Is the Los Angeles Housing Department’s policy geared towards improving living conditions of renters, or is its primary goal to increase local GDP by stimulating aggregate demand for services and products relating to construction? As an architect with graduate level training in economics, I’m inclined to conclude that the LAHD appears to be engaged in a mutated form of Keynesian economic policy. John Maynard Keynes is widely regarded as the father of modern macroeconomics. Essentially Keynesian economic policy involves the government spending during recessions in order to stimulate the economy. The main difference here is that the LAHD is compelling building owners to do the spending. The LAHD’s systematic code enforcement program or SCEP involves LAHD inspectors visiting residential units and pointing out code violations and issuing an “Order to Comply”. Anyone that has had the recent misfortune of being issued an order to comply by the LAHD is likely to have wondered “why am I being cited”? Those employed by the LAHD will no doubt tell you that they are protecting the life, safety and welfare of the public, but what else is going on? Is it merely coincidence that the apparent increased intensity of SCEP inspections is taking place while this country is experiencing “The Great Recession”?
Although inspector’s citations are supposed to be limited to those which are supported by city code, anyone with sufficient construction experience will concede that there is always an aspect of discretion. In other words, what one inspector considers a code violation might not constitute a violation in the eyes of another inspector? This can be problematic in that if an apartment owner is compelled to devote resources to resolving citations made by the LAHD inspector, then that means those resources cannot be spent on other building improvements. This is what economists call an opportunity cost. It is difficult to determine whether the issues cited by the inspector are of greater value to the tenant than the improvements that the building owner would have otherwise made. Hence, it is not a foregone conclusion that SCEP benefits renters. Let’s consider for a moment who this does benefit? It benefits the LAHD by way of inspection fees and other penalties; it also benefits architects, engineers, construction contractors and other specialized consultants in addition to building material suppliers. Is it fair for building owners to be taxed for the benefit of others?