In April, students from the Oakwood School in North Hollywood rallied in support of residents of the Villa Carlotta apartment building on Franklin Avenue in Hollywood, in an effort to stop their eviction from the complex after the new owners expressed interest in converting the building into a luxury hotel. (Los Angeles Times)
Property owners in Los Angeles evicted tenants from 725 units under the state Ellis Act in 2014, up from 308 the previous year. This, in a city where the rental market is among the tightest and the most expensive in the nation, and it's getting worse..
Most tenants' rights and affordable-housing advocates believe that the 1986 Ellis Act is one of the major obstacles to preserving and securing adequate affordable housing in L.A. The city cannot truly address its affordable-housing crisis without eliminating or significantly amending the law, which allows landlords to evict tenants from rent-controlled apartments if the owners raze their buildings, convert them to condominiums, change the use from residential rental property or let them sit vacant for at least five years.
To landlords and developers, the Ellis Act has become the Holy Grail. But it has resulted in massive tenant displacement and even homelessness.
Sam Fuller got his eviction notice three days before Christmas. The 83-year-old hotel worker had lived at Hollywood's Villa Carlotta apartments for 40 years. Mark Simon, a retired book buyer who has lived at his Los Feliz apartment for 23 years, got his notice in January. Freelance advertising art director Steven Luftman was served an eviction notice at his Beverly Grove home of 18 years in February.
These are just three recent examples. Since 2001, property owners have taken nearly 19,000 rent-controlled units across the city off the market using the Ellis Act, according to the Los Angeles Housing and Community Investment Department.
The goal of the housing and investment agency is to promote, develop and preserve "decent, safe, affordable housing." Yet it has been able to finance the construction of fewer than 10,000 affordable units through bonds and the city's Affordable Housing Trust Fund since 2001. It's clear that building our way out of the affordable-housing crisis is not a viable option. We must place the same priority on preserving existing affordable housing that we do on producing new ones.
The Ellis Act was a response to a state Supreme Court ruling that rejected a landlord's claim that property owners have a constitutional right to evict tenants and exit the rental housing business. The Ellis Act ensured landlords that right.
Originally seen as protection for small mom-and-pop landlords who were unable to maintain their property, the Ellis Act is now frequently abused by speculators and developers whose main purpose is to acquire property, evict the tenants, demolish the rent-controlled units and replace them with high-priced luxury housing.
The recent eviction of 17 households at two properties in the Beverly Grove and Fairfax neighborhoods is one of the most egregious examples of this problem. The landlord of the properties is developer Matthew Jacobs, who is also chairman of the California Housing Finance Agency. What many find outrageous is that Jacobs heads the board of this state agency whose stated mission is to provide financing and programs that "create safe, decent and affordable-housing opportunities for low to moderate income Californians."
As is the case with Jacobs, numerous analyses have found that most of the Ellis evictions come from landlords who have owned the property for less than a year.
The Los Angeles Times reported in 2014 that, "of the Los Angeles properties where owners filed to remove rent-controlled units under Ellis in 2013, at least 51% had been purchased within the previous year, according to an analysis of city data and property records tracked by real estate firm DataQuick."
And though the Ellis Act has stripped local governments' power to prohibit evictions, the statute clearly states that the Legislature's intent was not to "interfere with local governmental authority over land use, including regulations on the conversion of existing housing to condominiums … or the demolition and redevelopment of residential property."
The mayor and City Council could enact an ordinance that monitors existing affordable housing and sets an annual limit on the number of demolitions of rent-controlled units. The city could require new construction plans for rent-controlled properties to be approved before demolition permits are issued.
The city could also expand on AB 2222, the 2014 law that requires projects that get a "density bonus" to replace preexisting affordable units one-for-one. (These are projects in which a developer agrees to build a certain number of low-cost housing units in exchange for the opportunity to build more units than would otherwise be allowed.) The city could enact a regulation that applies this concept to projects seeking zone changes, removal of rent-controlled units or that receive government subsidies.
Ultimately, changing the Ellis Act has to happen at the state level and cover all cities, but it won't be easy. State Sen. Mark Leno (D-San Francisco) has tried over the last two years to modestly amend the Ellis Act. His bills would have required new property owners to wait five years before they could invoke the Ellis Act, and they could only do it once. These reasonable reforms would have applied only to San Francisco, and they still lost. And, while his 2015 bill, SB 364, could be reconsidered in January, the prospects of it passing appear slim.
Our political leadership must develop some backbone and take on the powerful real estate/landlord lobby to stop the abuse of the Ellis Act. We are losing too much affordable housing, and too many tenants are losing their homes.
Larry Gross is the executive director of the Los Angeles-based Coalition for Economic Survival, which advocates for renters' rights.