Third Annual Foreclosure Report Released: 200,000 California Tenants Affected by Foreclosure Crisis in 2010

Earlier this week, Tenants Together released its third annual report, California Renters in the Foreclosure Crisis. The report highlights recent foreclosure-related developments affecting tenants, quantifies the impact of home foreclosures on tenants in 2010, and makes recommendations to strengthen protections for tenants in foreclosure situations.

Tenants Together conservatively estimates that in 2010, at least 38 percent of residential units in foreclosure in California were rentals, directly affecting over 200,000 tenants, most of whom were displaced from their homes. The report quantifies the impact of the foreclosure crisis at the state and county level.

Tenants Together's annual foreclosure reports are designed to shed light on the plight of tenants in foreclosure situations and offer solutions to the ongoing crisis.

California Tenants Elect Donald Sterling and David Taran to Landlord Hall of Shame

Tenants across the state elected David Sterling of Los Angeles and David Taran / Page Mill Properties of East Palo Alto as the inaugural inductees to Tenants Together’s Landlord Hall of Shame.

The Landlord Hall of Shame is designed to shine a public spotlight on California’s bad landlords and send a clear message that their actions will be announced and publicized.

Throughout 2010, California tenants suggested nominees for induction into the Hall of Shame. Mr. Sterling and Mr. Taran distinguished themselves from this list of candidates by the egregiousness and scale of their bad conduct.

Donald Sterling, LA Clippers owner and LA-area mega landlord, has been involved in a number of out-of-court settlements in discrimination cases. In 2009, Sterling paid the Department of Justice (DOJ) the largest settlement ever involving a housing discrimination case. According to the DOJ, Sterling "engaged in a pattern or practice of discriminating on the basis of race, national origin, and family status." The DOJ stated that Sterling "refused to rent to African Americans and that his conduct was willful." In 2006, the Housing Rights Center in Los Angeles sued Sterling for discrimination, a case that Sterling settled for an undisclosed amount that included over $5 million in fees. Sterling has also been sued for harassment and employment discrimination based on race by NBA legend and former Clippers General Manager Elgin Baylor.

David Taran, through his company Page Mill Properties, orchestrated and executed a scheme to evict thousands of rent controlled tenants in the city of East Palo Alto (EPA). After acquiring more than half of the rent controlled housing in EPA, this landlord soon began imposing exorbitant rent hikes and aggressively displacing tenants from their homes. Within a few years, the scheme imploded with all units going into foreclosure in 2010, but not before an estimated 1500 tenants lost their homes, according to research by the Fair Rent Coalition of East Palo Alto.

Washington, D.C. Extends Rent Control for 10 Years

In its final 2010 meeting, Washington, D.C.'s Council voted to extend the city's local rent control for another ten years. The Washington Post summarized the development:

RENT CONTROL. Extended for 10 years the District’s rent-control laws that limit annual rent increases to about 2 percent plus inflation, or no more than 10 percent a year. The 35-year-old program was meant to protect tenants from rising costs. Increases for the elderly and disabled are limited to 5 percent a year; increases on vacant units may rise no more than 30 percent.

California readers will note that, unlike California, D.C. law permits vacancy control -- i.e. the amount that a landlord can increase rent after a vacancy.

Congratulations to the D.C. city council and local tenant activists. Particularly in these difficult economic times, the security provided by rent control laws is essential.