Feeling the Increase in Crime?

By Matt Williams, Principal, Williams Real Estate Advisors

With the California prison population being reduced by 18,000 inmates since March 2020 and the reduction in police budgets, crime is on the rise and rental property owners must be prepared. Most of the released inmates have committed non-violent crimes, but non-violent offenses just happen to impact rental property owners and their tenants.

These impacts include property and drug crimes such as theft, burglary, robbery, larceny, vandalism, drug possession, drug trafficking, etc. Even though many are happy to see that inmates get a second chance to be a productive part of our society, not all released inmates are sticking to the “straight and narrow” but rather going back to their old criminal ways.  To compound the problem, a reduction in police budgets and staffing are making it tougher for our police to respond to the increased crime. For example, the Los Angeles Police Department’s active duty police force will drop to a 12-year low based on the budget cuts approved by the Los Angeles City Council on July 1, 2020. This in turn is creating a perfect storm for a rise in crime that impacts both owners and tenants. In this article, I address how owners need to be prepared to address this situation.

As owners, we have all enjoyed the benefit of reduced crime from Santa Monica to Downtown Los Angeles. But more recently, tenants are starting to complain about an increase in crime. One of the major complaints is related to the homeless community wandering through properties, causing tenants to feel unsafe. Tenants have often called about such issues as homeless people in a building’s laundry room doing drugs or sleeping in the corner of the parking garage. 

A second complaint is the increased gang activity around neighboring properties. Gang activity has become a lot harder to spot unless one knows what to look for. In the old days, anyone could spot gang members because they wore “gang colors.”  But that has changed today. Gang members now often dress like a local skater and / or wear almost anything to blend in with the rest of society.  But despite that change, their activities remain dangerous, scaring and sometimes harming owners and tenants. Gang activity ranges from vandalism such as graffiti and theft such as stealing catalytic converters from cars, to far more serious crimes.

The third major complaint is the increase in drug activity, whether from gangs or others. There is nothing worse than living next to a property with a drug dealer.  It not only brings, s unwanted visitors to the neighborhood, but increases the chance of other crime in the community because drug addicts can act irrationally and become dangerous.  These are just a few of the issues that have come across my desk since March 2020, first with the release of inmates and then with the decrease in police budgets beginning this summer.

No matter what the crime, criminal activity negatively impacts owners and tenants.  For tenants, it causes them to feel unsafe, scared, and frustrated.  For owners, the impact of increased crime is also pronounced.  There is an added expense, which can be significant, of making a building less of a target for would-be vagrants and criminals.  Increased vacancy rates as tenants move out results in lost rental income. Reduced rental rates in turn lower property values. And lower rents can also put a serious financial squeeze on owners. As an owner, being ready to address tenants’ concerns is essential to countering the negative impacts of increased crime in the community.

Even if the uptick in crime has not impacted a particular owner’s property, it is good to be prepared. Here a few ideas to help address the problem.  First, focus on what can be done to deter crime at the property. A simple fix may be installing more lights and possibly brighter lights. This was done at a property we manage and the criminal activity disappeared. The next property fix is to install security cameras. The investment is worth it. With bright lights and security cameras, any activity can now be seen and recorded. This not only helps the tenants’ sense of security, but it aids the police in catching criminals and reducing crime in the community. Another solution that has worked for some owners is installing a fence. This does not work in every situation but can really help keep vagrants off the property as any deterrent makes it less likely that someone will try to enter a property.

Second, communicate with the tenants. Listen to what they have to say about what they are experiencing and understand their concerns.  Even though owners own the building, tenants live there and need to feel safe in their homes.  Their input and feedback is essential to addressing the issues but also giving them the security that an owner cares about them. Combined with some of the recommendations made in this article, open communications can help reduce the chances of tenants leaving, lost rent due to vacancy and possible lower rental rates should the unit need to be released for less.

Third, reach out to the authorities. Encourage tenants to take the initiative to call the police should there be any issue or concern. But with police having less resources yet more crime to address, it may be tough to get the type of attention needed to help deter criminal activities in a community. The next best option is to reach out to the local District Attorney.  The district attorney has the power to address crime in the community and works closely with the police.  The local district attorney can turn a low priority problem in the police department’s eye into something that they take seriously.  The district attorney also can issue a letter of eviction to tenants that are caught with illegal drugs or weapons should they meet the criteria required under the law.

With the increase in crime due to factors outside of owners’ control, do not let it catch you flatfooted. Whether it be increased vagrants, gangs, or drug activity, be prepared.  Do not be afraid to invest the money required to reduce crime at the onset; it will be an investment you will never regret.  Take the time to speak with the tenants and work with them to address their concerns.  Make friends with the local police and district attorney.  These three ideas can greatly help to reduce the impact of crime at a property and within the local neighborhood.

Matt Williams is the principal of Williams Real Estate Advisors, Inc. which is a full-service property management company that has approximately $150,000,000 of multifamily assets under management throughout Southern California.  You can reach Mr. Williams at matt@williamsrea.com.