In Los Angeles, where the median market rent is upwards of $3,500, rent-controlled apartments are a hot commodity for tenants who want stable and affordable housing.
But for many landlords, “rent control” simply translates to “lost profit.” That’s why some have been hiring professional “re-tenanters” who clear out these units, so they can hike up the rent to market rate.
Reporter Jack Ross investigated the growing — and lucrative — tenant relocation industry in a recent story for Los Angeles Public Press.
He tells KCRW that some landlords are willing to fork out tens of thousands of dollars to contract workers at tenant relocation firms, who use the voluntary buyout program Cash for Keys to get tenants to move.
“They do the interpersonal negotiations with tenants — convincing them, cajoling them and allegedly, in many cases, threatening them — to make tenants take money to leave their apartments,” says Ross. “Landlords can then convert those apartments to market rate, and bring in a new tenant who will pay three or four times the price.”
Ross spoke to renters across the city who dealt with these re-tenanters. He found some had been directly threatened, told they would be deported, or told that their buildings would be demolished — a practice outlawed by the city’s rarely-enforced Tenant Anti-Harassment Ordinance.
Other re-tenanters use a “carrot and stick” approach: offering an alternative to harassment or poor conditions already happening in tenants’ buildings.
“Services will be suspended, really brutal remodels will be ongoing, tenants are living amongst construction and drilling,” says Ross. “And then meanwhile, there's a friendly face who shows up at your door every so often, offering you tens of thousands of dollars to leave.”
Tenants aren’t required to take Cash for Keys offers, and often, tenant advocates advise them not to. Ross says that’s because the relocation money is often “not enough to rent another place in LA, and people end up leaving the city.”
Cash for Keys, and the practice of hiring tenant relocators, remains a legal practice under state and local law. But some advocates are pushing for a change.
One solution they’ve posed is repealing Costa-Hawkins, the California law that allows rents to be hiked up to market rate after a tenant vacates a unit. And Ross says there’s an initiative on the 2024 ballot that aims to do just that.
“If Costa-Hawkins were repealed … then cities and counties could institute laws that say, ‘I don't care if you had a rent-controlled tenant leave a rent-controlled unit. That unit is still rent-controlled. You are not allowed to then charge three, four times the rent for the next person.’ And it would take away that profit motive.”
