LOMITA, Calif. — When Paul Rajewski's company bought an eight-unit housing development in Lomita last year, he said he knew it meant taking on a collection of fixer-uppers.
But Rajewski shared that he was shocked to discover some of the unsanitary living conditions the tenants he inherited had settled into.
“When the person left, this was full of old, beat-up furniture that we had to remove," Rajewski said giving a tour of one of the now-empty units. “I mean look at this, it’s mouse crap. This isn’t something we condone."
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The unit on 250th Street that Rajewski showed Spectrum News 1 was vacated weeks ago, but still smells like animal feces and urine.
Rajewski says his team at Pinnacle Investments had to dump 10 tons of flea-infested furniture and belongings when the previous tenant was evicted for not paying rent.
“This place was so bad and infested with fleas and bugs, the carpet was terrible, you can see where the cat used to enjoy himself on the floor," Rajewski said.
His company's plan is to completely renovate the two-bedroom cottage and the seven others around it. Rajewski said their crews are mitigating a termite problem, replacing roofs and fixing cracked foundations in the poorly-maintained units.
With significant renovation comes a rent increase, one that Rajewski believes will bring the housing development closer to fair market rent and to livable conditions.
But before any units were fixed up, rent already went up.
For tenant Bill Johnson, it rose from $1,500 to $2,000 per month, which is more than the new state rent control law allows as of this year.
“I’m on social security disability, the only income I have is that. I have no credit, I can’t even rent a dog house,” Johnson said.
Johnson moved into his unit in 2014 and until Pinnacle Investments bought the property his rent had never increased.
He's had to take on part-time work despite his disability to make ends meet.
“I try to work as many days, as many hours as I can. Bottom line, they don’t care if we live or die,” said Johnson.
With a lack of affordable housing the issue of rent control versus capitalism and incentives for developers to invest is playing out across the City of Los Angeles.
The issue in Lomita came to a boiling point over the Christmas holiday.
Pinnacle issued 60-day notices in October asking tenants to move out so renovations could begin. The residents took the issue up with city officials.
Lomita's city council stepped in with an urgency ordinance that overturned evictions until the new statewide rent control law went into effect on January 1.
The Mayor of Lomita, James Gazeley, told Spectrum News 1 he was uncomfortable issuing the ordinance because he wasn't able to hear from both sides and city officials hadn't visited the property.
Under the new California rent control law, Pinnacle had to roll back rents to the rates tenants had in March 2019, plus five percent and the rate of inflation.
“Investors aren’t going to build something if they’re not going to make money. Investors don’t look at the world that way," Rajewski said. "And I don’t think we should let our tenants live in bad conditions, I don’t think that’s a good way to operate our business.”
Johnson told us he doesn’t want to leave his unit and he also doesn’t want it renovated. He just wants to pay his previous rent.
But Pinnacle has raised concerns about the living conditions inside. Johnson declined to let Spectrum News 1 see them.
Johnson insists he shouldn’t be forced to move.
“They want to throw us all out and take their time fixing it up and charge $2400," Johnson said.
According to Pinnacle, Johnson and his neighbors have been offered multiple options for relocation, including units in other areas Pinnacle manages that are more affordable.
Rajewski said his company gets turned down.
“Bill could save $300 if he moved to Long Beach. Bill could save a lot of money if he got a roommate," Rajewski said. "I don’t think it’s right to hold a property owner hostage for the way someone else wants to live.”
Pinnacle plans to move forward with renovation plans, which means new 60-day notices for the tenants.
Rajewski said he’s willing to work with them on solutions, but won't halt the work his company is putting into his investment.