Owners of small rental properties affected by the COVID-19 crisis could receive financial assistance from the City of Los Angeles, under a new policy proposal from three members of the City Council.
A motion introduced yesterday by Councilmembers Marqueece Harris-Dawson, Mike Bonin, and Herb Wesson proposes leveraging federal relief funds to establish a safety-net for "mom and pop" landlords who own up to 10 residential units citywide. According to the motion, approximately 87 percent of the apartment buildings in Los Angeles have 10 or fewer apartments, with most subject to the Rent Stabilization Ordinance due to their age. The authors assume that these buildings are largely owned by smaller-sized landlords.
"Such owners may suddenly face a loss of income, inability to pay their mortgages, and difficulty holding onto the buildings in which lower-income tenants reside," reads the motion. "This crisis puts tenants at risk of displacement, and neighborhoods at risk of gentrification."
The authors point to the aftermath of the 2008-2009 economic crisis, in which many homes and rental properties were foreclosed upon and later came under the ownership of land speculators and institutional investors. Blackstone, a New York-based private equity firm, famously owned more than 4,000 single-family homes in California at one point.
Noting that the Council has already approved a rental assistance subsidy program which can provide up to $1,000 per month for eligible households, Harris-Dawson, Bonin, and Wesson have moved to instruct the Housing and Community Investment Department to create a similar COVID-19 anti-displacement fund to provide mortgage assistance to smaller landlords. However, any financial payment to landlords would come with the condition that the property owner agree to not raise rents or evict tenants during the period in which they receive the subsidy.
The motion, which has been referred to the Council’s Housing Committee, suggests that potential funding could be found in the federal COVID-19 Community Development Block Grant allocation. Implementation would be expected within 30 days of adoption.
Plans for mortgage assistance to landlords follow months of debate amongst the City Council over increased protections for renters during the COVID-19 emergency - failed attempts to impose a blanket eviction moratorium and a freeze on rent increases. The proposed program could temporarily provide some of those protections, while also addressing concerns of landlords who have lost income as a result of the ensuing economic crisis.
