San Diego

City Heights Tenants Stunned by Notice of 75% Rent Increase

A real estate expert said the county’s housing shortage now makes investment in older, neglected neighborhoods more attractive for developers.

Tenants in a multi-unit apartment building in City Heights recently received two unexpected and unwelcome notices on their front doors.

The first was a notice of a change in the management of their apartment building.

The second was a 60-day notice that rent for their two-bedroom units on Marlborough Avenue will increase from $1,075 to $1,875, on July 1.

Several of those tenants told NBC 7 they cannot afford that 75-percent hike and don’t know where they’ll find a similarly affordable apartment.

“I think it’s too much,” said one tenant, who, like her neighbors, declined to give her name. “That’s why we moved here, because we want to save money to buy a mobile home.”

That tenant, and two others, said they’ll start looking now for a less-expensive apartment.

The new property management company, Constellationmgmt, did not respond to multiple requests for comment about the rent increase and its future plans for the property.

But tenants said company representatives told them the worn, aging building will be renovated.

A tenants’ rights organization also said the rent increase is legal, because tenants were advised of the rent hike at least 60 days before the increase takes effect.

"This is all about an imbalance of supply and demand," said real estate expert Gary London of London Moeder Advisors.

London said the county’s housing shortage now makes investment in older, neglected neighborhoods more attractive for developers.

While he expressed sympathy for tenants who can’t afford similar rent increases, London said the renovation of old units and construction of newer, higher-rent apartments is a overall positive development for City Heights and other low-income neighborhoods.

“You’re also creating opportunities for commercial development,” London explained. “You're making the neighborhood safer, and you’re doing all kinds of positive things for the neighborhood and the community as a whole."

London said many working families can afford $1,875 a month for a renovated two bedroom apartment in an older neighborhood.

London also said developers do care about families that can’t pay that much.

He said rent-control is not a solution, and that government taxpayer subsidies provide only short-term relief.

The solution, London said, is the creation of more housing supply to meet, or at least close the gap, with current demand. While solutions are difficult in populated west coast cities where land is at a premium, London said policy makers should encourage the construction of smaller units on high-density land parcels.

"And if we build more housing, it flattens out the rent levels and certainly flattens out the increase, or the velocity of the rent increases," London said.

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