L.A. City Council approves deal to share retrofit costsJan 28 2016 · 0 comments · Nishkian Chamberlain, Seismic ·0
Renters and apartment owners must equally share the financial burden of earthquake retrofitting, the Los Angeles City Council agreed Wednesday, January 13, 2016, capping a more than year-long debate that allows the city to begin implementing the most comprehensive mandatory seismic laws in the nation.
Following many housing studies and heated meetings with landlord and tenant groups, city staff proposed a compromise that the City Council unanimously voted to move forward: Owners can pass half the retrofit costs to tenants through rent increases over a 10-year period, with a maximum increase of $38 per month.
The law, signed in October by Mayor Eric Garcetti, caps decades of efforts to strengthen two types of older buildings that proved deadly in past earthquakes: non-ductile or brittle concrete buildings and wood-frame apartment complexes with weak first floors, an estimated 15,000 buildings across Los Angeles to be retrofitted. See our November blog post: “L.A. Quake Retrofit Ordinance Signed Into Law and other Local Municipalities Soon to Follow”.
In 2013, San Francisco passed a landmark law requiring 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. Compliance so far has not been an issue, however, exceptions have been made to help ease the burden on tenants with the lowest incomes.
Los Angeles tenants are concerned that owners would be allowed to recoup all the retrofitting costs through significant rent increases in a city that already has some of the nation’s highest rents. Under existing L.A. housing laws, property owners technically could do so through a rent increase of as much as $75 per month.
While Los Angeles, lawmakers grappled with the controversy of passing all the costs on to tenants, the 50-50 cost-sharing plan, approved January 13, 2016, took more than a year of committee hearings and discussions with building officials, engineers, and owner and tenant groups. Officials, for example, agreed to allow owners to also pass on half the cost of a building’s seismic evaluation, as well as the interest they would pay on any loans taken out to fund the retrofits.
With the cost-sharing debate resolved, the issue becomes how the retrofit laws will be implemented in the coming months. Tenant and owner groups worry that a sudden demand for thousands of mandatory retrofits will create price surges for qualified construction contractors. Housing and building officials are also considering whether they have adequate staffing to process all the retrofit permits and the rent increases.
Under the new retrofit law, property owners will have seven years to strengthen “soft-story” wooden apartments and 25 years to strengthen concrete buildings. The Los Angeles Department of Building and Safety is finalizing a list of roughly 13,500 soft-story wooden buildings that officials suspect need retrofitting. Once the list is finalized, officials will first issue a courtesy letter to every owner explaining the new law and the mandatory retrofit timeline.
It will take longer for city officials to identify which concrete buildings will be included in the new retrofit regulations. There are an estimated 1,500 buildings — including landmark structures in downtown, Hollywood and Westwood.
The city may continue to find financial aid options for these retrofits, such as low-interest loans, permit fee waivers and tax breaks. However, nothing has been reported to date.
A retrofit tax credit bill proposed by Assemblyman Adrin Nazarian (D-Sherman Oaks) passed the Assembly and Senate last year, but failed to get the governor’s signature. The city will continue to lobby the state for funding options.
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