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CES In The News
Daily News
Wednesday May 23, 2007
More Rentals to be Covered by City Council

For the first time since 1979, some additional apartments will be covered by Los Angeles' rent-stabilization ordinance, which prevents landlords from increasing rent more than 3 percent to 5 percent a year.

Currently, rent control applies only to buildings constructed before 1979.

But in a unanimous vote, the City Council closed a loophole that housing officials said allowed a landlord to evict tenants from a rent-controlled building, demolish the structure and erect a new apartment building that was exempt from the law.

The ordinance passed Tuesday requires rent controls on those replacement complexes.

"I think we're on the right track. This is a small piece, but a very important piece, to close the loophole," Councilman Eric Garcetti said.

But apartment owners and developers said they are considering filing a lawsuit because they believe state law prohibits the city from imposing rent control on new apartments.

"Rent control was extended to new construction, which it never has been in the past. This is questionable legally and we're considering our options," said Tony Hogrebe, a manager with apartment-management company Archstone Smith and a member of the California Apartment Association.

The ordinance passed Tuesday was the latest battle over rental housing in Los Angeles.

Under state law, landlords have a right to evict tenants and get out of the rental business.

In the past six years, more than 13,000 rent-controlled apartments have been taken off the market due to condominium conversions and demolitions.

Some communities, such as Studio City, have seen dozens of apartment complexes demolished to make way for new luxury condominiums.

But some tenants evicted from rent-controlled apartments have seen new rental buildings constructed, instead of for-sale units. And as the real estate market changes, some buildings planned as luxury condominiums are being rented as apartments.

Under the new law, all new units in the building could be set at market-rate rent, but would be covered by the rent-stabilization ordinance, limiting how much landlords could raise rents each year.

Landlords would also have the option of replacing demolished rental units with an equal number of affordable apartments, with a proviso that no more than 20 percent of the units would have to be affordable.

Larry Gross with the Coalition for Economic Survival
said the ordinance was long overdue, but that it still only addresses one part of the problem.

He and other housing advocates said the city should adopt a comprehensive policy to build more housing.

"There has to be a joint effort of preservation of affordable units and production of new units," Gross said.

Several city task forces are being created to study the city's rent-stabilization ordinance, create incentives to build new apartments and promote homeownership.

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