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October 9, 2009

Coalition for Economic Survival (CES)



The Coalition for Economic Survival (CES) scored a major tenants' rights victory when the 9th Circuit US Court of Appeals ruled in BARRIENTOS v. 1801-1825 MORTON LLC, that Los Angeles' rent control law is not preempted by federal laws or regulations.

The decision, which has a national impact, specially provides Section 8 tenants living at Morton Gardens Apartments in Echo Park protection against their landlord's attempt to evict them.

In ruling, the US Court of Appeals, 9th Circuit, stated that a landlord subject to the Los Angeles Rent Stabilization Ordinance ("LARSO") served notices of eviction upon tenants whose rent is subsidized by the federal government, because it desired to raise the rent on the apartment units. Though LARSO prohibits eviction for that purpose, Morton asserts that a U.S. Department of Housing and Urban Development (HUD) regulation permits the eviction of an assisted tenant during the lease term for "good cause" grounds, which "may include [the] desire to lease the unit at a higher rental." We must decide whether HUD's "good cause" regulation preempts the operation of the City of Los Angeles's eviction control ordinance. We hold that it does not. We affirm the district court's grant of summary judgment in favor of the tenants, permanent injunctive relief, and award of attorney's fees.

Legal Team Deserves Much Recognition & Appreciation

This victory is the direct result of the tireless work and deep commitment of Legal Aid Foundation of Los Angeles Attorney Christian Abasto, Attorney Jim Grow, the nationally acclaimed subsidized housing legal expert with the Oakland-based National Housing Law Project and Attorney Michael Soloff, a partner in the powerful downtown law firm of Munger, Tolles & Olson, who brilliantly argued the case before the 9th Circuit United States Court of Appeals on March 2, 2009.

City of LA and HUD Lent Support

The City of Los Angeles and HUD, as well as the AARP Foundation, filed amici curiae ("Friend of the Court") briefs in support of our case. LA City Council President Eric Garcetti, who represents the Morton Gardens tenants, provided important backing and helped in securing HUD's support.

CES' Long Efforts to Stop Evictions & Preserve This Affordable Housing

For more than the last 20 years, CES has been assisting these tenants' efforts to fight off evictions. Morton Gardens was developed in 1971 as a low-income rental housing project through a HUD subsidized mortgage-secured low interest loan program.

Morton Garden apartments is a 66-unit building which is situated just over a hill from Dodger Stadium in Echo Park.

In 1998 the prior owners prepaid the subsidized loan in advance of the original loan maturity date, thus removing the federal rent restrictions. As a result, tenants in residence received "enhanced" Section 8 rent subsidy vouchers, which entitled them the right to remain in their units, paying the same rent and requiring landlords to accept these vouchers as long as the tenants decide to stay and Congress provides the funding. In addition, other tenants holding regular Section 8 vouchers have since moved in.

In 2003, the City and the tenants had obtained an earlier ruling from the 9th Circuit Court that upheld the application of the City's rent control law to the units, rejecting the owner's claim that federal law "preempted" local rent protections. 

Eric Sussman, who along with other partners bought the building for $8 million in 2006, is not just any landlord. He teaches real estate at one of the nation's preeminent business schools, the UCLA Anderson School of Management. CES and tenants have argued that he should have known when he bought Morton Gardens that Section 8 tenants lived there and it is unethical of him to try to evict them just to increase rents.

The Morton Garden case involves two related, but distinct, federal tenant-based housing subsidies: "enhanced Section 8 vouchers" and regular Section 8 "housing choice vouchers."

The landlord was challenging the Congressionally enacted right to remain for the enhanced voucher holders, as well as the applicability of the city's just cause eviction law, which protects Section 8 tenants living in rent controlled units. Tenant attorneys citywide have been defending tenants against a wave of 90-day Section 8 termination notices, arguing that a Section 8 contract cannot be terminated until there is a vacancy and there needs to be a "just cause" reason under the rent control law to evict a tenant to secure a vacancy.

In 2007, tenants, outraged by eviction notices they received, rode a school bus to UCLA to protest outside his class. They held signs, chanted and then presented Sussman with a ceramic piggy bank, an award as the "Greediest Landlord in L.A."

To Read the landmark 9th Circuit United States Court of Appeals Decision that Protects Section 8 Tenants From Evictions and Finds that HUD regulations don't preempt local Rent Control Laws

Click Here

(Right) CES member Dulce Pena, who lives at the Morton Gardens Apartments in Echo Park, hands UCLA Real Estate Professor Eric Sussman, her landlord, a ceramic pig award for the city's greediest landlord as Morton Garden children look on. On May 17, 2007, Morton Gardens tenants and supporters traveled to UCLA to confront their landlord outside his classroom. Tenants wore CES bright red T-shirts and hoisted signs telling Sussman he should be ashamed. In addition to presenting Sussman the piggy bank, they handed UCLA officials that were present a letter asking UCLA's chancellor to review Sussman's business practices.

Coalition for Economic Survival (CES)
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