operating costs have skyrocketed. Utilities have nearly doubled. Insurance premiums have tripled. Maintenance expenses continue to rise. No small business could withstand these imbalances, yet we expect housing providers to do so indefinitely.
This vote did not occur in a vacuum. It follows a three-year rent freeze and eviction moratorium, along with new eviction thresholds that make it nearly impossible for small owners to enforce the terms of a lease. Each of these policies, though well-intentioned, has chipped away at the economic foundation that allows ordinary Angelenos to own and maintain rental housing.
The result? A growing exodus. Many longtime landlords – people who own one duplex or a small four-unit building – no longer see a future in providing housing in Los Angeles. Buyers are hesitant to acquire property in a city where the regulatory climate is increasingly unpredictable. This not only depresses property values for owners approaching retirement; it also shrinks the pool of private investors willing to build or maintain desperately needed housing stock.
Meanwhile, the city has taken the extraordinary step of funding tenants’ rights organizations that openly advocate against property owners. Groups such as Strategic Actions for a Just Economy and Keep LA Housed receive financial support from city agencies, including revenue from landlord fees and transfer taxes paid when owners sell their properties. It is difficult to view this arrangement as anything other than a conflict of interest: regulators using owners’ own dollars to fund groups working to undermine their rights.
Los Angeles cannot regulate its way out of the housing crisis. In fact, by continuing down this path, the city risks making the problem worse. When private investment dries up – and it will – new housing construction stalls, existing buildings age without reinvestment and the city falls even further behind its state-mandated goal of building 84,000 new units per year.
If the city truly wants to address its housing shortage, it must stop treating housing providers as adversaries. Instead of layering regulation on top of regulation, Los Angeles should focus on policies that strengthen its economy: job training, workforce development and a business environment that attracts – rather than drives away – investment.
A healthy housing ecosystem requires both tenants and housing providers. One cannot survive without the other. If we continue to undermine the people who supply the housing, the entire system will collapse – and all Angelenos will pay the price.
David Evans is a commercial real estate broker in Los Angeles and co-founder of We House LA, an organization focused on the advocating for housing providers rights.