Los Angeles City Council Latest Update
During the last several weeks, we have seen a flurry of activity at the Los Angeles City Council. As the City brought finality to the COVID-19 declaration of local emergency and associated moratoriums, the City Council also adopted and approved several extremely problematic ordinances establishing permanent housing policy changes.
Following the City’s adoption of Ordinance 187737, which expanded the City’s Rent Stabilization Ordinance (RSO) Just Cause Eviction provisions to non-RSO rental units citywide (Universal Just Cause), effective on January 27, 2023, the City Council has also begun the process of adopting two other detrimental ordinances both of which the Association vigorously opposed.
At the January 27th Los Angeles City Council meeting, the Council advanced two proposed ordinances, discussed below, that will have permanent financial impacts on the City's rental housing providers. During the meeting, the City Council went into closed session to discuss threats of litigation following submission of letters, including a letter from the law firm representing the Association which questioned the legality of the draft ordinances. During Council deliberations, Councilmembers Park and Rodriguez raised multiple concerns, highlighting the rushed manner in which these ordinances were being advanced, and as requested reports and issues remained outstanding.
Monetary Threshold - Evictions for Non-Payment of Rent
The first ordinance will restrict a rental housing providers’ ability to evict for non-payment of rent unless the renter is in default in paying their rent and “the amount due exceeds one month of fair market rent for the Los Angeles metro area set annually by the U.S. Department of Housing and Urban Development for an equivalent sized rental unit as that occupied by the tenant.” The ordinance also specifies that the written notice provided to the renter is to include the number of bedrooms in the rental unit. This ordinance will apply to both rental units subject to the City’s RSO as well as those rental units subject to the new universal just cause ordinance, referenced above, impacting all types of rental properties within the City, including RSO, non-RSO, single-family homes, and condominiums.
The ordinance was voted on first reading at the January 27th City Council meeting. As a procedural matter, the ordinance must be voted on a second time prior to adoption. The ordinance is on the upcoming Friday, February 3rd City Council meeting agenda, item 7 – Council File 21-0042-S4, for a second vote and adoption.
We encourage members with property in the City of Los Angeles to review the full details of the ordinance, linked below, and to seek legal guidance related to specific tenancy questions.
Relocation Fees Following Certain Rent Increases
The second ordinance will require rental housing providers that are not subject to the City’s RSO or State Law Assembly Bill 1482, to pay significant relocation fees to a renter who chooses to end their tenancy following a rent increase of “the lesser of (1) the Consumer Price Index – All Urban Consumers, plus five percent, or (2) ten percent.” The relocation fee to be paid under those circumstances is three times the fair market rent in the Los Angeles Metro area for a rental unit of a similar size based on HUD plus $1,411 in moving costs. The ordinance also includes provisions allowing a rental housing provider to deduct accrued rent due from the relocation fees that must be paid. In addition, the ordinance provides for a reduced relocation fee equal to one month’s rent based on the rental amount paid by the renter at the time of the written notice of the rent increase for certain small owners as specified in the ordinance. This ordinance impacts all types of properties within the City, not subject to the City's RSO or State rent control pursuant to Assembly Bill 1482, including newer construction, single-family homes and condominums.
During the January 27th City Council meeting discussion, amendments to the draft ordinance were approved. However, the Council vote on the ordinance was delayed pending the approved amendments being added to the draft ordinance. The amendments included specifying that the rent increase would be calculated “based on the highest legal monthly rate of rent established as of the date of the notice of rent increase, not any temporary, promotional or discounted rent.” The ordinance was also amended to remove the language regarding the timing of when the relocation fee must be paid. The timing of the payment is likely to be addressed through regulations to be established by the City’s Rent Adjustment Commission.
At the January 31st, City Council meeting, the Council voted to adopt the ordinance by a vote of 11-2, with Councilmembers Park and Lee opposing. As a procedural matter, the ordinance must be voted on a second time before adoption. It is anticipated that the second vote on the ordinance with be held at the February 7th City Council meeting.
We encourage members with property in the City of Los Angeles to review the full details of the ordinance, linked below, and consult with an attorney regarding any specific tenancy questions.
This article is for informational purposes only. If you have any questions regarding your property or specific tenancies and the requirements of any local law changes described herein, please consult with an attorney.