A Mar Vista dingbat on Venice Boulevard. A Traditional-style apartment building on Crenshaw Boulevard in Hyde Park. A midcentury complex a couple of blocks from the North Hollywood Metro station.
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.
Comments
Removing rent controlled apartments from the market means they can only be sold as condos or TICs. This increases the supply of housing for purchase for the middle class. So long as the landlords comply with the Ellis Act, this is a natural result of strict rent control.
By Greyvagabond on 02.04.20 4:15pm
It’s also pretty necessary for the development of much larger buildings, though as we’ve previously discussed UCLA found that the average existing housing unit removed (including SFR) is replaced by 13x as many units, and that itself is skewed by duplexes built in South LA.
By Seth Borman on 02.04.20 5:19pm
"For decades, tenants who rented units in these buildings enjoyed the benefits of rent control subsidized rent. But that’s drawing to an end." There, I corrected it for you.
It is entirely appropriate for landlords to be able to stop subsidizing their tenants rent under these circumstances.
By LADude on 02.04.20 4:40pm
The city will now use imminent domain to acquire all rent control buildings using tax payer funds. Isn’t this a new subsidy for the poor? Wouldn’t it be cheaper to just convert to Section 8, the city will pay the difference for market rate housing?
By TTTSec on 02.04.20 5:01pm
It is "eminent", not "imminent".
And the City won’t acquire rent controlled buildings. One Councilmember proposed doing that but that’s a far cry from it passing the whole Council and an even far cry from the City actually figuring out how to do that.
By I Like Buildings on 02.05.20 4:19pm
And there is always the option for those lamenting that landlords withdraw rent-controlled units to actually buy a house/apartment etc and then rent it out voluntarily ‘rent-controlled’ – what about that? That would save all the homeless people in town and you’d feel really good about that too. Just take out some mortgages and steam ahead!
By oceantern on 02.04.20 6:26pm
All of those referendums on the ballot for strict rent control are making Ellis a lot more tempting for landlords. Be careful what you wish for folks.
By calzada on 02.04.20 9:00pm
Meh. I’m not astonished.
By LosFeliz$ean on 02.05.20 1:07am
Very insightful comment $ean. Meh. No one cares if you’re not astonished. When you actually pay rent and not live with Mommy you can comment on this topic.
21K relocation fees is crazy to begin with. Especially considering the many years of paying under market rent. ’Should we throw in a new car, vacation to Hawaii too?
Its amazing that renters feel like they own the property and can dictate what an owner can or cant do with their own property.
If you cant afford to live in a certain area then TO BAD. Los Angeles is a big city and there are more affordable pockets than others. Or get more roommate/s. Figure it out.
By Ravid Dyu on 02.05.20 1:14pm
Rent control was voted in by the residents of Los Angeles, most of whom are renters. It’s mind blowing to me that aspiring real estate moguls like yourself complain about people acting in their own interests. You are acting in your interest when you try to evict tenants and overcharge tourists and newcomers to stay in your properties. And working people are acting in their own interest when they vote in rent regulations. If you don’t like doing being a real estate developer in a big city like Los Angeles that has a tenant’s rights movement, TOO BAD. Become a slumlord in Orange County. Figure it out.
By MelCarter on 02.05.20 11:11pm
It is figured out. It’s called being a property owner and owners can do whatever they want with their properties as long as the laws are followed.
By Ravid Dyu on 02.06.20 8:25am
Residents voted in rent control? When did this happen? All of the rent control that we have was enacted by a governing body. The last time rent control was on the ballot it was voted down.
By CaliSon on 02.06.20 9:56am
"complain about people acting in their own interests" Setting aside that voters did not enact rent control, the vast majority of voters are either not educated enough or informed enough to make good decisions. Rent control hurts renters in the long term because it leads to a lack of supply and high rents just like what is happening now! SF and LA both have had rent control for decades and look at the result.
By LADude on 02.06.20 10:06am
0.2% of the total, and 10% above the average since 2001. Astonishing.
"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."
Aside from the absurd idea that someone should give someone else a down payment on a house to move out of a rental… if someone can’t afford market rate rent, how are they going to afford a market rate mortgage payment?
By iONu on 02.05.20 6:58am
Oh no, some people want to control their own private property…..?
By Noice LA on 02.05.20 10:25am
oi, comrade… we must abolish profits, private property, and everything good/decent/beautiful.
By Chunk 서출의 on 02.05.20 8:01pm
Under the cash for keys program, in some ways tenants have less protection, because the city has moved itself further away from its enforcement. Under the previous tenant habitability program ("THP"), which I believe is still part of the rent control law, if a landlord will undertake renovations that will take longer than 30 days, the landlord has to advise the tenant of the right to temporarily vacate during the process and still remain a tenant, or take the tenant relocation monies. The THP program was rarely enforced because the city would behind closed doors advise landlords to not mention the repairs, force the tenant out, than the unit would be vacant and no THP required. One good thing about the THP was that the landlord was required to file it with the city BEFORE starting repairs and serve the tenant a copy. I reported numerous times to the city where this procedure was not followed, causing tenants across the city to lose thousands of dollars. With the cash for keys, landlords are only required to report this to the city AFTER the tenant has moved out, and of course everyone knows after the fact, you have lost some of your rights. Tenants really do not have a friend in city hall. I support that tenants who face no fault evictions must be guaranteed similar rental housing at the same rent amount. In related news: By email January 15, 2020, the city council was asked to disqualify five candidates for the council seat District 10. (The same email appears in the city damage claim.) Candidates for public office take an oath. Candidates are prohibited from violating the law or participating in a violation of the law. CITY DAMAGE CLAIM FILED OVER DENIAL EQUAL OPPORTUNITY. The candidate forum for District 10 for today at FAME Church is the subject of a Claim for Damages filed with the Los Angeles City clerk’s office on January 22, 2020. A similar complaint was filed with the State Department of Fair Employment and Housing on January 23 for denial of "equal privileges, services" etc. under the State Unruh Act. The 32 page complaint asks for money damages for "the politics of exclusion", "denial of equal opportunity by Church and councils", "violation of IRS regulations re Churches and Political Candidates" abuse of city tax dollars, interference with the election process, violation city code of ethics etc. Named as parties are Los Angeles city department of Neighborhood Empowerment, all city funded neighborhood councils, Holman Church members and employees, FAME church members and employees, Messob Ethiopian Restaurant, the Ethiopian Democratic Club, USC, LA County Board of Supervisors, Mark Ridley Thomas, Melvin Snell, Channing Martinez, Aura Vasquez, Grace Yoo. A related article can be seen at the website https://wp.me/P57D2C-KE or https://www.2020committeetoelectjohnson.com/ and see "disqualification of candidates". Anyone who attends or participates in the forums may be in violation of civil rights statutes prohibiting denial of equal opportunity. The three candidate forums have prohibited certified and qualified write-in candidates the equal opportunity to speak as candidates. There are over 250 write-in candidates who could potentially invalidate the election results. Ridley-Thomas should be disqualified for using LA County monies and position to participate in denial of equal opportunity, a violation of his code of ethics. Business as usual for Ridley Thomas. This is the third candidate forum that denied qualified write-in candidates the equal privilege to speak as candidates. https://wp.me/P57D2C-Lx
By GJJ3000 on 02.05.20 10:42am
If the goal is to increase density and housing stock, old units have to demolished. Old, rent-controlled, low-rise buildings should be "under threat" of being demolished in favor of newer, larger buildings with more units.
The Ellis withdrawals should be celebrated, not lamented.
By bluestructure on 02.05.20 11:20am
You’re wrong. Buildings that have been Ellis Acted are never demolished to make room for new high density units. That’s simply untrue. Here’s what happens: Rent controlled tenants are forced out. Condo buyers move in. The net effect of land use is exactly nothing. In fact it’s often worse. An entire low income family might be willing to live in a small rental unit, but when it’s gussied up as a TIC condo you better believe it’s going to a wealthy single person or couple buying in. Don’t pretend that Ellis "withdrawals" are helping solve the housing crisis. They are not. They are displacing rent control tenants and making speculators rich.
By MelCarter on 02.05.20 11:05pm
You say, "Buildings that have been Ellis Acted are never demolished to make room for new high density units. "
And yet the article above says, "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."
So it would appear that you are the one that is wrong.
By LADude on 02.06.20 10:12am
And another one of the apartments listed in the map included in the article is being rebuilt into a 77 unit complex. Maybe you should start researching each of the addresses on the map in the article before making a stupid comment.
https://urbanize.la/post/four-story-77-unit-apartment-complex-planned-venice
By LADude on 02.06.20 10:16am
Here is another one from the map in the article. 187 units.
https://urbanize.la/post/mixed-use-development-would-bring-187-apartments-palms
By LADude on 02.06.20 10:19am
As someone who has just been Ellis Acted, I’ll take the other view – which is it’s an extreme bummer. I get that it’s capitalism and landlords have every right to buy houses and demolish them and no one cares and we should just buy our property and offer it to the homeless etc, etc. But it still sucks that three families are out of a place to live and staying in the neighborhood is not an option anymore.
By HollywoodWow on 02.05.20 5:26pm
What sucks is that "three families" failed, over many years, to plan for permanent housing, rather than rely on the crutch of the Nanny State to "force" a private property owner to subsidize them.
What sucks is that city and state "sanctuary" policies assure that rental housing is hoarded and overcrowded, depriving entire neighborhoods of quiet enjoyment and public space, while substantially spiking asking rents on rare vacant units, all the while preventing building owners from doing proper management or wholesale rehab of the structure.
By smartalex on 02.07.20 12:37pm
Ellis Act "withdrawals" are the fattest giveaway to L.A. real estate developers this century. No problem is being solved by this. Housing density isn’t increased. Parking solutions aren’t created. Buildings aren’t even retrofit to be safer. People are kicked out of their rentals and condo owners move in. Let’s stop pretending that this is somehow beneficial to anybody but the land speculators racing to work this hustle until it’s made illegal. And that by the way is happening very soon. Good luck reselling that TIC!
By MelCarter on 02.05.20 11:17pm