Legal but 'a total outlier:' Tenants at Oxnard complex hit with 20% rent increase

When Nicholas Donoho opened the email from his landlord about a month ago, something didn’t look right.

“When I first saw it, I thought it was a joke,” he said.

The attached letter said the rent on his three-bedroom townhome in Oxnard will be $3,667 per month starting in December, if he signs a new one-year lease, or $100 more than that if he switches to a month-to-month lease. Even the lower figure is 20% more than his current monthly rent of $3,050. And his rent went up 10% a year ago, so the total increase in a little more than a year will be $917 a month, or more than 33%.

Donoho lives in a townhome complex called The Vines at Riverpark, in the residential area near The Collection at Riverpark. The complex’s owner, a Bay Area-based company called Interstate Equities, appears to be raising rents about 20% across the board at The Vines, after raising them 10% last year. Four tenants shared their renewal notices with The Star and all of them included similar rent increases.

“That’s a car payment, and a decent car, too” said Donoho’s neighbor Nissa Gay, referring to Donoho's rent increase. Gay moved into The Vines in December and hasn't heard from the landlord yet about the terms of a renewal.

“It’s ridiculous," she said. "It’s price gouging … They’re displacing families, and they’re disrupting lives just because they want an unreasonable increase.”

The Star contacted Interstate Equities through the on-site manager at The Vines, and the company did not make a representative available for an interview.

20% is legal, but 'a total outlier'

The rent increases at The Vines are legal, though they wouldn’t be if the complex were a bit older.

The Tenant Protection Act, a state law that went into effect in 2020, limits annual rent increases for tenants who stay in the same unit to the rate of inflation plus 5%, with a hard cap of 10%. But it only applies to buildings that are at least 15 years old, and The Vines was built in two phases in 2013 and 2014, so the complex won’t be covered by state rent limits until at least 2028.

The city of Oxnard has its own rent control measure, which the City Council adopted last year. It caps rent increases at 4% per year, regardless of inflation. But it doesn’t apply to The Vines, either. A state law known as the Costa-Hawkins Act prevents cities from applying new rent control policies to anything built after the act was passed, in 1995.

Alba Marshall, the city of Oxnard’s rent stabilization analyst, said the city has received “a few complaints” about the rent increases at The Vines. She’s told the tenants that there’s not much the city can do.

“One of the things that tenants can always do is reach out to their local representative, in the State Senate or the Assembly, regarding Costa-Hawkins,” Marshall said. “If that were repealed or modified, then the city rent control would apply.”

Rents have been going up all over Ventura County in recent years, but the increases at The Vines are “a total outlier,” said Dawn Dyer, the president of the Ventura-based real estate firm Dyer Sheehan Group.

Dyer Sheehan surveys apartment owners all over Ventura County and produces a report twice a year on the county’s average rents. The most recent report, in July, covered more than 21,000 units at 172 different properties. The Vines was not included in the survey, though Dyer said other fairly new, luxury buildings in the Riverpark area were included.

In July, Ventura County’s overall average apartment rent was $2,573, a 4.8% increase from a year earlier. The increases were even bigger in the two previous years: The average apartment rent went up 10.9% from July 2020 to July 2021 and 7.4% from 2021 to 2022.

“We’ve seen some pretty aggressive prices for Ventura County over the last few cycles,” Dyer said. “One factor is that during COVID a lot of property owners weren’t able to raise their rents, and in many cases they didn’t collect full rents, so that was simply a hole in their budget, and unfortunately that was followed up very rapidly by inflation like we haven’t seen in decades.”

That describes the pattern at The Vines. Tenants there say they had little or no rent increases from 2019 to 2022, and Donoho said the landlord was willing to forgive back rent when he went through a tough time financially.

'As soon as they bought it, they started raising rents'

But that was a different landlord. In 2022, the previous owner, Champion Real Estate, sold The Vines to Interstate Equities for $93 million, according to a news release from Champion. That sale brought a 68% return in seven years for Champion, which paid $55.5 million for The Vines in 2015.

“It was immediate. As soon as they bought it, they started raising rents,” said Travis Quine, who lives in a three-bedroom unit with his wife and their young child.

Their rent went up 10%, to $3,057, when they renewed their lease in April, and Quine said he’s expecting the same 20% increase everyone else is getting when the current lease is up next April. There was not any increase in services or amenities to go with the higher rents, Quine said; in fact, the new owners reduced the maintenance staff and tenants say it’s become harder to get management’s attention about things that need to be fixed.

Though a 20% rent hike coming a little more than a year after a 10% increase is very unusual, Dyer said The Vines appeared to be starting from rents that were below the market average. The average rent in Oxnard for a three-bedroom apartment in July was $3,442, about $400 more than tenants at The Vines say they are now paying. The pending increases will take them about $200 above the city average.

But not all three-bedroom apartments are the same, and the ones at The Vines are bigger than most. They are all two-story townhome units, and they all have private, attached two-car garages and in-unit laundry. They’re also newer than most apartments on the market.

On a per-square-foot basis, the new, higher rents are “on the end high of the market, but not the highest,” Dyer said. And the current rents, before the 20% increase takes effect, are lower than most similar rentals.

“My guess is that when The Vines came on, they were probably at the lower end of where they felt they should be in their pricing, in order to get it leased up,” Dyer said.

The advertised rents for new tenants at The Vines are now even higher than what the current residents will pay if they renew their leases with 20% increases. Prices on the complex’s website range from $3,495 per month for a two-bedroom unit to between $3,795 and $4,395 for different types of three-bedroom units.

The Vines has 164 units, 28 of them with two bedrooms and the rest with three bedrooms. One reason the owner can raise rents so much, Dyer said, is that three-bedroom apartments are rare. About 90% of the apartments in the latest Dyer Sheehan survey had one or two bedrooms, and only 4% of the units in the Oxnard area had three bedrooms.

“The type of housing they have there isn’t readily available elsewhere,” Dyer said. “Those are really premium units for Ventura County.”

'There's not enough choice out there'

In a sense, all types of rental housing are in short supply in Ventura County, as the county hasn’t built enough to keep up with demand. The apartment vacancy rate in the latest Dyer Sheehan survey was 2.9% countywide and 2.5% in Oxnard.

“That tells me there’s not enough choice out there,” Dyer said. “Five percent vacancy is considered to represent a healthy equilibrium, where there’s some choice for renters and some ability for property owners to make a decent return. We haven’t been at 5% in Ventura County since 2009.”

Low vacancy rates give landlords more power to raise rents. But at some point, Dyer said, there’s a limit to what the market will bear, because there’s a limit to what people who live and work here can afford.

“We’re not sitting in the middle of LA with literally millions of people on our doorstep, where you’ve got lots of different options to choose from as far as your tenants,” she said. “We have a decent job base, but it’s not extremely high-paying. There’s only so much people can afford to pay who live here in Ventura County.”

The tenants at The Vines say they aren’t sure what they’ll do when the rent hikes kick in. Donoho, who owns a commercial real estate finance company and is also a volunteer firefighter in Los Angeles, said he’s found similar apartments for less than what he’ll be paying, but he doesn’t think the difference is enough to justify the cost of moving.

“I plan to stay and see if I can tough it out,” he said.

Gay, his neighbor, said she’ll probably do the same. She just moved last year and isn’t looking forward to doing it again, and she likes the fact that The Vines is in a safe area that’s walking distance to the parks, shops and restaurants at The Collection.

Jim Rodey, a manager at an auto dealership in Culver City, said he will probably switch from a year-long lease to a month-to-month one, so it’s easier to move if he finds a better option. He’s also hoping Interstate Equities will be open to negotiation, though it wasn’t flexible about last year’s increases and hasn’t appeared willing to negotiate with tenants so far this time around.

“There may not be anything we can do, legally, but with public pressure, maybe they’ll think twice about it,” Rodey said.

Editor's note: This article was updated to correct the context for Nissa Gay's remarks about the rent increases. She was referring to her neighbor's increase, not her own.

Tony Biasotti is an investigative and watchdog reporter for the Ventura County Star. Reach him at tbiasotti@vcstar.com. This story was made possible by a grant from the Ventura County Community Foundation's Fund to Support Local Journalism.

This article originally appeared on Ventura County Star: Tenants at Oxnard complex hit with 20% rent increase