Landlords charge market rents without paying market taxes. Prop. 15 fixes that

By John Ballon, Los Angeles | 10/07/20

Regarding “Column: California’s tax system needs to be overhauled. Making changes to Proposition 13 won’t do it” (LA Times, October 5): Business groups are making the specious argument that Proposition 15 will push up rents for small businesses. In reality, landlords cannot simply pass on unlimited costs beyond what the market will bear.

My business is in Glendale. Nearby shops are vacant, closing or struggling to survive. In this climate, my landlord, who had previously raised my rent several times, recently offered me a 35% rent reduction. She told me she did not want to lose any more tenants.

Commercial and residential rents are likely to continue their downward trajectory. Furthermore, there is going to be less need for brick-and-mortar spaces. The immediate impact of all this will be increased building vacancies and significant downward pressure on rents.

Small businesses face difficulties today, but rent increases aren’t one of them. In contrast, the rapid loss of tax revenue and the consequent painful cuts are real concerns. Businesses don’t want to set up shop in a city with inadequate municipal services and poorly funded public schools.