Arnel Management Company Helped Kill Rent Control Expansion. Now It Improperly Withheld Security Deposits.
First, Arnel Management Company helped to kill two pro-rent control ballot measures in California by contributing a total of $500,000. Now the corporate landlord has reached a settlement with California Attorney General Rob Bonta for improperly withholding security deposits. It’s just the latest example of corporate landlords scheming to squeeze every last cent out of tenants — and why we need to expand rent control.
In 2018, Arnel contributed $250,000 to stop Proposition 10, a statewide ballot measure that aimed to repeal rent control restrictions in California and allow cities to expand rent regulations. Arnel was among a group of corporate landlords that successfully defeated the initiative by financing a massive, multi-million-dollar misinformation campaign.
In 2020, Arnel contributed another $250,000 to kill Proposition 21, a statewide initiative that would have also allowed cities to expand rent control. For that contribution, Arnel first delivered the money to the California Business Roundtable PAC, which then delivered millions to a No on Prop 21 committee. Housing Is A Human Right exposed that shell game in 2020.
Four years later, Arnel are up to no good once again.
On March 29, California Attorney General Rob Bonta announced that “Arnel — a corporate landlord that operates 19 apartment complexes in Orange and Los Angeles counties— is alleged to have automatically deducted pre-set cleaning charges from security deposits in violation of California law and an existing injunction. Under the terms of today’s settlement, Arnel will pay over $1 million and be subject to more stringent injunctive terms to deter future misconduct.”
Bonta said in a statement: “California tenants have rights, and my office is committed to protecting those rights. For many renters, especially those from lower-income backgrounds, affording a security deposit entails a great deal of sacrifice. We are holding Arnel accountable because, in some cases, the company failed to return to tenants the entire security deposit that they were legally entitled to and worked hard to save up for.”
Bonta’s office also noted that, in 2001, the Attorney General’s Office “reached a separate settlement with Arnel related to its security deposit withholding practices.”
Arnel’s predatory practices are nothing new among corporate landlords. Essex Property Trust, AvalonBay Communities, and Equity Residential, which also helped to kill Prop 10 and Prop 21, are mired in the ongoing RealPage Scandal for illegally working together to wildly inflate rents. Numerous federal and state lawsuits and at least one federal investigation are underway.
It’s why a broad coalition of housing justice organizations, social justice groups, labor unions, and civic leaders is working to pass the Justice for Renters Act. The November ballot measure will allow cities to expand rent control, rein in predatory landlords, and quickly stabilize the housing affordability crisis.
To avoid public scrutiny, corporate landlords and their front group, the California Apartment Association, are carrying out another shell game to fund a No on Justice for Renters Committee. Housing Is A Human Right exposed that under-handed move in February.
Corporate landlords have shown, time and again, that they must be better regulated — and Californians need better protections against Arnel, Essex Property Trust, and other real estate companies. The Justice for Renters Act will allow cities to finally stand up for tenants.
Patrick Range McDonald, the author of this article, is the award-winning advocacy journalist for Housing Is A Human Right.
