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LA lawmakers look to the carrot and stick for developers, landlords
Two council members propose new incentives for developers and increase tenant relocation fees
It’s going to cost Los Angeles landlords and developers more to relocate tenants they force out if a new City Council motion gets approved. While that’s not good news for the real estate industry, the same measure would also increase city incentives for developers who build middle-income housing.
Council members David Ryu and Mike Bonin introduced the motion to increase tenant relocation fees for developers who evict rent-regulated tenants under the state’s Ellis Act, which allows landlords to deregulate units.
The motion would increase the number of required affordable units for a new residential development that replaces one with an affordable component.
The 1985 Ellis Act was designed as a way for small landlords to shed rent-controlled properties. Developers have used it to evict rent-controlled tenants and turn units to market-rate rentals, condos, or to redevelop new market-rate housing.
Critics have for decades tried to mitigate or re-work the legislation to prevent that use. State legislators have attempted to do so with various measures in the past.
Ryu said that since 2001 “nearly 25,000 rent-stabilized units… were destroyed under the Ellis Act,” in a press release last week. That figures out to an average of roughly 3.9 every day.
Ryu also introduced a motion to create a new incentives package for middle-income housing, similar to incentives packages used to encourage low-income housing development, such as the Transit-Oriented Communities program.
So-called middle-income or “workforce” housing refers to homes affordable to people who make too much to qualify for low-income housing, but not enough to afford market-rate housing.
Pricing for market-rate homes in L.A. dipped in recent months, but remains near a peak reached last year.
Ryu did not specify the sort of incentives that he wants the city to consider, but said they would be “specific to middle-income housing.”
The popular Transit Oriented Communities program provides a number of incentives for new developments near transit, including density bonuses on a sliding scale based on the percentage of affordable units a developer includes in the project.