State Sen. Ben Allen and Assemblymember Richard Bloom will join a panel of public policy and housing experts on March 9 to discuss the impact of the Ellis Act on tenants in West Hollywood and across California.
The Ellis Act allows landlords to evict residential tenants if they decide to “go out of the rental business” and convert their property to condominiums or other uses. Tenants evicted from those buildings, which typically are older and often covered by the city’s rent stabilization law, can find it difficult to rent an affordable apartment in West Hollywood.
The city’s rent stabilization law, which covers only residential buildings built before July 1, 1979, restricts the amount by which a landlord can raise a tenant’s annual rent to a percentage of the Consumer Price Index for the greater Los Angeles area. Landlords can, however, raise rents to the market rent when a tenant leaves.
The impact of the Ellis Act has emerged as an issue in the March 7 West Hollywood City Council election. Some of those campaigning against incumbents John Duran and John Heilman have said that they are responsible for the loss of a large number of apartment units because of the Ellis Act. However, from its adoption in 1986 up to December 2015, only 5% of West Hollywood’s rent-stabilized apartments have been “Ellis’d” by building owners. The West Hollywood City Council has no control over whether or not a building owner can remove his or her property under the Ellis Act.
The apartments removed as of the end of 2015 are a total of 764 units in 203 buildings. As of the end of 2015, 51.7% of those units were still off the market or were converted to single family homes; 31.0% were new and pending condominiums; 1.5% were new and pending apartments; 7.9% were returned to the market, and 7.9% were converted to other uses such as bed and breakfasts or commercial. After a period of five years off the market, a building owner can begin renting units again in a building whose tenants have been evicted.
The Ellis Act requires that a landlord who leaves the rental business give tenants 120 days notice before eviction, although WeHo tenants who are seniors (62+) or disabled get a full year to move. The landlord also has to pay relocation fees to the tenants, set by the city, that currently range from $6,180 for a typical tenant in a studio apartment to $20,600 for a low-income household.
The Ellis Act was adopted by the state legislature in 1986 in response to a California Supreme Court decision in Nash vs. City of Santa Monica. That case involved a lawsuit brought against the City of Santa Monica by Jerome Nash, a developer who owns buildings in West Hollywood such as the Mirador on Fountain Avenue. Nash wanted to evict tenants and demolish a building he owned in Santa Monica, but that city denied him a permit.
“There is only one thing I want to do, and that is to evict the group of ingrates inhabiting my units, tear down the building, and hold on to the land until I can sell it at a price which will not mean a ruinous loss on my investment,” Nash said in his lawsuit.
Nash initially won his case, but in 1984 the state Supreme Court ruled that Santa Monica had a right to deny the permit to protect scarce rental housing. In response, Republican state Sen. James Ellis of San Diego introduced a successful bill that allowed landlords to evict tenants from a building so long as they were not going to continue to rent its units.
WeHo City Councilmember John D’Amico has asked that the city step up efforts to lobby the state legislature to amend or repeal the Ellis Act. The upcoming forum is part of D’Amico’s push to get the legislature to take action.
Other approaches include building coalitions with other rent control jurisdictions such as Santa Monica, Berkeley and Los Angeles and with advocacy organizations such as the Western Center on Law & Poverty and the Coalition for Economic Survival (CES).
There have been numerous attempts to modify or repeal the Ellis Act, but lobbyists for real estate developers have successfully pushed back against those efforts.
A report to the City Council that accompanied D’Amico’s proposal last year notes efforts the City of West Hollywood has taken to reduce the impact of the Ellis Act on local tenants”
— In 2015, the City Council increased relocation fees a landlord must
provide his or her tenants when removing the property from the rental market and approved annual adjustments based on the Consumer Price Index.
— In 2016, the City Council passed a change to the Rent Stabilization Ordinance to require new developments to include rent stabilized units if they are constructed within five years of the original building being removed from the rental market through the Ellis Act.
— The city also encourages the development of inclusionary housing and provides tenants that have been removed from rent stabilized units through the Ellis Act to receive right of first refusal to new low and moderate income units based on eligibility.
— The city contracts with the Alliance for Health and Healing to provide relocation assistance to all tenants that are being evicted through the Ellis process.
The forum will take place in the City Council Chambers at 625 N. San Vicente Blvd. south of Santa Monica. It will begin at 7 p.m.