Apartment investors and those just renting out your home or condo- Pay Attention! Current investors/owners and potential buyers must consider this pending legislation when buying or selling income property- if you are buying or own property that may be valued at a premium because it is in the coveted non-rent controlled category, read this article, consider weighing the risks as part of your due diligence, valuation, and/or decision to hold. I’m always available to help you evaluate and negotiate any of these.
If you are in California, but exempt from rent control, you have had a good run. Whenever property values increase, tenants invariably become displaced. Rent control laws protect a great many of those tenants, to a fault. To offset the un-American restrictions on free market, and to encourage investors to continue to build much-needed housing, new construction was declared off limits, along with other exemptions that were necessary to prevent a complete chilling of developing and/or maintaining income property.
In a misguided attempt to prevent tenant displacement and/or rental increases, tenant advocacy groups are seeking to expand rent control by repealing the Costa-Hawkins Rental Housing Act. They seek to revoke the exemptions to rent control listed therein and its’ state law protection against overly aggressive local ordinances. If this law makes it on the ballot, it will likely pass- there are more tenants than owners who will have an interest in showing up to vote- and not only will we still have a shortage of affordable housing, we will continue to worsen our shortage of any available housing in the targeted areas. Period.
This is not merely about rental prices- it’s about being permitted to not renew someone’s lease when it’s up; having to pay sometimes steep relocation fees (such as in Los Angeles), for the privilege of relocating a tenant from a unit that you want to move into. So much more. This is big. Owners- get involved in your local apartment association. Buyers- weigh the risks when paying a premium for what is currently a non-rent controlled building. You are paying now for the future rights to raise rents to market prices. Owners/Sellers: Weigh the risk of how this may impact future value- if you want to consider taking the money and running now, call me!
ABOUT LISA PHILLIPS, ESQ./ CA Bureau of Real Estate Lic# 01189413
Lisa Phillips is an active Realtor in the Los Angeles area, with more than twenty years as a practicing real estate broker and attorney. Her unparalleled knowledge of real estate, from local markets and pricing to legal issues and deal-making, has made her a trusted and valuable asset to her clients. In addition to her real estate and business savvy, Lisa is passionate about helping others, and works tirelessly to achieve the best results for her clients. Neither this article, nor any information provided to readers shall be construed as legal or real estate advice or representation. For more information, please visit www.LisaPhillipsRealEstate.com.
