Protecting Tenants as Los Angeles Decarbonizes

Los Angeles is tackling climate change and greenhouse gas, or GHG, emissions boldly.  By 2050, the city aims to fully decarbonize all of its buildings—including its housing stock—which is responsible for 43 percent of GHG emissions in the city and is the largest single source of emissions. However, decarbonizing puts a significant portion of LA’s already vulnerable renter community at risk as it can impact housing affordability and increase energy burdens.

But Strategic Actions for a Just Economy, an LA-based tenants’ rights organization, is working to make sure tenants’ rights are protected as the city decarbonizes—and make LA a model city for the country in passing progressive, socially conscious climate policy that leaves no one behind.

LA wants to decarbonize by fully electrifying buildings to reduce indoor and outdoor pollution, the Los Angeles Times reports. But decarbonization may incentivize landlords to increase rent once units are retrofitted and weatherized, a likely scenario as tenant protections are poorly enforced by LA’s housing department. Indeed, upgrading buildings is not cheap, and the city’s primary renovation work program, capital improvement program, and rehabilitation work program allow landlords to pass the cost of building upgrades to tenants. With nearly two million renters, half of which are rent burdened, meaning they spend most of their income on housing and energy costs and cannot afford to pay higher rents. This poses a huge housing problem as the city moves toward its decarbonization goals.

While tenants living in buildings under the rent-stabilized ordinance, or RSO, may face higher rents, tenants living in buildings not protected by RSO are at an even higher risk of rising housing costs and displacement as they have less legal protection. “This leaves a lot of newer buildings in situations where people can be evicted pretty much for no reason,” says Chelsea Kirk, SAJE’s assistant director of building equity and transit.

What’s at stake for tenants and small landlords?

SAJE points out that a decarbonization mandate could trigger the Ellis Act, which allows California landlords to evict tenants to convert or demolish properties. In the past two decades, over 26,000 rent-stabilized units have been removed from the market under this act.

SAJE has also noticed the increasing use of the corporate landlord business model, where lower-income tenants are systemically moved out when corporations are looking to buy a building and dramatically renovate or demolish it. “They [the corporations] hire someone to offer cash amounts to tenants or say whatever they can to get them out of there,” says Kirk. K3 Holdings LLC has become notorious for using such tactics and has been accused of numerous tenants’ rights abuses. If unchecked, such actions could escalate as LA moves forward with its decarbonization efforts.

The average cost of decarbonizing a rental unit is $28,000. Sixty-seven percent of LA’s housing stock is owned by investment companies that have easy access to large amounts of capital and could easily carry the cost of decarbonization. But of course, the best interest of corporate landlords is to maximize every dollar possible.

In contrast, $28,000 is an enormous cost to mid to small landlords. Although SAJE works for tenants, they are keeping small landlords in mind. “We’re very concerned about the consolidation of housing in the hands of larger corporations,” says Cynthia Strathmann, executive director of SAJE, in reference to the recent purchase by corporations, such as the Blackstone Group, of large swaths of the city’s housing stock, tilting the balance of the housing market, a study by SAJE finds.

Smaller landlords are less efficient than large corporations at capitalizing on properties. “We have a lot of mom-and-pop landlords who don’t raise the rent for years,” says Strathmann. SAJE would like the corporations that profit most from LA’s housing industry to bear the cost of decarbonization initiatives while protecting small landlords. “We don’t want this [decarbonization] to turn into a mechanism where small landlords are forced to sell up,” Strathmann stresses.

SAJE also stresses that although the climate mitigation movement is happening at a policy level, “there’s really no consideration around the material conditions of people living in South Central, Compton, or East LA,” says Oscar Zarate, director of building equity and transit at SAJE. Decarbonization is believed to reduce energy burdens by lowering energy use. However, SAJE points out that few studies properly assess decarbonization’s impact on LA’s residents. In addition, the full impact of housing decarbonization—which can sometimes increase energy bills—depends on the individual actions of landlords, including which energy-efficiency measures they choose to implement and the kind of energy-saving appliances installed.

SAJE Recommendations

In partnership with other justice organizations across the city, SAJE is pushing for support for small landlords and affordable housing providers and the prioritization of energy-burdened areas in the decarbonization transition. It is also pushing to link decarbonization policy with city action to improve housing quality.

In December 2021, in response to the city ramping up conversations about decarbonization and working to quickly pass ordinances to start the process, SAJE published a report that analyzes gaps in rental law enforcement and shows how decarbonization can expand quality affordable housing.

The report also offers policy recommendations informed by SAJE’s Tenant Action Clinic, a space for the SAJA tenant community to get questions answered about harassment, evictions, and other housing issues, and by SAJE’s partner organizations, including the Koreatown Immigrant Workers Alliance, Venice Community Housing, and Esperanza Hope for All-UnidosUS, among others.

These recommendations include, but are not limited to:

1. Banning retrofit costs from being passed on to tenants living in low-income non-RSO units and affordable units and giving public subsidies to small-to-mid landlords to help them absorb the cost of decarbonizing. Corporate landlords would be banned from receiving public assistance as they can afford such costs.
2. Mandating that retrofits create energy-efficient, all-electric, climate-resilient homes.
3. Amending the anti-tenant harassment ordinance to better protect tenants from harassment and closing the eviction loophole in AB1482 to protect tenants from displacement.
4. Continuing to focus on COVID recovery for the city’s most vulnerable renters.
5. Improving indoor air quality by banning gas stoves which can generate unsafe levels of indoor air pollution.

For SAJE, this push for decarbonization is also about creating healthier living spaces by fixing many of the housing issues tenants face, including plumbing issues, lack of hot water, faulty electric wiring, and pest infestations. One of the many things SAJE hears in its tenant clinics, Strathmann explains, is that an electric stove—or any decarbonization effort, for that matter—is not a priority when a tenant has a bedbug infestation or is dealing with a slum landlord. “We’re interested in uplifting the agency and autonomy of the people we work with,” says Zarate, reasoning that a city-wide housing-quality mandate could address many of the habitability concerns that tenants face. For SAJE, decarbonization, if done right, can protect tenants, keep housing affordable, and make LA a leader on the path to healthier cities.