Is Rent Control Coming To Long Beach?

Come this November there is a mounting possibility that Long Beach will pass a rent control ordinance. If the proposed ordinance is passed it would establish a cap on rent-controlled units in Long beach, how these units are established will vary by the year the building was constructed, its location and other factors. The base rent for these properties will revert to what the monthly rates were in January 2017. Subsequently, It would cap annual increases at 5 percent or 100 percent of the increase in the consumer price index (whichever is less). This ordinance also protects renters in other ways, for example landlords will be required to provide relocation payments to tenants under certain circumstances, unjust evictions will be closely monitored and more. To read the full proposal click here.

Many Long Beach Residents, Landlords, and Realtor Associations are against this ordinance, and do not believe having rent controlled apartments will benefit our city. However, there are polarizing views on rent control in Long Beach and many residents believe in protecting renters from irresponsible landlords, one very important advocate for rent control is Housing Long Beach Executive Director, Josh Butler he is one of the leaders in the ballot initiative.

The question on most Long Beach residents’ minds is. . . Does Rental Control Work?

To hopefully shed some light on this questions the Long Beach Business Journal recently interviewed economists from Zillow and LA based research firm Beacon Economics. They were both in agreement that the lack of affordable housing in California is driven by an inadequate housing supply. Furthermore, these economists believe policies that discourage new housing construction or policies that further diminish the local housing supply – such as rental control only exacerbates the problem.

Here is an example on how rent control diminishes the supply of housing. . .

Kyle would like to rent a one bedroom, and he has a budget of $900 per month, after some research Kyle realizes he cannot afford a one-bedroom apartment on his own. Reluctantly, Kyle rents a 3-bedroom apartment with two roommates – 3 people in one unit. In an alternate reality where there is rent control, Kyle is able to find a one-bedroom apartment within his budget, but so can his two roommates. This happens city wide, meaning there are more people trying to rent one-bedroom apartments than there are one-bedroom apartments available, therefore creating a housing shortage.  

The executive director of research at Beacon Economics, Robert Kleinhenz believes rental control is not addressing the root of the problem “In my estimation, rent control is a Band-Aid on a much bigger problem, which is an undersupply of multi-family housing for rental purposes”

There are many advocates for both sides of Rent Control, and with that there are many Pros & Cons. However, many of  the pros are short lived and do not improve the city’s housing issues in the long run. 

Stay tuned for more updates on the Rent Control Ordinance. Voting for this ordinance will take place November 2018. 




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