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LA is making it harder for landlords to take rent-controlled units off the market

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The city lost almost 1,400 rent-controlled units last year

A cluster of dense white and beige apartments on a hillside at sunset. Tyler Lowmiller | creative commons

As the cost to rent in Los Angeles continues to creep up, the Los Angeles City Council unanimously approved a new set of regulations on Wednesday aimed at deterring owners of rent-controlled buildings from taking their units off the market.

The new rules make it tougher on landlords in a couple of ways.

To raze rent-controlled apartments in order to build higher-priced new ones, landlords will have to make an equal number, or 20 percent, of the new units affordable—whichever is larger. Landlords will also have to pay for the relocation of tenants evicted under the state’s Ellis Act and file annual reports with the city on the status of units withdrawn from the rental market.

The Ellis Act allows landlords of rent-controlled apartment buildings to mass-evict tenants under certain circumstances, including when they plan to convert the units to condos or tear down the building and redevelop the property, for example, with a hotel.

Last year, close to 1,400 units were taken off the rental market citywide due to Ellis Act evictions—an increase of more than 25 percent since 2015, when 1,075 units were removed.

Tenant advocates say the loss of these units can affect affordability citywide, and most LA renters already spend more than 30 percent of their income on housing.

Councilmembers have argued the Ellis Act, which was originally meant to help landlords exit the rental business, has lately been abused by speculative developers looking to demolish older buildings in order to build newer, market-rate projects.

Tenant advocates at the meeting praised the new rules, particularly a requirement that landlords restart the Ellis application process if vacated units end up back on the rental market. Recently, the city has seen a number of well-publicized cases in which landlords evict tenants only to re-rent the units on short-term rental sites like Airbnb.

But the regulations have also faced criticism. Several members of the LA Tenants Union who spoke at the meeting questioned whether the city would be able to properly enforce the new requirements.

Meanwhile, as the Los Angeles Times notes, others have questioned whether the ordinance’s affordable housing requirements will discourage the construction of new housing.

Marie Rumsey, director of legislative affairs for the Central City Association, told the committee that the ordinance represented a “significant shift in policy.”

She pointed out that, under the new rules, a developer replacing a 10-unit building with a project with 300 units would be required to make 20 percent of those units affordable—a significantly higher number than those removed from the market. The cost of adding those affordable units could make some developers shy away from major projects, Rumsey said.

In approving the ordinance Wednesday, the council also asked the City Attorney and Los Angeles Housing and Community Investment Department to research further ways to protect tenants from Ellis Act evictions.