Rent Control took effect in the City of Los Angeles in 1979. In February, 1986, provision for tenant relocation assistance was added by amendment. For the purpose of relocation assistance, the ordinance recognizes two categories of tenants: Eligible – which is basically everyone, and Qualified – which is any tenant with one or more minor children, or over age 62, or disabled.
The original amendment mandated that when a landlord evicted a tenant for the landlord’s own occupancy, an eligible tenant would receive $1,000, and a qualified tenant would receive $2,500. The payment is per entire household, not to each person in the household. If the eviction is for non-payment of rent or other breach of contract, relocation assistance doesn’t apply.
The relocation assistance amount was increased over the years, with the change taking effect July 1 of each year. In July 2005, the amount due to eligible tenants was up to 3,200, and the amount due to qualified tenants was $8,000. On July 1, 2006 the amounts increased to $3,450 and $8,550.
Remember the real estate market in late 2006 and early 2007? It was still pretty hot, Developers bought up aging apartment buildings, paid the tenants the required relocation, then tore the apartment buildings down to build condos.
On April 11, 2007, in emergency session, the city council voted in new relocation assistance amounts, effective immediately: For eligible tenants, $6,810 if they have lived in the unit less than 3 years, $9,040 if they have lived in the unit more than 3 years, For qualified tenants: $,14,850 if they have lived in the unit less than 3 years, $17,080 if they have lived in the unit over 3 years. The city council figured that’ll make the developers think twice before throwing any more tenants out on the street.
I can’t speak for developers, but I can remember when first time home buyers would consider a duplex or triplex as their first property purchase, with the intention of living in one unit, and letting the rents from the other unit(s) help with the mortgage payment. These new relocation amounts pretty much shut down that particular little niche.
Council members state they had no idea (!) that the new provisions were written to cover all no-fault evictions, not just condo conversions. Oops. The Apartment Association of Greater Los Angeles AAGLA has sued the City of Los Angeles on behalf of its membership.
Rumours have circulated that come April, 2008, the higher amounts will be rescinded for owner occupancy evictions. I know of a buyer that was in the middle of escrow to purchase a small four-plex when the change was voted in. She went ahead and closed the escrow, and subsequently paid one of the tenants $14,850 in order to move into the unit she wanted to occupy as her home. If the city council declares the increased amount erroneous for owner-occupied evictions, will they refund the overpayments made by hundreds of property owners in this situation? I know one property owner that would sure like to get her $6,300 back.
Mike Farmer says:
That’s a great example of meddling. Don’t get me started.
Thanks.
February 15, 2008 — 2:01 pm
Smithers says:
To be fair (or not), rent control for property owners is provided throughout California — it’s called “Prop 13”. Long time owner-landlords pay far lower taxes than new owner-landlords.
So it goes.
February 15, 2008 — 3:01 pm
Jeff Brown says:
That Prop 13 red herring has been shot down so many times it will never hold water.
Rent control never works — unless the agenda is to create areas in which developers must be enticed by massive gov’t bribes. OR the idea is to create decaying areas where investors with IQs over room temperature avoid them like the plague.
Stealing from the investor class has never worked, and never will. If you wanna see what’s in your future, read Atlas Shrugged and enjoy simultaneous moments of truth and terror. Our country is about 1/3 of the way there.
The next time you run into an investor, ask them if the reason they invest is so renters can enjoy the lowest artificial rent level possible. 🙂
February 15, 2008 — 11:08 pm
Pamela says:
Question to Cheryl Johnson re: tenants relocation expenses.
Do these apply to rental HOMES in the city of Los Angeles, as well, where tenants are on a month by month and not a lease? Also, are these the same dollar amounts the owner would have to give if he’s planning on selling the homes? In this case 2 homes on 1 lot, both occupied. One has minor children in the home, one does not.
Look forward to your response.
February 29, 2008 — 12:56 am
Mike says:
Pamela. Im almost certain it does NOT apply to rental homes but Condo’s may be subject to these guidlines. Check with your city
April 15, 2008 — 6:24 pm
Simon says:
Pamela — In most cases, two houses on one lot in the city of Los Angeles would fall under the rent-control ordinance (unless the houses were issued certificates of occupancy after 1978 or so). Month-to-month rental agreements aren’t really month-to-month at all under rent control, since the landlord can’t change the terms of the lease without the tenant’s agreement. Also, the landlord can’t evict without paying the relocation fees, unless the tenant violates the terms of the lease.
Basically, all the landlord can do is enforce the terms of the existing lease and raise the rent the agreed amounts every year (this year it was 3%, but if another adult moves into one of the units, you may be able to get an additional 10% increase). I hope this helps, depressing as it may be. — Simon
October 3, 2008 — 5:45 pm
Jeff says:
Can anybody give me a straight answer to the following question:
My grandmother (82 years old) has a duplex in the city of Los Angeles. She’s owned the house for almost 60 years. The city has come down on her to fix major problems with the house that she cannot afford. We are considering selling it but since both units are occupied, we would have to pay relocation costs. Can anybody tell me the amount and the repurcussions if she is not able to pay since she simply can’t afford to. She makes 500 dollars a month on social security and that’s it. Any help is appreciated.
February 20, 2009 — 3:15 pm