Post Fires Furnished Rental Market Update

As we have all seen, a large number of affluent families have flooded into our area, victims from the catastrophic fires in the Pacific Palisades. 

They are all scrambling for housing, and they have high budgets.

Price gouging and bidding wars abound.

Enter the sheriff, aka the government, trying as quickly as they can to reign in some semblance of order to the rental market in our beach towns.

They set anti-price gouging rules that are going to stay in place until March 8, 2025.

Necessary, yes, and some of the basic rules should stay in place, but the sherif does not understand our local rental market.

The rules need to be amended.

One of the problems concerns first time landlords:

If you own a home with 3+ bedrooms in Los Angeles County, and have not offered it for rent within the last year, according to the Times, the maximum you can charge is $9,554 / month.

Yes, you read that correctly.

Rent can't be higher than 160% of a federally-set fair market value, and that maximum is $9,554.

For this area, that cap is absurdly low.

We live in the Beach Cities and our maximum rental cap should be based on OUR data, not data from sprawling Los Angeles county.

For example, say you own a nice 3 bedroom home in Manhattan Beach's sand section.

Owning a home here is an expensive proposition.

Let's pretend that home is valued at $5 Million. Your property taxes alone are $5,200 / month. 

Add a mortgage, utilities and possible property manager on top of that, your expenses are likely much higher than $9,554 / month.

According to the MLS, the median rent for Manhattan Beach sand section 3 bedroom furnished homes (not including The Strand) from the last 30 days (Dec 25 - Jan 26), is $16,250 / month.

In our furnished 3 bedroom rental market in Manhattan Beach's sand section, where homes are worth millions, and expenses are high, people simply can not afford to rent out their homes if they receive only $9,554 / month.

In a twist to the story, if you have rented out your home in the past year at a monthly rate exceeding $9,554, you are not subject to that cap.

(I'll cover those rules in my next post, and how they are affecting our summer rental market)

Why are first time landlords who want to help with the housing shortage penalized from obtaining Manhattan Beach's fair market rent?

None of this micro-data currently matters to our sherif.

Do we need protections against price gouging?

Absolutely.

Do we need to have those rules shift so more home owners entering the rental market as landlords for the first time can afford to offer their homes for rent in our Beach Cities?

Absolutely.

For more info, here's a great article to check out:

https://www.thecentersquare.com/california/article_644c993c-d909-11ef-a4c7-abcb5f669a26.html