Long Beach Real Estate-Long Beach Condos

What madness is this I hear?  The Long Beach City Council is about to attempt to burden the good people of the City of Long Beach with Rent Control?  Sorry, I have to ask.................Are you out of your minds? 

The Long Beach City Council meeting is Tuesday, December 11, 2007 at 5:00 PM at City Hall.   City Hall is located at 333 W. Ocean Blvd in Downtown Long Beach. Directions and transportation options to City Hall.  Be there or never complain about losing your rights! 

The City of Long Beach City Council Agenda - See #22

Yep, you heard that right, rent control.  They plan on introducing this recipe for disaster on us by changing the current laws regarding condominium conversions and are proposing relocation benefits and a policy option of lifetime leases for existing tenants.  Well folks, I have to ask some questions...................

• What developer in their right mind would take on a project here in Long Beach with the prospect of unknown costs and unknown profits or losses looming over their heads? 

• What buyer would purchase in a condo conversion if there were tenants expecting to be serviced and not contributing to the collective? 

• What tenant would take a paltry move out fee if they could stay on as guaranteed "lifetime tenants"  with likely controlled increases in their rents.  They know that over the years their rent will become minimal as their income increases, they would have to be nuts to give up these units.  Ask any New Yorker who has a rent controlled or rent stablized apartment, hell they keep them in the family, they never give them up!

• Are they also planning on restricting rental increases to these "lifetime tenants" if this bill passes?

• What condo buyer would be willing to pay exorbitant HOA dues to account for the rental units as time goes by and the rents are no longer enough to cover expenses? 

• Will renters show the same care for the building that owners do?

• What is this a predecessor of?  Can full out Rent Control be far behind if we allow this to occur?  I think not!

It is damn near impossible to buy or sell income properties in Long Beach right now as it is.  The current rent structures do not support the purchase prices.  Go ahead, throw rent control into the mix and see what you get.  Do you currently own income property in Long Beach?  If you do you had better be at this meeting to voice your objections to even the remotest possibility of rent control being introduced into our environment.  The income property market in Long Beach is very weak right now.  As it is now, it will take years for rental income to rise to levels high enough to sustain the prices many paid for these units over the last five or more years.   Were you thinking about converting your apartment building at some point in the future, forget it if this bill passes, you probably won't even be able to sell it. 

I remember what happened to Santa Monica when they had rent control.  Owners were stuck with buildings they could not sell and could not afford to maintain.  The buildings began to literally fall apart.  Inflation never stops and rent increases, under rent control, do not keep up with inflation.  Once rent controls were lifted (many years after it should have happened) money poured into the area and it was regenerated.  Rent control eventually turns neighborhoods into slums.  Inflation never stops and rent increases do not keep up with inflation. 

Many Long Beach homeowners are currently staring down the face of short sales and foreclosures; most of these homeowners will be entering the rental market here.  Depending on who you listen to the current rental vacancy rate in Long Beach is somewhere between 4 and 5%.  With these homeowners entering the rental market it is projected that the vacancy rate will drop to around 3.2%.  Quite frankly I suspect that we are going to drop closer to a 0% vacancy rate, but I could be wrong.  If 5% vacancy rate equates to about 4500 units and we have about 500 foreclosures a month (that is conservative), those vacancies will be full in less than one year.  I never had a really big problem with math, do you? 

The real problem here is that while the City of Long Beach was busy approving high rise luxury condominiums they didn't plan for future rentals that were affordable.  Long Beach is still basically a blue collar city and housing is needed for it's huge workforce. Maybe the city should take some of the massive amounts of land it has acquired over the last 10 or 15 years in and around the Downtown Long Beach area and allocate it to developing affordable rental housing.  Maybe they should do that really quickly, it sounds to me like we need some balance here. 

Did authorising the demise of rental units to allow for condo conversions, high rises luxury condominiums and loft space contribute to the alleged housing shortage?  Absolutely!  The City approved every one of these projects, was it just bad planning?  What happened to the affordable housing projects?  Swept under the rug for more expensive luxury housing? 

Hey City Council, this is the wrong answer to a real problem. 

Then again, this may all be a crock of you know what...............Planning and Building Director Suzanne Frick told the commission that there have been 2,174 conversions approved in recent years, but added by only 482 units have been converted.  If what Ms. Frick says is true and only  482 units have been converted, then what exactly is the problem?  This should not have caused an imbalance strong enough to even call for this bill.  Perhaps they are only counting the loss of rental units due to actual "condo conversions" and are not including the losses to build the high rise luxury condos and lofts?   I just love technicalities. 

Related Articles:

• The District Weekly - Apartment Renters' Rights
• The Press Telegram - Rent Controls
• The City of Long Beach City Council Agenda - See #22

Laurie Manny Long Beach Realtor® (562) 212-5420 244 Redondo Avenue Belmont Heights Long Beach, California 90803 Buyers/Sellers/Investors Homes Condos Income Properties 1031 Exchanges