Facing rapidly rising housing costs and homelessness, renters in Los Angeles formed a tenants’ organization, and, with the rhetorical support of prominent civic leaders, carried out rent strikes, shamed landlords who raised rents dramatically, and advocated for rent control.
LA in 2018?
No, try almost a century earlier, in the very early 1920s, which saw the first major battle over rent control in Los Angeles.
With Los Angeles again suffering from an acute housing crisis, and a measure on the ballot to remove state limits on rent control, I thought it was worth considering the past, present and potential future of rent control in LA. This essay examines the first (and short lived) time that the City of Los Angeles had rent control.
The origins of rent control
People have likely thought that ‘the rent is too damn high’ for as long as tenants have leased dwellings. Political action by tenants and/or a crisis situation were often prerequisites for
political leaders seeing a justification to regulate rent levels.
In the western political tradition, the philosophical case for restricting rents rested on the concept that there was a ‘just price’ for products and services, that could be different than the market price. Aristotle wrote about just prices, as did Thomas Aquinas and other scholastic thinkers in the medieval to early modern eras.
It wasn’t until towards the end of this two thousand year period that the theory of a just price was applied in practice to mandate rent levels. Take the city of Rome as an example. While the majority of residents in Imperial Rome rented homes in multi-story apartment buildings (insulae), there were no limits on prices that owners could charge. There were restrictions on demotion of existing apartments which may have been intended to prevent low-income tenants from losing their homes). Starting in the 1560s, rent control with some of the features that we would recognize in modern laws was established in Rome by Popes to regulate Christian landlords renting homes to Jewish tenants. Jewish residents needed rent relief because the same Church leaders had imposed legal discrimination against Jews, preventing them from owning property and forcing them to live in just a few neighborhoods. Christian landlords renting to Jews in these ghettos were barred from raising rents, except to pass through the costs of renovations, and forbidden from evicting their tenants. Rent control was also used in France and Spain in the late Medieval/ early Modern periods.
Modern rent control emerged from the turmoil of the first world war. The outbreak of war led to the diversion of financing, building materials and labor to military efforts, slowing or halting home building. The movement of soldiers, workers and refugees caused spikes in demand for dwellings. Cities struck by shelling also lost significant housing stock. Governments of all types and ideologies responded by freezing or otherwise regulating rents. In his history of rent control, John W. Willis points out the strong link between wars and other calamities and rent control:
“A character in one of Plato's dialogues remarks that laws "are not made by human beings but by accidents or misfortunes-war, epidemics, famine, or a succession of bad seasons".' So it is with rent control laws. In few if any cases has rent control been adopted because of an abstract idea that state regulation would bring better results than the operation of the laws of economics. Rather, in almost every instance the hand of the legislator has been forced by some calamitous event or situation which has upset the normal state of affairs-war, depression, earthquake, fire, plague, or some other vagary of history which either destroys the balance of supply and demand, thereby creating a housing shortage, or makes it impossible for tenants to continue to pay their contractual rents.”
Rent control in LA: early 1920s.
The first push for rent control in Los Angeles illustrates this pattern of war causing a housing crises, leading to calls to protect tenants. Housing shortages brought on by World War One, combined with ongoing population growth, caused rents in Los Angeles to spike in the late nineteen ’teens and early twenties.
A federal study of rent control explained that rents rose throughout much of the United States:
“After the armistice, the housing shortage in many of the larger cities became steadily more acute … [due to] 1. the accumulated deficit of new housing which resulted from the virtual cessation of private building during the war; 2. the return of more than 2,000,000 service men to civilian life; 3. continuation of the movement of population toward the cities; and 3. the postwar increase in income available for housing. Urban rents, which had advanced much less rapidly than the cost of living during the war, now rose at an accelerated rate and continued their upward movement even when other elements in the cost of living fell back in the depression of 1920–21.” Wheildon, L. (1947). “Liquidation of rent controls.” Editorial research reports 1947 (Vol. I). Washington, DC: CQ Press
In Los Angeles, rents rose approximately 75 percent between 1917 and 1925. [“Rent Levels Compared.” Los Angeles Times. April 9, 1925. pg. A4.] The situation was especially dire in the years immediately after the war. In 1920, the city’s public defender counted over 500 cases between July and October in which tenants complained that their rent had been raised between 25 and 100 percent. He also noted:
“scores of stories.. regarding high-handed inhumane and illegal methods adopted by landlords and real estate agents to push poor people out into the streets, post-haste, so as to make the houses and apartments available to new tenants forced, through present circumstances, to pay anything that is asked of them.” “Ask Rent Gouge Facts: Reality Board and Others Prepare to Drive Profiteers into Open.” Los Angeles Times, October 25, 1920. Pg II 1.
In response to rental costs, harassment and evictions, renters in Los Angeles organized to push for reforms. In 1917, a group called the Los Angeles Rent Payers’ League lobbied council to establish a revolving fund of public money that could be lent to builders to construct homes and to residents who wanted to buy them. [“House Building Plan for Los Angeles.” Building and Engineering News. 19 (44), October 29, 1919. Pg 22.]
By 1920, a new tenant’ organization and even many of the city’s prominent conservative institutions were condemning landlords and rent increases. The pro-real estate development and anti-labor Los Angeles Times published numerous op-eds and articles attacking “rent-gougers” and “profiteers.” The American Legion announced it was ready to “lay down a barrage on [greedy landlord]” and asked the Department of War for 1000 tents that could be set up in Exposition Park for veteran and other persons “who have been driven into the streets and the river bottom by the rent hogs.” [“Plan Park Tent City.” Los Angeles Times, Los Angeles Times, November 5, 1920. pg. II 1.]
The Chamber of Commerce published newspaper ads seeking people with “any living quarters which you would be willing to rent at reasonable rates, in order to relieve the present acute housing shortage, you are requested, as a matter of public service, to fill out the [attached form] and mail it to [us].” [“Living Quarters to Rent” advertisement. Los Angeles Times, November 5, 1920. pg. II 1.] The city’s Realty Board established a rent gouging committee, with meetings open to public and press, to give tenants an opportunity to “appear in person and lay the facts before the investigators. Landlords, too, will be given every chance to explain why the rents were raised.” [“Ask Rent Gouge Facts, ibid].
Several factors explain the broad appeal of condemning rent gouging. First, while we often think of early 20th century Los Angeles as a place dominated by real estate interests and anti-labor conservatives, politics before and after WW1 was diverse. Socialist Job Harriman was nearly elected mayor in 1911. Los Angeles helped pioneer the direct voters’ initiative and recall. And a range of interests, from socialists to labor to anti-machine politics ‘progressive’ reformers, supported municipal ownership of utilities and other services. [Robert M. Fogelson, The Fragmented Metropolis: Los Angeles, 1850-1930. pgs. 205-246.]
Second, as the American Legion’ activities show, increases in rent during and after the war caused veterans groups and other war supporters to lump landlords into the category of war profiteers, blending tenant’s interests with patriotism/ militarism. Third, higher rents at times seemed to threaten continuing migration of residents and tourists to the LA region. LA boosters had reason to worry that rising rents would undermine the source of the city’s growth and their wealth. [For example, a letter writer in 1920 expressed concern that the reality and/or reputation of rent profiteering would spread as visitors to the Southland returned home, harming the region’s future. John Wolf. “About High Rent.” Letter to Editor, Los Angeles Times. November 15, 1920.]
Rent control passage and legal challenge
Around the same time that business interests were singling out individual rent-gouging landlords, the Los Angeles Tenants’ Protective Association was taking action to control all rents. In December 1920, several hundred members filled city council chambers to submit 30 thousand petitions demanding passage of an ordinance to regulate rents. The account in the next day’s Los Angeles Herald described their demand for “stringent legislation to curb rent gouging in Los Angeles… [that would] fix the maximum legal returns to landlords at 11 per cent on their real estate investment and 16 percent on furniture.” [“Demand Law to Regulate Houserates: Petition Signed by 30,000 Demanding Ordinance Is Presented to L. A.” Los Angeles Herald, Number 34, 10 December 1920, A1.] (Due to high rates of tourism and migration to the city, many rental units were offered furnished).
combining ‘Georgist’ logic, warnings of civil unrest, and appeals to the public good, the Tenants Protective Association’s petition argued that the city had authority to control rents:
“the private ownership of real property constitutes a natural and legal monopoly of an absolute necessity of life that is subject to gross abuse, causing great hardships to the lessees by forcing them to contract under duress, by exacting extortionate rentals without statutory redress and jeopardizing the public peace, safety and welfare, through the increase of social unrest to the point of anarchy, thus coming well within the legal purview of the police powers of the municipality. The evils complained-about are not correctable by the operation of economic laws, but continually intensify under the concentration of population in centers of wealth and industry.” “Demand Law to Regulate Houserates, ibid.
A month later, in January 1921, the City Council passed an ordinance implementing the exact rules sought in the petition. [City of Los Angeles, Ordinance 41,266.] This doesn’t mean that all councilmen supported rent control. Some wanted to avoid a public referendum vote on the petition; others listened to the City Attorney who warned that LA lacked legal power to control rents. Even the attorney for the newly-organized Apartment House Association of Los Angeles County supported passage of the ordinance. ’’We’ll knock it out In court,” he declared.” [“Council Passes Rent Law. Landlords to Fight New Ordinance. City Attorney Says He Will Defend Statute to ‘Best of His Ability.’ Los Angeles Herald, Number 62, 12 January 1921, A1.]
After passage, the Apartment House Association and Tenants’ Protective Association both escalated. The Herald characterized their plans as both sides going on strike. Landlords prepared to sue to overturn the law, and threatened to discontinue janitor and housemald services and let tenants “shift for themselves.” Meanwhile, “Tenants will .. refuse to pay rentals in excess of [that allowed by the ordinance and plan to collect data on owners charging above the mandated rent ceiling] .. which they assert they will bring about the arrest of several hundred Los Angeles landlords.” [“Both Landlords and Tenants to Strike.” Los Angeles Herald, Number 65, 15 January 1921.]
By March over 1000 renters were participating in the strike, [“Rent Strikers Gain Recruits.”Los Angeles Times, Mar 3, 1921, pg. II 8.] and tenants were heartened by an April decision by the U.S. Supreme Court upholding a rent control law in Washington D.C. that had been passed by Congress. [Block v. Hirsch, 256 U.S. 135 (1921).] Their optimism was short lived. On June 3, 1921, a judge ruled that the LA rent control ordinance was not a valid exercise of the police power, but instead a taking of property without due process. The decision drew a distinction between the Washington Dc regulations, which set rents based on the assessed value of properties, and the Los Angeles ordinance, which tied prices to how much money owners had invested to buy or build an apartment. [“City Rent Law Found Invalid.” Los Angeles Times. June 4, 1921. pg. A 9].
Though the judge pointed out a path for the city to amend its rent control to make it legally acceptable, Los Angeles didn’t pass another local rent control ordinance for 57 years. I haven’t done enough research to explore why tenants and their allies didn't organize another successful petition drive. Part of the reason may be that time went on the sense that the rental market was still part of the war emergency may have faded. Also, as I wrote about in my piece on LA’s ‘Forbidden City,’ the city’s combination of flexible zoning, high demand from new arrivals, and plenty of buildable land allowed homebuilding to recover and skyrocket throughout the 1920s. Permits for almost 20,000 homes were issued in 1921, and nearly 45,000 thousand homes were permitted in 1923. The housing shortage eased. Rents fell 28% between January 1923 and January 1929, and then, following the onset of the great depression, continued to fall until they reached a low in 1933 and rebounded. [Tom Austin. “Cupid Groans- As Rents go Higher.” The Apartment Journal. May 1935, p 13].
… if I have time, will follow up with accounts of federal rent control in place from 1941-1950 and 1971 to 1994 and LA’s rent stabilization in place since 1978.