Under Earthquake Retrofit Plan, L.A. Tenants Would Pay Full Costs

Los Angeles City Council member Bernard Parks wants to allow owners who seismically retrofit apartment buildings to pass on 100 percent of the costs to tenants. He also wants the city to consider exempting these apartment owners from rent control laws. Under existing laws, only half of major rehabilitation costs can be passed through to tenants. Parks would like to transition to full cost pass through, “over a reasonable period of time.” 

L.A. officials have known about the dangers of older buildings for years, but cost concerns have complicated earlier efforts to require privately owned buildings to retrofit. Many owners object to paying for costly earthquake improvements on their own. The City Council is looking into a state bond measure that would provide owners with additional aide to quake-proof their buildings, but Parks thinks the city should first consider other options, before going to the state for funding. 

A Los Angeles tenants-rights group said tenants cannot afford to foot the entire bill for seismic upgrades. Apartment owners welcomed Parks' idea but added officials should still pursue other ways of helping pay for the costs. 

In San Francisco, officials waive rent control limits on rent increases when owners seismically retrofit their apartment buildings. Owners are allowed to pass along the full retrofit costs to tenants, including those on rent control, over a 20-year period. Extremely low-income tenants, such as those on food stamps, are exempt from the rent increases. The San Francisco Board of Supervisors last year required about 3,000 wooden apartment buildings with weak ground floors to be strengthened. The San Francisco law makes owners responsible for completing the retrofits. Owners can finance them with private loans or city loans that could be repaid through additional property taxes.

After the retrofit, tenants would see monthly rent increases of probably $8 to $50 a month if they were not classified as very low income. Retrofitting an apartment building in San Francisco is estimated to cost $60,000 to $130,000.

(Sources: Los Angeles Times, Apartment Association of Greater Los Angeles) 

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NAAEI Leadership Experience: Powered by Dale Carnegie

NAAEI Leadership Experience: Powered by Dale Carnegie  

Responding to the need for leadership training within the apartment industry, NAAEI has partnered with Dale Carnegie Training to deliver a world-class program called the NAAEI Leadership Experience....