LA County Rent Control Expansion - Property Rights Concerns

The Los Angeles County Board of Supervisors Passes New Rent Cap for Unincorporated Areas

The Los Angeles County Board of Supervisors recently voted 3-2 to implement a new 3% rent cap for most units in unincorporated areas, effective January 1, 2025. While the board aims to address the county's housing affordability crisis, this decision raises serious concerns for property owners and may ultimately exacerbate the very problem it seeks to solve.

A Closer Look at the Facts

• Limited Scope: The new rent cap applies only to unincorporated areas of LA County, such as East Los Angeles, City Terrace, and parts of South LA, affecting roughly 51,700 rent-controlled units. This leaves a large portion of the county's rental market untouched.
• Exceptions and Potential Issues: The measure includes exceptions for "small landlords" who own 10 or fewer units, allowing them to increase rent by up to 4%. This two-tiered system creates complexity and could lead to unintended consequences, potentially favoring larger corporate landlords over smaller, independent property owners.
• Root Cause of the Housing Crisis: Supervisor Kathryn Barger, who voted against the measure, highlighted the root cause of the housing crisis as a lack of supply. She emphasized the need to focus on streamlining development and removing regulatory barriers to increase the availability of affordable housing. This is a positive sign that the Supervisors understand the need for increased development and creative incentives for Housing Providers who are interested and willing to bring more units online in LA County.

The Downsides

1. Financial Strain: The rent cap will likely make it more difficult for landlords to cover rising costs like insurance, taxes, maintenance, and utilities. This could lead to financial strain, forcing some to sell their properties. At Coastline Equity we are actively working with our clients to manage expenses, zero base budget each year, and take all maintenance contracts and insurance coverage to bid each year.
2. Disincentivizing Investment: The strict rent cap could discourage investment in new rental housing construction and renovation, further limiting the availability of affordable units. This could worsen the existing housing shortage and exacerbate the problem of affordability.
3. Shifting Focus: Rent control may divert attention away from more effective solutions like streamlining the permitting process, encouraging affordable housing development, and addressing the root causes of homelessness.

Coastline Equity's Commitment to Our Clients

At Coastline Equity, we are dedicated to advocating for policies that support a healthy and thriving housing market. We believe in protecting the rights of our clients, property owners, and ensuring that they have the resources and freedom to manage their properties effectively.

We will continue to monitor developments like this closely and engage with housing provider advocates in our region. Our commitment is to work toward solutions that address the housing crisis sustainably, creating a more equitable and vibrant housing market for all.

The Path Forward

• Increasing Housing Supply: Streamlining development and removing regulatory barriers to encourage new housing construction.
• Promoting Affordable Housing: Providing incentives and support for developers to create more affordable housing options.
• Addressing Root Causes: Tackling homelessness and poverty, which are major contributors to the housing crisis.

By working together, we can find solutions that create a sustainable and thriving housing market for everyone.

For more detailed information and updates, visit our website
Coastline Equity - Urgent Call to Action