City looks to buy rent-controlled buildings at risk of demolition

If an owner wants to demolish a rent-controlled building, should the city of Los Angeles or the tenants get the opportunity to buy it first?

The Los Angeles City Council’s housing committee endorsed the idea Wednesday. It was proposed by Councilmember Herb Wesson, who wrote in a motion that “we need to come up with solutions to keep our fellow Angelenos in their homes and stop the flow into homelessness.”

The “first right of refusal” would come into play when a property owner files an Ellis Act application.

That’s the state law that allows landlords to withdraw their property from rent control, either because they plan to demolish it or remove it permanently from rental housing use, typically to convert to condos or other for-sale units.

According to the Coalition for Economic Survival, property owners have applied to strip 1,348 rental units from rent control under the Ellis Act so far this year.

“Large developers and land speculators have taken advantage of the Ellis Act by purchasing rent-controlled buildings, evicting the tenants, and replacing the existing buildings with market-rate, luxury developments, upscale condominiums, and non-rental commercial uses,” Wesson’s motion says.

Under his proposal, either the city, the tenants, or “mission-driven” affordable housing developers would be given the option to buy the property instead.

Beyond that, it’s unclear how exactly the proposal would work. The housing committee is asking the full council to task the housing and community investment department and city attorney with drafting an ordinance that would provide more details.

“This sounds like a terrific idea to me,” said Councilmember Paul Krekorian, who serves on the housing committee. But he said he wanted to learn more about the potential advantages, disadvantages, and risks. “Our council has a tendency to not think” ordinances through, he said.

Representatives from two local land trusts said it would bolster their efforts to keep property affordable and within the control of communities.

“Our neighborhood has a lot of rent-controlled buildings,” said Roberto Garcia of East LA Community Corp. “We want to make sure that if their building is sold they have access to buy it.”

In a letter to the housing committee’s chair, Damien Goodmon, a community organizer in the Crenshaw area, said it would give the city the opportunity to “replace exploitative for-profit [owners] with owners dedicated to preserving housing unit affordability.”

“Passing the motion... would preserve the number of affordable units for poor and working-class Angelinos, and spare tenants of the traumatic process of eviction and harassment,” he wrote.

The Apartment Association of Greater Los Angeles and the California Apartment Association oppose the proposal.

It would restrict and “unfairly encumber” mom and pop property owners, said Danielle Leidner-Peretz director of government affairs for the Apartment Association of Greater Los Angeles. In a letter to the committee, she said it could “unnecessarily” delay the potential sale of the property or discourage “potential buyers from making a purchase offer in the first place.”

Leidner-Peretz urged the council to focus instead on policies and incentives to encourage more housing production as a solution to the city’s housing crisis and shortage.

Correction: An earlier version of this story stated City Councilmember Gil Cedillo introduced the proposal. It was introduced by City Councilmember Herb Wesson and “seconded” by Cedillo.