In summary

As Los Angeles works to decarbonize buildings, city leaders must consider how tenants may be harmed by rising rents.

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By Chelsea Kirk, Special to CalMattrers

Chelsea Kirk is a research and policy analyst at Strategic Actions for a Just Economy. Her forthcoming report “Los Angeles Building Decarbonization: Tenant Impact and Recommendations” analyzes the impact of building decarbonization on the renter population.

Los Angeles is in a state of emergency. Urban heat waves, rising sea levels and wildfires are increasingly more common than they were a decade ago. In 2019, Mayor Eric Garcetti launched the Los Angeles Green New Deal, which lays out a roadmap to fight climate change in our city. 

One of the largest sources of greenhouse gas emissions in Los Angeles is buildings – houses, apartment complexes and commercial spaces constitute 41% of its greenhouse gas emissions. It is only logical that the LA Green New Deal has set a goal to decarbonize the entire building stock by 2050. While action to advance on this goal looms, city leaders must take care to consider how communities can be easily harmed by it and protect them. 

Tenants are in a state of crisis. Half of all renters spend more than 50% of their income on rent. Many have rental debt and are at risk of displacement due to COVID-19-related job loss. Households are cutting back on basic needs like food and clothing to be able to pay rent. Decarbonization could cause sharp increases in housing costs for tenants and make an already dire situation worse. 

Decarbonization will require that landlords replace polluting natural gas appliances with cleaner electric ones. They’ll also make other energy efficiency improvements such as upgrading the building’s insulation, replacing windows and installing solar panels in order to reduce the size of the building’s carbon footprint and improve the home’s air quality and comfort for residents. But it is expensive– – up to $28,200 per housing unit – and tenants may be forced to foot the bill. The city’s existing laws allow landlords to pass the bulk of decarbonization costs on to tenants. 

For those Los Angeles renters fortunate enough to live in a rent-stabilized building, annual rent increases are capped at 3%-5%. But a city cost recovery program called the Primary Renovation Work program allows landlords to increase rent by an additional 10% in order to recoup the cost of decarbonization.

A sweeping decarbonization mandate would increase rent burdens for tenants and prompt a city-wide spike in prices across the city’s rent-controlled housing stock. And the price increases would be permanent, because the Primary Renovation Work program does not require landlords to undo the rent increase even after they’ve covered the renovation costs. If this happens, severely rent-burdened households will be faced with a hard choice to make. 

Decarbonization could also motivate landlords to try to evict vulnerable tenants. L.A.’s rent stabilization law, which covers over half the city’s rental housing, controls rent prices only during the term of a renter’s tenancy. When the tenant leaves the home, the landlord is allowed to raise the rent as much as they like. These policies create an incentive for landlords to displace tenants who pay low rents. 

The high upfront costs of decarbonization could motivate landlords to target long-standing tenants and replace them with higher earners. Many landlords will use harassing conduct to force low-income tenants from their homes. The precedent is certainly there: in 2018 the housing department responded to 10,000 complaints of tenant harassment, and in 2021, the city passed the Tenant Anti-Harassment Ordinance. And laws like this protect only tenants who live in rent-controlled homes. Decarbonization poses even higher risks for tenants who do not live in rent-controlled housing because they have only minimal protections tied to retrofit work. 

Decarbonization should not lead to eviction. It should lead to energy bills savings, a more comfortable home environment and a Los Angeles more resilient to climate change. But this is only possible if city leaders center tenants in their policy process, genuinely seek their input, and ensure that they will be helped and not harmed. 

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