L.A. Is Losing Rent-Controlled Apartments at an Alarming Rate

The number of rent-controlled apartments that have disappeared from the Los Angeles market in 2017 has almost surpassed last year’s total of 1,372 — and it’s only October.

In Los Angeles, rent control applies to most apartment units built prior to October 1978 and exempts single-family homes. The city has lost a total of 1,284 rent-controlled units in the first nine months of 2017 — a rate of nearly five per day — according to a report released this week by the nonprofit Coalition for Economic Survival, which keeps a quarterly tally.

There are still around 624,000 rent-controlled units in Los Angeles.

“It shows that if you’re living in a rent-controlled unit in Los Angeles you literally have a bull’s eye on your back,” says Larry Gross, executive director of the Coalition for Economic Survival.

A state law known as the Ellis Act allows property owners to mass-evict tenants from rent-controlled apartments if the owner is tearing down the building or getting out of the rental business. Landlords who tear down rent-controlled units are obligated by law to wait five years before they can replace them with non-rent-controlled units (but can convert them to condos immediately).

Tenant advocates have long argued that the Ellis Act gives landlords a loophole to avoid the city's rent control laws. Gross says the law is a boon to real estate development and that most Ellis Act developers have owned
their rent-controlled property for less than a year when they file the applications to evict. Though the law calls for evicted tenants to be paid relocation allowance, among other protections, Gross says that landlords have been known to flout the law.

An official in the city's housing agency that oversees rent stabilization says the law requires that tenants receive 120 days' notice to vacate and gives an opportunity for them to extend that period to a full year. In the event that a landlord attempts to evict tenants illegally, the city can also step in and rescind the notice.

The city recently adopted a law to oversee what are known as cash-for-keys deals that landlords are known to offer their rent-controlled tenants to vacate the building. The new law took effect in January and requires that landlords notify the rent-controlled tenants of their rights to refuse the cash-for-keys offer as well as their right to rescind the agreement within 30 days.

Between July and September of this year the city received 352 applications under the Ellis Act to eject rent-controlled tenants from their homes. 

“We’re seeing an overall increase in Ellis Act evictions and displacement,” Gross says. “We haven’t seen the worst yet, in our opinion.”

Nearly 60 percent of all Los Angeles residents live in rental housing, according to the city's Housing and Community Investment Department. Los Angeles ranked among the top cities for "cost-burdened" renters in the latest "State of the Nation's Housing," a report released earlier this year from Harvard's Joint Center for Housing Studies. Being cost-burdened means you're paying 30 percent or more of your income for rent. The Harvard study found that more than 57 percent of Angelenos were paying that much or more.

In L.A.'s mostly black and Latino communities the average renter was shelling out a whopping 60 percent of his or her income to stay sheltered, according to a recent analysis from rental listings site Zillow.

With the city experiencing a shortage of affordable housing, there is a new push to toughen rent-control laws at the city and state levels.

The Los Angeles City Council announced a new ordinance Oct. 24 intended to lower incentives to evict tenants using the Ellis Act. Under the new law, tenants have a right to return to the original units if they are put back on the market within 10 years; it was previously 5 years.

The city's amendments to the Ellis Act include stronger language requiring payment of the relocation allowance and the right of tenants to return if their units are put back on the rental market before 10 years. It also states that tenants in eviction proceedings may raise as an "affirmative defense" the failure on the part of the property owner to comply with one or more of the requirements set forth under the Ellis Act or the city's Rent Stabilization Ordinance.

“Only time will tell if this change in law is effective,” says Fredy Ceja, communications director for Councilmember Gilbert Cedillo. “Along with other tenant protections, we hope this amendment will stop evictions from happening citywide.”

Tenant advocates say that unless action is taken by the state Legislature to eliminate or more aggressively amend the Ellis Act, Los Angeles officials can only do so much.

“These actions today will not stop those numbers on our maps from rising,” Gross says.

Aimee Williams, a staff attorney with the Inner City Law Center, says that despite its latest restrictions to the Ellis Act, Los Angeles still lags behind San Francisco and other California cities dealing with similar issues. “It’s encouraging that the City Council has made moves going in the right direction, but it doesn’t address the degree and increase of displacement,” she says.

Williams offers a few suggestions: Citywide quotas on the number of demolitions of rent-controlled buildings, and a requirement that a developer own a property for at least five years before invoking the Ellis Act.

On the state level, the AIDS Healthcare Foundation ACCE Action and Eviction Defense Network has filed a proposed ballot initiative to expand California's rent-control laws. The measure calls for the repeal of the controversial Costa Hawkins act, a state law that currently limits rent control to apartment units built before October 1978 and that exempts single-family homes.

Correction: A previous version of this story incorrectly stated that both the Ellis Act and the city's new ordinance mandate a waiting period before property owners can replace rental units or convert a building to condominiums. There is no such waiting period in either law. It also incorrectly stated the estimated number of rent-controlled units in Los Angeles.

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