There’s always something to howl about.

City of Los Angeles Tenant Relocation Assistance

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.