Landlords and apartment owners see a recently proposed reform of the city of L.A.’s code enforcement as a Draconian money-grab that will make it far more costly for them to deal with alleged violations. But city officials see it as the answer to persistent logjams that have long gone unresolved.
The proposed reform is called ACE, for Administrative Code Enforcement. Co-sponsored by City Attorney Carmen Trutanich and Councilman Paul Koretz, ACE would change the way building codes are enforced for apartment owners. Under the current system, landlords have some time to correct violations or face fines of $50 to $500. Under the proposed system, fines must be paid right away pending a hearing on the case, and the dollar amount could climb into the thousands.
The reform might later be adopted for retail and commercial property owners as well.
Michael Millman, a Mar Vista resident who owns several apartment buildings on the Westside, sees ACE as a quick way for a financially challenged city to generate revenue at landlords’ expense.
“A blind man can see this is simply a money-grab,” Millman said. “The fines are quite high and under Los Angeles Housing Department operations, building owners are always held responsible.”
Harold Greenberg, chairman of the government relations committee at the Apartment Association of Greater Los Angeles, said his landlord organization is 100 percent against ACE.
“Most of our members are moms and pops with maybe four or five units,” Greenbegr explained. “They won’t understand ACE, and frankly it would bankrupt them. If it’s $4,000 per day, most of them couldn’t pay it.”
Under current rules, the city learns of code violations from complaints by tenants or from city inspections conducted every three years. Typical violations are peeling paint and kicked-in doors that have not been replaced. The inspector, from the Housing or Building and Safety departments, issues a warning and gives the landlord 15 days to fix the problem. If the problem remains after the 15 days, the inspector issues a citation and a fine. If the landlord doesn’t pay the fine and fix the problem, the city can go to court and seek a misdemeanor criminal conviction.
Violations uncorrected
Jane Usher, a special assistant in the City Attorney’s Office, said the current system needs reform because the city attorney only has resources to take flagrant, repeat offenders to court, and residents are upset because many code violations go uncorrected.
She likened the proposed ACE system to a traffic court. If a motorist gets a ticket, he or she must pay first and then can get a hearing to determine guilt. But the ACE program significantly increases the fines for building code violations. Currently, fines start in the hundreds of dollars. But in ACE, they start at $1,000 per day for a first violation and jump to $4,000 for a third. Based on a square-foot formula, they can climb as high as $64,000 a day. Since the fines must be paid quickly, some apartment owners believe the proposal is a new revenue-generator for the city.
Paul Neumann, director of communications for Councilman Koretz, said ACE will be a fiscal break-even for the city. It will save the city money in criminal prosecutions, but the city would have to set up administrative courts to hear the cases.
“We do not see ACE significantly changing the economics of income-property ownership for owners large or small,” Neumann said.
Usher at the City Attorney’s Office emphasized that increased code compliance, not revenue, is the program’s purpose.
“The goal is to set the fines high enough that violations aren’t just a cost of doing business, but not as high as a criminal penalty,” Usher said.
After paying the penalty, the landlord can request a hearing. But based on his past experience with the city regulators, Louis Eisenstein, an owner of apartments in the Silver Lake, Fairfax and Sherman Oaks neighborhoods, believes the scales of justice will favor the city.
“The administrative hearings will be a kangaroo court,” Eisenstein said. “The city of Los Angeles cites you, fines you and judges you; so it’s all the same entity. ACE will be used to punish businesses the city doesn’t like, and they are going to hit landlords hard.”
The ACE proposal, officially made early this month, is scheduled for a hearing before the City Council’s budget committee by Wednesday. The program isn’t restricted to apartment infractions. Other problems handled by the Police and Housing departments, and Animal Services would also be subject to the reform. Eventually, the program could expand to other departments, including Building and Safety, which would impact commercial property owners.
A spokeswoman for the Building Owners and Managers Association of Los Angeles said the organization was not familiar with ACE and didn’t have an official position on it.
Neumann said landlords need to understand that policymakers are responding to strong political pressure from voters calling for code compliance. They claim that many property owners are lax about fixing problems.
“The primary motivation comes from countless neighborhood councils, homeowner associations and civic groups across the entire city that want to see effective enforcement,” he said.
Usher said that during the 2009 campaign for city attorney, the most common complaint from voters was “Where’s the enforcement?”
“And then here’s the line I loathed to hear: ‘The case has gone to the city attorney, but it’s just sitting on his desk.’ ACE is intended solve that bottleneck,” she said.
Greenberg of the Apartment Association believes lawmakers are rushing to implement a program without considering the downside for landlords and tenants, who may end up homeless if apartment owners go bankrupt.
“They don’t know what they’re doing,” he said, referring to the City Council. “They have no idea of the collateral effects. This is going to kill a lot of businesses.”
