With No Rent Freeze in Place, Tenants Suffer Price Hikes as Landlords Fear Rent Control in Long Beach

Extreme rent increases at this apartment complex (above) saw some people’s rent double earlier this month, with the landlord citing a pending ballot initiative for rent control as the reason. Photo by Jason Ruiz

When Dione McCrea received a $125 rent increase this February she didn’t feel like it was an unreasonable amount. Rent had rarely increased for her one-bedroom unit inside a 1920s style Craftsman complex just north of St. Anthony High School.

McCrea, who is a teacher in the Irvine Unified School District, moved into the apartment in 2014 when the rent was $925 per month. She said the new $1,175 monthly rent wasn’t crazy, but she, like other tenants who received the same increase, now expected minor issues like non-operable heaters and windows that didn’t close correctly to be fixed.

After communicating this to Eric Kessler, the man who managed the building, tenants got what they felt to be a retaliatory price increase. This time it was nearly 100 percent. But Kessler told them through text messages that it had nothing to do with their requests for maintenance and everything to do with a proposed rent control ordinance that is currently being circulated for signatures.

“He said that he can’t raise rent after rent control passes,” McCrea told the Post, which was verified through texts between McCrea and another tenant and Kessler that were shared with the Post. “He said I was welcome to get a roommate and charge whatever I want and that he was in the process of trying to sell the building.”

McCrea’s rent went from $1,050 at the start of February to $2,000 starting in July. When she asked Kessler how he came to the new price point for her apartment she said he sent back two listings for 1920s Craftsman buildings on Ocean Boulevard.

“One was going for $2,900, one was going for $2,700,” she said. “I said ‘Okay, I understand that. They have a new floor, they had Restoration Hardware everything, smart tv, Viking stove, double-paned windows…and they also have an ocean view! How does that compare to here?’”

She said that she’s signed the rent control petition that Kessler cited in doubling her rent. Her neighbor, Cassandra Jorgensen, has yet to sign the petition but said she plans to track it down after her rent was doubled earlier this month.

Long Beach Begins Addressing Potential Future as a Rent Controlled City

Jorgensen is a Marine Corps veteran and is in her last semester at Cal State Long Beach where she’s a biology major. She said the stress of 14 credit-hours in upper division classes was taxing enough; now she has added pressure to pass those classes because if she doesn’t she’ll have to relocate just to retake any classes she might not pass. She said she simply cannot afford $2,000 a month.

“The rate that they’re raising the rent doesn’t meet the rate that people are getting raises or inflation,” Jorgensen said. “Now we’re paying more and we’re not getting paid any more. What I dislike is that they were able to manipulate things in the meantime. I feel like there should have been a clause or something in there to prevent them from manipulating the renters they have now.”

Kessler did not respond to multiple requests for comment.

Johanna Cunningham, executive director of the Apartment Association, Southern California Cities, said that landlords are rightly concerned about the rent control ordinance and that for the past 5-8 years they’ve relented on rental increases because they knew that, in light of the economy, tenants could not afford them.

Now, they’re having to act to protect their investments and their retirement incomes, Cunningham said.

“Fear that you will lose all control of your investment, that your private property rights may be stripped away and that your own livelihood may forever change is a reality that owners are now being forced to explore,” she said, speaking to whether or not she felt increases made sense if the ordinance has the ability to roll them back.

“As for the rollback, I would like to understand how that will be evaluated? Many of our owners are in the process of improving their properties, or just finished the improvements,” Cunningham continued. “Do those who improve, or have improved over the past few years lose all of that investment? What if there are still things that need to be done? There are more questions that the public does not understand about this issue and to make a decision without further investigation and knowledge is ill-advised.”

The proposed rent control ordinance does have language in it that, if enacted by the voters, would roll back rents to what they were in November 2017. It also does allow annual rent increases of up to 5 percent or 100 percent of the consumer price index increase, whichever is less. However, it does not include language for a rent freeze, with that action landing squarely in the city council’s purview.

Other cities that have enacted rent freezes while their cities underwent ballot initiatives to prevent rent gouging from taking place include San Jose, Santa Cruz and Los Angeles. Larry Gross, executive director of the Coalition for Economic Survival, based in LA, was part of that effort in the 1970s when LA was exploring the policy.

He said that as the leaders in LA at the time saw tenants having their rents increased by landlords they instituted a base-rate, roll-back figure and then froze rent increases until the issue was settled. He said Long Beach should do the same to ensure that its voters have a chance to have their voices heard at the ballot box, if the initiative even makes it that far.

“So without that [rent freeze and roll back] the tenants are essentially at prey of these rent gouging situations and so it’s incumbent upon the Long Beach City Council, recognizing this and without taking necessarily a position one way or another, they should impose a rent freeze and eviction moratorium until the outcome of this ballot measure,” Gross said. “Because what these landlords fully intend to do is to get rid of the support of voters by increasing rents and displacing them through that process to try to make sure the ballot measure fails.”

The council and Mayor Robert Garcia have been largely silent as the initiative has worked its way through the city and has started down the homestretch for its signature gathering cutoff coming next month.

Business Groups Remind Council of Past Statements on Rent Control As Ballot Initiative Progresses

In January, just before the process of signature gathering began, the Pacific West Association of Realtors sent out a release to the media thanking the entire city council and mayor who had filled out a questionnaire which included a question on whether or not they supported rent control.

None of them indicated that they did.

Second District Councilwoman Jeannine Pearce attributed her response on that survey to a busy campaign where a lot of things were being asked of candidates and “someone checked a box that said no.”

She said her track record, which includes being a one-time steering committee member of Housing Long Beach, a local tenant advocacy non-profit, shows that she supports tenants rights but that the current petition being circulated is hard for her to agree with because it’s so inclusive.

It has clauses for just cause eviction, rent control, caps on how much rent can be raised annually and establish a rental housing board that would have authority over determining the annual allowable rent increase. Pearce said other initiatives like the recently passed Measure MM which legalized medical marijuana dispensaries in the city were crafted with input from the city attorney and other city offices.

Despite that, Pearce said she has signed the rent control petition and is weighing the idea of putting a rent freeze on the council agenda for some time, even though she doesn’t feel there’s the needed support for it among her colleagues. Still, she may move to add it to “see where the conversation goes.”

“I think that no matter what happens that the council and the mayor are at a place where they are ready to dig into the issues of rising rents and renters’ protections in this city,” Pearce said. “I think that it is a matter of time and people are waiting to see what’s going to happen, what’s the lay of the land in the next six weeks.”

That’s when the petition would need to be returned to the city clerk’s office to qualify for the November ballot. Housing Long Beach Executive Director Josh Butler, who is among the coalition of people who are behind the proposed ordinance, said that they will use every last day to secure the needed signatures to comfortably clear the hurdle for it to qualify.

When asked how he felt that his ballot initiative was being cited by a landlord as reason for doubling tenants’ rents in a proactive move to skirt potential losses incurred by rent control passing, Butler said he refused to accept responsibility for Kessler’s actions.

“This doesn’t sound like a landlord, this sounds like an extortionist,” Butler said.

He added that in crafting the ordinance they assumed that landlords would resort to price gouging and that’s precisely why the ordinance included the roll back date for rental prices of November 1, 2017 if rent control does pass.

Until then, barring any action by the city council to enact a rent freeze, tenants in Long Beach will continue to be at the mercy of their landlords. While cities like Los Angeles and West Hollywood, which have rent control, have annual caps on how much rents can go up, cities like Long Beach which follow state laws have no such ceilings.

Susanne Browne of the Legal Aid Foundation of Los Angeles explained that in non-rent controlled cities all a landlord has to do is to give proper legal notice, which in the case of McCrae and Jorgensen would require a 60-day notice for any rental increase of over 10 percent.

Browne said that dramatic rent increases are something that her office has been seeing more of in recent months. She said that she’s aware of some instances where tenant unions have been able to negotiate pared-down versions of increases or have been able to get them spread out over time but those instances have been rare. The housing crisis facing Long Beach, Browne said, is a perfect storm of economic forces that have been brewing for some time.

As Developers Move In, the Fight to Keep Long Beach Affordable Continues for Community Groups

“We’re just seeing massive displacement and gentrification in our city as a lot of these luxury developments come in and how there appears to be a premium on that, particularly in the downtown area,” Browne said.

“We’re seeing the displacement of thousands of residents because they can’t afford their rent anymore. It’s either that their building is either physically being removed and replaced with a newer, nicer one, or they’re still in their building but the owner is raising the rent because he or she sees that they can do that because of the luxury developments that are coming in.”

Those luxury apartments, and the billions of dollars in other developments featured in a story by The New York Times Tuesday, sit just a few blocks south of where McCrea calls home for the next few months.

She’s moving, but has no intentions of heading south to Orange County or other cities on Long Beach’s periphery. She references the downtown developments and wonders if the mayor she voted for in 2014 cares more about drawing in the people who can afford to live in those luxury apartments than keeping those that have lived here for generations.

McCrea says that her dream has always been to own a home—something no one in her family has been able to do—but the housing market in California and the ever-increasing rents are a source of constant anxiety that she won’t be able to achieve that dream in this state.

She’s lived in West Hollywood, a city often cited by landlords as a prime example of how rent control can go wrong, but she has fond memories of it. The rent was cheap and things got fixed when she requested it. She feels that something similar is needed in Long Beach as landlords currently hold too much power in setting prices and the city council has only acted in a piecemeal approach to the city’s housing crisis.

“Throwing money at a situation doesn’t make sense to me,” McCrea said, referencing a recent story in the Post of a council member helping to secure relocation assistance for displaced tenants. “Are you going to keep patching up holes? Eventually you’re going to sink. You have to get a new boat, you can’t keep putting patches over the holes and that’s what I feel like [the city’s] doing.”

Stephanie Rivera contributed to this report.

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Jason Ruiz covers City Hall and politics for the Long Beach Post.
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