Socialism Finds It’s Way to Los Angeles
By: Nicholas A. Dunlap, CPM
Aside from the unfortunate circumstances many property owners are facing, now, the owners of multifamily properties in Los Angeles city are facing what could be a moratorium on the dismal increase of 3 to 5% they were once allowed by the city on rent controlled buildings. Citing that many of the residents of these rent controlled apartments had been effected by the economic downturn, Alarcon stated that it was not right for the apartment owners to raise their rent by 3%. So, let’s get this straight: the residents were negatively affected, but the apartment owners who have seen rents decline, expenses increase and elevated vacancy rates over the past 3 years, have emerged from the battlegrounds unwounded? Au contrare, Mr. Alarcon.
The appropriate solution to this issue is not at the expense of the apartment owner. Drive through Hollywood, Mid-Wilshire, Koreatown or Arlington Heights and experience first hand the compromise of someone’s financial return on their investment. Beautiful and historically significant apartment houses, reminiscent of the many stories that Old Hollywood has to tell, and yet you see dilapidated buildings that look bombed out and not maintained. So again, I ask: Why at the expense of the apartment owner? Frustrated over the inability to raise their rents to anywhere near market level and typically resigned to a whopping 5% annual increase, many of these apartment owners avoid improvement projects and maintenance that could make the property more appealing. This does us all a disservice, polluting the hardscape of our city with rundown, brick and mortar ruins.
Using the logic of Mr. Alarcon and other rent control proponents, doesn’t it make equally good sense to approach the residents’ employer and mandate a wage increase so that they can afford to pay higher rent, or, maybe we should approach oil companies and ask them to drop their prices per barrel so that gasoline would be cheaper and maybe, just maybe with those few extra bucks, residents could pay their rent. No, I’ve got it: we demand that restaurants and grocery stores drop their prices on food so that people can eat whatever they want, whenever they want and not worry about what is being spent on food and be able to pay rent? Or maybe DIRECTV will cut their rates or provide discounted cable so that people can still get the Extra Innings MLB package and afford to pay increased rent? See how ridiculous it seems to suggest that a third party pay part of someone’s rent? The apartment business is a for-profit industry, not a social service that subsidizes one of life’s luxuries.
The way our country and California is heading, I should avoid such suggestions. Hopefully Antonio Villaraigosa will be able to talk some sense into him or simply dismiss his notion.
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