By Daniel M. Yukelson
We are about to see the housing madness begin. The City of Oxnard has started on the path of being one of those sadly demagogic places, where re-treaded, brute force housing policy sacrifices the long-term quality of life for the City Council’s short-term political gain, a rent regulated city.
Forty-four out of the 50 states in our great nation do not even have a single municipality, town, county, or jurisdiction of any kind with rent control. Only a handful of California’s cities, primarily the State’s largest, have rent control, yet Oxnard is now setting its course to unfoundedly joined the ranks of the illogical large cities. Rent control is a rarity in this nation because it strips property owners like me of basic rights ordinarily considered sacred to property ownership—the ability to freely regulate, and so long as there is no discrimination, the right to freely enter a lease contract at arms-length negotiated terms, including for how much and for how long.
Taking these basic inalienable rights away from me and others like me, rental property owners, means that the ability to manage our rental property is diminished, and the risk that any property owner has taken on as an investor and provider of necessary housing has significantly increased. Control of my property and those of others just like me will shift from our owner hands to the City Council and the City’s renters. Under normal housing policy, we as owners should have earned the respect and appreciation of renters by providing something very meaningful and important like the housing services that deliver the very roof over a tenant’s head, which has only been made available to tenants through our hard work and much sacrifice, saving, investing, risking capital, and then maintaining our investment by paying our mortgages, taxes, insurance, repair bills and multitudes of other expenses.
Not only does Oxnard’s proposed “rent stabilization” ordinance include price controls that “cap” rent increases to some untenable amount each year, but owners like me are also being forced to make extortion payments to renters we desperately wish to vacate our units. These extortion payments take the form of so-called relocation benefits that will cost thousands of dollars – who has thousands of dollars in cash sitting around these days following two years of a pandemic, job losses, uncollected rents, etc.? Now, the authority over the management of Oxnard’s rental properties, which used to be guaranteed by traditional property rights, may now have been placed in the hands of that once in a while problem renter living at a building who ruins it for everyone else (and who hasn’t had a neighbor like that at one time or another?).
The City’s ordinance places a giant hurdle in the path of rental property owners ending month-to-month leases with renters who are, for example, extremely abusive to their neighbors, may be conducting criminal activity at a property or creating some other type of disturbance. By requiring that we property owners pay such large sums of our hard-earned money to nuisance or crime committing tenants merely for the privilege of discontinuing an already-expired lease will flip the property management dynamic in every single rental building in the City. The right to be the biggest offender and nuisance in the building, with total immunity, has now been protected by law. Mr. (or Ms.) Jerk will now know that the worse he or she conducts himself or herself, the closer they get to a pay day. No one in this business signed up for that kind of aggravation!
Furthermore, the City has compiled a list of so-called ‘just causes’ for eviction, including standard breaches of a lease, like failure to pay rent, commission of a serious crime (like drug dealing, a weapons offense, or domestic violence, but only if adjudicated), or being a nuisance to neighbors. Unfortunately, none of these ‘just-causes’ are ever just, and if you ever speak to any landlord-tenant law attorney in a city with ‘just cause’ eviction rules, the list of just causes is nearly unenforceable (and going to court in any event is far more costly and time consuming than the thousands of dollars in extortion money we owners must now shell out to relocate the problems at our properties. In its zeal to assist the City’s renters and achieve short-term political gain, the City Council has created a nightmare scenario for the City’s rental property owners.
So, how did we get here? Outside tenant rights organizations far removed from the City are pressuring City Council to act. It seems when there is a political wave out there, elected officials are clamoring to get on their surf boards and ride it. And to reproduce a local ordinance rather that opt-for sufficient protections existing under state law’s Assembly Bill 1482, it will cost Oxnard millions of dollars each year in addition to a need to hire an army of administrative personnel to police compliance for such a complicated ordinance – likely another cost to be added onto the backs of property owners that will further drive-up rents and reduce badly needed housing supplies in the City. Get me to the exit-ramp please!
These types of “rent control” ordinances have existed for more than four decades, and it is very easy to see the result. Today, cities such as San Francisco, Santa Monica, Los Angeles and Berkeley have the biggest housing shortages, fastest rising rents resulting from a demand that far outweighs supply and have the worse and worsening homelessness problems. What is needed for Oxnard is more housing supply, particularly affordable housing along with incentives to build – not retreaded policies such as rent control that discourage housing development, cause gentrification, result in less upkeep of properties, force small owners out of the housing business, and lead to severe housing shortages and resulting higher rents – the unintended consequences of rent regulations.
From here, if Oxnard’s rent stabilization ordinance is passed, things will only get worse for the City’s rental housing providers, and then as has been shown time and time again, things will also get worse for the City’s renters as the City’s property owners exit the housing business and fewer housing choices exist. We are at the precipice of Oxnard’s Rent Stabilization Folly.
Daniel Yukelson is currently the Executive Director of The Apartment Association of Greater Los Angeles (AAGLA) which serves more than 10,000 members throughout Southern California. As Certified Public Accountant, Yukelson began his career at Ernst & Young, the global accounting firm, and had served in senior financial roles principally as Chief Financial Officer for various public, private and start-up companies. He is a former Planning Commissioner in the City of Beverly Hills.
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