L.A. Tenants Hit With Sudden Rent Hikes Under 'Discounted Rent' Loophole

Despite the city's ostensible rent freeze and eviction moratoriums implemented to help renters stay in their homes during the pandemic, some landlords in Los Angeles are finding ways to dramatically hike rents and threaten tenants with eviction, reports David Wagner.

Tenants who thought the city’s rules protected them have received demands of hundreds of dollars more per month. They’ve been told they could be evicted if they don’t accept the rent increases. When the tenants reached out to the city’s housing department for help, they were told the practice is legal.

The 'gaping loophole' letting landlords suddenly raise rent by hundreds of dollars in apartments technically subject to rent control and COVID protections, Wagner writes, allows landlords to claim that the "original rent" for a unit was higher than what the tenant was paying thanks to a promotion. In the case of Andreina Kniss, whose landlord suddenly raised her rent by $400 per month, "She has never paid that higher amount, and she said Orion did not discuss it with her when she first moved in." But "Kniss was told to read the text of her lease, which states she has been paying a 'discounted' rent for the past year, and that her 'original' rent has always been about $1,000 higher."

According to the city, the perfectly legal process amounts to "expiration of a discounted rent," a provision that many tenants struggling to find housing in the last two years failed to notice or understand. "Jeff Tucker, a senior economist at Zillow, said that instead of offering permanently lower rents, landlords were most likely to offer temporary discounts. Almost 40% of L.A. apartment listings in early 2021 included such concessions, according to Zillow’s research — more than double the rate of concessions being offered in L.A. before the pandemic." Now landlords are trying to make their money back and, due to this legal loophole, tenants are suffering the consequences.