LA lawmakers look to the carrot and stick for developers, landlords

Two council members propose new incentives for developers and increase tenant relocation fees

TRD LOS ANGELES /
Jun.June 24, 2019 10:00 AM
Councilmembers Mike Bonin and David Ryu (Credit: iStock)
Councilmembers Mike Bonin and David Ryu (Credit: iStock)

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.


Related Articles

arrow_forward_ios
Jose Huizar (Getty)

Huizar indicted on 34 counts related to bribery and corruption scheme

Huizar indicted on 34 counts related to bribery and corruption scheme
Mike Bonin and David Ryu

LA Council rejects stronger eviction protection measures

LA Council rejects stronger eviction protection measures
LA City Hall

DTLA resi project at center of bribery probe: report

DTLA resi project at center of bribery probe: report
Nury Martinez

LA considers emergency rent relief program

LA considers emergency rent relief program
Jose Huizar gave new details Monday on Pershing Square redesign (Credit: Getty Images and Wikipedia)

An embattled Jose Huizar revives Pershing Square redesign

An embattled Jose Huizar revives Pershing Square redesign
Larry Bond made use of federal opportunity zone program

Opportunity Zones program finally kicks off in Los Angeles

Opportunity Zones program finally kicks off in Los Angeles
Monica Rodriguez orchestrated the nixing of a residential project set for the Verdugo Hills Golf Course (Credit: Google Maps, Wikipedia)

The threat of fire doomed this Tujunga resi project. Now the developer will sue

The threat of fire doomed this Tujunga resi project. Now the developer will sue
Council Member Mitch O’Farrell’s motion will not be automatically furled into Airbnb ordinance. (Credit: Getty Images, iStock, and Airbnb)

LA throws Airbnb hosts lifeline at rent-stabilized homes, but there’s a catch

LA throws Airbnb hosts lifeline at rent-stabilized homes, but there’s a catch
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...