Cheap rents fleeting in Imperial Beach

"I lived there 15 years,” a former Imperial Beach renter said about his apartment complex at 642 Ocean Lane. “When it sold, the new owner gave everyone 60-day notice that the rent was going to be double.”

Many renters in Imperial Beach are experiencing drastic rent increases as property values skyrocket in this south San Diego County beach town.

Home values, which affect rental prices, have risen in Imperial Beach over 20 percent in just the last year, as opposed to less than 1 percent in Ocean Beach and 7.4 percent in La Jolla, according to the website Zillow.com.

There is currently no maximum limit for rent increases under California Law, according to the Housing Rights Center. The only restriction is that a landowner must give the tenant at least 30 days advance notice for rent increases up to 10 percent, and 60 days for rent increase more than 10 percent.

Patricia Hutchins of Hutchins Realty and Gary Trieshman of Pacific Realty, who are based in Imperial Beach, confirmed that rents are zooming upwards.

"They are on the rise and they will continue to rise," said Hutchins, who said rent on single family houses have gone up 10-15 percent in the last year.

"There has been an increase, more than in the past," said Treishman, adding that the rent increases are directly linked to the increase in property values. "Because of the higher purchase price as an investment, it takes a $2400-plus rent to cover the mortgage," Treishman said.

Most renters with rent-increase horror stories requested anonymity due to legal issues or in fear of reprisal.

Many of the renters at 642 Ocean Lane who experience a doubling or near-doubling of their rental charges had to move completely out of Imperial Beach after.

"Everyone in that section of Imperial Beach knew each other," the anonymous former tenant of 642 Ocean Lane said. "Then the developers moved in.”

The apartment building was purchased for $6,250,000, according to real estate websites involved with the sale. In June, residents were instructed in writing to make payments to IB Coastal LLC by Will Creagan, a “managing member” of IB Coastal LLC and president of the property management group, Southwest Equity Partners, who handle the building.

“It's not IB anymore, it's whoever can pay the highest price…I feel like I was forced out, "the renter said, adding that one elderly couple in the building had to move all the way to Modesto.

Repeated calls to Creagan and Southwest Equity Partners, based in Encinitas, CA, were not returned.

The onsite manager of the building, Toby Stone, said that more than half of the tenants stayed when the rent was raised last summer.

“Some of them left, not most of them,” Stone said. He said that the rent on two-bedroom apartments increased from $1750 to $2425 last summer. Stone said he had been there since before the rent hike and “it wasn't enough to make me look for other places.”

“I would say that the new owner is being fair in terms of upgrades,” Stone said, added that with renovation the apartments “look really good...the service that we offer in terms of maintenance, upkeep, the facelift, it's very fair.”

“All our new renters are very happy,” Stone added.

Some owners are sympathetic to the renters’ plight. "Being a homeowner with a rental, I find it so disappointing that greed most often wins out,” said Karen Johnson on a social media forum about rent in Imperial Beach. “When is enough, enough?...this is a hard working middle class family town and I do hope it stays that way...tighten your own belt a little for the benefit of the next guy."

Trieshman said that another factor is "out of area realtors are inflating rent value to their clients, giving them expectations that are difficult to meet," which results in new owners asking for unrealistically high rents.

"The other end of that, the owners are able to improve the property,” he said, “generally upgrading the interior and exterior of the facility so they can get the higher rent."

A tenant in another large Imperial Beach apartment complex said rent hikes were proliferating. "The rate increase here was pretty much 12% across the board," the renter said.

"My hope was that I could live at this residence for the remainder of my days. Without some type of control, that hope will not be able to materialize," said the renter, who is a semi-retired active contributor to the Imperial Beach community.

"I think big companies don't put any value in stable residents," the renter added.

Other than some new affordable housing units that may be built in the future, “we do not have any sort of rent control,” said city manager Andy Hall.

“It would be difficult to implement because although prices are rising, IB is still relatively affordable when compared with surrounding communities, especially beach communities. It is legally challenging, if possible at all, to keep rents lower than market value,” Hall said.

“Rent control is normally used in locations that experience rental rates much higher than market rate,” Hall added. “That is not to say the City Council may not try to look at some method of rent control, it just may be very challenging until rents rise above market value which is something we need to carefully monitor.”

Diana Avina, the community manager and the Imperial Beach Gardens and Mariner’s Point apartment complexes, said her rents went up a lot recently. “After doing a market analysis we were actual cheap, which is why we had to do an increase,” she said. “Some people were extremely affected, some said ‘we were ready for this.’”

Avina said she tries to help if renters have trouble with the increases. “If there's anything we can do to negotiate with [the owners],” she said, “most of the time we are able to help people.”

The changing nature of Imperial Beach in general is another factor. "We have been undervalued compared to other oceanfront small towns," Hutchins said.

"In the past, I.B. was not the most desirable location to live, not per me but in some people's eyes," Trieshman said. "Rents were low and were maintained at a fairly low rate."

Another factor is "the increase in Navy personnel, roommating in homes, transient and mobile and single” from the upcoming Silver Strand Training Center which is expected to have 5000 new personnel. "There's an influx of Navy personnel already," Trieshman said.

Trieshman said these renters often share houses and so they can be charged more. "A lot of owners are taking advantage of that," he said.

Also, the town has also added attractions such as a new hotel and new restaurants recently, "and the property owners have recognized that," Trieshman said.

Hutchins said that renters in general are in a bind. "We try to deal fairly with both the landlord and the tenant. There are laws that if you raise the rent more that 10% you have to give the tenant 60 days. We try to be reasonable, not to go out and be robber barons."

"The significant increase in the cost of renting is an issue that is impacting families throughout California and not just Imperial Beach but is something I am very worried about," Mayor Serge Dedina said. "The lack of funding via a state approved redevelopment program makes it harder than ever for small cities like Imperial Beach to invest in affordable housing."

The mayor added that the city is evaluating affordable housing options. "This is an issue that Imperial Beach cannot deal with alone and requires coordination and support from agencies at the federal, state and county levels."