For far too long, the narrative surrounding Los Angeles’ housing crisis has been a zero-sum game, pitting tenants against those of us who are the very people who supply their homes and roofs over their heads. We, the Apartment Association of Greater Los Angeles, believe it’s time for an honest, fact-based reckoning. Los Angeles City Council’s mad rush to impose ever-stricter regulations, while politically expedient, is choking the essential, multifaceted economic contribution made by rental housing providers—and threatening the stability of the entire rental market.

The Greater Los Angeles Area is an economy driven by its people, and those people need places to live. Housing providers, from the single mom with a duplex to the mid-sized operator with a handful of buildings to the corporate owner with newer properties, are not just collecting rent; they are vital economic engines providing vital housing services.

Consider the sheer scale of the impact we housing providers have. Housing providers pay billions of dollars each year in property taxes, which fund vital city services, schools, and infrastructure across the region. We employ a small army of people: maintenance workers, plumbers, electricians, carpenters, handymen, landscapers, property managers, and administrative staff. Every time a new apartment is constructed, or maintenance or remodel work is undertaken on an existing unit, it ripples throughout the local economy, supporting small businesses and working-class Californians.

Yet, although an essential contributor to our local economy, we housing providers are under siege. Recent policy decisions—particularly the perpetual lowering of rent increase limits that destroy our rental income and fail to keep pace with soaring operational costs—have created an untenable financial imbalance. Insurance premiums have ballooned by double-to-triple digit percentages. Utility costs are skyrocketing. Interest rates are at or near all-time highs. Maintenance and repair expenses, especially for those who manage the region’s aging housing stock, have consistently outpaced general inflation.

When revenue is artificially “capped,” but costs are not, the math simply doesn’t work. For many small, “mom-and-pop” landlords who may have traditionally charged lower-than-average rents, failed to consistently take available rent increases and are already under greater financial stress than larger entities, the choice becomes stark: defer maintenance, or find the exit ramp and get out of the rental market entirely.

This isn’t theoretical; we’re seeing an increasing exodus of small providers, taking much-needed units off the market or selling to institutional buyers who can absorb the losses, further concentrating ownership. These institutional “bottom fishing” buyers ultimately will redevelop these older properties, known as “naturally occurring affordable housing,” into luxury rentals because that is the only investment in rental housing that seems to work, or into condominiums or mixed-use properties. In the City of Los Angeles, this trend of forcing out small, independent owners has resulted in the loss of approximately 5 rent stabilized (controlled) rental units per day.

The unintended consequences of this over-regulation are now becoming tragically clear. By restricting the ability of owners to maintain their properties, the region’s local jurisdictions are accelerating the deterioration of our badly needed housing stock. By disincentivizing new investment, it starves the very supply needed to naturally relieve rental price pressure. The economic roundtable reports confirm that turnover, not annual adjustments, is the primary driver of rent increases. Stricter rent caps, as we’ve warned, merely heighten the pressure for owners to maximize rent when they can, and thus deepening the affordability crisis for new tenants. This is why about 95% of economists believe that rent control is a failed policy that does much more harm than good.

To solve the housing crisis, local government must stop viewing housing providers as the problem and recognize us as a crucial part of the solution. We need policies that encourage, not ones that punish, investment and maintenance. This means allowing rental income to reflect the true, rising cost of operating a quality property. It means streamlining the labyrinthine process for building new housing. It means creating a regulatory environment that supports the local, community-focused small provider.

Undermining the economic viability of those of us who house Los Angeles and surrounding communities is not a path to affordability; it is a fast track to a diminished region, where poorly maintained housing and constricted supply will ultimately harm everyone. It’s time to replace political posturing with sound economic policy and work together with housing providers to build stronger and more stable communities for us all.

By Daniel Yukelson, Chief Executive and Executive Director

Apartment Association of Greater Los Angeles (AAGLA)

Daniel Yukelson is currently the Chief Executive and 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 since then had 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 12 years as Chief Financial Officer for Premiere Radio Networks, now a subsidiary of I-Heart Media, and then 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. Yukelson also served for 6 years as a Planning Commissioner and for 3 years as a Public Works Commissioner for the City of Beverly Hills.