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September 09, 2015

Who Pays for Earthquake Retrofits? Landlords, Tenants and Taxpayers

Public News Service
News In The Public Interest

Suzanne Potter, Public News Service - CA


The 1989 Loma Prieto earthquake damaged many homes that had garages on the first floor. Credit: edStock/

SACRAMENTO, Calif. – Supporters of a bill to give tax credits to landlords for earthquake retrofitting are hoping for a vote in the California State Senate before the legislative session ends on Friday.

Assembly Bill 428 would cover 30 percent of the cost if the retrofit work is done in the next five years.

Larry Gross, who heads the nonprofit Coalition for Economic Survival, supports the tax credit. He explains it would take some of the pressure off landlords, who would then have a smaller burden to pass on to their tenants.

"We need to address the threat of earthquake," says Gross, "but we don't want to create an economic earthquake for a tenant who won't be able to afford this increase, and will likely be displaced from their home."

The issue is coming to a head in part because the Los Angeles City Council is expected to unveil a plan this week or next to require earthquake retrofitting in about 1,500 of the buildings considered most vulnerable. That plan targets buildings that include what is known as "soft-story" construction – a large, open space on the bottom floor, such as a parking area or commercial businesses with big windows – that have collapsed in past quakes.

The L.A. City Council may place limits on the cost amount landlords can pass on in the form of rent increases. Without those limits, Gross estimates 166,000 families could see their rent go up by $75 month.

"This poses an incredible threat to tenants who can't afford the existing rent, because under the current law, the entire cost of that can be passed on to tenants," he says.

San Francisco passed a similar measure in 2013, which allowed landlords to pass on 100 percent of the costs but let low-income tenants apply for a hardship waiver.

Many smaller cities across California face the same quake risk, but don't have rent-control ordinances. In those cities, landlords simply are permitted to pass on all costs to renters



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