Landlords Must Now Pick up Moving Costs for All “Ellised” Tenants

By Lookout Staff

August 12 -- For local landlord's going out of business, kicking renters out of their rent-controlled units just got considerably more expensive.

A new local law went into effect Thursday that forces rent control landlords to pick up a portion of the relocation tab for all evicted renters, regardless of income. The law comes in the wake of a recent State decision that allows financial aid for all tenants evicted under the 1986 Ellis Act.

Previous to the new law, landlords who used the Ellis Act -- which allows landlords who want to get out of the rental business to evict tenants and withdraw their units from the market -- only had to help tenants move who qualify under state law as "lower income."

If a landlord withdraws his or her rental units, they must now pay relocation expenses based on the size of the unit: Single ($3,000 to $4,400), one-bedroom ($3,750 to $5,500), two-bedroom ($4,250 to $6,200), three-bedroom ($5,250 to $7,700) and four or more bedrooms ($5,500 to $8,050).

The removal of the Ellis' low-income requirement is seen by City officials as not only helping tenants with what can be a financially draining move, but also acts as a deterrent for landlords who use the act to compel tenants to move out in order to return the unit to market rate -- which can mean hundreds of dollars more in rent per month.

"The City's Attorney's Office has received complaints in recent years of landlords trying to use threats of 'Ellising' to induce tenants to vacate their apartments without the landlord using the Ellis procedures," Deputy City Attorney Adam Radinsky said in a statement Thursday.

Radinsky added that the new law will also "eliminate the frequent disputes that have arisen between landlords and tenants over the tenant's income status, which required the intervention of City Hall to resolve."

While many on the City Council and in City Hall hail the change, several landlords, their organizations and attorney's who represent them have blasted the new law as unfair to smaller landlords.

Local land-use attorney, Rosario Perry, has called the law "outragous" and argues that it will stop mom-and-pop landlords from using the Ellis Act to move into their own buildings.

The 18-year-old Ellis Act has lead to thousands of units being pulled from Santa Monica's rental market. .

In the late 1990's, with improved economic conditions, residential development booming and thel Costa Hawkins Act's vacancy decontrol provision coming into full effect in 1999 (a law which returned rent controlled units to market rate once they were vacated by the tenant) Ellis evictions shot up substantially.

Between May 1998 and December 1999, 80 properties were withdrawn according to Rent Control Board statistics.

Between 1998 and December 2002, 55 withdrawn properties returned to rental use, allowing owners to re-rent those properties for whatever the market would bear.

In response, the Ellis Act was amended in January 2003 so owners could not receive a market rate increase for five years after the property had been withdrawn.