The L.A. City Council and Board of Supervisor are Exacerbating the Housing Crisis for Many of Los Angeles’ Most Vulnerable

These days its very common in Los Angeles Democratic politics to demonize landlords, pass policies to prevent rent increases, and make it difficult to evict tenants who don't pay rent. It is all done in the name of preventing homelessness and in response to rental affordability issues. I am a small, mom and pop landlord. I believe in rent control and tenant protections, but I can tell you that these measures are making the housing crisis worse for Angelenos who can ill-afford additional housing challenges – namely undocumented workers and those already struggling to pay their existing bills.

In Los Angeles County we have a byzantine system to evict a tenant who is not paying rent. The average eviction takes 6 months and costs $20,000. Both the City and County are in the process of supplying lawyers to all individuals being evicted which will only make the process longer and costlier to landlords. Therefore, the stakes for selecting a tenant who will pay their rent has become higher as the cost for removing a tenant is so significant.

Once I sign a lease, Los Angeles’ pro-tenant laws kick in and as I mentioned, I have to be willing to pay $20,000 to remove a tenant who stops paying rent. This means I must be excruciatingly picky when choosing a tenant to rent a property too, and I cannot take chances on people. There are two main criteria I must consider when screening potential tenants to predict if they will pay their rent consistently, their credit score and income. If a tenant’s credit score is too low, I simply cannot rent to them as they are too much of a risk and the cost of eviction is too high. If you ever take the time to review ads for apartments, you will see 600 and 650 credit score requirements quite frequently (if not higher). And for those that don’t list their credit score requirements up front, they likely still have those requirements but are trying to get more applications in. For every unit I list, I have to tell at least 50 applicants that I will not rent to them because of their credit score or lack of credit at all. For those with no credit, or credit scores below 600 it is nearly impossible to find an apartment. When you consider who in Los Angeles has no credit score, this usually includes undocumented workers as they have no social security numbers and thus do not have credit reports. Those who are already struggling to pay their bills and make ends meet are likely those also struggling with their credit scores.

The second criteria I mentioned when trying to predict if a tenant will pay their rent consistently is income. It is a general rule of thumb in real estate to require a tenant to make two and half or three times the rent every month. When screening a potential tenant, I have to be able to verify this information. Unfortunately, if an individual gets paid in cash I cannot verify their income through a paystub, and if they don’t have a bank account I cannot ask them to send bank statements to verify those cash payments. Even if they do have a bank account, I have to be willing to trust that deposits they make into that account represent their actual pay, and once again they become too much of a risk to rent too because of the high cost of eviction. Much like the profile of an individual with a poor credit score, those paid in cash are often undocumented workers and those on the lower-end of the socio-economic spectrum.

Right now there are tens of thousands of hard working Angelenos who either have bad credit or no credit and cannot find a place to live. And even more who work in the informal economy or get paid cash, that can't find a place to live because landlords like me cannot take a chance and get stuck paying $20,000 to remove them if they stop paying rent. As with all policies, there are always unintended consequences. So, as Los Angeles lawmakers rush to make it harder to remove tenants who do not pay rent, assuming they are helping those tenants, many others who can least afford it are finding it impossible to find housing from anyone other than a slumlord.

Joshua Kamali is a landlord in Los Angeles and a member of the Apartment Association of Greater Los Angeles. He worked for almost 10 years in Democratic politics and policy in Washington, D.C. and in California before becoming a nonprofit fundraiser. He now works in property development and construction and owns twelve units in Los Angeles County.