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The reason big real estate investment firms and corporate landlords have been buying up properties in bulk is because tenants' rights legislation has gone to such an extreme it's made renting out residential property so dangerous to the owners that a huge fraction of those moving out of their houses are choosing to sell rather than gamble their life savings on getting into the landlord business. Rental risk is diversifiable, which means the market won't pay you to take the risk, which makes taking the risk irrational for anybody who isn't big enough to diversify his operation over hundreds of tenants. This artificial suppression of competition from traditional mom-and-pop landlords drives up rents, giving corporations an incentive to outbid regular people trying to buy homes. So
of course corporations are going to end up owning a ton of the housing.
"Landlords in LA cannot evict tenants from any rental property, including single-family homes, unless there was unpaid rent, documented lease violations, owner move-ins, or other specific reasons that would justify moving the tenant out. The Los Angeles Housing Department keeps a specific list of the allowed “at-fault” eviction reasons and the “no-fault” legal reasons for eviction. Landlords will also have to pay relocation assistance to tenants if the eviction is for “no-fault” reasons. Some tenants already had “just cause” eviction protections in place thanks to the state law, but LA has made them universal, expanding the protections to about 400,000 additional units. If these laws did not apply to your property before, they might apply now. This is one of the most significant new rental laws in LA, because all units in the city are now covered by the protections."
Addressing paragraph 2: Real estate investment firms invest in targeted markets across the US where they can maximize rents in and around metro areas. It has little if anything to do with "extreme tenants rights legislation".
There is nothing particularly dangerous for mom and pop with a few rentals. Even if mom and pop do not want to take the time to read the landlord/tenant laws, there are management companies who do just this for about $100 a month per. They know the laws and how to get a deadbeat out soonest IAW the law to minimize lost rent.
Addressing your quoted paragraph 3: I see nothing wrong with what is stated here. This looks very similar to what it was when I was a landlord some 20 years ago in San Diego. Looking up "at fault" and "no fault" evictions for LAHD, it looks perfectly reasonable.
I think what may be unique to California is if a landlord does not make repairs in a timely manner, tenants may have the repair done, subtracting the cost from the rent and providing a copy of receipt long with.
The problem isn't knowing the list of grounds for eviction, but what isn't in the list: because the lease is up. That means
if you want to sell somebody one-year occupation of your property, you're required to throw in an option for much longer occupation. Just like a stock option, an occupation option has a price. It costs the seller something to provide it; it benefits the buyer to have it. If there were no such ordinance, the owner and the renter would still be able to include that option in the terms of the lease if they wanted to -- they could negotiate an agreeable price for the option so it's mutually beneficial. I.e. if the place you rent comes with an option to stay after the lease is up, you'd expect to pay a higher rent; if you make an enforceable promise to leave after a year, in exchange you'd expect to pay lower rent. Making the option compulsory doesn't make it free; it just means the owner will take it into account when calculating how much rent to charge. If the city allowed the renter to waive that right in the rental contract he could get a lower price. But
how much lower?
The cost of an option has two components. The first is the expected return: the present value of what it will cost the seller if you exercise it, times the probability that you'll exercise it. The second component is a premium for the risk -- the uncertainty of whether you'll stay past the lease end. There's no point investing in a risky asset if you can invest in a lower-risk asset with the same expected return; the market therefore pays investors higher returns for riskier investments. But
how much higher?
That turns on the question of whether a bad outcome from the investment is correlated with bad outcomes from other investments. Whether a renter chooses to exercise his option to stay past the end of the lease is normally uncorrelated with whether some other renter does the same, which means the risk is "diversifiable" -- each renter is deciding based on his own situation, not based on some environmental constraint that affects all renters at once. As
Wikipedia explains, the risk premium depends on whether the risk is diversifiable. "The capital asset pricing model argues that investors should only be compensated for non-diversifiable risk." The idea is that an investor can make diversifiable risk go away by diversifying her investments, so why would the market compensate her for uncertainty she doesn't actually face? If she tries to charge a diversifiable risk premium, go find some competing investor who charges a risk premium only for his non-diversifiable risk. So the implication for rentals is, how much risk premium for renters exercising their option to stay will the market bear?
A big fat zero. Property owners do not get compensated for taking a chance on a renter leaving when the owner wants him out, because a diversified property owner isn't actually running any risk -- she may not know up front whether any given renter will move out, but she has a hundred rental units, and she has experience telling her, say, about 30% of the ones she wants to go will insist on staying, which is all she really needs to know.
The trouble is, this market situation screws over any landlord who only has one or a few units. Theoretical diversifiability doesn't make him actually diversified -- he doesn't own enough units for that. So the ordinance in effect orders him to sell a high-risk-to-him option for the low-risk price. So it reverses the comparative advantage. In a free market for rentals the small landlord has a comparative advantage over the giant corporation. He's intimately familiar with the local housing market, he can make repairs himself or else knows who will do them at the best price, and he knows his tenants personally. But require him to give tenants an option on extending their stays and the giant corporation has the comparative advantage. Now the economically rational move for the small owner is to sell out to the giant corporation.
