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RENTAL HELL - My mother dreamed of retiring as a landlord of a 5 to 10-unit apartment building. She envisioned earning a decent retirement income while providing good housing for those wanting to live in the area. Sadly, my mother passed away before she could see that dream come true. If she were alive today, the hostility from the City, County, State, and tenants toward landlords would have pushed her into an early grave. What follows is a true story; only the name has been changed for privacy.
Raivo never imagined that the American dream of property ownership would become his worst and continuing nightmare. An immigrant who worked his way through the University of California system with a double major, married his school sweetheart, and built a portfolio of 68 rental units, he embodied the success story that California once promised. Today, he can’t wait to leave California.
A prime example of the gauntlet landlords face began with a phone call from a real estate broker friend. There was a house in the Valley—a distressed sale from an owner drowning in unpaid rent and mounting expenses. Ravio found out that the owner had been bleeding money for months: $80,000 in back rent, plus property taxes, mortgage payments, insurance, and constant repair requests from tenants who had stopped paying during the COVID moratorium.
"The guy just wanted out," Raivo recalls. "He was trapped and could not evict the occupants because of the moratorium, but he still had to pay all the carrying costs while getting nothing in return."
When Raivo first saw the property, the situation was immediately clear. The primary tenant and his extended family occupied the main house, but the recreation room in the back had been illegally turned into a dwelling and sublet to another family. Even the pergola in the backyard was rented out illegally. The driveway told the true story: Mercedes, Lexuses, and BMWs—luxury cars that indicated the tenants could easily afford rent but were choosing not to pay.
"People took advantage of the city's messaging," Raivo explains. "The housing department website literally told people not to worry about paying rent, that landlords couldn't evict them, and offered free legal counsel to fight any eviction attempts."
Even after purchasing the house, Raivo couldn't immediately reclaim his property. The COVID moratorium made eviction nearly impossible, forcing him to wait months before filing based on the illegal subletting of the recreation room. This space had a certificate of occupancy for recreation, not as a dwelling unit.
The legal process exposed the system's dysfunction. When Raivo's attorney submitted the paperwork, the tenants ignored the court documents. Despite their non-cooperation, the judge initially ruled against Raivo, citing insufficient evidence. It wasn't until his attorney filed a motion challenging the ruling that the court ultimately approved the eviction.
The tenants started their exit plan when the sheriff's department finally showed up with a five-day notice. Like a scene from a heist movie, furniture trucks arrived late at night, systematically taking everything of value from the house: appliances, chandeliers, light fixtures—anything that could be removed and sold.
They literally stole everything, and all that was left was an empty shell." Raivo says. "When I finally took possession, I had to spend $50,000 just to make the house livable again." The financial toll was immense: $35,000 in unpaid rent, $15,000 in legal fees, and tens of thousands more in rehabilitation costs. So, the total amount of money lost on this property by two owners adds up to around $180,000+ in lost rent, legal fees, and repairs, not including property taxes and upkeep. Collection agencies laughed when he inquired about recovering the money. "They told me California is heaven for thieves, and I'd just be throwing good money after bad."
Undeterred, Raivo renovated the house and put it back on the rental market. The next applicants seemed perfect: a man in a wheelchair and his partner with excellent credit scores and high-paying jobs verified through pay stubs. The house's accessibility features made it ideal for someone with mobility challenges.
For six months, everything appeared normal. Then the rent payments stopped. Raivo recalls, "They claimed they had no money," but neighbors reported seeing 10 to 14 people living there at various times, along with several large dogs—all lease agreement violations. However, the couple who rented the house only occasionally did a drive-by and never inhabited the house. We wondered if they had illegally sublet the house. People kept coming and going at odd hours. None of them seemed to have steady jobs. Yet, the driveway was often double- and triple-parked with high-end luxury cars, including a white Rolls-Royce SUV that was frequently parked there.
The eviction process revealed the system's built-in advantages for tenants. The couple received a free attorney through a city-funded program, who immediately employed delay tactics. What should have been a straightforward case of non-payment stretched into months of legal maneuvering.
At the court hearing, the tenant's free lawyer made an offer that exposed the system's perverse incentives: "Drop all charges, don't pursue collection, don't provide negative references, remove any eviction from their record, and we'll have them out in one month. Otherwise, we'll demand a jury trial that will cost you $15,000 and take four more months, plus another two months for the sheriff's department to actually remove them." Raivo's attorney was blunt: "You don't want to be right; you want to be smart. Take the deal."
These experiences represent the tip of the iceberg for Raivo's 68-unit portfolio. During COVID, he estimates 35 units had problematic tenants taking advantage of the moratorium. The city's Housing and Economic Rights Advocates (HERA) program provided some relief, covering up to 12 months of rent, but only after landlord and tenant participated in a complex application process.
Recent legislative changes have worsened the situation. Since February 2025, the Ellis Act now requires landlords to pay up to $90,000 in relocation fees to "protected tenants" (low-income renters)—up from a cap of $25,000. This could amount to half a million dollars in relocation costs for just a six-unit building.
Raivo explains, "They're literally making it impossible to develop." "On one hand, they want more affordable housing. On the other hand, they've created a system that punishes anyone trying to provide it."
The regulatory burden goes well beyond tenant relations. The housing department can place units in receivership if landlords don't complete arbitrary "corrections" quickly enough, enabling tenants to pay rent directly to the city. Raivo explains how inspectors issue conflicting requirements and fines for issues outside the landlord's control—such as when tenants remove smoke detectors after installation.
Raivo's story highlights a wider trend among California property owners and developers. Several of his close friends have already left the state. The combination of strict tenant laws, high taxes, regulatory overreach, and declining public safety has made the decision clear: the costs are greater than the benefits.
"I immigrated here, went to the University of California, built a business, started a family," Raivo reflects. "But we're seriously considering leaving unless things drastically change. We pay massive taxes and get nothing in return—streets full of homelessness, rampant crime, and schools losing funding. I don't feel safe walking with my kids in Venice Beach or Third Street Promenade." When I go shopping, “I am always looking over my shoulder, we no longer live in a society where we can trust people”.
His departure plans are concrete: finish his last two development projects, wait for the market to improve, then sell everything and relocate to Florida. He's not alone—the state that once attracted ambitious entrepreneurs and innovators is now driving them away with policies that punish success and reward dysfunction.
Perhaps most troubling is how well-intentioned tenant protections have backfired. Instead of helping renters, these policies have made landlords incredibly selective, often discriminating against the people the laws were meant to protect. The system incentivizes people to remain low-income to qualify for benefits, creating a permanent dependent class rather than pathways to prosperity.
"I see Section 8 tenants my age, young and healthy, playing video games all day while my wife works at the hospital and teaches nursing at the University," Raivo observes. "The system rewards non-contribution while penalizing people who work hard and pay taxes."
The housing crisis deepens as insurance companies flee California and development costs skyrocket due to endless regulations. The state's response? More regulations, more bureaucracy (formerly red tape, but since Democrats have been in charge for two decades, it now shall be known as Blue Tape), higher fees, that drive away the very investors and developers needed to solve the problem.
Raivo's story isn't just about one landlord's frustration—it's a warning about what happens when ideology outweighs economics and common sense, when good intentions lead to perverse incentives, and when a government forgets that prosperity depends on policies that reward productive activity rather than punish it.
The state’s political leaders have relied on California’s good weather to keep residents here. But as Raivo learned the hard way, sunshine doesn't pay the bills when the system is set up to make honest business impossible. So, the continuous exodus from the state will persist until thousands of laws, mandates, and fees are repealed and people have a fair shot at prosperity.
(Eliot Cohen has been on the Neighborhood Council, served on the Van Nuys Airport Citizens Advisory Council, is on the Board of Homeowners of Encino, and was the president of HOME for over seven years. Eliot retired after a 35-year career on Wall Street. Eliot is a critic of the stinking thinking of the bureaucrats and politicians that run the County, the State, and the City. Eliot and his wife divide their time between L.A. and Baja Norte, Mexico.)
