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# Rent control is a two-way street
- URL: https://www.smdp.com/rent-control-is-a-two-way-street/
- Published: 2008-02-13T16:00:00.000Z
- Updated: 2026-10-24T23:12:54.000Z
- Author: Guest Author
- Tags: Opinion, Santa Monica, #archive-import

*By Mike Heayn Real Estate 101*

DO YOU OWN A PROPERTY IN A RENT controlled area of Los Angeles County and want to raise the rent, but do not want to pay the tenant to vacate? Many owners want to raise below market rents to market levels, but are unable to do so because of strict rent control laws.

Rent control is both good and bad. First, rent control adds stability to the rental market to a degree. However, once a tipping point is reached, rent control inhibits an owner’s ability to improve the property. In New York City, the rent control laws became so stringent in the 1980s that many owners walked away from their properties because they were not able to handle the daily operating costs. Many tenants believe apartment properties collect large amounts of money. Some owners do make a great deal of money, however, from what I have seen, many do not.

Apartment owners who own a small number of units do not have the economics of scale on their side. They are not able to bring in the big dollars and do complete property renovations, which can cost hundreds of thousands of dollars. Many apartment owners worked hard and lived in their apartment buildings until they could afford another property and subsequently moved into the new property. The problem with owners who do not have a large number of units lies with the cash flow. After you subtract operating costs, the mortgage payment is still left. A mortgage will usually wipe out the majority of the property’s cash flow. A small property owner may be left with a nominal amount of money at the end of the year, if any at all.

If an owner cannot raise rents each year, eventually operating costs surpass income levels, leaving the owner with a negative cash flow property. Now, this is not to say many property owners are not successful because many of them are; however, the path to success is usually one involving many years of struggle.

If an apartment owner wanted to raise rents, but did not want to pay a tenant relocation fee, they could ask the tenant if they wanted any improvements done to the unit. If a tenant wanted hardwood floors the owner could offer this upgrade for an additional amount of rent each month, say $25\. The owner would write a separate addendum and add it to the lease. This could be done with the addition of ceiling fans, new windows, etc. Each item could raise the rent a small amount. Of course, the tenant would have to agree and want the improvements completed. An owner would want to check with legal council to make sure this course of action was legally permissible.

Another idea is waiting for a tenant to move out and then completely renovate the unit. Before the unit is completed and offered on the rental market, the owner could ask the current tenants if anyone wanted to move into the newly revamped unit. If one of the tenants decided to do so, when that tenant moved out improvements could be done to their unit and the process could be repeated until all units were improved slowly and brought to market rental levels.

Tenants have rights and for good reason, but owners need to be able to profit from the risk that comes from owning real estate. The best way to increase a apartment property’s profit margin is to increase the rent, but an owner must remember that they are providing a service and should not arbitrarily increase rents without first doing improvements.

MIKE HEAYN is a Washington Mutual multi-family loan consultant. He (310) 428-1342, or e-mailed at

*Originally published in the Santa Monica Daily Press print edition on February 13, 2008.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/021308.pdf?ref=smdp.com)