HomeCity NewsLandlords Weigh in on Renovation Evictions

Landlords Weigh in on Renovation Evictions

Landlords joined in on the mass-eviction conversation in Burbank this week as other cities also grapple with the issue, with the city of South Pasadena passing an eviction moratorium to stop the trend that has spiked in recent months since the end of the countywide eviction moratorium.

At a time when Burbank is expanding on legislation that would streamline new affordable housing developments, the available pool of existing affordable housing in town is diminishing.

Just one day after the Los Angeles county eviction moratorium expired on March 31, Emmanuel Perez and Sandra Varona received a 60-day notice to vacate their Burbank apartment. They didn’t know that they would join dozens of other Burbankers in being displaced from their homes, forced to search for comparable accommodations miles from the city.

The couple lives in a compact, two-bedroom apartment in a dingbat-style building a few blocks from downtown Burbank. The couple said that they were good tenants, but they weren’t surprised when they found the notice taped to their door.

Landlord and real estate investor Masis Khodaverdian told the Leader he has wanted the tenants out for months. He had purchased the 10-unit building in 2021 and raised rent 16% since then, but still felt that the $1,900 the couple was paying for their unit was too low. Under L.A. County law, landlords are limited to an 8% annual rent increase. Increasing rent after a property is vacated, meanwhile, is not regulated.

Khodaverdian said he plans to relist the unit somewhere between $2,400 and $2,800 after Perez and Varona vacate.

“When a tenant’s [rent] is low, the value of the building is directly attached to the income that the building generates. So when it comes to refinancing or selling the property, their property is not worth as much as the other [comparable] ones. So business wise, it doesn’t make sense whatsoever for any landlord to keep tenants that are paying below the market value,” Khodaverdian said.

The rent for a two-bedroom unit in Burbank has soared in recent years. Since 2021, rent prices in the city increased more than 36% according to a study by Zumper, an online rental listing marketplace. A unit renting for $2,200 two years ago now rents for $3,000 per month, and while the economy has not yet recovered from instability caused by the COVID-19 pandemic, prices now exceed pre-pandemic ranges by about 10-15%.

“This whole ordeal has caused us a lot of stress and anxiety to the point of becoming ill,” Perez told the Leader. “We are very sad that we will most likely have to leave Burbank, a city that we have made our home for six years. … This move will end up costing us about $9,000, and we are not confident our landlord will make an attempt to return our deposit.”

Prior to receiving the 60-day notice, the couple said they had issues with Khodaverdian since he purchased the building in 2021.

“At first, he was a very charming guy. He came and said he was going to make all these great new improvements, but then a few months later, he was just being a complete jerk and just trying to squeeze money out of us at any moment, and would show up without notice,” Perez said.

Khodaverdian told the Leader that raising rent by 8% each year is not enough to offset his costs. Instead, he said that his best course of action is to find a way to end the lease agreement and find new tenants who would pay far more for the unit.

During the pandemic, landlords were encouraged by local governments to give some grace to tenants impacted by job instability while officials found ways to provide relief.

During that time, Perez and Varona were out of work in the film production sector, which completely halted in 2020.

The couple waited to get some relief from the county rent relief efforts, and ultimately they made good on all missing rent payments. According to bank statements confirmed by the Leader, the couple did not miss another payment after receiving the rental assistance.

“Besides,” Perez said, “he wasn’t even our landlord at the time. He purchased the unit the following year.”

Khodaverdian cited this reason for wanting to evict the tenants and stated that, because they brought in Varona’s father — who had recently begun suffering from Alzheimer’s — to live with them for a few months, they were in violation of their lease.

Eventually, in response to complaints from Khodaverdian, Varona made arrangements for the professional care of her father at a facility.

At that time, Khodaverdian also attempted to increase the rent because the couple had a child living with them. However, to do so would have been a clear violation of fair housing law. Khodaverdian wrote in an email to Perez: “Regardless of your dad staying or leaving, you still have to pay additional rent for your son.”

According to the U.S. Department of Housing and Urban Development, a tenant cannot be charged more rent or related fees because the tenant has a child.

But neither reason was cited on the 60-day notice to end tenancy. Instead, listed on their notice was “intent to remodel.”

Emmanuel Perez reviews bank statements and a 60-day notice to vacate his apartment.

Since April 1, this method of evicting tenants via no-fault, just-cause eviction has spiked in Burbank as the county eviction moratorium ended. Based on information collected at four apartment buildings and dozens of tenants who spoke out at City Council meetings in the past month, at least 40 tenants have been affected by renovation evictions. Similar to Perez and Varona, these tenants were given less than two months to come up with the resources to find a new home.

Tenants served with the eviction notices have been offered one month’s rent as compensation for being forced to move.

A loophole in state rent control law — Assembly Bill 1482 — allows landlords to end a lease agreement as long as owners have an “intent” to renovate the property. Under state law, it is legal for owners to serve 60-day notices if they have an “intent to remodel.” The method is often used to raise the rent higher than the county’s annual cap of 8%, a trend that is chipping away at the city’s already meager supply of affordable housing. The city has no method to verify if such renovations ever take place.

According to Khodaverdian, it’s just business: “People say, well, these are the little guys. They’re the ones who can’t afford it. I’m sorry, you know what, there’s a lot of people that cannot afford something. I would like to drive a Rolls Royce. I would like to have a mansion in Beverly Hills, but I don’t have the money. So I shut up and deal with what I have.”

Tenants across Burbank have spoken out at City Council meetings, over social media and in other forums to advocate for increased renter protections, including an end to the “renoviction loophole” in AB 1482.

In most cases, tenants are unable to contact their landlords directly, as their buildings were recently purchased by ambiguious LLCs registered in Beverly Hills or in other cities outside of Burbank. Most of those owners have enlisted the help of local property management companies such as Drake Realty to carry out the evictions. This makes it difficult for tenants to negotiate more leniant terms with their landlords.

Local landlords, including Khodaverdian, have drawn a line between their management styles and those of outside corporations. Khodaverdian, who lives in Glendale, says he is legitimately making repairs to his building. He also believes landlords should be required to show proof that they pulled rennovation permits with the city for their remodel prior to evicting tenants.

Four of five buildings known to be involved in mass evictions since April have not applied for permits with the city.

Other landlords weighed in during this week’s City Council meeting. “Let’s try to add more affordable housing in these multi-unit developments in the city of Burbank,” said Kristy Maloof. “I do support AB 1482. I feel it works.”

Another local landlord, Ron Bax, recommended that tenants speak with their landlords and ask why they are being displaced.

“I don’t know what, short of razing the building, would require a tenant to be displaced,” he said.

The issue under AB 1482 that is causing confusion is that any requirements under the definition of “substantial remodel,” which Bax referenced in his comments, are moot because of the vague phrasing in the law that states landlords only need to express an “intent to renovate.”

City attorney Joe McDougall told the Leader that intent is enough to dodge requirements for a remodel, and if tenants wish to contest their notices, they must do so in court.

“I must now find a new place to live, and I ask the council, should it be in Burbank?” asked John Fisher — another tenant who also recently received an eviction notice — at last Tuesday’s City Council meeting.

“If I find another affordable home, will I face this same problem again and again? Will I face another renoviction?”

“I still haven’t heard anything from the City Councilmembers that I wrote to,” Stephanie Duckula, a tenant whose entire building is being evicted, told the Leader. “I feel like my city let me down and maybe I don’t belong here anymore.”

Now many tenants are on their last week of the 60-day period, and six individuals interviewed by the Leader said that they have not yet secured new housing.

Many are unsure if they will be able to vacate by the end of the 60-day period, and fear they will face unlawful detainers, a permanent mark of delinquency on their rental records that will make it very difficult to secure housing in the future.

First published in the May 27 print issue of the Burbank Leader.

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