Pomona recently implemented emergency rent control. The Annual Allowable Rent Increase effective August 1, 2024 - July 31, 2025 is based on the lesser of 4% or the change in the Consumer Price Index (CPI) for the Los Angeles-Long Beach-Anaheim metropolitan area. I attended a special council meeting last night on the topic. The public was allowed to give 2-min speeches (there were 34 of them). Tenants spoke and rental providers spoke. Mayor Tim Sandoval and several other Councilmembers listened to proposals for rent control from RSG (consulting firm out of Vista, CA). The city council is faced with a tough decision; make the emergency rent control permanent or not, or implement alternative strategies. In the meeting we heard from the many tenants who are victims of predatory landlords and from housing providers who attempted to explain how rent control destroys the business model for a housing provider. My take is that predatory practices and threats must be controlled, and housing quality must be enforced. However, if rent control is too restrictive, it will chase housing providers out of the city. Pomona's population is about 150,000 people (source Google). It was said in the meeting that 50-60% of the population are renters. If there are on average 3-4 people in each rental unit, that means they need about 23,000 rental units. It was said that the 2019 Tenant Protection Act has a negative effect on the number of rental units in some low-income cities (to the tune of 15%). Let's call it 10% to be conservative. Is the City of Pomona prepared to lose 10% of its rental unit supply (2300+ units)? Councilmember John Nolte mentioned that in rent-controlled cities in other LA County cities, that hardship petitions from housing providers was non-existent. His conclusion is that housing providers in those cities make enough money. The Mayor asked the question "what are costs of the housing provider?". He genuinely wanted to know. It struck me that the people leading the City of Pomona and making very big decisions about housing for its citizens, but they know very little about the housing provider business (industry) and how it works. It seems to me that the supply of housing is important to the citizens of the city, and the Mayor & City Council of Pomona should know more about what housing providers do and how they operate. If the City makes a bad decision, they could drive the supply of rental units down which would exacerbate the housing problem by reducing supply and negatively impacting the quality of housing as housing providers will simply leave Pomona and invest in Montclair, Ontario, Riverside, etc. If the rental unit has too little cash flow, the quality of the home will obviously decline. To the housing providers in Pomona ...how can we teach the Mayor & City Council of Pomona about the economics of and business fundamentals of providing our products to the market (housing)? Mayor Sandoval, please reach out to your housing providers personally, not through RSG. Let us come to the City and talk politely about the business models of housing providers so that you can be better informed. I am a small business (housing provider) and I have one rental unit in Pomona and am building another. I have to choose whether to sell those units which will take them out of the rental supply. I can speak to the business model of a small operation like mine if you want to hear it.

Los Angeles County, California

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