Is California's Housing Plan Missing the Mark?

The state's lawmakers are working on ways to address its affordable housing crisis, but advocates and academics say they're not going about it in the best way.
by | August 9, 2017
A luxury apartment building in Los Angeles
A luxury apartment building in Los Angeles (David Kidd)

California is in the grip of a housing crisis. The median price of a home in the state is $500,000, more than twice the national average. Its poverty rate is the highest in the nation, even while wages remain relatively high. And homelessness is spiking in cities as rents have skyrocketed.

"Not only are [people] losing their homes, they’re displaced from their neighborhood, forced out of their city and eventually out of the state because they can’t find housing," says Larry Gross, executive director of the Los Angeles-based Coalition for Economic Survival. "If L.A. opened up its Section 8 waiting list [which is currently 11 years long], there would be 800,000 people eligible for Section 8 housing. That should give you an idea of the kind of crisis we are facing."

State officials have been wrestling with how best to address the problem but have yet to pass any significant legislation. This month, the state Assembly will vote on a package of housing bills meant to relieve some pressure on renters, including one that would force reluctant cities to make good on plans to build new housing.

But according to affordable housing advocates and academics, some decades-old state laws are compounding the crisis -- and there are currently no plans to revisit them.

One of those is a 1985 law called the Ellis Act, which allows landlords to mass-evict tenants in order to leave the rental business. Advocates argue that landlords are abusing the law to kick people out of rent-controlled apartments so they can build luxury condominiums or apartment buildings. Cities in other states have similar laws, and booming rental markets are also facing problems with illegal evictions of rent-controlled tenants.

Some evidence appears to back up advocates' claims of abuse.

A 2013 Los Angeles Times analysis found that 51 percent of residential properties taken off the city's market under the Ellis Act had been purchased within the previous year, suggesting that owners are purchasing properties with the intention of evicting and developing. In a city where 60 percent of renters spend upwards of 30 percent of their income on rent, use of the Ellis Act is on the rise: In the second quarter of 2017, Ellis evictions in L.A. more than doubled from the first quarter. Since 2001, Los Angeles has lost 20,000 rent-controlled units to Ellis evictions, leaving the city with about 641,000.

For their part, landlords contend that this is a fabricated -- or at least greatly exaggerated -- problem.

Debra Carlton, senior vice president of public affairs for the California Apartment Association, says the Ellis Act is mainly used as intended: by landlords who can no longer afford to keep their properties (usually because of rent-control regulations) and simply want to leave the business. She says landlords almost never turn these properties into condos or high-rise apartment buildings, as tenants-rights organizations allege.

"These are small owners who want to turn their Victorians back into single-family homes or want to move their family members in," says Carlton.

Research, however, only partially supports her position.

A 2016 report from the Rent Control Board in Santa Monica -- which is in Los Angeles County -- shows that more than a third (38 percent) of Ellis Act properties in the city became condos or apartments while just 22 percent were converted to single-family dwellings and 14 percent became businesses.

Anecdotal evidence that landlords are misusing the law is also plentiful. Previously rent-controlled apartments in L.A. are beginning to show up as short-term rentals on Airbnb. The city eventually filed criminal charges against a building owner who listed affordable units on the short-term rental site after evicting tenants.

Because of state pre-emption laws, however, local governments’ hands are largely tied when it comes to stopping improper Ellis evictions.

Nurit Greenger, a resident of Los Angeles for 35 years, learned that the hard way. After her landlord used the Ellis Act to evict her from her rent-controlled unit, Greenger rushed to city council to try to fight her eviction, only to get blank stares in return, she says.

"I went to my councilman twice and he just looked at me," she says. "I'm 70 years old, and you know what Councilman [Paul] Koretz said to me? He said, ‘Why don’t you do room-sharing [so you can afford more expensive rent]?'"

Greenger eventually gave up and moved to another one-bedroom apartment a few blocks away. Her rent, which was $1,300 at her old place, has shot up to $1,750 -- almost unmanageable on her fixed income, she says.

Urban planning experts generally agree the Ellis Act should be tweaked to discourage abuses and encourage the construction of affordable units. Joan Ling, an urban planning professor at the UCLA Luskin School of Public Affairs, suggests requiring developers to replace Ellis Act properties at comparable rents.

But the Ellis Act isn’t the only state law that could be worsening the housing crisis.

Ling and Gross both say the state limits what localities can do to preserve rent-controlled housing -- most of which is currently being rented at market value in larger cities, according to Ling.

When the Assembly considers its housing package this month, the most high-profile bills will be geared toward encouraging construction across the state. Gross, however, worries that's not enough.

"No one denies that we need to build more housing. But we need 500,000 units of new affordable housing in L.A., and I just don’t see that happening," Gross says. "We need to preserve what already exists, or else we’re just losing ground."