A group of companies owned by multifamily developer Geoff Palmer is suing the city of Los Angeles for $100 million over its eviction moratorium.
The companies claim they have incurred “astronomical” financial losses because of the measure meant to protect tenants hit hard by Covid, according to the Los Angeles Times.
The eviction ban has been in place since the beginning of the pandemic and has also been challenged by the Apartment Association of Greater Los Angeles, a landlord advocacy group.
Palmer’s companies claim the moratorium violates the Constitution’s “takings clause” in the Fifth Amendment, which says private property cannot “be taken for public use, without just compensation.”
The suit also claims the moratorium “arbitrarily shifts the financial burden” of tenants onto property owners. Because of the moratorium, the suit alleges lenders have refused to refinance loans on properties owned by Palmer’s companies.
L.A. City Attorney Mike Feuer called the moratorium a “lawful ordinance.”
“We defeated a previous attack on these crucial protections and will vigorously defend the ordinance again,” he said, according to the report.
Palmer’s firms argue it’s unlikely they’ll recoup uncollected rent when the moratorium expires. The L.A. moratorium lasts through September, while the CDC’s targeted ban lasts through Oct. 3.
It’s unclear whether Palmer’s companies are eligible to receive rental assistance from the city or state. California set aside $5.2 billion in its budget for rental assistance.
Both programs specifically target low-income renters. Palmer successfully sued the city in 2007 over its affordable housing requirement, winning the right to exclude affordable units from one of his buildings.
[LAT] — Dennis Lynch