Gentrification is woven into our systems under the veneers of  'fairness.' Let's look at what is really fair and what is not, so that we can dispel certain illusions.

 

The Costa Hawkins Act is of concern to tenants because it effectively legalizes landlords to be able to raise the rent to 'market rates' for any new tenant. Said differently, when a tenant moves out, the unit they previously leased may be rented to the next person for an amount much higher that what the previous tenant paid; this amount is called the market rate. 

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Here is an Example:

Tenant X is renting an apartment for $990 per month and every year, on the anniversary of when Tenant X initially signed their lease, the landlord may raise their rent to some lawful maximum as stipulated in the rent control laws. This, according to even judges, allows the landlord to realize an income that sustains the property in working order and allows for a reasonable profit to be made. 

 

So let's say that while Tenant X is leasing their rent controlled apartment for $990 per month, a comparable apartment in the same area is going for a much higher rent amount in the current market, so in our example let's say that current demand would allow the landlord to charge $2300 per month for Tenant X's apartment should Tenant X move out. The only reason the landlord has not done so with Tenant X is due to the rent stabilization laws in place that protect Tenant X from having to pay market rates after they moved into their unit, and instead pay some percent increase each year over what they paid the year before that allows for a fair return on investment for the landlord while also not whiplashing the rent price on the tenant to where they would quickly be unable to afford their rent given that the historical trend of wage increases have not, and still do not, keep up with inflation. This is particularly of immense concern when it comes to basic needs like housing. In other words, wages do not rise in proportion with market rents, and if tenants had to find new housing each quarter just like the landlords would like, due to  rents being constantly increased to market rates, then businesses would experience too much volatility in employee turnover, culture(s) could not effectively take root in cities as they'd be constantly uprooted, and society as we know it would have no cohesion which would result in severe psychological distress since humans look to their surrounding culture, beyond their family unit, for structure and a collective (shared) identity above and beyond just the self. We are tribal at the root of our being, albeit refined, and thus need cohesive and dependable societal structures that we can depend on to consistently provide supportive social and economic networks in every facet of our lives - this is what is generally referred to as society.  Therefore, we cannot change residence every three months like landlords would like so they can simply realize very high profits. Landlords have, however, consistently shown over time that they do not care about this. They feel entitled to price gauging because they simply have property in an area with high demand, where many judges have stated that the current rent stabilization ordinances allow for plenty of profit to be realized. One real estate investor recently posted on their website that they made $70 million in profits in the 2023 fiscal year. Apparently, harassing people out of their rent controlled units, something they are notorious for, not fixing properties to code, and charging $200 for that plastic rod that goes into the tube of toilet paper, is a very profitable business strategy. All the while the rest of us have to actually provide real value, one that enhances people's lives, if we want to keep our jobs - not that we're complaining, just proving a point. This is the difference between a cancer and life engendering processes. 

 

This is what is discussed on an earlier page on this site, titled Rent Stabilization vs. Rent Control. The above scenario is what is referred to as rent stabilization. Rent control is where Tenant X in our above example moves out and the next tenant to rent the unit after Tenant X would do so at the last rent price paid by Tenant X. This would preserve the rent controlled rent price during the previous tenancy so that it can be realized by other tenants while still allowing landlords to make a fair return on investment.

 

This is why we find the Costa-Hawkins Act to be anti-tenant, especially that landlords realize even higher profits than what is reasonable under rent stabilization because they hardly ever make repairs necessary to keep their buildings in proper working order, or they hire questionable people to do their renovations. Here at the Westside Tenants' Alliance, we constantly see tenants' struggle for getting their rented unit up to code, not to mention the harassment tenants endure in retaliation to simply get them out so that a higher rent price may be charged from the next tenant (See out page titled Tenant Associations - Ten Reason To Start A Tenant's Association). 

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Let's discuss landlord to tenant harassment next. Why does this happen and why is it not under a separate page but instead under Costa-Hawkins Act? Here is why. Why do perfectly good tenants all of a sudden complain of harassment by their landlord and their landlord's agents? It is because of the Costa-Hawkins Act! The landlord is not grateful for having a good tenant, as good tenants are eventually no longer as profitable as they once were, where a new tenant could be paying the landlord much more for essentially the same thing, where they also continue to get robbed of the value due to them as we have already mentioned that landlords often do not hold to their end of the bargain in maintaining their properties and generally following the law in other ways as well. New tenants come to us in droves just like the old, complaining of landlord harassment the minute their lease is almost up. And do not be fooled by renovated apartments - they are often lackluster, things break if not fall on the head of the tenant below since the people who often do the renovations are unlicensed or work under a licensed person who can never be found onsite. Verifying to see if workers are licensed is met with vehement and manipulative responses from apartment managers and eventually results in retaliation (see our page titled Tenant Associations - Ten Reasons To Start A Tenant's Association). How do we know, we personally have been in situations where the construction workers onsite of a rental property were drinking and smoking so badly inside the units they were renovating, one could smell it across the entire property, and not a single manager or contractor could be found to intervene for days. When a female tenant finally went to speak to the workers, they insinuated aggression. Eventually, the entire ceiling sans the rafters fell in one of her longtime neighbor's units who lived below one of the renovated units, and who would have been dead had he been in his hallway or bathroom at the time of the ceiling falling, where it effectively created a foot and half of rubbish off of his floor. He could not even get to his toilet. And there were no warning signs, such as a leak or even water stains. The sound created by the fall was so loud, he fell out of his bed and out of deep sleep in a matter of a split second. His hands still shook days later when he showed us the photos of the damage. 

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Any demand of landlords to follow the law and to ensure tenants safety and quality of work when renovation takes place in properties is often met with strategic ways of being chased out of one's rent controlled apartment, aka harassed. Habitability plans signed off by the Department of Building and Safety are not overlooked once the renovation processes start and OSHA has to be called if one is lucky to know what dangers are taking place before things go wrong. The list goes on. We've seen a lot. We weren't lying when we stated on our home page that we have tenant horror stories to fill volumes.

 

Tenant harassment, as we have seen in the few examples above, most notably where landlords want a high tenant turnover so that they can re-rent at market rate, are one of the main ways gentrification works thanks to such provisions as within the Costa-Hawkins Act. If amended, so that each subsequent tenant rents a unit at the price of what the previous tenant paid, harassment perpetuated by landlords would be almost non-existent. We would still have to, however, fight for safe and up to code dwellings, but it would be one less fight to contend with and what would be left would be easier to accomplish because chasing tenants out of their apartments would no longer add levels of serious complexity. As you can see, tenant struggles are by far wide and large, and if we organize, we can not only help our current situations within the buildings in which we live in, but also push for better legislation.     

 

Please see our other pages, titled Rent Stabilization vs. Rent Control, Fundamentals of Econ, and Tenant Associations - Ten Reasons to Start a Tenants Association.

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