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A $1,800 apartment became a $3,300 corporate rental. Is that bad for housing?

Andrew Khouri, Los Angeles Times on

Published in Home and Consumer News

Richard Green, director of the USC Lusk Center for Real Estate, said an increase in such concepts could indeed push prices up slightly in neighborhoods where lots of those companies operate. In theory, he said, there would be less housing for long-term tenants. And as vacancies dwindle, landlords would feel less pressure to drop rent to fill units.

But Green argued the correct policy response isn't to crack down on the practice, but to allow more housing to be built in the first place. That way, different living arrangements can flourish without sending prices higher.

"People sometimes need a place to live for six months too," he said. "They are not any less of human beings than people who need to live (somewhere) for a long time."

Tenant advocates, however, are concerned that corporate conversions are reducing the number of rent-controlled units available to more permanent residents.

Those units can be a haven of affordability for long-term tenants. In units covered by rent control, landlords can set the initial rent, but then face limits on annual increases for as long as a tenant stays. When the tenant moves out, the landlord can price the unit as they prefer once again.

In the city of Los Angeles, the number of older rent-controlled buildings has been on the decline amid a wave of redevelopment. Since 2001, property owners have filed to remove more than 25,000 units from the market, usually to demolish the building or convert units to condos.


Apartment owners already face a crackdown on the practice of filling units for less than a month with the help of services such as Airbnb. Come July 1, a new short-term rental law will take effect in Los Angeles that explicitly bans stays of 30 days or less in rent-controlled buildings. Those short-term stays would also be outlawed in units that aren't someone's primary residence.

A spokeswoman for the Los Angeles Housing and Community Investment Department said renting furnished apartments for at least a month to temporary residents isn't illegal in rent-controlled buildings, but landlords cannot evict long-term tenants to do so.

People who move into units in rent-controlled buildings on a lease of less than a year are still protected by rent control -- which means they can stay beyond their lease term, as long as they pay rent and follow the building's rules. They also have protection against sharp rent increases. But people renting corporate apartments probably don't want to stay for long, which allows landlords to reset rents more often than if they rented it in a traditional fashion.

Gross, of the Coalition for Economic Survival, contends that corporate-style housing should be banned in rent-controlled buildings, because it creates additional incentive to force long-term tenants out to charge higher rent.


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