As rent control gets tighter in Los Angeles, landlords have been looking for other ways to keep afloat. The Ellis Act has given landlords some room to get out of the rent control situation; however, it has become highly criticized as developers increasingly abuse the law to mass-evict tenants in cities such as Santa Monica where property value is high.
The Ellis Act is a California provisions that gives landlords the right to evict tenants if the landlord plans on demolishing or permanently withdrawing the units from the rental housing market. The Los Angeles Housing and Community Investment Department (HCIDLA) outlines the provisions to withdraw units from rental housing use.
The problem now lies with re-renting the units AFTER withdrawing the units from the rental market using the Ellis Act.
Under the old law, new replacement rental units that have been constructed within five years from the date of withdrawal would be subject to rent control under the Rent Stabilization Ordinance (RSO). Landlords could also opt to dedicate the same number of units withdrawn from the rental market or 20% of the units built to affordable housing units, whichever is less.
The new Ellis Act law is much stricter. It calls for the landlords to either dedicate the same number of units withdrawn from the rental market or 20% of the units built to affordable housing units, whichever is greater. This may drastically effect larger buildings. The new ordinance also require that landlords restart the Ellis application process if vacated units end up back on the rental market.
These new regulations are sure to deter developers from entering the market and using the Ellis Act as the means of mass-eviction. Although a good ordinance for tenants now, it may cause more housing shortages in Los Angeles, making rents soar even higher than it is now. These provisions have been passed, but will not be enforced until provisions are clearly written out and sent to landlords.
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