The 2018 Long Beach Multi-Family Unit Sell-Off
Why is the Long Beach Real Estate Market inundated with an inordinate amount of multi-family unit apartment buildings for sale? Between off-market deals and LoopNet’s current listings, there are well over 150 multi-family unit buildings for sale in LB right now. And you don’t have to be a Rocket Scientist to understand the sell-off, all you need to know is that there is a proposed Long Beach Rent Control Initiative that can potentially make the ballot.
By the excessive amount of multi-family apartment buildings for sale in Long Beach, you’d think investors might be interested in taking a look. And they do. But once they take a closer look and discover Long Beach might fall under the rule of a city-wide rent control ordinance; Long Beach loses all of its appeal!
The immediate impact of the latest wave and threat of a city-wide rent control ordinance is obvious, property owners want to sell now, they don’t want to stick around to see what happens. The problem is, not many investors are willing to roll the dice. (Just as a lot of sellers don’t want to wait for any outcome, educated buyers won’t make a move until any outcome.)
Before I share my feelings about all of this, let me take a second and say:
Long Beach is where both of my parents were born, Long Beach is where I was born, and Long Beach is where all of my children were born. And besides the fact the I live and work in Long Beach, I love and I care about Long Beach, too. And in fairness, before I go on and for those that don’t know, in the early 90’s my brother and I got into the landlord business and we currently own and manage several multi-family unit buildings, mostly in Long Beach.
I’m coming from a place that loves truly loves Long Beach “as well as” I have skin in the game. I also want to point out there is absolutely no rent gouging going on (and for those that don’t know,) Long Beach and San Pedro are the two most affordable beach cities in SOCAL. Long Beach and San Pedro border each other, and up and down the beach cities rents are 20%, 30%, 50% to double that of LB and SP.
The ambiguous purposed initiative.
The small advocacy group that submitted their proposed ballot measure states in their very first paragraph: This Ordinance shall be known as The Long Beach Fair Rent, Just Cause for Eviction and Homeowner Protection Ordinance. The purpose of this Ordinance is to promote neighborhood and community stability, healthy housing, and affordability for renters in the City of Long Beach by controlling excessive rent increases and arbitrary evictions to the greatest extent allowable under California law, while ensuring Landlords a fair return on their investment and protecting homeowners.
1. This Ordinance promotes neighborhood and community stability? Wrong! Neighborhoods deteriorate as property owners are not encouraged to repair and remodel. In fact, some property owners won’t be able to make it under this proposed Ordinance and will end up losing their once hopeful investment to the bank (which is a whole other problem.)
2. This Ordinance promotes healthy housing? Wrong, again! The supply actually shrinks under rent-controlled areas and there’s nothing healthy about having no housing for new renters.
3. This Ordinance promotes affordability for renters in the City of Long Beach by controlling excessive rent increases and arbitrary evictions to the greatest extent allowable under California law, while ensuring Landlords a fair return on their investment and protecting homeowners? I’m just going to claim foul here! (I would almost think it was a joke “if” I didn’t know better.) Affordability for renters in LB by controlling excessive rent increases? I had no idea that “affordability” is general to all LB renters. And to assume they can assure Landlords a fair and reasonable return on their investment! “Little green men will fall from the sky before they can guarantee a fair and reasonable return to all Landlords.”
I just covered the first paragraph of their proposed Ordinance; I am not about to cover their 43-page ballot measure in one sitting. I’m just going on record that I agree with the LB City Council, LB Chamber of Commerce, LB Apartment Association, NAR, PWR, local Banks and many other local leaders in town “this ballot measure would be harmful to the growth and future of this city!”
So, if this ballot measure isn’t the answer, what is?
As it relates to tenant-landlord relations, both sides complain about inadequate protection “and” both sides at times get intentionally railroaded and the short end of the stick. And the answer is (from my humble viewpoint) “we” need to make it much harder for offenders to scam the system, right now there are too many loopholes for offenders to manipulate. But swaying the pendulum to either side isn’t fair nor is it the answer. Fixing this problem from a tenant-landlord perspective is as easy as assembling sensible provisions for both sides (which I assure you can be done!)
As it relates to new affordable housing, it first starts with the City of Long Beach. LB City needs to get busy, they need to rezone areas, make new affordable housing plans and have developers bid for the jobs. And to my knowledge, the Mayor and City Council agreed to move forward four-years ago to create and implement a new housing plan.
Anyway, that’s all I got for now, this topic is so substantial and complicated that another 1000 -words wouldn’t cover it all. Clearly, I got more to say, but I’m finished for today!
Thankfully, the City Council voted 8-0 in favor of the Clerk’s office, City Manager (and or) City Attorney’s office to review and develop impact reports within 30 days. They want to get ahead of this ballot measure before it even has a chance to reach the ballot polls. You’ll most likely hear from me next on this matter when the City reports back with their findings!
Virginia In The Rain DMB