LOS ANGELES—The Los Angeles City Council is urging the state to pass legislation that would require homeowners to own a property for at least five years before they can invoke the Ellis Act—a state law that allows homeowners to evict tenants and take their properties off the rental market.
Assembly Bill 2050 was introduced on March 17 by state Assemblymembers Alex Lee (D-San Jose) and Wendy Carrillo (D-Los Angeles) after Assembly Bill 854, a similar bill they previously introduced, was defeated in February.
According to the city council’s resolution, the Ellis Act may have become a “major loophole” for some homeowners who purchase a property, immediately evict tenants, and renovate the property into condominiums shortly after.
Councilman Paul Koretz—who introduced the resolution along with Councilman Marqueece Harris-Dawson—said ahead of the vote that some homeowners have “exploited” the Ellis Act, turning housing into “purely a commodity.”
“Like so many legislative actions, the Ellis Act has turned out to have some serious unintended consequences,” Koretz said. “[Some property owners] purchase buildings specifically to empty them out, tear them down, or replace them with new or refurbished units that previous tenants couldn’t possibly afford.”
Koretz also noted that the legislation would still allow homeowners to invoke the Ellis Act, but after having owned the property for five years in the hopes it would spread out Ellis Act evictions and lower speculative apartment building purchases.
According to the resolution, Ellis Act evictions “most often affect long-term, elderly, disabled and below-market rent tenants,” creating “great upheaval and disruption” that can lead to homelessness or population outflow because of the city’s high rental costs.
Los Angeles has lost 27,000 residential units to the Ellis Act since 1985, according to the resolution.
The Apartment Association of Greater Los Angeles, an association representing landlords, expressed its opposition to Assembly Bill 2050, saying in a statement that putting more restrictions on the Ellis Act could lead to fewer people willing to invest in real estate in California.
“Construction in the state of California has really stopped in terms of multi-family housing because the regulatory burden is too excessive,” Yukelson said.
A spokesperson for Councilors Koretz and Harris-Dawson did not respond to a request for comment by press deadline.