While Renters “Walk” With Thousands in Undeserved Dollars, Controller Mejia Finds Fault

Los Angeles City Controller, and avowed Socialist Democrat, Kenneth Mejia recently launched an online map that tracks data on tenant buyout agreements (a/k/a, “cash for keys” agreements) occurring throughout the city.  Although the data presented is an interesting resource tracking where tenant buyouts are occurring in the city and information on dollar amounts being given out to tenants, Controller Mejia is using this data to promote a false narrative once again against rental housing providers that somehow this is a bad thing for renters although these agreements are strictly voluntary and have many other safeguards imposed by the city. According to Controller Mejia, he claims that tenant buyouts are being used as a tactic that landlords use to “compel tenants” to move out of housing units that are protected under the Rent Stabilization ordinance, often so landlords can “re- rent” these units to new tenants at market rate prices.

Controller Mejia’s comments once again show how out of touch with reality he truly is. Today, due to excessive and overbearing layers of regulation, it is nearly impossible for owners to recover rental units through evictions even under the most extenuating circumstances such as non-payment of rent for protracted time periods, or even in matters where a tenant may be destroying property, acting as an extreme nuisance or conducting criminal activities at a property. Often, an eviction and ultimately a sheriff’s lockout in the Los Angeles Area can take up to 8 months at a cost of upwards of $50,000.

When faced with extenuating circumstances, often the most expedient way for an owner to deal with a problem tenant are through tenant buyout agreements. Very often, particularly when owners are dealing with lease violations like a nuisance or criminal activity, they must act quickly in order to maintain the peace and enjoyment of their property for other, lease-abiding renters. The fact that Controller Mejia would complain about renters, very often bad actors in such situations, being allowed to walk with thousands of dollars in monetary or forgiven rent benefits despite violating a lease agreement makes no sense whatsoever. Under less extreme circumstances when an owner would like to remodel a unit that has been occupied for 20—30 years, a “buy-out” offers a renter a large sum of money that can help them relocate to a lower priced area while “banking” considerable money to put in savings.

By his comments, Controller Mejia must think these “buy-out” agreements are somehow being forced upon renters, when they are absolutely not. These arrangements are legal agreements that require a meeting of the minds and mutual agreement. Moreover, the anti-harassment protections that exist today in the City of Los Angeles impose substantial fines and other legal ramifications upon property owners who must tread lightly when approaching renters for even the most innocuous issue (it should be noted that there are no protections in place for housing providers who are harassed and violently threatened regularly by their renters). Controller Mejia, who is an avowed Socialist, has no respect for private property ownership. In his world, the government should own all private property and his comments and constant attacks against property owners, particularly the majority in the city of whom are independent, “mom and pop” owners are intended to further this desire to effectively takeover private property.

Controller Mejia’s comment about tenant buyouts being “not enough” is ridiculous. These buyouts often entail huge amounts of cash and forgiven rent that the city specifically requires the owner to offer as a minimum for those in rent-controlled units.  The city’s Tenants Anti-Harassment Ordinance (TAHO) in place that prevents owners from even approaching a renter more than once every 6 months with a buyout agreement.  Again, the agreements are strictly voluntary, and the renter even has the right to rescind them within 30 days after they sign them.

As a result of mentalities like Controller Mejia’s and most of the Los Angeles City Council, rental properties in California are already very unappealing to most investors, and at the same time, government housing has been a proven failure decade after decade. At this point, private property owners are better off not being ambitious, not risking their hard-earned retirement savings, and not being responsible for putting roofs over the heads of renters. As a result, for a large majority of those of us in the rental housing business who are the over 80% of owners comprised of minorities, recent immigrants, retirees and other independent owners who have invested in real estate to supplement retirements and housing expenses, or for the creation of generational wealth, the business of rental housing is verging on impossible. Younger generations won’t enter this arena. It appears our government is pandering to the majority of voters who rent by making private property owners out to the “bad guy” and imposing horrendous, mostly unworkable regulations on hard working citizens who have sacrificed by investing in their communities to provide badly needed rental housing.

Radical socialists, like Controller Mejia, will never be satisfied until there is no way whatsoever for an owner to get rid of a bad tenant.  The city just keeps passing more and more restrictions that protect bad renters and the expense of the vast majority of renters who are good, law and lease abiding tenants and their families as well as owners.  It’s absolutely disgusting the actions that are being taken by the city, including Mejia, to protect what often turns out to be extremely difficult situations for property owners, especially when dealing with criminals and other troublemakers living at their properties. It’s as if governments like the city are telling renters that they do not have to own anything and can be happy about it because the government will regulate private property to the extent renters will, in effect, own the property by merely renting.

What has become abundantly clear is that Controller Mejia is aligned with and working in tandem with radical tenant activist groups.  Recently, the Los Angeles Tenants Union posted on its website the false narrative that owners are somehow “forcing” renters into agreeing to accept buyout agreements.  It is shameful that an elected official like Controller Mejia is so obviously biased and favors one constituency over another.  As a duly elected city Controller, his primary responsibility is to present data and to not engage in biased and presumptuous social commentary about it.  If Controller Mejia wants to say that tenant buyout agreements force people out of their housing and out of the city, then as the Controller he needs to collect and present data that backs up that false allegation.

(Editor’s Note: This editorial by Daniel Yukelson was first published in the Los Angeles Daily News on January 13, 2024.)

—

Daniel Yukelson is currently the Executive Director of The Apartment Association of Greater Los Angeles (AAGLA). As Certified Public Accountant, Yukelson began his career at Ernst & Young, the global accounting firm, and throughout his career has served in senior financial roles principally as Chief Financial Officer for various public, private and start-up companies. Prior to joining AAGLA, Yukelson served for 15 years as Chief Financial Officer for Premiere Radio Networks, now a subsidiary of I-Heart Media, and for 3 years as Chief Financial Officer for Oasis West Realty, the owner of the Beverly Hilton and Waldorf Astoria Beverly Hills where he was involved with the development and construction of the Waldorf. Mr. Yukelson is a former Public Works Commissioner and Planning Commissioner for the City of Beverly Hills.