LA landlords pitch controversial ownership arrangement as rent law kicks in

Rent control advocates say tenancy in common is another way for owners to displace renters

Los Angeles /
Dec.December 30, 2019 02:30 PM
Tenancy in common arrangementsare growing in gentrifying Eastside neighborhoods like Silver Lake, Echo Park and Glassell Park (Credit: iStock)
Tenancy in common arrangements are growing in gentrifying Eastside neighborhoods like Silver Lake, Echo Park and Glassell Park (Credit: iStock)

A lesser-known aspect of the Los Angeles residential market — tenancy in common — is stirring controversy just as the statewide rent control law is set to kick in Jan. 1.

Tenancy in common arrangements, in which two or more people share ownership rights to a property though not an individual unit, are growing in gentrifying Eastside neighborhoods like Silver Lake, Echo Park and Glassell Park, according to the Los Angeles Times.

The practice allows residents a form of ownership at a fraction of what it would otherwise cost. But rent control and affordable housing advocates say it represents another way for landlords to displace renters and shed rent-stabilized and rent-controlled units from their rolls.

California’s new rent control law caps annual increases and implements “just cause eviction” protections. It has also prompted landlords to mobilize — some are holding seminars — to come up with different ways to fend off rent stabilization, according to the report.

Tenancy in common has emerged as one such method. Landlords can sell a stake of their rental property to an occupant, thereby getting rid of a renter in a rent-controlled unit, while still maintaining ownership in the overall property. The practice was first popularized in San Francisco; the arrangement has been part of that city’s housing stock for 30 years.

In November, some L.A. landlords began sending eviction notices to tenants at dozens of buildings, hoping to bypass the new rent law. The City Council quickly invalidated those notices.

Renters aren’t the only ones who may lose out under tenancy in common, according to the Times. Banks could, too. Unlike traditional Fannie Mae and Freddie Mac-backed mortgages, a market has not emerged to resell and package loans for tenancy in common ownership. As it now stands, Sterling Bank and National Cooperative Bank are the only L.A. financial institutions that offer tenancy in common homeowner loans, and only at adjustable rates. [LAT] — Matthew Blake


Related Articles

arrow_forward_ios
Uncommon Developers' Ryan Hekmat and Jason Larian with rendering of project at 1017-1027 N. Berendo Street (LinkedIn, Works Progress Architecture)
Developer aims to raze three homes for 69 apartments in East Hollywood
Developer aims to raze three homes for 69 apartments in East Hollywood
Render of housing project at 2111 Firestone Blvd. (Los Angeles County)
LA County antes up $163M on four affordable housing projects
LA County antes up $163M on four affordable housing projects
Angel Stadium and State Sen.Tom Umberg (Getty)
New bill could force open bidding in future sale of Angel Stadium
New bill could force open bidding in future sale of Angel Stadium
Hollywood Arts Collective rendering (Hollywood Arts Collective, iStock)
Neighbor hits Safran’s Hollywood Arts Collective with $15M suit
Neighbor hits Safran’s Hollywood Arts Collective with $15M suit
A photo illustration representing the increased sales tax on mansions (iStock)
Measure to add tax on property sales over $5M set for November ballot
Measure to add tax on property sales over $5M set for November ballot
State Sen. Scott Wiener (Getty, iStock)
State bill would fast-track affordable housing at houses of worship
State bill would fast-track affordable housing at houses of worship
Rendering of the proposed project site at 401 Rosecrans and 3770 Highland avenues, Manhattan Beach (Withee Malcolm Architects)
Manhattan Beach planners reject residents’ attempts to trim 4-story apartment complex
Manhattan Beach planners reject residents’ attempts to trim 4-story apartment complex
Standard Communities’ Chris Cruz and the 196-unit Heritage Village complex at 707 West Santa Ana Street in Anaheim (Google Maps, About.Me, LinkedIn)
Standard adds three senior affordable housing complexes across California
Standard adds three senior affordable housing complexes across California
arrow_forward_ios

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

Loading...