Sept. 16--The cost of making buildings strong enough to withstand a major earthquake should be equally divided between apartment owners and renters in Los Angeles, a compromise that could clear the way for mandatory retrofitting laws, according to a proposal from city housing officials.
Since L.A. Mayor Eric Garcetti called for the most sweeping earthquake-retrofitting laws in California history, the big question this year has been who will pay for the costly upgrades. The issue has been complicated by the fact that many quake-vulnerable buildings are older apartments, with residents who say they are already living in one of the least affordable cities for renters.
Garcetti's plans would require owners to retrofit thousands of at-risk buildings across the city -- the costs could be as much as $130,000 for a weak wooden apartment and millions of dollars for a taller concrete building. Tenants have worried that owners would be allowed to recoup all of the retrofit costs through huge rent increases.
In San Francisco, officials passed a landmark law in 2013 that required owners to retrofit vulnerable wooden apartment buildings but allowed the costs to be passed on to renters -- even those protected by rent control -- over a 20-year period. Exceptions have been made to help ease the burden on renters with the lowest incomes.
Councilman Gil Cedillo, the head of the City Council's housing committee, pledged earlier this year that tenants would not face a 100% pass-through like San Francisco's. He instructed city officials to come up with recommendations on how the financial burden could be shared between landlords and tenants.
On Wednesday, housing officials will offer their answer to Cedillo: A 50-50 split through a rent increase over a five-to-10-year period, with a maximum rent increase of $38 per month. (Under current housing laws, which have rarely been used for seismic retrofits, property owners technically could pass 100% of the retrofit costs through a rent increase of as much as $75 per month.)
Housing officials held four meetings with tenant and property owner groups, but were unable to come to a consensus on how to split the costs. Landlord representatives were concerned that owners wouldn't be able to obtain loans if they couldn't demonstrate that their properties could provide adequate cash returns to support the repayment of the retrofit work, according to a report submitted to Cedillo's committee this month.
"However, there was consensus that the seismic resiliency program is vital for the safety of the city's residents and preservation of the city's housing stock, and that costs should be shared between both property owners and renters," the report said.
"We agreed on a number of issues, but we could not, not surprisingly, come to agreement on the pass-through," said Larry Gross, executive director of the tenant advocacy group Coalition for Economic Survival.
Gross said any rent increase will be tough on tenants, but that Wednesday's proposal "at least attempts to lessen that burden." He said he supports a 10-year time period but is concerned about how accumulated interest on the retrofit costs will be factored into how much tenants will pay.
In addition to finding a way to split the costs between tenants and owners, Cedillo has said that he hopes to find other financing options to help owners with the cost of retrofitting.
These options could include low-interest loans and tax breaks to owners who retrofit. Cedillo and his colleagues are also expanding a program that provides private loans for retrofitting that would be paid back through a temporary, voluntary increase on their property tax bill.
Some kind of deal that satisfies tenants and owners could clear the way for the mayor's plans. He has voiced confidence that a mandatory retrofit law will pass and credited the work of his office and his earthquake advisor, U.S. Geological Survey seismologist Lucy Jones, for having 130 meetings last year to get feedback from various groups.
The dangers of concrete buildings have been known since the 1971 Sylmar earthquake, when hospital buildings were destroyed. As many as 50 of the more than 1,000 concrete buildings across the city would collapse in a big earthquake, the Los Angeles Times reported in 2013.
Wooden "soft-story" buildings with weak first floors -- often with carports on the lowest story -- are also a well-known risk. Sixteen people were killed when the Northridge Meadows apartment complex pancaked in the 1994 earthquake. There are about 12,100 of these buildings across the city, according to building officials.
The proposal to split the retrofit costs equally between renters and owners will be discussed Wednesday afternoon by the City Council's housing committee.
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