Annual Rent Control Increases Limited Statewide
California Real Estate Journal
By Keeley Webster
...Few landlords have anything good to say about rent control ordinances that keep their properties at below-market rents. This appears to be particularly true this year in California's cities where apartment rents are still governed by rent control. Rent control boards have allowed, at most, very slight rent increases on rent-controlled properties throughout the state, as increases are pegged to economic factors that have declined during the recession. The trade off is the relatively stable occupancy rent-controlled properties offer versus more volatile market-rate units...
...The pain isn't universal, however. "I know landlords who don't even know there is a recession going on," said Brent Sprenkle, an associate partner for Hendricks & Partners. "These people bought their properties a long time ago, for pennies on the dollar. They keep rents artificially low so tenants never move out. Those apartments are 100 percent occupied."
That is not the case for the majority, however. Sprenkle has heard many tales of landlords forced to lower rents to retain tenants, some of whom are telling landlords that if they don't lower the rent they will have to double-up or move in with a friend. Although the average vacancy level in Los Angeles increased from 3 percent to 8 percent in 2008, according to the University of Southern California's Casden Real Estate Economics Forecast, Sprenkle knows owners who are experiencing 30 percent vacancy levels in their buildings...