DEAR WEHO: Developers might have a terrible new tool to bypass rent control

Dear WeHo,

I wanted to let you know about an upcoming hearing to take place in front of WEHO city council soon that could change allowable increases on Rent Controlled apartments here in West Hollywood.

To give you a brief overview of the issue, I am a tenant in West Hollywood. Our 8 unit building was taken under receivership by the city. The new owner was a law firm that brought the building up to code and put it on the market in 2019. 

A real estate developer, Taylor Medgal, had purchased the building at auction as is.  Over the past year, this developer and former attorney has applied for a rent increase of 60 percent under the NOI ordinance. 

A hearing examiner listened to a circus of misinformation and false testimony, ruled in his favor raising rents approximately 40% over the next two years. The tenants appealed to City Council and they voted to remand the hearing. 

After 2 more hearings, one in which the landlord was a no-show, but the city granted him a reschedule even though it was against hearing procedure, the second resulted in a decision to increase rents approximately 57%.

The tenants have filed appeals and now we are waiting for the date to appear in front of city council of West Hollywood. 

If they uphold the examiner’s decision, this will give precedence to allow real estate developers to purchase buildings that are under rent control, present inflated spreadsheets and fabricated documentation in order to increase rent to the max allowable of 60 percent. 

This hearing will be a major development in how landlords can manipulate the system, use a loophole in the NOI ordinance, and bypass allowable rent increases for rent controlled units.

With the upcoming elections, this may be of interest to your readers.

Please feel free to contact me for more details.

Thank you for your time.

Lorraine P.  

Resident of West Hollywood LP

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Ian
Ian
1 month ago

This backdoor defeats EVERY aspect of Rent Control!!!!

West Hollywood should be ashamed to have allowed this. NOT ONE of those individuals would have a job at the City of West Hollywood had it not been for long term West Hollywood residents who formed this city.
SHAME ON West Hollywood’s lust for greedy degenerate mini Hedge Funders!!!!

Westmount Dr Resident
Westmount Dr Resident
1 month ago

I’ll willing to be skeptical of owner or developer representations always, but unfortunately I think the first detail is the most relevant – the building went into receivership, which I assume means a tax default. It’s unlikely that situation will be repeated that often, so it seems like this won’t be a systemic problem for renters (aside from the challenges we normally face). And it’s worth talking about what the city does with properties like this in the future – though the city is likely obliged to at least recover lost revenue, a market rate auction doesn’t seem like the… Read more »

trigger1924
trigger1924
1 month ago

Geez..reading comment’s that includes unfounded and stereotypical accusations of developers or wealthy folks taking advantage of tenants by raising rent to market value is disturbing. Do you all think what you’re saying is WeHo culture? What I don’t understand is why current tenants seem to feel entitled to live in a desirable location without paying what the location demands. Ok, shelter is a right for everyone, but location is not. My opinion isn’t popular. Work and earn wages that will support your desired location. Get a degree if you don’t have one. I graduated as an adult student and worked… Read more »

cody warlock
cody warlock
30 days ago
Reply to  trigger1924

You are obviously a landlord. Rent control protects tenants from greedy unscrupulous landlords.

trigger1924
trigger1924
30 days ago
Reply to  cody warlock

Nope. Just a veteran who has learned a thing or two….maybe even three from living in many states and South Africa. Now. I think WeHo ideals are wonderful, but they do not work with human nature. Humans have not evolved past power, greed, money and so on. The right has the wrong idea too. They want to roll with more of authoritarian approach. Check out the Forward Party. Its a centrist approach that puts community and country before any types of ideology. Obviously, 3rd parties are frowned upon but the 2 existing parties…no one likes losing votes. But the 2… Read more »

Gavin R. Putland
Gavin R. Putland
1 month ago

What’s better than rent control? A tax on vacant lots and unoccupied buildings. While rent control makes it less attractive to supply accommodation, a vacant-property tax makes it less attractive NOT to! Such a tax, although sometimes called a “vacancy tax”, is not limited to what real-estate agents call “vacancies” — that is, properties available for rent. It also applies to vacant lots and empty properties that are not on the rental market, and prompts the owners to put them onto the market and get them occupied in order to avoid the tax. By the way, the desired *avoidance* of… Read more »

carleton cronin
carleton cronin
1 month ago

It should be remembered that renters protesting unreasonable conditions were the people who bought West Hollywood into citywide. Band together to once again fight injustice. Numbers. out – ask any politician. Well, not just ANY politician…

Ham
Ham
1 month ago

It’s injustice to pay the market rate for a rental property???? Surely you can’t believe that?

C.R.
C.R.
1 month ago
Reply to  Ham

If the market rate is being established for the most part by large corporations with major financial resources, yes, it’s an injustice. The needs of the many outweigh the needs of the few, and this certainly applies to housing.

trigger1924
trigger1924
30 days ago
Reply to  C.R.

So you do understand large corporations may not have unlimited funds. Um no. In order to stay in business those fat cats have to pay their mortgage too, as well as overhead. So why people wonder why terrible landlords (stereotype) actually can’t, not wont, but can’t continue repairs bc rent control just to name one of many expenses. As time goes on, prices go up for everything. Those corporations somehow have unlimited funds to pay the difference between market and whatever rent control is “providing” them. Easy example, mortgage at 1k, rent control price 500. Loss of 500 right there.… Read more »

Ian
Ian
30 days ago
Reply to  Ham

What part of “market rate” BECAUSE of the hard work put into forming this city that made it desirable don’t you get?

WeHo resident
WeHo resident
1 month ago

Can someone provide the information on how each council member voted on the rent increase, or simply provide the date of the vote so I can look it up on the city website.

Emiliano
Emiliano
1 month ago

The greed from the freeloaders here is shameful.

Ian
Ian
30 days ago
Reply to  Emiliano

Just like the parasite developers and interlopers that slither in after decades putting a little x dump like West Hollywood on the map. Chances are people like you wouldn’t even know about West Hollywood without the past work of those “freeloaders”.

trigger1924
trigger1924
30 days ago
Reply to  Ian

Um….developers 99% of the time build new. So yall can stop hating developers.

Landlords in town are actually individuals, not interlopers.

Freeloaders can’t build a community. The individuals and small businesses decades ago who purchased in the city, therefore they built the city. Example, me. History is wonderful!

“Landlords” has a negative connotation. Its really not fair. Just like I don’t like people saying the LGBTQ community is full of groomers and pedophiles. Not cool.

Now. There are bad landlords, but remember there are also bad renters. For example, leaving a unit trashed. Guess who pays for that.

cody warlock
cody warlock
30 days ago
Reply to  Emiliano

the greed from crooked greedy landords is shameful.

Michael Dolan
Michael Dolan
1 month ago

The current City Council is not knowledgeable enough, or even care enough, how this loophole can devastate, perhaps the most important foundational to West Hollywoods Incorporation. The RSO, written by John Heilman, The West Hollywood Housing Corporation, John Heilman was integral in its creation to increase affordable, and John’s vision in the creation of West Hollywood’s Inclusionary Housing program which no new development will be approved only when the developer includes 20% of units as affordable. My point is we need John Heilman back on Council to stop/end the loophole of rent gauging and displacement of low to moderate-income residents… Read more »

Promises, Promises, Promises
Promises, Promises, Promises
1 month ago
Reply to  Michael Dolan

The only person currently on city council knowledgable about this subject would be Lauren Meister. The only other candidates for city council knowledgable about the RSO would be John Heilman, John Duran and Steve Martin. One candidate has compromised themselves by claiming to be an advocate of affordable housing, doesn’t know a wit about RSO and consistently votes for projects contrary to that. A dyed in the wool advocate for development as evidenced by allegiance to developers without consideration for affordable and/or sustainable housing. One must do more than mouth words. The city does not need that nor do they… Read more »

Tom Van Patton
Tom Van Patton
1 month ago

Brilliant reply. Good for you.

Tom
Tom
1 month ago

All the people who talk about rent control as socialism will I am sure remain silent on this one. This developer bought a property, doubtless with full access to the rent rolls and full knowledge of WeHo rent control. Now they’re gambling that the city will validate their poor business decision by saddling the existing tenants with a usurious rent increase. How about no.

radii
radii
1 month ago
Reply to  Tom

The investor class, i.e.; Developers, have the resources to pay high-powered attorneys to find any and every loophole around the law or just on the boundary – all in bad faith, of course … and they have the money to pay lobbyists to put politicians in their pocket. All they care about is profit and that greed-driven motivation must have checks against it in any civil society. Time to tax total wealth in order to make the rich actually pay their fair share since they not for many decades.

Wildebeest
Wildebeest
1 month ago
Reply to  radii

And the obvious results are visible in West Hollywood. Take Sunset Blvd. which has denigrated its landmark buildings and businesses to the ax with the horrid Digital Billboard phenomenon. The only stretch to escape is Sunset Plaza, tightly held by the Montgomery Family and not willing to venture down that miserable path. Once one leaves Sunset Plaza particularly driving east it becomes akin to the Great Migration in Africa, specifically when the Wildebeests attempt to cross the river and are consumed by the waiting crocodiles. What a miserable world with all that these folks have are their $$$ and their… Read more »

Joshua88
Joshua88
1 month ago

Very interesting, although too vague,

How do we get in touch with you, Lorraine P?

Individual investigative reporter
Individual investigative reporter
1 month ago

Best for tenants to keep accurate files…..in a form ready for any legal challenge. Those most likely can be relied upon for any hearings or additional litigation and made available to Wehoville in the absence of investigative reporters. Personally have a “library of 3-ring binders” all up to date for whatever occurs.

Cyn Guy
Cyn Guy
1 month ago

I wish WeHoVille would take reader submitted items such as this and do a bit of actual journalism – i.e., pull the case file, review the writer’s statements and analyze what is truly happening. One man’s “false misinformation spreadsheets” may be an accurate listing of expenses to bring a building thrown into receivership up to a habitable condition – which benefits the tenants. Or maybe it is all unsupportable work that wasn’t performed. We don’t know. So this column is sorta crying “fire” and WeHoVille provides no context other than being the theatre.

Larry Block
Admin
1 month ago
Reply to  Cyn Guy

we have no access to a private property owners records. and each owner has a different set of circumstances, loans, tenants, rent controlled or otherwise. and you are welcome to contribute, all of us besides one person works for free to provide you with the theatre.

Cyn Guy
Cyn Guy
1 month ago
Reply to  Larry Block

Larry – I get and understand that. You do a lot with one full time employee. I guess it begs the question is WeHoVille a “blog” or more a news site? I view WeHoVille as more newsy than “blog”, although the comments certainly provide more than enough “blog content.” Guess my point / suggestion is to spend a bit of Brandon’s time “vetting” submittals to provide the “news” overlay. Otherwise these reader submittals will cement tbe “blog” handle.

Larry Block
Admin
1 month ago
Reply to  Cyn Guy

Its whatever you want it to be. There are too many diverse opinions to funnel all perceptions into one place. Brandon can make his own judgements.

Details& Structure
Details& Structure
1 month ago
Reply to  Larry Block

Having sound journalistic structure is not a bad thing.

Joshua88
Joshua88
30 days ago

Wholeheartedly agree.

Mark
Mark
1 month ago
Reply to  Cyn Guy

Thus is the only rational reply I’ve read here. The costs to improve thus building could easily justify a 50% rent increase especially if the tenants have been there for years and are paying 25 to 30% of market rent. How does the author have any clue what the owner spent?

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