For decades, tenants who rented units in these buildings enjoyed the benefits of rent control. But that’s drawing to an end.
Landlords sought to withdraw these and hundreds more buildings from rent control last year. In total, Los Angeles property owners filed applications to remove 1,659 rent-stabilized units from the market in 2019, according to the tenant advocacy group the Coalition for Economic Survival.
The numbers for the last year are “worrisome,” says Larry Gross, the coalition’s executive director. Gross says that’s partly because the number of applications were high in 2018 too.
The Ellis Act figures were obtained by the coalition under a public records act request to the city and were analyzed independently by Curbed.
Applications to remove the units from rent control under the Ellis Act, a state law that allows landlords to take their rent-stabilized units off the market in one of two situations: if they plan to demolish the building or permanently cease renting the units, usually to convert them to condos or other for-sale units.
As the map below shows, most of the city is affected. But the zip codes that lost the most units to the Ellis Act last year were 90006, which includes almost all of Pico-Union and a portion of southern Koreatown (90 units); 90028, which covers northern Hollywood and a section of East Hollywood nearest the 101 Freeway (108 units); and 90026, which contains Silver Lake, Echo Park, Historic Filipinotown, and a bit of Temple-Beaudry (130 units).
According to the coalition, since 2001, property owners have filed applications to pull 26,562 units from under the city’s rent-stabilization law. The number represents a fraction of the approximately 600,000 rent-controlled housing units in the city of Los Angeles, but city leaders have frequently connected these evictions to the larger problems of homelessness throughout the city.
In the city of Los Angeles, only buildings constructed and occupied before October 1, 1978 are subject to rent control. A new state law attempts to regulate rent increases for tenants living in most buildings 15 years old or older, but the burden of enforcing the law appears to be largely on the tenant.
When rent-controlled buildings are demolished to make way for new apartment complexes, developers are required to either put the entire building under rent control or incorporate affordable units that are available to low-income renters at subsidized rates.
In one case last year, the Ellis Act was used to remove 52 units in a residential hotel on Stanford Avenue in Downtown’s Skid Row. The developer LAMP Community, a nonprofit that works with the homeless, plans to build a 100-percent affordable complex with 82 units.
Those units do come with an expiration date, typically flipping to market rate after 30 or 55 years, under financing agreements and contracts with the city and state.
Renters evicted under the Ellis Act are entitled to relocation assistance, at least $8,200 to $21,200, depending on the renter’s income, age, and years lived in the unit. Sometimes, landlords who are seeking to flip a property into some other use, like a tenancy in common, offer more money in a “cash for keys” scenario to entice residents to vacate sooner.
Those payments are often in the thousands or tens of thousands of dollars, but are not usually enough for a down payment on a home in the same neighborhood. For those tenants who continue to rent, the money does not always stretch very far, especially for longtime tenants living in neighborhoods where prices have skyrocketed.
In that scenario, tenants are paid to leave their unit of their own volition, and the landlord can reset the rent to market-rate. The city mandates that property owners submit records detailing cash for keys agreements, but it has no way of tracking the landlords who are not complying with the reporting requirement, housing department officials say.
Gross says the Ellis Act numbers only tell part of the story. They don’t take into account the units that are renting at market-rate levels because of cash-for-keys scenarios, or units that are still being rented as Airbnbs instead of to longer-term residents.
“The numbers are astonishing, but they still don’t give the full picture,” he says.