WEHOville

City Report Shows Slow Growth in Housing in WeHo

Fri, Feb 03, 2017   By Staff    6 Comments

The Huxley apartment building

The amount of development and the loss of affordable housing has been a constant issue in West Hollywood, and a talking point for many of the eight challengers seeking to unseat two incumbents on the WeHo City Council next month.

A report by the city’s Human Services and Rent Stabilization Department offers facts about what really is going on. According to that report, which will be presented to the city council on Monday, the facts are as follows:

— Since 1986, when the Ellis Act was adopted by the state legislature, 203 buildings with a total of 764 rent-stabilized housing units have been removed from the market. That represents only 4.5% of the city’s total of 16,832 rent-stabilized units. Of those properties, 7.9% have been returned to the rental market.

The Ellis Act allows property owners to evict renters if they intend to remove their property from the rental market. The city’s rent stabilization law covers buildings constructed no later than July 1, 1979. Rents on those WeHo properties can be increased only according to a formula tied to the regional Consumer Price Index. However a landlord can increase a unit’s rent to the current market rate when a tenant moves out.

Of the housing removed from rent-stabilization, most were two-, three- and four-bedrooms properties, and they were converted to single-family homes or remain unused. Duplex, triplex and quadriplex units make up about 12% of all units in WeHo.

— City council members have asked if rent control or stabilization rules could be applied to newer buildings. The report notes that the state’s Costa-Hawkins law bars rent stabilization on housing built after Feb. 1, 1995. West Hollywood has an exception because it already had a rent stabilization ordinance in place when Costa-Hawkins was passed.

The city council is considering Monday a proposal by the Human Services and Rent Stabilization Department that would require a developer who removes rent-stabilized units for a new project to include rent-stabilized unit in his new project if the number of rent-stabilized units is fewer that the number of affordable units planned for the building. The city currently requires a developer of a building of 10 units or more to make 20% of those units affordable to low- or moderate-income tenants.

If the council accepts that proposal, a developer who demolishes a building with six rent-stabilized apartments and replaces it with a 10-unit building, would have to make four units affordable and two rent-stabilized, which would limit the degree to which he could increase the rent. Since January 2013, 15 low-income households have had to move because of the Ellis Act, with seven of them finding housing in apartments set aside for low- or moderate-income people.

— And the amount of development in WeHo? That data shows there hasn’t been a lot.

According to the Human Services Department report, 491 new residential units were built in the city from 2013 to 2015, a figure that includes both rental units and single-family homes and condos. That is an increase of about 2% in the city’s housing stock. Of those, 18 are single-family homes, 400 are market rate units in apartment buildings, and 49 are affordable units in buildings developed by nonprofit organizations such as the West Hollywood Community Housing Corp. There also were 81 affordable housing units included in market-rate apartment buildings.

That report doesn’t include recently opened or about to open apartment buildings such as the Avalon West Hollywood and the Domain on Santa Monica Boulevard, whose apartments will boost the city’s housing stock by another 2 percent. The eventual opening of the Melrose Triangle and the 8555 Santa Monica Blvd. buildings, where construction hasn’t begun, and the Sunset-La Cienega project, which is almost completed, will increase the number of units by around 1%

— The city report also addresses a question raised by council members about whether the increase in housing in WeHo has caused rents to go down. Opponents of new housing development have argued that it hasn’t, citing rents at new buildings such as the Avalon, where a 709 square foot, one-bedroom apartment is on the market for $3,260 a month.

Floor diagram of a 709 square foot apartment at the Avalon West Hollywood on the market for $3,260 a month.

The issue, according to the report, is that West Hollywood is a small part of a much larger regional market where new home construction hasn’t kept up with population growth. It notes that outside of California, construction of buildings with five or more housing units has been at its highest level since 1987. But in 2015 the Los Angeles region had the lowest rate of housing production in the United States. Among the issues are regulatory and zoning controls.

The report cites data showing that in 2015, the vacancy rate in WeHo was 2.5% and the average rent was $1,648, an increase of 7% from the year before. “The increase in supply has been exceeded by the increase in the need for housing in West Hollywood and regionally,” the report says.

An examination by WEHOville has found many vacancies in new buildings with high rents such as the Huxley and Dylan, and that property owners now are offering incentives such as one month or two weeks free rent on the signing of a one-year lease. That indicates owners of buildings with high rents are feeling pressure, which likely will increase with the opening of even more competitors such as the 166-unit Domain. Also, the Dylan and several other new buildings have units that are being offered for short-term rentals, which is a violation of city law.

— What can West Hollywood do to reform the Ellis Act? The report notes that recent proposals to amend the Ellis Act have failed because of strong opposition from developers. There is not a well-organized renter’s lobbying group in Sacramento to oppose them. The report notes that the City of West Hollywood has asked staff members to step up their lobbying efforts, possibly pushing to extend the one-year relocation period offered to seniors and the disabled under the Ellis Act to all tenants in a building housing seniors and disabled. The report also notes that the city does not have the right to deny a property owner permission to leave the rental market.

The city council will receive and may discuss this report at its meeting on Monday at 6:30 p.m. at the City Council Chambers, 625 N. San Vicente Blvd., south of Santa Monica.

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6 Comments

  1. 90069Fri, Feb 03, 2017 at 4:48 pm

    Will all the NIMBY candidates running for council please read the data and stop trumpeting the same populist – Not In My Backyard – drivel that is so common place in WeHo/LA political campaigns. The formula is quite simple … Step 1: Blame incumbents on traffic. Step 2: Blame incumbents on runaway development by pointing to a current building(s) under construction. Unfortunately it is a cynical and dishonest strategy because these candidates do not discuss actual numbers! Math, it is important when developing public policy rather than the Trump like “what people are saying” anecdotal garbage.

  2. Kevin SeidelFri, Feb 03, 2017 at 7:16 pm

    I can’t believe we are doing one more thing to encourage multi-unit buildings. We need to encourage more single family homes. Seems like everytime I turn around there is another huge multi-unit apartment complex going up.. We are losing the community feeling.

  3. RandySat, Feb 04, 2017 at 5:14 pm

    Kevin, West Hollywood has always been a community mostly made up of apartments. There is a shortage of housing. Which means we need multiunit dwellings

  4. JD90069Mon, Feb 06, 2017 at 9:24 am

    I cant believe the prices of apartments in the New buildings, its out of control and greed from the developers. who can afford this? young professionals cant afford it, who can? yes we need housing but more importantly we need affordable housing. I hope these building stay vacant so they see that they are OVER priced, not by a little but ALOT. Can the City step in and get these prices reduced so the young prof can afford it? I think $2400 for a studio is expensive. and as for the incentives, lol, they are not incentives.

  5. RandyMon, Feb 06, 2017 at 5:17 pm

    JD90069, no, the city doesn’t have a way to do that. I agree that the prices are outrageous, but there is little the city can do here. We just have to wait and see what happens in the market. If they find enough people to pay that much, then we will start to see a change in our city’s culture, much like what has happened in San Francisco.

  6. J SimmonsFri, Feb 17, 2017 at 2:50 am

    The City is blaming evictions on “The Ellis Act”.

    The law (Ellis act) IS ANTI LANDLORD, AND PRO PROTECTION OF RENTERS WHO, WITHOUT THE ELLIS ACT, WOULD FACE IMMEDIATE (AND MORE UNITS) WITH NO COMPENSATION.

    Landlords & Rental Property owners HATE the Ellis Act.

    WeHo Began with a concept of a rent controlled city (UNIVRRSAL ECONOMIC THEORY read about it on wikipedia IS NOT FEASABLE IN THE LONG RUN … no politics, no left or right issues, just BASIC ECONOMIC THEORY).

    Anyway, Tent Control IS MOOT IN ALL OF CALIFORNIA by State Law.

    Done deal. The City of West Hollywood is prohibited by State Law to choose rent control. (there are some grandfathering by date but not a lot)

    IN REACTION TO THE “NO RENT CONTROL” BY THE STATE LEGISLATOR (I assume the left liberal in State Legislature tried to protect mass immediate evictions 30 days after it abolished Rent Control.

    THE BEST THEY GOT TO PROTECT RENTERS WAS THE ELLIS ACT. IT IMPOSES COSTS, RESTRICTIONS, DELAYS AND ADDITIONAL COSTS ON LANDLORDS/RENTAL PROPERTY OWNERS.

    ON THE OTHER SIDE, THE ELLIS ACT IMPOSES NOTHING ON TENANTS. IT GIVES TENANTS RIGHTS WITH THE COSTS IMPOSED ON LANDLORDS DELAY EVICTIONS UNTIL THEY FIND THE COSTS ADDED BY THE ELLIS ACT ARE COST EFFECTIVE …. TO EVICT TENANTS.

    IN ADDITION, THE ELLIS ACT HAS FINANCIAL COMPENDATION TO EVICTED TENANTS …. THAT WOULD NOT EXIST WITHOUT THE ELLIS ACT.

    It is better than nothong for tenants, which is the Ellis Act. It was the State of California’s Prohibiting Rent Control IS 100℅ BAD FOR TENANTS. ELLIS ACT IS PRO TENANT ANTI LANDLORD … AND HAS PREVENTED MANY MANY PEOPLE FROM BEING EVICTED 30 DAYS AFTER THE 1980′ State Anti Rent Control.

    THE CITY CONSISTENTLY (IF YOU HAVEN’T NOTICED THE CITY OF WEHO IS 100℅ PRO BIG DEVELOPERS … AND PRETEND TO CARE ABOUT RENTERS) DRAWS ATTENTION AWAY FROM THE MASSIVE OVERDEVELOPMENT OF WEHO BY CHERRY PICKING ELLIS ACT RELATIVELY SMALL APARTMENTS … WHILE THE DEVELOPERS ARE OUT OF CONTROL DESTROYING WEHO WITH GIANT BOX MULTI USE PROJECTS.

    I feel for people evicted. However if is under the ELLIS ACT I feel some comfort there is some compensation for moving. ELLIS IS GOOD in a bad eviction situation.

  7. Zam Zachary A Loomstein IIISun, Feb 26, 2017 at 2:41 pm

    First and foremost, this further solidifies the illogical nature of those who argue against development and increasing density. I am disabled but make too much money on paper to qualify for assistance, but don’t make nearly as much in actual cash. Because of my disability almost none of the available units with rent control are accessible. Even newer buildings aren’t accessible. It took me 6 months of searching for a place to buy or rent. The first place that was close enough for me to ‘roll’ instead of drive every day that I had any hope of affording was almost 5k/month. Clearly, demand is much higher than supply. Most of this city needs more room for housing and offices. Given the current state of this town, the only way to go is up.

    I’m all for certain neighborhoods and enclaves maintaining single-family homes. This includes West Hollywood West, and parts of the Norma Triangle, among others. For the majority of the city, which exists outside of these areas, we need to allow increased density if we don’t, rents will continue to skyrocket and the population will continue to age as the neighborhood is priced further and further out of reach for those making normal incomes. This will also make it more and more difficult for local businesses to afford increasing rent on their side and vacancies along the Santa Monica will continue to grow.

    Personally, I want to see residential / retail mixed use buildings along the major thoroughfares outside of the nightlife districts. Where nightlife exists, I’m more for Retail / Office mixed use buildings as there is little overlap between the two business types because they aren’t usually open at the same time. This would reduce parking congestion, and block much of the noise generated by our bars and nightclubs. As a bonus, local businesses would attract more crowds during the day, which would help make up for higher rents. Moving further back from the main streets in both situations, buildings should be transition to entirely residential.

    I’m also in favor of aggressively maintaining our stock of rent stabilized units. The proposal to require the difference between affordable units and the previous number of rent controlled units to be additional rent controlled units, I’m all for that. This proposal will require new projects with more units in order to be profitable.

    In conclusion, I’m great full for the fact that this article finally gives us a realistic picture of just how developmentally averse this city actually is and just how much our city is becoming less and less accepting of diversity by pricing housing out of reach for all but the wealthy and established.

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